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Posted on December 16, 2010 by ClassicalLiberalism When we hear about fascism, naturally many first start to think about nationalism, militarism and antisemitism of Hitler’s National Socialist  Germany or perhaps similar things about Italy’s Fascist Mussolini. Once you peel the top layers back, one will see that fascism is socialism in disguise.  Here I will be dealing primarily with the economic connections of Socialism and Fascism. In a letter to Fabian leader Bernard Shaw, Keynes said he was writing a book on economic theory “which will largely revolutionize … the way the world thinks about economic problems. When my new theory has been duly assimilated and mixed with politics and feelings and passions, I can’t predict what the final upshot will be in its effect on action and affairs.”

Keynes made his objective clear with the following observation in his General Theory of Employment Interest and Money: “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.” Keynes’ most important book, The General Theory of Employment Interest and Money, was first published in 1936 and was immediately hailed by Socialists everywhere. It is important to stress that Mrs. Joan Robinson, an internationally recognized Marxist, was one of the main economic experts who collaborated with Keynes on his project. Another leading Socialist economic expert, R. F. Kahn, contributed so much that “his share in the historic achievement cannot have fallen very far short of co-authorship.” Source

Mrs. Joan Robinson was highly regarded by Keynes, who in The General Theory generously praises her for her contribution to his work. It is therefore important to note carefully Mrs. Robinson’s statement that the differences between Marx and Keynes are only verbal. Writing in the Communist journal, Science and Society, winter, 1947, p. 61, Mrs. Robinson said:  “‘The time, therefore, seems ripe to bridge the verbal gulf.” The only real difference between the Marxians and the Fabians is one of degree and tactics. Source It was the famous historian, Eric Hobsbawm (original surname: Obstbaum),  who later became known as one of Britain’s most resolute Communist. Hobsbawn clearly saw only slight differences between Communism and Nazism at that time. It’s obvious for anyone who has studied Keynes the man and his work, that socialists of all stripes were large admirers of  his economic ideology. This includes national socialists and fascists. As an economic system, fascism is SOCIALISM with a capitalist veneer. In its day fascism was seen as the happy medium between liberal (Free market) capitalism and revolutionary MARXISM. Fascism substituted the particularity of nationalism and racialism—“blood and soil”—for the internationalism of both classical liberalism and Marxism.

Read more on the History of Economic Fascism
Here we can see that fascism gives the illusion that “private property” exists so long as it is used for the “greater good”, “national good”, “public good”, and so on.

Communism and socialism are more honest about what they claim to be: they admit that no one has a private life any longer, and that all goods, services, and human beings are the property of the state. One may argue, as I do, that this is evil, but it is also honest.

Fascism, however, is both dishonest and evil. The fascists claim that there is such a thing as private property, with all the responsibilities of ownership, and the facade of ownership — yet, the state controls the “owner’s” every decision on penalty of fine or imprisonment (or both).

In the ultimate analysis, there is no real difference between any of these systems. The divergences in specifics of ideology are debatable in academia but not to the regular individual being oppressed by the State. All hold human beings as right-less. Individuals cannot act freely provided that they respect the rights of others; they can only act with permission from the state. Both socialists and fascists have taken a great liking to massive economic interventionism and Keynesian economics. Benito Mussolini said “Fascism has taken up an attitude of complete opposition to the doctrines of Liberalism, both in the political field and in the field of economics”. (Source)
Obviously, Mussolini and Hitler were opposed to the individualist concept of economic liberalism. They were anti-liberal to an extreme but today this is referred to as classical liberalism.  This, if not labeled properly, is often called libertarianism and also fits some strains of American conservatism. It should also be noted that not only Hitler and Mussolini were against the philosophy of classical liberalism, but so was Lenin, Stalin, Mao and all the other collectivist/statist rulers of the time. With classical liberalism ousted as an option, the rivalry between two competing collectivist systems occurred in the early twentieth century. Mises pointed out that fascism “began with a split in the ranks of Marxian socialism…. Its economic program was borrowed from German non-Marxian socialism” and that “its conduct of government affairs was a replica of Lenin’s dictatorship.” Mises also argued that the philosophy of Nazism was “the purest and most consistent manifestation of the anticapitalistic and socialistic spirit of our age”. The traditionalist Marxists and the Fascist’s, therefore, are rather like two baseball teams fighting for power over people with the same mindsets. Hence, like two competing teams of any game, there was a bitter rivalry back in the early 20th century and dissent would cause too much social interruption so it could not be tolerated by any of the rulers.
To tie these systems together it should be noted that Mussolini personally set his approval and signature over a book which proclaims:

“Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a [so called] Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (l926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.”and ‘”all that (Keynesian teaching) is pure Fascist premises”. (1929), Universal Aspects of Fascism

Hitler was actually Keynesian before Keynes published his General Theory. Observing and admiring the Nazi economic program, Keynes wrote in the foreword to the German edition to the General Theory (1936): Some may ask, “Wasn’t Hitler just a tool of big business”? or “Isn’t Fascism where corporations control the government”? To answer that, I will refer first to the fact that Hitler was named “Man of the Year” in 1938 by Time Magazine. They later noted Hitler’s anti-capitalistic economic policies. The following quotation from Time Magazine accurately helps clarify the common misperception.

