Fascism 101 (Part 1): The Economics of Fascism

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[NOTE: This the first part of a three-part series. Part 2 will be posted on Monday, December 5th; Part 3 will be posted on Thursday, December 8th]

What is the economic policy of fascism?

The US is already at a turning point in the road. One can only marvel at the brilliance of the elite subterfuge known as the Obama juggernaut. US corporate interests funneled over half a million dollars into the Obama campaign, which was pushed into power on the idea of “change”. The subterfuge involved was that the new administration was from the beginning a tenacious defender of the status quo, and duly proceeded once in office with policies very much in line with prior administrations.

However, the pursuing of the same old strategy of capital accumulation and growth that the US elite pushed through beginning in the 1980s (neoliberalism) will clearly not work thirty years down the line. The same old strategy will not only fail to provide broad prosperity to the masses, but will more importantly fail to ensure continued capital accumulation for the ruling classes. This will eventually lead to a disinvestment in the status quo by the masses as well as many sections within the elite. Already there are growing rifts between different interest groups within the US ruling class. What happens next will be contingent upon the results of the political battle to determine where the new course takes us.

One option is that the US will become more in line with the European “social democratic” capitalist welfare states. This could only occur if the ruling classes felt so threatened — by the possibility of rule by the majority (communism) and/or the likelihood of the destruction of pretty much everything by war or environmental catastrophe — that they would be willing to make a compromise with the working class.

This compromise would be basically thus: the capitalist classes would continue to rule over society, but they would accept lower levels of capital accumulation (and a slow-growing economy), disinvest in the war economy (disassemble the global military apparatus) and funnel a portion of the surplus they appropriate toward providing a bare minimum existence to the masses of people in the form of the welfare state — free education for all, universal healthcare, etc.

The option of a communist revolution in which the capitalist classes are completely overthrown and the whole of society’s bounty is distributed democratically seems highly unlikely in the US at this time, therefore I won’t pursue this scenario.

The other option, which for a number of reasons I think more likely than either of the above, is a renewed drive toward capital accumulation for the capitalist class through fascism. What do I mean by fascism? There are a number of theories of comparative fascism, which is to say what constitutes “fascism”. These are, without exception, all political theories, and treat fascism primarily as a political project. My contention is that fascism is best understood as an economic strategy.

Some people say we live under conditions of fascism today. This is untrue. We do indeed have a great deal of corporate/government collusion, but this is typical in a capitalist economy. A fascist strategy for renewed capital accumulation in the US would necessitate the following:

