Fascist Economics Cont’d


Via Econlog, here’s part of Sheldon Richman’s entry on Fascism in the Encyclopedia of Economics:

Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”–that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.

Richman is right to note that the fascist economics weren’t un-totalitarian, they were just indirectly totalitarian. I discuss this at length in the book, particularly in my discussion of the gleichshaltung:

Fascism is the cult of unity, within all spheres and between all spheres. Fascists are desperate to erode the “artificial,” legal, or cultural boundaries between family and state, public and private, business and the “public good.” Unlike communist Jacobinism (or Jacobin communism, if you prefer), which expropriated property and uprooted institutions in order to remake society from the ground up, fascism pragmatically sought to preserve what was good and authentic about society while bending it to the common good. Interests or institutions that stood in the way of progress could be nationalized, to be sure. But if they worked with the regime, if they “did their part,” they could keep their little factories, banks, clubs, and department stores.
It’s revealing that corporatism has many of its roots in Catholic doctrine. The 1891 papal encyclical Rerum novarum proposed corporatism or syndicalism in response to the dislocations of the Industrial Revolution. In 1931 an updated encyclical, Quadragesimo anno, reaffirmed the principles of Rerum novarum. The two documents formed the backbone of progressive Catholic social thought. The Church’s interest in corporatism stemmed from its belief that this was the best way to revive medieval social arrangements that gave man a greater sense of meaning in his life. In short, corporatism was in large measure a spiritual project. Both the cold impersonal forces of Marx’s history and the unloving dogma of Adam Smith’s invisible hand would be rejected in favor of a Third Way that let the “forgotten man” feel like he had a place in the grand scheme of things.
The Nazis had a word for this process: Gleichschaltung. A political word borrowed—like so many others—from the realm of engineering,it meant “coordination.” The idea was simple: all institutions needed to work together as if they were part of the same machine. Those that did so willingly were given wide latitude by the state. “Islands of separateness” — be they businesses, churches, or people — were worn down over time. There could be no rocks in the river of progress. In effect, the entire society agreed to the fascist bargain, in which they bought economic, moral, and political security in exchange for absolute loyalty to the ideals of the Reich. Of course, this was a false security; the fascist bargain is a Faustian bargain. But that is what people thought they were getting.

One of the great recent examples of a liberal gleichshaltung was NBC’s “Green Week” in which the GE subsidiary agreed to propagandize environmentalism in order to seem like a “progressive corporation.” No one on the left complained, because they liked the propaganda (note propaganda can be true or false, the truth of the Green Week message is irrelevant to whether it was propaganda). GE coordinated with the regime, and in turn stands to benefit greatly from the regime’s policies.

Arnold Kling calls what we’re looking at today “progressive corporatism.” It’s a fine label as far as I’m concerned. But it’s basically an updating on what Ron Radosh and others called “corporate liberalism” or what some libertarians called “liberal corporatism.” According to Radosh’s corporate liberalism, “the dominant worldview of American political leaders was not one of laissez faire, but rather a managerial form of liberalism.”

More to the point, the economic similarities[*] between liberal corporatism, corporate liberalism and fascist economics aren’t merely significant, they’re profound. But, I should note, they aren’t identical. Our political culture serves as a vital check on the inherently undemocratic and illiberal tendencies of corporatism. If it were otherwise, Obama wouldn’t be constantly insisting that his takeover of business is only temporary. Whether he’s lying or telling the truth (or simply doesn’t really know) doesn’t change the fact that in America, political realities demand that he say this is all temporary. Let’s hope political reality leads to plain old reality.

Update: Zoiks!

Update II: From a reader:

Dear Mr. Goldberg; Please explain and expand on your statements in today’s LF blog “More to the point, the economic distinctions between liberal corporatism, corporate liberalism and fascist economics aren’t merely significant, they’re profound.” To me they sound like they are rather similar. Interestingly you follow this up with “But, I should note, they’re not identical.” I guess not since they are profoundly distinct. I am profoundly confused. Yours, [Name withheld]

I apologize if I was unclear. But to answer the question, brothers can have profound similarities but nonetheless not be identical, right?

[*]Update III: Woops: From a reader:


Sorry if I’m the 100th person to point this out, but I think the confusion stemming from your last post in the LF blog may be the result of a simple typo.  You probably meant to say:

“More to the point, the economic similarities between liberal corporatism, corporate liberalism and fascist economics aren’t merely significant, they’re profound. But, I should note, they aren’t identical.”

You wrote “distinctions”.

Yup all my boneheadedness. My apologies. I’ve fixed it above.


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