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Fascism then. Fascism now?
When people think of fascism, they imagine Rows of goose-stepping
storm troopers and puffy-chested dictators. What they don't see is
the economic and political process that leads to the nightmare.
By Paul Bigioni
11/27/05 "Toronto
Star" -- -- Observing political and economic
discourse in North America since the 1970s leads to an inescapable
conclusion: The vast bulk of legislative activity favours the
interests of large commercial enterprises. Big business is very well
off, and successive Canadian and U.S. governments, of whatever
political stripe, have made this their primary objective for at
least the past 25 years.
Digging deeper into 20th century history, one finds the exaltation
of big business at the expense of the citizen was a central
characteristic of government policy in Germany and Italy in the
years before those countries were chewed to bits and spat out by
fascism. Fascist dictatorships were borne to power in each of these
countries by big business, and they served the interests of big
business with remarkable ferocity.
These facts have been lost to the popular consciousness in North
America. Fascism could therefore return to us, and we will not even
recognize it. Indeed, Huey Long, one of America's most brilliant and
most corrupt politicians, was once asked if America would ever see
fascism. "Yes," he replied, "but we will call it anti-fascism."
By exploring the disturbing parallels between our own time and the
era of overt fascism, we can avoid the same hideous mistakes. At
present, we live in a constitutional democracy. The tools necessary
to protect us from fascism remain in the hands of the citizen. All
the same, North America is on a fascist trajectory. We must
recognize this threat for what it is, and we must change course.
Consider the words of Thurman Arnold, head of the Antitrust Division
of the U.S. Department of Justice in 1939:
"Germany, of course, has developed within 15 years from an
industrial autocracy into a dictatorship. Most people are under the
impression that the power of Hitler was the result of his demagogic
blandishments and appeals to the mob... Actually, Hitler holds his
power through the final and inevitable development of the
uncontrolled tendency to combine in restraint of trade."
Arnold made his point even more clearly in a 1939 address to the
American Bar Association:
"Germany presents the logical end of the process of cartelization.
From 1923 to 1935, cartelization grew in Germany until finally that
nation was so organized that everyone had to belong either to a
squad, a regiment or a brigade in order to survive. The names given
to these squads, regiments or brigades were cartels, trade
associations, unions and trusts. Such a distribution system could
not adjust its prices. It needed a general with quasi-military
authority who could order the workers to work and the mills to
produce. Hitler named himself that general. Had it not been Hitler
it would have been someone else."
I suspect that to most readers, Arnold's words are bewildering.
People today are quite certain that they know what fascism is. When
I ask people to define it, they typically tell me what it was, the
assumption being that it no longer exists. Most people associate
fascism with concentration camps and rows of storm troopers, yet
they know nothing of the political and economic processes that led
to these horrible end results.
Before the rise of fascism, Germany and Italy were, on paper,
liberal democracies. Fascism did not swoop down on these nations as
if from another planet. To the contrary, fascist dictatorship was
the result of political and economic changes these nations underwent
while they were still democratic. In both these countries, economic
power became so utterly concentrated that the bulk of all economic
activity fell under the control of a handful of men. Economic power,
when sufficiently vast, becomes by its very nature political power.
The political power of big business supported fascism in Italy and
Germany.
Business tightened its grip on the state in both Italy and Germany
by means of intricate webs of cartels and business associations.
These associations exercised a high degree of control over the
businesses of their members. They frequently controlled pricing,
supply and the licensing of patented technology. These associations
were private but were entirely legal. Neither Germany nor Italy had
effective antitrust laws, and the proliferation of business
associations was generally encouraged by government.
This was an era eerily like our own, insofar as economists and
businessmen constantly clamoured for self-regulation in business. By
the mid 1920s, however, self-regulation had become self-imposed
regimentation. By means of monopoly and cartel, the businessmen had
wrought for themselves a "command and control" economy that replaced
the free market. The business associations of Italy and Germany at
this time are perhaps history's most perfect illustration of Adam
Smith's famous dictum: "People of the same trade seldom meet
together, even for merriment and diversion, but the conversation
ends in a conspiracy against the public, or in some contrivance to
raise prices."
How could the German government not be influenced by Fritz Thyssen,
the man who controlled most of Germany's coal production? How could
it ignore the demands of the great I.G. Farben industrial trust,
controlling as it did most of that nation's chemical production?
Indeed, the German nation was bent to the will of these powerful
industrial interests. Hitler attended to the reduction of taxes
applicable to large businesses while simultaneously increasing the
same taxes as they related to small business. Previous decrees
establishing price ceilings were repealed such that the cost of
living for the average family was increased. Hitler's economic
policies hastened the destruction of Germany's middle class by
decimating small business.
Ironically, Hitler pandered to the middle class, and they provided
some of his most enthusiastically violent supporters. The fact that
he did this while simultaneously destroying them was a terrible
achievement of Nazi propaganda.
