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Fascism and Big Business by Daniel Guerin

Tuesday, June 19, 2018

Reading notes - Fascism and Big Business by Daniel Guerin

Chapter 9: Fascism in power: Economic policy


When fascism takes power, overflowing with gratitude for big business which financed it, its words and its deeds exhale the purest sort of laisser-faire economic doctrine. It announces its intention of favoring and protecting in every possible way private property and individual initiative. It rejects with horror the idea that the state might meddle in production. But the fascist state stands aside only so long as Messieurs Capitalists request it not to interfere in their private affairs. It imposes on them the lightest possible taxes, the most tenuous sort of control. But it is always ready to come running whenever these gentlemen cannot pull through by themselves. In any such crisis, it is immediately at their service, "socializing" their losses, refloating their enterprises, and keeping them alive with its orders.


the course of events soon forces fascism to give its program a serious wrench. Carried away by its eagerness to resurrect big business profits, it finds itself embarked, above all in Germany, on a huge armament program. Fascism speedily gets caught up in a system of wheels within wheels which insensibly conducts it from laisser-faire capitalism to autarky and a wartime economy.


fascism is compelled to gradually bureaucratize the economy and is more and more trapped in the contradiction between what it would like to do and what it must do. Groping tortuously forward, it succeeds in maintaining the capitalist system, but only by restricting each individual capitalist's freedom of movement, and by sacrificing the other branches of the economy on the altar of heavy industry. Only the great capitalists continue to draw their profits, while the economy as a whole is paralysed and individuals of every class are ruined or put on short rations.


For a moment, fascism, by repairing the profit-making mechanism, seems to banish the illness that capitalism suffers from. But this only aggravates the disease. Charged with saving the system, it ends by plunging it into a worldwide holocaust.


Nor is this denouement peculiar to fascism. Every expedient that capitalism has resorted to in other countries has sooner or later led to the same result. Thus the authors of the "New Deal" in the United States temporarily succeeded in restarting the capitalist machine only by arms purchases even more gigantic than those in Germany. With the return of peace, American capitalism could survive only by remaining on a war footing-a nuclear war footing-that imperils the future of the whole planet.


It would be a mistake to interpret this state intervention as "socialist" in character. It is brought about not in the interest of the community but in the exclusive interest of the capitalists.


generously refloating sinking enterprises. It takes over a block of the stock, but instead of using the opportunity to nationalize these enterprises, it preserves their character as private corporations and leaves the industrialists at their head. Its intervention is only temporary, and it hopes to be able-after it has made the companies solvent by standing all the expense and assuming all the risks-to restore to the private owners the stock it has taken over.


In all industrial countries today heavy industry, having become parasitic, survives only thanks to state orders. If there is a difference, it is to be found in the disproportion, much more striking in Italy and Germany than elsewhere, between the national income and the huge expenditures undertaken.


State orders are of two sorts: great public works for the sake of prestige, generally yielding no return, and orders and works for "national defense." It is rather difficult to draw a strict line of demarcation between the two sorts of outlay; but as the second is intensified, the first tends to go into the background. Part of the outlay for public works, it is also true, arises out of "national defense," particularly highway and railroad projects.


it issues paper and ruins the national currency at the expense of all the people who live on fixed incomes from investments, savings, pensions, government salaries, etc.,-and also the working class, whose wages remain stable or lag far behind the rise in the cost of living.


An abundance of paper is issued. But it is not banknotes, but rather commercial paper and short-term bonds.


Gradually the hidden inflation produces the same effects as open inflation: the purchasing power of money is lessened. But fascism wants to conceal this depreciation-or at least put off as long as possible the moment of its open appearance-and it wants to preserve as long as possible the artificial value of the currency. It succeeds to a large extent by police terror and by secrecy. But these extraordinary measures are effective only within the national boundaries; they have no effect abroad. Fascism is thus driven to a new expedient: that of placing a wall around the national currency.


