Economic Update: Fascism: An Analysis for Today



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[S9 E12]

On this week's show Prof. Wolff presents an in-depth analysis of fascism as massive government intervention to protect and save a crashing capitalism. We focus on today's examples, historical parallels (in Germany and Italy), and how "strong men" leaders push fascist agendas. We discuss how fascism and socialism differ and how nationalism serves as fascism's social "disguise.

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Transcript has been edited for clarity. 

Welcome friends to another edition of Economic Update a weekly program devoted to the economic dimensions of our lives, jobs, debts, all of that. I'm your host Richard Wolff, and it's my pleasure to bring to you each week the updates and the analyses that may make the economic system more understandable, and subject to the change it so badly needs. Today's program is going to be devoted in a sense to a single topic: fascism. It is back on the radar all around the world in a way that we haven't seen since pretty much the 1930s, almost a century ago; and in that, lies a lesson that we're going to develop in this program. 

But first, let's talk about how it is back in the news, and why first, and perhaps most important, is to recognize that the fascist response to society's problems has very often featured what is called a strong man. The way this game is played out politically, is that the society, as it begins to crumble, and we're talking about capitalist societies, whether in the 1920s and 30s in Germany, or Italy, or Japan, or any of the other countries which had this kind of problem, when capitalism begins to unravel, to fall apart, one of the responses understandably, is for someone to step up and say: well the society is falling apart. 

The traditional political parties are not being able to function, or they're not saving the situation, so here I am the strong man who will lead us out of all of this trouble. Let's go through the current crop of strongmen. You all remember the old crop: the Mussolini, the Hitler, etc. Well today, we have in Hungary: Viktor Orban; in the United States: Donald Trump; in Brazil: Jair Bolsonaro. I could go on, but you get the picture. They're popping up all over the place. In France, you don't yet see them in power, but you see them running political parties. Marine Le Pen in the National Front organization; in Germany there's a political party that has zoomed into prominence called The Alternative for Germany, Alternative für Deutschland; and again, you can see in Spanish politics; you can see it in the government of Italy, and so on. The emergence of strong popular leaders like Mr. Trump, who's going to sort it all out:  first, throw away the old Republicans, and throw away the old Democrats; and he's going to do it all. 

But beyond that political game, there is something very serious going on. Whenever capitalism has crashed, suffered not just another economic downturn - they have that in capitalism every 4 to 7 years - but a real big one, where millions of people lose their job, not for six months, not for 18 months, but for years on end. Whenever that has happened, you begin to see anxiety; and you see two kinds of anxiety. One: “we have to do something to save capitalism; it's in mortal danger.” That's one reaction. That's where fascism lies. But, there's also another reaction. There's the reaction of: capitalism is irreparably broken, and we need to go to a different, better system. So the solution isn't save capitalism, but go beyond it; take society to a new and different system that doesn't crash, like this capitalism just has.

Sometimes both of these movements get lumped together, under names like populism. That's the popular one this time. The idea being people are scared; people are worried; people are looking for new directions; people are angry about what's happening to the mass of people from this crumbling economic system. So you can lump them all together, but lumping them is itself a political act, an ideological act, because they are fundamentally different. Saving the system through a strong man who can carry us through, is a very different political project from saying goodbye to capitalism and moving on to one or another alternative. 

We have names for the effort to hold on to capitalism, to keep it going in a new way, with a strong man, that's called fascism. The effort to go beyond a broken capitalism usually goes by the name socialism or communism, and as I'll point out these two alternative reactions to crashes of capitalism usually hate each other, struggle tremendously against each other and have often been very very unkind as I will explain. 

Let's begin with the analysis of what is fascism. Fascism is basically the name for an economic system even though the word has been used for many things. But in economics, fascism is when the government is called in. The government steps in to reinforce, to support, to sustain private capitalist enterprises. Those private capitalist enterprises left to themselves are falling apart; they can't sell their goods; they can't maintain their job roles; they lay people off; they cut back; they plunge people into a situation of no job, no income, no prospects. It's a mass suffering; and the capitalist system is called into question, when people see it performing this badly. That's what happened in 1929 that led into the Great Depression of the 1930s; and that is what happened in 2008, that led to the last 10 years of economic crisis, of political upheaval, where the strongmen could emerge and have an audience, etc. 

The fascist solution to capitalism's breakdown is to bring in the government to support private capitalist enterprises. It is sometimes referred to as a merging of the government and private enterprise, not to go to another system, but to keep the existing system going. What does the government do in fascism? It helps private capitalists by getting rid of the trade unions, and replacing them with its own organizations, run by the government, controlled, so that they support, rather than challenge private capitalists.

Here's the second one: the government comes in and does for private companies what they couldn't do for themselves. It rearranges foreign trade, so that domestic capitalists have an easier time selling their goods abroad, and blocking imports, so they can sell to their own people, because the government has prevented imports from coming in by way of tariffs, for example. The government comes in and deregulates - that's a clever term to say that the regulations that are costly to capitalists are removed, and the regulations that help them are enhanced. That's typically what fascists do. They typically like to boost the economy by an enormous expenditure on the military, putting people to work in the military, and putting people to work producing the guns, the bullets, the planes, and the uniforms of those people in military, as a tremendous way to stimulate, and support, and to profit private capitalist enterprises. Military and capitalists, government and capitalists merging together to run the system in a way that builds up capitalism, captures what has to be done that the capitalists couldn't do for themselves, and makes this system have some more life. It's all about saving capitalism.

