Fascism and Economic Liberalism

Economics Political Theory
1

Frequently, fascism is said to be “capitalist.” If you follow Marxism, this makes sense, since it sees capitalism, in general, as wealth distriibution in favor of the wealthy. Fascism, then, just speeds up the process. By that, I mean that both the fascist and the economic Liberal would be opposed to vast welfare for the poor, government support for unions, and antitrust. But there are a number of important distinctions to be made, which many fail to realize.

The fascist would let the economy be centrally-managed by a cartel of business leaders, whereas the economic liberal would see this act as the government establishing a monopoly, which he would strongly oppose. Whereas the fascist would use government power to suppress unions, the economic liberal would see the right to join a union just as important as the right to not join a union. And finally, fascists are likely to support heavy taxation in support of certain massive government projects, such as defense build-ups, war, or simply distributing the funds to his companies of choice.

So, Fascism is not “capitalist,” in the sense of being free market and is more properly described Corporatist, It is not economically liberal, except in as much as economic liberalism may turn a blind eye to monopolies, which arguably create similar institutions as government-established cartels.

But here’s my question for you, then: Why has it seemed that economic liberalism and corporatism have tended to go hand-in-hand? The example in America is the Republican party. Many people are under the mistaken notion that while the Democrats are social liberals, the Republicans are economically liberal. While there is no doubt some strain of economic liberalism in American conservative ideology, at least its adherents seem to think so, more often than not Republican policies historically have been welfare for the rich. “Supply-side economics,” is a demonstration of what I mean. On the one hand, Reagan touted the free market, but on the other hand, he seemed to think it could only work effectively if the government continually engaged in debt-spending to subsidize the rich.

Ludwig von Mises was clearly not a fascist. However, even looking into Austria’s history, after World War II, economic liberals sided with former nazis to form the “Freedom Party of Austria”. There are many more examples of economic liberals and corporatists working side-by-side. For instance, there is Margaret Thatcher’s adoration of Friedrich Hayek and Milton Friedman’s remarks about Pinochet. I’ve also found a certain French fascist party, Faisceau, which was formed by anarcho-syndicalists and economically liberal business leaders who both claimed to ascribe to “Corporatism.” The party split because the syndicalists and the business leaders could not agree on how corporatism should be established. The syndicalists wanted to establish cartels of the Italian fascist sort, whereas business leaders wanted to establish a legitimate economic liberal policy.

Why does it seem like there is a tendency for economic liberals to hold sympathy for corporatism, simply because they’re anti-socialist and pro-business? With regard to Libertarianism, some have identified this same plague within Libertarianism itself, and have called it “Vulgar Libertarianism.”

2

You’re correct in that fascism is by no means laissez-faire. Marxists, if I am correct, consider it to be a reactionary bourgeois movement (Gorky’s approbative quotation of the German saying “Eliminate the homosexual and fascism will disappear” is not accidental) and the result of capitalism, but I put little stock into their materialistic determinism. Mises identified fascism as a reactionary socialist movement (Reisman has expanded upon this here: http://mises.org/daily/1937).

As to why many libertarians (unfortunately) side with individuals whose interest in free markets is purely decorative, to this I have no answer. I suppose a study of Rothbard’s writings on left and right would be illuminating, as would an overview of Kevin Carson’s articles. Conservatives have always feared the notion of socialist revolution, and lend at least nominal support to markets. They are not liberals and never have been. US Conservatives, at least in the past, differed in this regard from European ones, but I don’t think the distinction holds much, anymore.

3

Because the people who make that comparison have no idea what they are talking about.

Now, according to Hayek in The Road to Serfdom, corporatism is the natural result of the current system – a ‘mixed’ economy. He also states that fascism and socialism are basically the same thing and lead to the exact same result it’s just that socialism takes a more indirect route to the dictatorial stage than fascism.

You need to use another word than ‘liberals’ since it has changed meaning – at least in the US.

Corporatism as I understand it, haven’t really wasted much time really looking into it, is where the corporations use the coercive nature of the State to benefit themselves at the expense of the people. I can’t really see anyone on this forum (except possibly you if you personal gain by it) advocating such a thing and Austrian economics would frown on such a thing most certainly.