To forbid the flight of capital is not enough. It is necessary to prohibit all withdrawals of gold not justified by an urgent need for importations. Only the import of materials needed in the manufacture of armaments and not produced domestically can be authorized; other imports are tolerated only if the former have not already exhausted the available foreign exchange.


from expedient to expedient-following no preconceived theory but in a purely empirical fashion, perhaps without having foreseen exactly where the road was leading which excessive armaments was forcing it to takefascism arrives at a "war economy" similar to that of the belligerent countries between 1914 and 1918. The only difference between yesterday and today is that the economy of 1914-1918 was a wartime economy in the proper meaning of the word, while the present fascist economy is war economy in peace time.


distinguishing characteristic of this economy is the continuous extension of the functions of the state. The state is the supreme director of the whole economy; the state becomes the sole customer of industry; the state drains off all private savings; the state monopolizes foreign trade; the state controls prices; the state freely disposes of labor; the state allots raw materials; the state determines in what sectors of economy new investments are necessary and decides on new manufactures, etc., etc.


a few innocent people are still convinced that under a fascist regime the big capitalists have no power over the state, but that, on the contrary, the state rules the capitalists with a rod of iron. Whence comes this persistent illusion? The fascist plebeians have a large share of responsibility for its spread. In fact, they take their wishes for reality, and would have others do so also. Indeed they would like to reverse the roles and use the "war economy" and the "corporations" to subject capitalism to the authoritarian rule of the state-that is to say, to themselves. As masters of the economy, they would possess wealth and power. Also a little verbal demagogy seems useful to allay the discontent of their rank-and-file. But they no more manage in this field than any other to go from words to deeds. The capitalists vigorously defend themselves against these pretensions. Faithful to economic liberalism, they accept the war economy only under the force of circumstances and insist on being in charge of it. They will not stand for the plebeians taking advantage of it to imprison them in an ever more stringent "statism." They fear that the "corporations" or "professional groups" may be diverted from their original aim, strictly limited in space and time, so that they are caught in their own trap. The rulers of the fascist state formally condemn and repudiate all "socializing" tendencies. They draw the line between temporary measures capitalism may resort to and the idle dreams of some who, following a preconceived scheme, would transform this "statism" into a permanent system.


industrialists start grumbling not only about the plebeian demagogues but about the man who has done the most for them, who is entirely devoted to them, who would doubtless readily dispense with subjecting them to restrictions were he not himself forced to insure the success of the "four-year plan" at all costs.


sections of light industry working for domestic consumption have still more cause for complaint. They pay dearly for the enhanced domination of heavy industry, through higher prices for machinery, fuels, etc. They see their markets constantly growing smaller because of the lessened buying power of the masses. On account of the preference given the importation of products to be used in armaments, they suffer a serious scarcity of raw materials and undergo a severe crisis.


As for the middle classes-the very ones whose discontent put fascism in power-they are simply bled white.


small manufacturers and independent craftsmen suffer both from a scarcity of raw materials and a lack of markets.


From: Fascism and Big Business by Daniel Guerin

Monday, June 18, 2018

Isolated and confused: Paul Sweezey and the retreat of the 1970s middle class left

I've been reading the late 1970s issues of The Militant during the last two weeks.

One trend The Militant followed was the retreat of the U.S. petty bourgeois left under the onslaught bourgeois public opinion as Vietnam aided Kampuchean rebels in ousting the brutal capitalist dictatorship of Pol Pot and China subsequently invaded Vietnam (with tacit approval of the Carter administration).

Paul Sweezey is presented as a prime example of this trend.

I am probably not the only one to hear echoes of middle class left's collapse as Washington beat the drums for war in 1939-1940. Sweezey seems to be channeling Max Shachtman and Bruno Rizzi.


18 June 2018


Crisis of petty-bourgeois left

The correctness of the SWP's turn to the indus-trial working·class is highlighted by the crisis and
decay that infect petty-bourgeois radical formations that looked elsewhere for solutions.