“Most cruel joke of all, however, has been played by Hitler & Co. on those German capitalists and small businessmen who once backed National Socialism as a means of saving Germany’s bourgeois economic structure from radicalism. The Nazi credo that the individual belongs to the state also applies to business. Some businesses have been confiscated outright, on other what amounts to a capital tax has been levied. Profits have been strictly controlled. Some idea of the increasing Governmental control and interference in business could be deduced from the fact that 80% of all building and 50% of all industrial orders in Germany originated last year with the Government. Hard-pressed for food- stuffs as well as funds, the Nazi regime has taken over large estates and in many instances collectivized agriculture, a procedure fundamentally similar to Russian Communism.” (Time Magazine; Jaunuary 2, 1939.)

To reinforce the observation by Time Magazine (1939) is Norman Thomas, a six-time American socialist party presidential candidate and leading spokesman for avowed socialists. He correctly puts Nazism in the anti-private enterprise camp:

“The social and economic consequences of fascist triumph under the German form were revolutionary, unless one insists on reserving the word revolutionary for a triumph of the working class. In no way was Hitler the tool of big business.” Source

This excerpt from a summary of a book- The Dictators (by Richard Overy) comparing Hitler and Stalin says: “But the resemblances are inescapable. Both tyrannies relied on a desperate ideology of do-or-die confrontation. Both were obsessed by battle imagery: ‘The dictatorships were military metaphors, founded to fight political war.’ And despite the rhetoric about a fate-struggle between socialism and capitalism, the two economic systems converged strongly. Stalin’s Russia permitted a substantial private sector, while Nazi Germany became rapidly dominated by state direction and state-owned industries.”

The will to LIVE: When people argue that initially small and large business preferred Germany’s national socialism over the Soviet Union, Ludwig von Mises (1940) gives a very simple reason:

“The fact that the capitalists and entrepreneurs, faced with the alternative of Communism or Nazism, chose the latter, does not require any further explanation. They preferred to live as shop managers under Hitler than to be “liquidated” as “bourgeois” by Stalin. Capitalists don’t like to be killed any more than other people do.”

Hitler helped clarify his position on private property and capitalism by stating

“The party is all-embracing… Each activity and each need of the individual will thereby be regulated by the party as the representative of the general good…This is Socialism- not such trifles as the private possession of the means of production. Of what importance is that if I range men firmly within a discipline they cannot escape. Let them own land or factories as much as they please. The decisive factor is that the State, through the party, is supreme over all, regardless of whether they are owners or workers…Our Socialism goes far deeper…[the people] have entered a new relation…What are ownership and income to that? Why need we trouble to socialize banks and factories? We socialize human beings.” (1940, Hermann Rauschning in The Voice of Destruction, p. 193)

As you can see, Hitler was less concerned with who technically “owned” property and more concerned with the fact that himself (or the National Socialist German Workers Party) would be the ultimate decision maker as to how property (including humans) would be used, compensated, and allocated. That is the basic tenant of socialism  but it is called fascism. This means that most countries of the world, even if they are called socialist,  are actually economically fascist. It can then be said that “private property” exists in name only which means that it is not capitalism and certainly not “free-market capitalism”. Some may argue that it is not pure socialism either, which is partially true as Fascism has been called the “third way”. The problem with this argument is that ultimately the State dictates and “allows” what can be done, how it is done, and how something is allocated. Therefore Fascism is just a variant–or the more practical evolution–of the classical ideal of socialism.
To firm up how the Nazi’s felt about private property (capitalism):

“…All property is common property. The owner is bound by the people and the Reich to the responsible management of his goods. His legal position is only justified when he satisfies this responsibility to the community.”  (Ernst Huber, Nazi party spokesman; National Socialism, prepared by Raymond E. Murphy, et al; quoting Huber, Verfassungsrecht des grossdeutschen Reiches (Hamburg, 1939) Source

Hitler had an obvious hatred for liberal capitalism though but he also hated the communists. The reason for this dual hatred was for very different reasons. He believed the Jews (often considered synonymous with “capitalist”) were the cause of all the nations troubles. He hated the communists because of their internationalist agenda, Ideas of class conflict,  and obviously the bitter rivalry for power over the same people and property. He felt that they needed to be united rather than be in conflict with each other. The unification was either accepted, accomplished  by force, or dissenting purist ideologues were imprisoned or killed.