Can’t really speak for the Libertarians since I’m not knowledgeable enough about their system to generalize how they would respond to such a statement.

‘some have identified’…without references I just assume you’re pulling that out of your ass or it was an attack on the Libertarian Party.

4

I am aware of “vulgar libertarianism”. I do think that, perhaps without intending to do so, many conservatives and even some libertarians have sometimes functioned as apologists for what amounts to economic fascism because they are still holding onto an erroneous view of the political spectrum in which left-socialism is the polar opposite of their creed. I agree with the Rothbardian and analysis that socialism is essentially a confused middle of the road doctrine. Compatability between libertarians and the left and right varies depending on the historical context.

And I think that there is a distinction between being pro-market and pro-buisiness; being pro-market entails accepting whatever free competition leads to, while being pro-buisiness entails supporting whatever the status quo in buisiness arrangements happen to be, regaurdless of wether or not it came about as a result of free competition. There is an unfortunate tendency by some people who hold otherwise free market views of defending certain aspects of the status quo as if it were a free market, when they should very well know better. There is a distinction between property rights and existing property titles. Not all currently existing property titles are just under any voluntaristic test of legitimacy.

I’ve actually personally come to the conclusion that capitalism and socialism have become anti-concepts. What is socialism? Is it worker’s control or government ownership? These two principles are contradictary. What is capitalism? Is it a free economy or government privilege and protectionism for buisiness? These two principles are contradictary. Since capitalism is commonly characterized as being the status quo, when debating with the socialistically inclined I always end up having to make a distinction between “state-capitalism” or economic fascism and a free market. I even sometimes describe myself as anti-capitalist insofar as “capitalism” is meant to describe a strategy to use the state’s intervention for pro-buisiness or pro-capital ends.

I take a much more harsh view towards conservatism then most libertarians do. I find it to be the most disingenuous and self-contradictary modern political ideology. I view most conservatives as essentially using free market rhetoric while supporting government-buisiness patronage and a general trend of goverment intervention in the economy to concentrate capital and benefit their buddies. Since many libertarians have made the error of seeing conservatives as our natural allies, in a united front against “the socialists” or “the left”, they have sometimes ended up with what amounts to fascists as bed fellows.

Clearly, fascism is nothing close to a free market, although as an economic system it may be more free then communism. One way to think of it is that fascism is a middle-of-the-road synthesis in which big government and big buisiness collude with eachother at the hip, but still remain superficially separate entities, while communism is actually the result of taking the synergy between buisiness and government to the point where they are literally the same institution. In a sense, the communist state becomes big buisiness itself, since it owns all the capital. In either case, I don’t believe that anti-communism should allow free marketers to become apologists for fascism. Unfortunately, this has happened before and still does occur.

My view of the political spectrum could be described as a vertical one-dimensional spectrum of political means vs. voluntary means, with a cultural left and cultural right representing personal preferences. The left and right are meaningless or irrelevant in that they only represent what ends one seeks personally. Under a paradime of voluntarism they can plurally co-exist, while under a paradime of political means they inevitably try to monopolize things and cause unecessary conflict. Any personal preference is compatible with libertarianism insofar as it is voluntarily persued. The preferences sought become irrelevant to the spectrum in that what really matters is the means by which they are persued.

5

I think one answer to your question is incorporated into it - via usage of the terms ‘seem’ and ‘seemed’. Political parties use rhetoric which gains them power. So Republicans bill themselves as ‘fiscal conservatives’ to gain support from those with libertarian leanings. But those supporters continue to judge by rhetoric all too often, and fail to appreciate that the actions do not match it. Ya know, fool me once, shame on you, fool me twice…fool me…we won’t get fooled again.

A longer answer may be extracted from Rothbard’s ‘Betrayal of the American Right’, which traces the numerous threads of conservatism in America over the last century, including the overthrow of the Old Right (non-interventionist, laissez-faire) with the New Right (Throne and Altar conservatism).

Claire Wolfe also touches on this issue in ‘The State vs The People’, as does Albert Jay Nock in a number of works, notably ‘Memoirs of a Superfluous Man’, wherein he coined the term ‘economism’ which equates with corporatism.