Now the problem is, of course, that while they're doing that, the other side of the reaction to capitalism's crashes is not sitting by and having tea. The socialists point to the breakdown of capitalism and say “see we told you so.” Capitalism is a system that, among its other flaws, like making people very rich or poor, and very little in the middle, has another flaw called instability. It crashes. It crashed all the time; and every now and then, it crashes big-time. Socialists then surge, because they have an explanation, and they have a solution. The way we deal with a capitalism that crashes; that plunges millions into unemployment; that makes people have more and more needs, even though it cuts back the production that could meet those needs, for no reason that anybody can understand, other than to keep the private capitalists in control, which they want to stay in.  

The Socialists appeal to the mass of people, particularly those unemployed, those without income, those whose education had to be interrupted, those who see no future, and say it's overdue; we should get to a different economic system. They want the government to help that project. Don't save capitalism; that's fascism. Help the mass of people move beyond capitalism to a socialist system, where things are run not for capitalists, but for the mass of people; where things are run to enable people to control their lives, rather than controlling them in the interests of a system that already shows it can't work without that kind of rigid control. 

Fascism means the control of a population to save capitalism. Socialism means to go beyond it. The two have trouble. One of the things the fascist political parties, the fascist leaders offer to the big businesses that they're saving, is to squash, to remove, to end the power of the Socialists. Typically they have done that not only in legal ways, but in illegal ways. Let me just give you a few examples from history. The leading communist intellectual and political leader in Italy, at the time of the rise of Mussolini's fascism, was a man named Antonio Gramsci. In the 1920s, when fascism arose, because capitalism, while not crashing quite, was having terrible troubles and messing up people's lives, Mussolini arrested Antonio Gramsci; put him in jail for the rest of Gramsci's life and effectively killed him. 

The other major fascist leader in the 1930s, Adolf Hitler will go down in history, as he already has, for having killed people on a scale and with a ferocity we've really rarely seen in human history. Socialists, communists, as well as Jews, and Gypsies, and others, were simply destroyed physically, so that they would be removed, as we're all the leaders of independent workers organizations. Fascists kill socialists almost everywhere where you see fascism; and that's a service they provide to capitalists too, because it destroys the most active leading forces within the working class, saying that the solution to a broken capitalism is to go somewhere else.

We continue with our discussion today of fascism, particularly the economic forms of fascism. Capitalists are in trouble, and that they're going to need to change the way the world works for them to survive. The old way, which in our case right now was free trade, globalization, allowing money and people to move around the world to wherever the jobs and the profits are, the whole free trade world, won't work for capitalism anymore. They're not making the kind of money they wanted to; they're laying people off; they're going through a crisis, like the crash that happened in 2008. 

Fascism is the plan to get around all those problems, by reorganizing and having the government come in, not the government staying out, while private enterprises do their thing. That's what got us into the crash of 2008. Now it's the government stepping in and making a capitalism work that can't work without the government. That's why in the last months of 2008, the same capitalists, businessmen, big business tycoons, who had denounced the government as unnecessary and wasteful, flew to Washington in their private jets and begged for the government to come in and save them. However, turns out a quick fix wasn't enough. They needed the government to be there a long time. This is what happens when capitalism crashes, and fascism steps in. But, the problem with fascism has always been that for the government, which, at least publicly, is supposed to represent all the people, supposed to attend to the needs of all the people, is now busily being used by the biggest capitalists to save them, their profits, their social position, sitting at the top of the economic pyramid that we call capitalism.

The government can't say “we're saving the people who run this show; we’re saving the few who are capitalists; no, we're not going to waste a lot of time on the mass of the people, the majority.” They couldn't possibly say that, because that's not tolerable. There has to be another way that you can justify, another way to contextualize, another way to paint the movement of the government in to support private capitalism. It can't be admitted for what it is. What's the disguise? What's the way to get it done? The answer is really simple: nationalism. It's always been the go-to thing to say, the argument being: the government is stepping in and taking over, getting rid of these people, changing everything and manipulating everything; not to help capitalists, heaven forbid! Rather, to help the nation. The whole nation is at danger, and the government is going to step in and save the nation, meanwhile, taking all the steps that fascism always involves: getting rid of the labor unions; getting rid of the Socialists and communists; getting rid of the regulations that impede profits; manipulating the rest of the world to make things more profitable for your people here; to help capitalists who can't help themselves anymore. Nationalism is the disguise. 

