Paul Bigioni: Neoliberalism & Fascism


Richard Moore


Here's a very interesting analysis relating neoliberalism and
fascism. I received this article with a sense of irony, as
over the past few days I've been working on my book and
developing a very similar thesis.

My thesis: The neoliberal project is leading to a situation
where the nation-state will have no control over its own
economic & regulatory regimes. This will make governance
difficult as conditions worsen and few resources are available
to provide a safety net. Hence the need to introduce fascism
under the cover of a phony War on Terrorism.

Bigioni develops this same thesis, using Nazi Germany as an
example. I disagree with Bigioni only on what might be
considered a small point. I think his analysis applies more
accurately to Italy, where fascism first arose under
Mussolini. In the case of Germany, fascism was not so much a
domestic project, but rather a project of Anglo-American
elites who funded the rise of the Nazi party from its humble
beginnings in Munich, and arranged for the financial collapse
of the Weimar republic. It was a case of borrowing the Italian
'solution' and imposing it elsewhere.



Published on Friday, September 30, 2005 by 

The Real Threat of Fascism 
by  Paul Bigioni 

Observing political and economic discourse in North America
since the 1970's leads to an inescapable conclusion: the vast
bulk of legislative activity favors 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 last 25 years. Digging deeper into twentieth
century history, one finds this steadfast focus on the
well-being of big business in other times and places. 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. His answer was,
"Yes, but we will call it anti-fascism".

By exploring the disturbing parallels between our own time and
the era of overt fascism, I am confident that we can avoid the
same hideous mistakes. At present, we live in a constitutional
democracy. The tools necessary to protect ourselves from
fascism remain in the hands of the citizen. All the same, I
believe that North America is on a fascist trajectory. We must
recognize this threat for what it is, and we must change
course. I propose to identify the core economic elements of
fascism. In doing so, I will show that present-day political
fashions are leading us down the path already trodden by Italy
and Germany.

Consider the words of Thurman Arnold, head of the Anti-trust
Section 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 mobŠ
        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, Thurman Arnold's words are
bewildering. Most people today are quite certain that they
know what fascism is. When I ask people to define fascism,
they typically tell me what it was, the assumption being that
it no longer exists. I have asked this question on numerous
occasions, and the usual answer contains references to
dictatorship and racism which trail off into muttering when
the respondent realizes that he or she knows almost nothing
about fascism's political and economic characteristics.

Before the rise of fascism, Germany and Italy were liberal
democracies. Fascism did not swoop down on these nations as if
from another planet. To the contrary, fascist dictatorship was
the end result of political and economic processes which 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 very 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
clamored for self-regulation in business. By the mid 1920's,
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 which effectively 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 reduction of certain 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 labor by making strikes
illegal.  Notwithstanding the socialist terms in which he
appealed to the masses, Hitler's labor 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) labor was the crowning
achievement of Nazi labor relations.  Along with millions of
people, organized labor 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 labor 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 "Urbeit Macht
Frei" - "work shall set you free". I do not know if this was
black humor 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, F.I.A.T.
and the Ansaldo shipping concern being the chief examples.
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 share cropper 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 labor and management
representatives.  The corporazioni would resolve all
labor/management disputes, and 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
laborer to the status of peasant.

Mussolini the one-time socialist went on to abolish the
inheritance tax, a measure which favored 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 US
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 held 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 20's and
30's, business associations clamor 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. 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 which 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 quite certain, however, that President Clinton
was not worrying about fascism when he repealed federal
antitrust laws that had been enacted in the 1930's. The
Canadian Council of Chief Executives is similarly unworried
about fascism when it lobbies the Canadian government to water
down our Federal Competition Act. (The Competition Act
regulates monopolies, among other things, and itself
represents a watering down of Canada's previous antitrust
laws. It was essentially written 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 which recognizes the political danger of monopolistic
conditions. Antitrust laws do not just protect the
marketplace, they protect democracy.

Our collective forgetfulness about the economic nature of
fascism is also dangerous at a more philosophical level. As
contradictory as it may seem, fascist dictatorship was made
possible because of the flawed notion of freedom which held
sway during the era of laissez-faire capitalism in the early
twentieth century. It was the liberals of that era that
clamored for unfettered personal and economic freedom, no
matter what the cost to society. Such untrammeled 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 which 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 twentieth 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 postwar 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
labor 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 1900's.) Neo-liberals call
relentlessly for tax cuts which, in a previously progressive
system, disproportionately favor the wealthy. Regarding the
distribution of wealth, the neo-liberals have nothing to say.
In the result, 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
that he is being ripped off. The racist 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
Freidman 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-15Š". 
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, I respectfully suggest that we must reexamine what we
mean when we throw around the word "freedom". We must conceive
of freedom in a more enlightened way. Indeed, it was the
thinkers of the Enlightenment that imagined a balanced and
civilized freedom which did not impinge upon the freedom of
one's neighbor. 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 practicing in
Markham, Ontario, Canada. He is a commentator on trade and
political issues. This article is drawn from his work on a
book about the persistence of fascism .


"Apocalypse Now and the Brave New World"