More than a few radicals of the 1960s now
denounce affirmative action as unfair to white
males. Some, like Joan Baez, who opposed the U.S. war in Vietnam, have enlisted in the imperialist
propaganda campaign that continues the war
against the Vietnamese revolution in the guise of
concern for the "boat people." Still others have
drifted into the search for personal solutions
through "liberating lifestyles."

"Marxists" such as the editors of the Guardian
cry that "these are sorry days for socialism," while Monthly Review editor Paul Sweezy pronounces Marxism inadequate to explain today's world.

Isolated from and indifferent to the growing
proletarian resistance to the rulers' drive, and
completely incapable of charting an independent
course, such petty-bourgeois ex-radicals are being drawn in the wake of the imperialist offensive.

Invariably they cover their retreat by proclaiming
that the American workers are moving to the right.
They mistake their own drift for that of the masses.
The experiences of socialist workers as described by delegates on the floor of the convention and by
other SWP members in industrial union fraction
meetings and workshops show how far off the mark the ex-radical doomsayers are….

Feldman, Fred "Socialists meet: big advance in building party of industrial workers."


'Crisis of Marxism' or Crisis of Stalinist 'Theory'?

(This month's column was contributed by Leslie
Evans. Evans Is the author of the book 'China After Mao' published by Pathfinder Press. )

In the June issue of Monthly Review, Paul
Sweezy, the journal's founding editor, who still
commands some reputation as a Marxist econo-
mist, proclaims "A Crisis in Marxian Theory."

The crisis that Sweezy perceives can be summed
up in the fact that the principal workers states, the
Soviet Union and China, are not moving to elimi-
nate inequality, have clung doggedly to a repres-
sive state apparatus, and, in Sweezy's view,

"They go to war not only in self-defense but to impose their will on other countries-even ones that are also assumed to be socialist." Sweezy no doubt had Peking's invasion of Vietnam in mind as an example.

From this summary, Sweezy draws a pessimistic
conclusion about the prospects for establishing a
genuine socialist society:

"We do not need to rule out the possibility of a
post-revolutionary society's being socialist in the
Marxian sense. That would be foolish and self-
defeating. But we do need to recognize that a
proletarian revolution can give rise to a non-
socialist society .... Having recognized this, we
can proceed along one of two lines: (1) the
hypothesis that the only alternative to socialism is
capitalism, and (2) the hypothesis that proletarian
revolutions can give rise to a new form of society,
neither capitalist nor socialist. I believe that the
second line is the fruitful one." (Emphasis in

In the past, Sweezy used the term "socialist" to
describe all workers states. His new terminology
does not mark a recognition that these are socie-
ties in transition from capitalism to socialism. He
has concluded that a new form of class society has emerged, qualitatively different both from capitalist and workers states. He appears ready to apply this label to all workers states, whether Stalinist-governed as in the Soviet Union, or led by revolutionists as in Cuba.

Sweezy maintains that revolutions against capi-
talism carry within them a monster that gestates in the state apparatus of a successful revolution,
emerging as a new repressive ruling class.

Clearly, a "new ruling class," if we mean by that
what Marxists mean, rests on a definite new set of production relations. Such a new ruling class must be assumed to have a fairly long historical life-span ahead of it, until it has exhausted the potential of its productive system. So the outlook for the workers is pretty bleak, from Sweezy's standpoint.

This theory is not new. It is usually called
"bureaucratic collectivism," that vision of a monoli-
thic, totalitarian superstate described in the novel

The first thing that must be said in reply to
Sweezy's dismal perspective is that it lacks the first requirements of a serious Marxist analysis: it does not examine either the causes, development, or the specific manifestations of the bureaucratization of the Soviet and Chinese workers states.

That is not surprising, given Sweezy's own
political trajectory. He began as a Stalinist fellow-
traveler in the 1930s, who closed his eyes to the
destruction of workers democracy in the USSR
under Stalin. He accepted and still accepts the
reactionary theory of constructing an isolated
"socialism in one country," the diametric opposite
of Marx and Lenin's concept of a world socialist
society transcending previous national boundaries.