Hitler also destroyed organized labour by making strikes illegal.
Notwithstanding the socialist terms in which he appealed to the
masses, Hitler's labour policy was the dream come true of the
industrial cartels that supported him. Nazi law gave total control
over wages and working conditions to the employer.
Compulsory (slave) labour was the crowning achievement of Nazi
labour relations. Along with millions of people, organized labour
died in the concentration camps. The camps were not only the most
depraved of all human achievements, they were a part and parcel of
Nazi economic policy. Hitler's Untermenschen, largely Jews, Poles
and Russians, supplied slave labour to German industry. Surely this
was a capitalist bonanza. In another bitter irony, the gates over
many of the camps bore a sign that read Arbeit Macht Frei — "Work
shall set you free." I do not know if this was black humour or
propaganda, but it is emblematic of the deception that lies at the
heart of fascism.
The same economic reality existed in Italy between the two world
wars. In that country, nearly all industrial activity was owned or
controlled by a few corporate giants, Fiat and the Ansaldo shipping
concern being the chief examples of this.
Land ownership in Italy was also highly concentrated and jealously
guarded. Vast tracts of farmland were owned by a few latifundisti.
The actual farming was carried out by a landless peasantry who were
locked into a role essentially the same as that of the sharecropper
of the U.S. Deep South.
As in Germany, the few owners of the nation's capital assets had
immense influence over government. As a young man, Mussolini had
been a strident socialist, and he, like Hitler, used socialist
language to lure the people to fascism. Mussolini spoke of a
"corporate" society wherein the energy of the people would not be
wasted on class struggle. The entire economy was to be divided into
industry specific corporazioni, bodies composed of both labour and
management representatives. The corporazioni would resolve all
labour/management disputes; if they failed to do so, the fascist
state would intervene.
Unfortunately, as in Germany, there laid at the heart of this plan a
swindle. The corporazioni, to the extent that they were actually put
in place, were controlled by the employers. Together with
Mussolini's ban on strikes, these measures reduced the Italian
labourer to the status of peasant.
Mussolini, the one-time socialist, went on to abolish the
inheritance tax, a measure that favoured the wealthy. He decreed a
series of massive subsidies to Italy's largest industrial businesses
and repeatedly ordered wage reductions. Italy's poor were forced to
subsidize the wealthy. In real terms, wages and living standards for
the average Italian dropped precipitously under fascism.
Even this brief historical sketch shows how fascism did the bidding
of big business. The fact that Hitler called his party the "National
Socialist Party" did not change the reactionary nature of his
policies. The connection between the fascist dictatorships and
monopoly capital was obvious to the U.S. Department of Justice in
1939. As of 2005, however, it is all but forgotten.
It is always dangerous to forget the lessons of history. It is
particularly perilous to forget about the economic origins of
fascism in our modern era of deregulation. Most Western liberal
democracies are currently in the thrall of what some call market
fundamentalism. Few nowadays question the flawed assumption that
state intervention in the marketplace is inherently bad.
As in Italy and Germany in the '20s and '30s, business associations
clamour for more deregulation and deeper tax cuts. The gradual
erosion of antitrust legislation, especially in the United States,
has encouraged consolidation in many sectors of the economy by way
of mergers and acquisitions. The North American economy has become
more monopolistic than at any time in the post-WWII period.
U.S. census data from 1997 shows that the largest four companies in
the food, motor vehicle and aerospace industries control 53.4, 87.3
and 55.6 per cent of their respective markets. Over 20 per cent of
commercial banking in the U.S. is controlled by the four largest
financial institutions, with the largest 50 controlling over 60 per
cent. Even these numbers underestimate the scope of concentration,
since they do not account for the myriad interconnections between
firms by means of debt instruments and multiple directorships, which
further reduce the extent of competition.
Actual levels of U.S. commercial concentration have been difficult
to measure since the 1970s, when strong corporate opposition put an
end to the Federal Trade Commission's efforts to collect the
necessary information.
Fewer, larger competitors dominate all economic activity, and their
political will is expressed with the millions of dollars they spend
lobbying politicians and funding policy formulation in the many
right-wing institutes that now limit public discourse to the
question of how best to serve the interests of business.
The consolidation of the economy and the resulting perversion of
public policy are themselves fascistic. I am certain, however, that
former president Bill Clinton was not worried about fascism when he
repealed federal antitrust laws that had been enacted in the 1930s.
The Canadian Council of Chief Executives is similarly unworried
about fascism as it lobbies the Canadian government to water down
proposed amendments to our federal Competition Act. (The Competition
Act, last amended in 1986, regulates monopolies, among other things,
and itself represents a watering down of Canada's previous antitrust
laws. It was essentially rewritten by industry and handed to the
Mulroney government to be enacted.)
