Fascism then. Fascism now?
by Paul Bigioni
Toronto Star, November 27, 2005
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
"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
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
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
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
marketplace, 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
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
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.