Having defended Stalin's rule, Sweezy turned
away from Moscow towards Peking when many of Stalin's crimes were revealed for all to see by his successors in the late 1950s.

He moved in recent years toward the views of
French economist Charles Bettelheim, who deve-
loped an elaborate theoretical justification for
Mao's claim that the socialist revolution in the
USSR had been reversed.

Sweezy was a proponent of Mao's "cultural
revolution." He refused to recognize that Mao was
the leader of the bureaucratic caste in China, not
its proletarian opponent. When Mao's Red Guard
broke up trade-union meetings, burned books, and assaulted leaders of the Chinese Communist Party who belonged to factions Mao sought to crush, Sweezy assured his readers that this was a great emancipation of the masses from traditional bureaucratic elites. Even today, Sweezy clings to this false judgment. In his current article he writes of the existing workers states:

"They have not eliminated classes except in a
purely verbal sense; and, except in the period of
the Cultural Revolution in China, they have not
attempted to follow a course which could have the
long-run effect of eliminating classes."

With blinders like these on, it is small wonder
that the revelations of the crimes of the Mao era
that have poured out of China in the past two years caught Sweezy unawares. It must seem to him that a "new ruling class" inexplicably walked into power upon Mao's death, deposing the followers of his beloved Chairman.

To worsen Sweezy's predicament, China's work-
ing people gave every indication of being pleased
at the fall of the "proletarian" four. What they saw
as an opening to press for concessions looked like a counterrevolution to Sweezy.

For those like Sweezy, recent events must in-
deed seem like "A Crisis in Marxian Theory."
The truth is that it is impossible to understand
the real nature of the bureaucratized workers
states while clinging to a belief in Mao's self-
serving justifications for the great purge that he
called a "Cultural Revolution."

It is necessary to go further back, to the struggle
in the 1920s between the proletarian wing of the
Russian Communist Party, led by Lenin and Trot-
sky, against the rise of the reactionary bureau-
cracy led by Stalin.

Sweezy never came to grips with the Trotskyist
analysis of the social character of Stalinist bureau-
cratic castes as privileged layers that live as
parasites on nationalized and planned economies.
The progressive dynamics of the economic struc-
tures, established as a consequence of working-
class victories, are in contradiction to the long-
term existence of the governing castes.

The bureaucratic caste's need for a monopoly of
political power-and repressions like the "Cultural
Revolution" that flow from this-is an expression
of its weakness and vulnerability, not of strength. It is not a ruling class linked to a mode of production which cannot exist without it-as is the capitalist class. The mode of production in a workers state is in the interests of the working class. The bureaucratic caste feeds off the workers state by keeping tight political control within it.

In complaining that the workers states-in a
world still dominated by imperialism-have not
abolished classes or inequality, Sweezy protests
the fact that Stalin's and Mao's promises to build
socialism in one country have been exposed by
actual events as a fraud.

But this, like the origins of the castes them-
selves, was explained by Marxists in the 1920s and 1930s. Trotsky showed that socialism could not be achieved in individual backward countries while imperialism remained dominant on a world scale.

He demonstrated that "socialism in one country"
was no theory at all but a rationalization that the
bureaucracy used to justify its rule and its collabo-
ration with imperialism against the spread of
socialist revolution. The invasion of Vietnam by
Peking's forces is a recent example.

"Socialism in one country" is not the slogan of a
new ruling class confident of its capacity and
destiny to rule the world, as would follow from
Sweezy's theory. It is the watchword instead of a
conservative, bureaucratic governing caste that
seeks to preserve its privileges by reaching a live-
and-let-live arrangement with world imperialism.

Far from seeing proletarian revolutions as the
prologue to its rule, the bureaucratic castes join
with imperialism in trying to block them, for the
overthrow of imperialism would doom the castes
as well.