In my opinion, all of this can be understood most readily by grasping that most conservatives believe that the function of the government is to ‘help business’ - corporatism grows out of that misunderstanding. Since most liberals think the role of government is to ‘help people’, they are less prone (but by no means immune!) to that manifestation of illegitimate State action, and are more prone to welfarism.

But the end outcome is the same in either case - State Socialism. It’s just a choice between Daddy socialism and Mommy socialism.

6

As noted above, though, Fascism is very distinct from Socialism. Never have economic liberals (to be clear: those who want minimal intervention in the economy) somehow found themselves in a Socialist party. Why, then, should some of them, sometimes, find themselves on the side of Fascism, but never in the opposite direction?

The two examples above I used are the now defunct Austrian Freedom Party and Faisceau.

Words tend to be defined by their common meaning. And you understood what I meant, so that’s all that matters.

“Corporatism” is the idea that the economy ought to be managed by business leaders, not necessarily through force, as demonstrated by the economic liberals that supported Faisceau.

Kevin Carson, like somebody said above, has written on it extensively:

Now that seems like a perfect explanation I hadn’t thought of.

I suppose there’s also the fact that, like somebody else said above, Fascists (in the sense of Reagan, Bush, etc, not Mussolini obviously) frequently make sermons about the free-market. This further reinforces the left-right distinction.

I’d also say that this is a good explanation for why American progressives value democracy, while at the same time supporting Castro, Hugo Chavez, and in the not-too-distant past, chairman Mao. The left-right distinction causes them to put forth ridiculous apologetics – in the case of Hugo Chavez, even after he declares his right to rule-by-decree, they still deny that he’s a dictator.

7

They start out distinct but both end up at the same place, be it Stalin, Hitler or Mussolini. They are really two different forms of the same collectivist goal which is why, as Hayek states, the fascists, socialists and communists all fight amongst themselves over the same people because they know they aren’t going to turn any ‘liberals’ to their cause.

It would seem to be somewhat of a stretch to call someone who believes that the economy ought to be managed an ‘economic liberal’. Definitely not a follower of the Austrian school to say the least.

That’s where corporatism derives it’s power – they talk the talk but don’t walk the walk so you end up with a partially planned, partially free market that’s ripe for abuse by Big Business. You really think a presidential election has to cost a billion dollars in donated monies? This is where the power comes from, you don’t play the game and you aren’t going to get the big bucks to compete on the national level. When you do succeed in becoming an election official, if you have any inkling to remain in office, then when the people that ‘helped’ you during election time come around asking for favorable legislation for their company or industry you best be ‘yessir, I’ll be getting right on that sir, can I get you something while you wait, sir?’.

Don’t believe me, name me one industry in the US that isn’t regulated in some way, shape or form. Or, failing that, name one regulation that doesn’t benefit one group over the interests of another.

Meh. When fully grilled they are just closet collectivists, they only approve of democracy when things go in their favor…generally speaking of course. Your closet variety progressive wants all the benefits of a planned economy without wanting to take the extreme measures necessary to achieve it such as total governmental control of the means of production. Regulating every single aspect of the economy is enough for them – as long as the massive bureaucracy is only used to do their bidding. Which yet again brings us back to the root of corporatism…

Chavez is just a fun guy, he takes great pleasure in provoking Bush over stupid little things.

You’re right though, I made a comment on another site that it is a stretch to call Venezuela a ‘democracy’ and the guy who made the original comment rose fully to his defense.

8

Nathyn says:

“There are many more examples of economic liberals and corporatists working side-by-side. For instance, there is Margaret Thatcher’s adoration of Friedrich Hayek and Milton Friedman’s remarks about Pinochet.”

i can’t quite figure out what is corporatism has to do with either pinochet or thatcher. pinochet was a dictator, but liberalized the economy (under the advice of the “chicago boys”). the only corporatist aspect of his rule that comes to mind was the armed forces enjoying the royalties from the national copper company. this, however, predated his regime, codelco having been nationalized by his predecessor, allende.

thatcher certainly liberalized the economy. of course, the state hardly withered under her administration, in spite of the rhetoric. a similar accusation could be made of reagan. but corporatists? i don’t think so.

i think had thatcher or pinochet followed corporatist models, both countries would have seen sub-par economic growth, as this is the inevitable consequence of government directing businesses. that this hasn’t been the case weakens your argument.