Reading notes - Fascism and Big Business by Daniel Guerin

Chapter 9: Fascism in power: Economic policy

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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

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

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From: Fascism and Big Business by Daniel Guerin http://www.pathfinderpress.com/s.nl/it.A/id.702/.f?sc=8&category=110