Hitler wasn't helping big business. He even called his party the National Socialist Party, as if he could fool people into thinking that he had something to do with socialism;  and saved Germany from the evil Russians, against whom he went to war, from the Jews, from the gypsies, from the homosexuals, from all the people he then savaged to give the Germans the idea: “I'm saving Germany!” Mussolini did the same thing in Italy. Bolsonaro is talking like that in Brazil. He's saving Brazil from the evil people who threaten the nation. And now, let's use the best example: Mr. Trump. Do we have fascism in America? Not yet. No, we don't have it yet, but boy have we got movement in that direction, and it would be naive and ignorant not to see it. 

Mr. Trump attacked free trade; he attacks globalization; he attacks all the notions of the free market being the best way to organize an economy, something we've been told for the last 50 years. He is going to punish the Russians; he's going to punish the Chinese; he is going to punish the Europeans; he's going to control the trade by hitting them with taxes; the government is going to intervene massively in international trade. He's proud of it. Why? To save the nation! He is going to block the border on the southern part of the United States to save America's... something, from the hordes of caravans coming in and taking away our national identity. Get the picture? He's a strong man who is going to do it. 

In December of 2017, he gave big business the biggest tax cut it had ever seen, after 40 years in which they had become more wealthy, after 40 years in which the wages in America went absolutely nowhere, when business didn't need another boost, they were falling apart, despite the benefits they've gotten. Mr. Trump had to come in and give business another big boost. These are all signs of a nationalism that's disguising a service to capitalists who can't make it on their own, as evidenced by the crash of 2008, and the ten years since then, that have been a lost decade for most American working-class families. 

And yet, there are still people who make an equation between fascism and socialism; who like to think of them as somehow together having a big role for the government, and that that's the issue. That's a remarkable act, given that Hitler attacked and destroyed the Soviet Union; given that every fascist has been the enemy of socialists and vice-versa, for as long as modern history has any records of these two social forces. Yes, they both want the government to step in. But that's where it ends. They want the government to step in for radically different reasons, on a different project, going to a different future. 

The fascists want the government to come in and reinforce, stabilize private capitalist profits. The socialists want the government to come in to help transform society, so it isn't capitalist anymore; so that the number one guide to what gets produced, what gets invested in, isn't profits for a few, but social benefits for the many. The Socialists are the ones who make fun of the notion that if you do something for private profit, it'll trickle down and help everybody else. No it doesn't they point out, which is why the inequality that we have seen in the last thirty years only worsens the inequality that capitalism already had; and that's why the so called solution to the instability of capitalism, it's periodic downturns punctuated by that collapses and crashes that we've been talking about, socialists argue, that's not a system worth preserving; it's not a system that should be fixed up yet again. It is a refrigerator that has broken down so many times, that the only logical and sensible response is to get a new one; to go to a different one, not to keep fixing something that works as badly as this one has now done, and repeatedly. 

Fascism is the effort by the richest people in this society, sitting on top of the biggest corporations, to save the system that made them rich, after it has gone through a crash like 1929, like 2008. That's what it's about: save the system, Get rid of the critics of the system, the left, the Socialists, the Communists, the critics. Shut them up; put them in jail; kill them; get rid of them; then, deregulate, support, subsidize, use the power of the government to support a broken economic system, and do it all in the name of the nation, of the identity of the nation. 

Find people to demonize who threatened the nation, and then act out a drama of squelching them. In Germany it was leftists and Jews; in Italy it was southerners versus northerners, and gypsies, and Jews. In other countries, you invent a good old days mythology, a story of the past when the nation was wonderful, and great, and super, and we're going to go back there. “Make (fill in the blank) great again!” That's a standard play. Hitler called what he was doing the Third Reich, because it had a reich that was the second,  and a reich that was the first. That was the good old days of the past of Germany, and he was going to bring it back. Make Germany great again, literally his slogan. Use whatever supports a nationalism can. 

If you can identify the nation with religion, go for that. Use religion as a way. We're protecting our religion is we're protecting our nationalism; and we're going to have a powerful government that does that, so you can disguise and cover the support for a broken economic system against its critics. Build up the military. Why? Because that too is protecting the nation against foreign endangerment of whatever kind you can conjure up. The nationalist hysteria is a mechanism fascism has always used to support its prime function, which is to rescue, reinforce, and stabilize the instability and the social problems of a capitalist system.

Socialism is a very different project. This is not to say that socialists haven't done terrible things. They have. It is not to deny that violence is not a special political tool of the right. It has also been used by the left. Social violence is a serious problem. But to use it as if it were something peculiar to one or the other side, misses the real point. It misses what is different about them, in whose interests, toward what ends are the means used, means that you approve of, means that you don't. Criticize those that you don't, but don't lose sight of what fundamental difference divides the one from the other. 

We don't have fascism in the United States yet, and maybe it won't come if enough Americans understand what's at stake ,and what's going on so that they can prevent it. There were efforts in the 1930s to move the United States in a fascist direction. Some of you will remember Father Coughlin, you'll remember Huey Long a very important leader in Louisiana. There were people who wanted to go in that direction, but there were people who didn't. That fight saw the defeat of fascism here in the US, even though that fight saw the victory of fascism in Germany. That's why it's important. It's understandable that fascism is in the news, and we need to understand it in order to avoid it. 

Transcript by Maria C. 

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