At present, monopolies are regulated on purely economic grounds to
ensure the efficient allocation of goods.
If we are to protect ourselves from the growing political influence
of big business, then our antitrust laws must be reconceived in a
way that recognizes the political danger of monopolistic conditions.
Antitrust laws do not just protect the market place, they protect
democracy.
It might be argued that North America's democratic political systems
are so entrenched that we needn't fear fascism's return. The
democracies of Italy and Germany in the 1920s were in many respects
fledgling and weak. Our systems will surely react at the first whiff
of dictatorship.
Or will they? This argument denies the reality that the fascist
dictatorships were preceded by years of reactionary politics, the
kind of politics that are playing out today. Further, it is based on
the conceit that whatever our own governments do is democracy.
Canada still clings to a quaint, 19th-century "first past the post"
electoral system in which a minority of the popular vote can and has
resulted in majority control of Parliament.
In the U.S., millions still question the legality of the sitting
president's first election victory, and the power to declare war has
effectively become his personal prerogative. Assuming that we have
enough democracy to protect us is exactly the kind of complacency
that allows our systems to be quietly and slowly perverted. On
paper, Italy and Germany had constitutional, democratic systems.
What they lacked was the eternal vigilance necessary to sustain
them. That vigilance is also lacking today.
Our collective forgetfulness about the economic nature of fascism is
also dangerous at a philosophical level. As contradictory as it may
seem, fascist dictatorship was made possible because of the flawed
notion of freedom that held sway during the era of laissez-faire
capitalism in the early 20th century.
It was the liberals of that era who clamoured for unfettered
personal and economic freedom, no matter what the cost to society.
Such untrammelled freedom is not suitable to civilized humans. It is
the freedom of the jungle. In other words, the strong have more of
it than the weak. It is a notion of freedom that is inherently
violent, because it is enjoyed at the expense of others. Such a
notion of freedom legitimizes each and every increase in the wealth
and power of those who are already powerful, regardless of the
misery that will be suffered by others as a result. The use of the
state to limit such "freedom" was denounced by the laissez-faire
liberals of the early 20th century. The use of the state to protect
such "freedom" was fascism. Just as monopoly is the ruin of the free
market, fascism is the ultimate degradation of liberal capitalism.
In the post-war period, this flawed notion of freedom has been
perpetuated by the neo-liberal school of thought. The neo-liberals
denounce any regulation of the marketplace. In so doing, they mimic
the posture of big business in the pre-fascist period. Under the
sway of neo-liberalism, Thatcher, Reagan, Mulroney and George W.
Bush have decimated labour and exalted capital. (At present, only
7.8 per cent of workers in the U.S. private sector are unionized —
about the same percentage as in the early 1900s.)
Neo-liberals call relentlessly for tax cuts, which, in a previously
progressive system, disproportionately favour the wealthy. Regarding
the distribution of wealth, the neo-liberals have nothing to say. In
the end, the rich get richer and the poor get poorer. As in Weimar
Germany, the function of the state is being reduced to that of a
steward for the interests of the moneyed elite. All that would be
required now for a more rapid descent into fascism are a few reasons
for the average person to forget he is being ripped off. Hatred of
Arabs, fundamentalist Christianity or an illusory sense of perpetual
war may well be taking the place of Hitler's hatred for communists
and Jews.
Neo-liberal intellectuals often recognize the need for violence to
protect what they regard as freedom. Thomas Friedman of The New York
Times has written enthusiastically that "the hidden hand of the
market will never work without a hidden fist," and that "McDonald's
cannot flourish without McDonnell Douglas, the designer of the U.S.
Air Force F-15." As in pre-fascist Germany and Italy, the
laissez-faire businessmen call for the state to do their bidding
even as they insist that the state should stay out of the
marketplace. Put plainly, neo-liberals advocate the use of the
state's military force for the sake of private gain. Their view of
the state's role in society is identical to that of the businessmen
and intellectuals who supported Hitler and Mussolini. There is no
fear of the big state here. There is only the desire to wield its
power. Neo-liberalism is thus fertile soil for fascism to grow again
into an outright threat to our democracy.
Having said that fascism is the result of a flawed notion of
freedom, we need to re-examine what we mean when we throw around the
word. We must conceive of freedom in a more enlightened way.
Indeed, it was the thinkers of the Enlightenment who imagined a
balanced and civilized freedom that did not impinge upon the freedom
of one's neighbour. Put in the simplest terms, my right to life
means that you must give up your freedom to kill me. This may seem
terribly obvious to decent people. Unfortunately, in our neo-liberal
era, this civilized sense of freedom has, like the dangers of
fascism, been all but forgotten.
Paul Bigioni is a lawyer practising in Markham. This article is
drawn from his work on a book about the persistence of fascism.
Copyright Toronto Star Newspapers Limited
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