Rather than recognize that the "theory" of build-
ing socialism in one country was fallacious,
Sweezy now repudiates the workers states as new class societies because of their failure to accomplish the impossible.

He continues to reject the Marxist view that the
working masses-not bureaucratic saviours like
Mao-have the capacity to establish proletarian
democracy by overthrowing the bureaucratic
castes. And he shows no interest in the struggle
for an internationalist course aimed at removing
the imperialist obstacle to building world social-

Quite the contrary. Sweezy's growing pessimism
leads him to adopt a theory that has invariably led
its proponents to renounce the defense of the
workers states against imperialism on the grounds that the workers had nothing to choose between hem. Unless he plans to rally to the defense of the "new ruling class," what else can be the political significance of his theory of the "new form of society."

Ironically, the events that threw Sweezy's "Marx-
ism" into crisis-such as the exposure of Stalin's
crimes in the USSR, the Hungarian, Polish, and
Czechoslovak antibureaucratic upsurges, and the
precipitous decline of the Mao cult in China-
inspire real Marxists with added confidence in our
socialist perspective. Along with such recent
events as the overthrow of the shah, Somoza, and Pol Pot, they indicate that the working people of the world are growing stronger relative to their
enemies and have the power to topple capitalist
exploiters and bureaucratic parasites.

Such events provide new confirmation of the
Marxist analysis of Stalinism, developed most
thoroughly by Trotsky in The Third International
After Lenin and The Revolution Betrayed.


Reading notes - Fascism and Big Business by Daniel Guerin

Chapter 7: The real fascist doctrine

....Fascism no longer needs to hide its real face, and in fact it finds it useful to legitimize its rule with a "doctrine." This doctrine, to be sure, was not elaborated for the first time after the conquest of power. Long before that, it could be found in the writings and speeches of the leaders, though submerged in "anti-capitalist" phraseology. Now demagogy retires to the background, yielding the spotlight to ideological justification of the dictatorship. And at last we see clearly that fascist doctrine is an old acquaintance; it is a twin of reactionary philosophy, the philosophy of feudalism, of absolutism.

....This was precisely the philosophy that the bourgeoisie had to combat so bitterly at the dawn of its rule in order to achieve its own liberation. To the pessimistic dogma of the fall of man, the bourgeoisie opposed the idea of unlimited progress; to the "aristocratic principle" and the "Moloch-State," government by the masses and democracy; to brute force, human "rights."

....But the day came when the bourgeoisie perceived "that all the weapons which it had forged against feudalism turned their points against itself, that all the means of education which it had produced rebelled against its own civilization, that all the gods which it had created had fallen away from it" -when it understood that "all the so-called bourgeois liberties and organs of progress attacked and menaced its class rule .... " Shaken to its foundations by the crisis of capitalism, able to save its threatened profits only by destroying democratic institutions and brutally exterminating the proletarian organizations, the bourgeoisie rejects the ideology that once helped it triumph over absolutism. Indeed, it dresses itself up in the ideology of that self-same absolutism-it denies progress, attacks reason, refuses the masses the right of self-government, tramples on democracy, invokes the "aristocratic principle" and "reasons of State," rehabilitates violence. There is nothing astonishing about finding reactionary thinkers who attacked with hatred the ideas of the French Revolution, democracy and liberalism, suddenly becoming great men. From these "masters of counterrevolution"  fascism borrows its doctrines. "We represent the antithesis ... of all that world of the 'immoral principles' of 1789,"  a reaction against the "movement of the eighteenth-century visionaries and Encyclopedists," exclaim the Italian fascists. And the National Socialists say: "The year 1789 will be erased from history .... " "We wish to destroy the immoral ideology of the French Revolution."