“We are socialists, we are enemies of today’s capitalistic economic system…. and we are all determined to destroy this system under all conditions.” —Adolf Hitler (Speech of May 1, 1927. Quoted by Toland, 1976, p. 306)

Some will say that Hitler was just saying these things to gain support of the communists and social democrats. It is not a stretch to look at the results of his actions to see that he was not a liberal capitalist and despised the fact that individuals and businesses would go against the collective “Will of the nation”.

In discussion with Hermann Rauschning Hitler acknowledged that,

“I have learned a great deal from Marxism, as I do not hesitate to admit. The difference between them and myself is that I have really put into practice what these peddlers and penpushers have timidly begun. The whole of national socialism is based on it…I had only to develop logically what Social Democracy repeatedly failed in because of its attempt to realize its evolution within the framework of democracy. National Socialism is what Marxism might have been if it could have broken its absurd and artificial ties with the democratic order.” -(The Voice of Destruction, pg. 186).

Despite some ideological differences between Communists and National Socialists, they had a unified cause against liberal capitalism and limited government. It is a matter of record that in the German election of 1933, the Communist Party was ordered by its leaders to vote for the Nazis—with the explanation that they could later fight the Nazis for power, but first they had to help destroy their common enemy: capitalism and its parliamentary form of government. The slogan was “first brown, then red”. James Gregor, a liberal professor at the University of California, Berkeley, is well known for his deep research on Marxism, Fascism, and national security. He concluded that it is fascism’s “national socialism” in the name of modernization, national unity, and international political rivalry among states that has been the dominant form of socialist ideology in the 20th century. And most fundamentally what bound communist, fascist, and Nazi socialism together as a single force in our time was their common hatred and opposition to individualism, limited government, free-market economics, and a civil society outside and independent of political control.  Future of Freedom Foundation

James Gregor locates the origin of the false dichotomy between “right wing” revolution and “left wing” revolution in the first Marxist-Leninist interpretations of Fascism. According to this original interpretation, Fascist dictatorships arose when the ruling bourgeoisie attempted to stave off the impending socialist revolution by installing a dictatorship that would protect their interests. Gregor dismisses this argument as being “at best, a caricature of the actual political and historical sequence” (p. 36) and argues that the regimes of both Mussolini and Hitler displaced the traditional bourgeoisie from power and subordinated the bourgeoisie’s interests to the collective national interest (pp. 40-42). According to Fascist ideology, the means of production and the forces of the market, under the control but not the ownership of the state, are seen as instruments to coordinate and harmonize the productive forces of the nation for the good of all classes. Gregor concludes that Fascist regimes are not in the service of any one particular class, but seek a harmony between all the classes. Source
In adding to Gregor’s writings about fascists seeking harmony between all classes, Benito Mussolini said,

“Fascism recognizes the real needs which gave rise to socialism and trade-unionism, giving them due weight in the guild or corporative system in which diverent interests are coordinated and harmonised in the unity of the State.” –Doctrine of Fascism

As you can see, the obvious difference between fascism and the classic version of Marxism is the notion of class conflict and equality. Traditionally, socialists believed in a single class (or classless) society with an all powerful scientific elite that actually decides the important decisions about the social, economic, and political life for the masses. Fascists believed unequal “divergent interests” could be brought into harmony through the state. This is also known as corporatism; harmonizing special interests such as agricultural, business, ethnic, labour, military, scientific, and religious affiliations all into a collective body. The state is the ultimate merger of these interests.
When Mussolini broke with the Socialist party in 1914, it was over whether or not Italy should enter World War I. Following Marx’s internationalist doctrines, the “Socialist” (Marxist) party was neutralist and anti-patriotic but Mussolini soon became uncomfortable with that for several  reasons:
1) It had already become fairly clear even before the war that the workers were nationalistic and patriotic rather than class-conscious — so the Marxist vision of the workers of the world uniting regardless of nationality was just not going to happen. And all that was thoroughly confirmed when the mainstream Leftist parties of the various European countries lined up behind their respective national governments in World War I. So it was nationalism and patriotism rather than class-struggle that would most move the workers. And, as the aspiring leader of the workers, Mussolini had to follow that!