  • Active suppression of labor. This means the destruction of existing labor institutions, the outlawing of the right to organize, and the actual disciplining of labor inside and outside of the workplace through a number of means up to and including physical violence. The goal of these policies is to lower the wages of US workers until they are more in line with (and thus competitive with) wages in other nations.
  • Closing the US borders to labor from abroad. Probably the first act of a fascist government in power would be to close the borders to foreign labor, which is a top priority for the popular right-wing movement that would help them gain ascendancy. Anti-immigrant, anti-foreigner and other racist policies are probably the only political plank upon which all elements of the fascist movement will be in absolute accord. For the right-wing masses, this means they will not be competing for unskilled jobs with non-US-born peoples. For the fascist elite it means providing a convenient scapegoat for popular anger, and also acts as a step forward in their longer-term goal of closing off the US economy from the world economy.
  • Closing the US borders to foreign capital, materials, goods and services. The idea, if it was to be at all articulated, would be to close off the US economy from the world (likely in response to some world economic crisis that would threaten to “contaminate” the US). This period of separation would serve as a time to retool the American economy and make it more competitive through labor suppression and a “jobs and public works” strategy.
  • Jobs and public works. We noted above that this strategy would involve a combination of suppressing labor until wages for US workers become competitive with wages of workers elsewhere. An additional critical element to creating conditions for economic recovery consists in rebuilding America’s dilapidated industrial infrastructure. Only once US borders are closed to foreign commodities — let’s take as our example Chinese steel — would it make economic sense to put people to work building steel mills inside the US. This would serve a dual economic and political function. Economically, it would rebuild US industrial capacity which has been decimated by years of neglect and lack of investment, which would lead to the potential for the US to be a dominant economic power once again years down the road. Politically it would be a propaganda coup for the fascist regime if it were able to re-open steel mills in the Rust Belt and provide jobs for ordinary Americans, making the proverbial desert bloom. Such public works could include as a fundamental component the mobilization of the masses in the US on behalf of a war effort, either as cannon-fodder or workers producing military hardware, though this analysis becomes problematic. [See Imperialism, below]
  • The active encouragement of monopolization of industry, in the form of mergers and the creation of business cartels. This would be necessary because even if the US closes its borders, this act will not put an end to inter-firm competitive pressure which leads to mechanization of work. By eliminating competitive pressure between rival capitalists, it would be possible to reverse or at least put a halt to the relentless mechanization of labor.
  • Reverse or put a halt to the mechanization of labor. Essentially this would mean allowing certain groups of people living in the US (i.e. bona-fide “citizens”) a portion of the new surpluses created in the production process in the form of a wage, which is the time-honored capitalist method of wealth distribution. Even though the technology would exist to make these jobs unnecessary — that is to say machines could be doing them instead of people — under a fascist regime people will be doing them anyway so they can collect a wage. This runs counter to a socialist strategy in which people are provided a living stipend and are not required to work as their jobs are made obsolete by mechanization.
  • Reneging on debt. The primary factor which will determine whether nations go toward autarkic (fascist) policies or social democratic policies will be the extent to which the nation and their peoples are indebted. Closing off to the world economy would mean that reneging on debt would have no serious consequences to US economic activity. Reneging on US debts will not only hit the “reset” button on the capital accumulation process for the US elite, but will also score a major political victory among the domestic masses. It’s not for no reason that the Nazis’ enemy #1 in the early years of the Party was (“Jewish”) international finance, or that as soon as Hitler came to power, reparations (i.e. debt payments) ceased completely.
  • Accumulation by loot and plunder. This will occur through expropriation of property of internal enemies (dissidents, etc.) and from undertaking new invasions (Iran?).
  • Imperialism. Fascist regimes typically have different relationships to imperialism. We admit this element of the equation is probably the most difficult to predict. Fascist regimes always emerge out of declining empires (Portugal, Spain) or failed attempts at imperial reconstitution (Italy). The case of Germany was much more drastic than many other fascist regimes in part because of the rapidity with which they lost pretty much every part of their global empire during the Versailles negotiations at the close of WWI, and additionally had portions of their own contiguous territory occupied by foreign powers in the years of peace. The big unknowns here are that 1) the US has the largest military empire ever in human history, 2) the US has already attempted to respond to underlying conditions of economic stagnation through exponential extension of empire which only continues at present. This element is difficult to predict because it is contingent upon future events which have not yet occurred. Military defeat in Afghanistan? A terrorist attack on the US homeland? Impossible to say. Future events will determine what role imperialism will play in a fascist regime.

These are the policies we expect will be put in place by a fascist government. Such policies would not necessarily have to come into effect all at once or immediately. For a fascist economy to “work” (i.e. to generate economic growth) it would optimally have to have all these constituent elements. Parts 2 & 3 in this series¬†will address questions such as who would constitute a “fascist government”.

With this list, anyone who is interested can accurately identify fascism. For example, many liberal critics of the Bush II administration criticized the regime as fascist. However, they based their analysis only on political categories, such as disdain for human rights, which can easily exist in non-fascist societies. However, reneging on debt never happened under Bush II, though it was a key point in the establishment of historically fascist regimes. I would argue that this historical difference is not superficial, but rather constitutes one of the fundamental features of a fascist regime.

Obviously there are a number of demographic, cultural and political trends which point toward fascism, but none constitute the central contradiction which drives a society into this acute stage of crisis. Reactionaries tend to blame “national decline” and economic stagnation on moral and cultural degeneracy, racial miscegenation and a host of other ridiculous notions. I would counter these arguments with an analysis based on material “real world” conditions happening in real time (“history”).

Of course, it’s up to the reader to decide which argument appears more convincing.


Written by Tim Horras, Chairman, Philly Socialists (http://www.phillysocialists.org).

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