....The bourgeoisie used the idea of progress to batter down the bastilles of absolutism. Antiquity and the Middle Ages lived on the idea of the corruption and decadence of the human race, on the dogma of the fall of man: humanity, come perfect from the hands of God, was through original sin plunged into evil. Man is born wicked and is not perfectible-and similarly his political, economic, and social system. Man must accept it as imposed by God, without discussion and without hope of improvement. To this pessimistic doctrine, so convenient for the justification of tyranny and the legitimization of poverty, the bourgeoisie, eager to be freed, opposed the idea of infinite progress at the beginning of its domination. The golden age is not in the past but before us; humanity is perfectible and is continually rising from poverty to material well-being, from ignorance to knowledge, from barbarism to civilization. The great discoveries of the second half of the eighteenth century, the birth of the machine age and modern industry, gave new confirmation to the idea of progress. The young industrial bourgeoisie was sure the new means of production invented by it were capable of infinitely improving the lot of humanity. From this came the blissful optimism of the Saint-Simonian businessmen like Michel Chevalier.

....But a day comes when the idea of progress is turned against the bourgeoisie. The productive forces, as they develop at a dizzy rate of speed, come into conflict with the social system. Capitalist society ceases to be progressive, and, far from holding out to humanity a prospect of well-being, it offers only poverty and unemployment. Then suddenly the bourgeoisie stops believing in progress. The opponents of progress become its ideological masters.

Another weapon of the conquering bourgeoisie was reason. For revealed knowledge, it substituted the free exercise of intelligence, the supremacy of common sense. But today that weapon is being turned against it. The employment of reason and scientific analysis can no longer serve except to undermine the foundations of its rule and condemn the capitalist system of production; only a resorting to the "irrational" can permit it to prolong its reign. Let man renounce domination of the world and subject himself to it as to a "mystic phenomenon" (the expression is from Edouard Berth, another of Sorel's disciples);  let his intelligence be ready to abdicate before all the instinctive forces and be carried away by any "movement" whatever; let him be ready to follow the first charlatan who comes along, the first maker of miracles or myths; let him be ready to trust, not to reasoned actions but to blind faith in a Duce or a Fuehrer in seeking a way out from his sufferings.

....Once absolutism was conquered, the bourgeoisie instituted the form of government that best corresponded to its historic mission. Free competition, "laisserjaire," and free trade were the very conditions for capitalist expansion. Economic liberalism was extended to political liberalism, to parliamentary democracy. But a day comes when liberty and democracy are incompatible with bourgeois rule. The era of free competition is succeeded by that of monopoly capitalism. We have seen that in order to save their profits, threatened by crisis, the capitalist magnates need the support of the state. They have to substitute for the democratic state the authoritarian state (Chapter 1). Then the bourgeoisie tramples with rage on its old idols, and the reactionary theoreticians of anti-democracy become its ideological masters.

....At the dawn of its rule, the capitalist bourgeoisie demanded that the state call as little attention to its existence as possible, and it victoriously refuted the "barbarous" concept of the Moloch-State. But today, it needs the strong state. Hence it adopts the philosophers of absolutism and takes as its own, Hobbes' State, "a real mortal god"; Hegel's State, which is its own end, and for which the individual is nothing; and Treitschke's State, which "does not need to ask the people to consent but only to obey."

....In the early days of its power, the bourgeoisie denied the legitimacy of violence and the "right of the strongest" as old barbaric notions deriving from the first ages of man upon which feudal and absolutist society still rested. Instead of force, the eighteenth-century philosophers championed human "rights." Relations between men should be no longer settled by force but determined by contracts; Rousseau refuted the "alleged" right of the strongest and declared that "might does not make right."

In fact, with the appearance of "right," the bourgeoisie, once it was the dominant class, ruled by force. But, not needing to display force too openly, it preferred to rule through the fiction of "law." But a time comes when the bourgeoisie can save its threatened profits only by exterminating the proletarian organizations and governing through terror. Then it digs up the old notions of barbaric epochs; it rehabilitates violence and adopts reactionary apologists of violence as its authorities.

These apologists transfer the discoveries of Darwin from the domain of biology to the field of sociology, distorting them in the process.

From: Fascism and Big Business by Daniel Guerin