2) Gregor also delved into the writings of Fascist theorists in order to show that Fascism is a “variant of revolutionary Marxism designed to address the reality of lesser developed nations” (p. 133). Traditional Marxist theory argues that Capitalist economic practices contain within them conflicts that only a proletarian revolution can transcend. However, social liberation via revolution of the proletariat can only be achieved after the Capitalist industrial system of a nation develops to the point where it can provide the material conditions and abundance needed to achieve social harmony. In lesser industrially-developed countries, which do not have the material conditions for a genuine Marxist proletarian revolution, a different mode of industrialization had to be achieved that did not leave those same countries subservient to the interests of international capitalists. It is out of this background that Fascism arose. Source FDR and New Deal Fascism:

Now some important information and quotes which show that FDR implemented fascist policies for the United States, even though he was dominated by Fabian Socialists (labeled “Progressive” in America). Stuart Chase was a progressive (fabian) who was fundamental in the planning and writing of the “New Deal”. Chase, himself, did not find much use in differentiating between state capitalism, state socialism, fascism, or communism because the general “progressive” goal is to keep inching towards totalitarian collectivism, by whatever methods or labels possible. Many will label the New Deal as socialism which it is, but it is also considered fascist. Again, these systems are variants or sisters to each other and overlap in the most important areas while contrasting in the minors which is mainly for academia to debate.
The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies” and “the development toward an authoritarian state” based on the “demand that collective good be put before individual self-interest.” (Reason Magazine)

“Roosevelt and his “Brain Trust,” the architects of the New Deal, were fascinated by Italy’s fascism — a term which was not perjorative at the time. In America, it was seen as a form of economic nationalism built around consensus planning by the established elites in government, business, and labor.” Srdja Trifkovic
Mussolini saw the connection of FDR and himself: In a laudatory review of Roosevelt’s 1933 book Looking Forward, Mussolini wrote, “Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices…Without question, the mood accompanying this sea change resembles that of Fascism.” (Reason Magazine)

Fascist Mussolini himself praised the New Deal as following his own corporate state, as quoted in a July 1933 article in the New York Times, “Your plan for coordination of industry follows precisely our lines of cooperation.” Source

As you can see today, it is not just National Socailist Germany or Fascist Italy that had begun to incorporate the economics of fascism.  It goes under several names today as “Fascism” is not a popular word to use. Some common names for economic fascism today are “industrial policy”, “planned capitalism”, “state capitalism”, “corporatism”, “crony capitalism”, “Fabian socialism”, “State socialism”, “socialism”, “Marxism”, etc.
Hitler himself welcomed the ideology of Keynes, as did Mussolini. In fact, Hitler was the chief keynote speaker at the March 15, 1942 Fabian International Bureau’s Conference and made the comment that “there is not much difference between the basic economic techniques of Socialism and Nazism.” ALOR.org
Hitler had genuine admiration for the decisive manner in which the President had taken over the reins of government.

‘I have sympathy for Mr. Roosevelt,’ he told a correspondent for the New York Times two months later, ‘because he marches straight toward his objectives over Congress, lobbies and bureaucracy.’ Hitler went on to note that he was the sole leader in Europe who expressed ‘understanding of the methods and motives of President Roosevelt.’ Future of Freedom Foundation

Hitler sent the following letter to U.S. Ambassador Thomas Dodd on March 14, 1934:

The Reich chancellor requests Mr. Dodd to present his greetings to President Roosevelt. He congratulates the president upon his heroic effort in the interest of the American people. The president’s successful struggle against economic distress is being followed by the entire German people with interest and admiration. The Reich chancellor is in accord with the president that the virtues of sense of duty, readiness for sacrifice, and discipline must be the supreme rule of the whole nation. This moral demand, which the president is addressing to every single citizen, is only the quintessence of German philosophy of the state, expressed in the motto “The public weal before the private gain.”  Future of Freedom Foundation The American classical liberal writer, John T. Flynn wrote in his book As we go marching,

“the New Dealers … began to flirt with the alluring pastime of reconstructing the capitalist system … and in the process of this new career they began to fashion doctrines that turned out to be the principles of fascism.”

Flynn, in another penetrating examination of the “creeping revolution” in the U.S.A., The Road Ahead, stated

Regardless of what they call it today, as Ludwig von Mises stated in his 1922 book Socialism: “The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state. Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name. The most recent slogan is “State Capitalism.”[Fascism] It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the “classic” ideal of egalitarian Socialism.”

This post is entirely excluding the progressive Eugenics movement of America and it’s relation to Hitler. That will be for another post.

Rather than attacking and bickering over which collectivist/statist system is better or who is more fascist or who is more socialist, the true alternative available for America is the true progress of Natural Law in the Classical Liberal tradition. Free minds, free markets, and limited government. Arguing for one collectivist evil or another is futile and will end the same way it always has; in oppression and death. “And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works” — Frederic Bastiat’s concluding paragraph in his classic work, “The Law.” , 1850

Full books for free:

Keynes at Harvard -Fabian Socialism, Marxism, and Fascism.
As We Go Marching, (soil fascism, bad fascism and good fascism) John T. Flynn- Full Book
The Road Ahead: Americas Creeping Revolution by John T. Flynn- Full Book
Socialism– By Ludwig von Mises


Concise Encyclopedia of Economics-Fascism
A History on Economic Fascism
The Fabian Socialist Contribution to the Communist Advance


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