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Some free-market theorists state there is a distinct economics of fascism which fascist regimes practiced during the 1920s and 1930s. This branch of thought claims private (or nominally private) ownership of the means of production that was heavily coordinated by government is a defining trait of the economic policies of fascist governments.. Cited aspects include economic interventionism, Central economic coordination, mercantilism, economic nationalism, corporativism, protectionism, a welfare state, and militarism as an economic institution.

The fascist economy as a "third way"

Mussolini referred to his economic system as a "third way," noting it to be distinct from both socialism and capitalism. He said that "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."

Journalist Thomas R. Eddlem's view on private property in a fascist economy is "simply heavy government regulation and control of what is only nominally private property."

Objectivist economist George Reisman argues that the Nazi economy was "de facto socialism" due to extensive governmental control over nominal private property, noting especially the presence of wage and price controls.

Christoph Buchheim and Jonas Scherner argue though that the view that private property in the Nazi economy existed in name only is incorrect. They say that while there was substantial central planning of private industry, the severity of the restrictions did not arise to the level of rendering private property a mere formality. Buchheim and Scherner describe the system as a "state-directed private ownership economy."

Journalist Michael Coren, in writing of distributivism, an economic theory that underlay the support by some for a fascist economy in the 1930s in his biography of G.K. Chesterton, said that "economic fascism both capitalism and socialism."

Sheldon Richman, writing in the Concise Encyclopaedia of Economics, refers, like Mussolini, to fascist economic systems as a 'third way' whose proponents advocated them as a solution to avoid the perceived inegalitarian dangers of too strong of an enforcement of private property rights while at the same time avoiding the total abolition of private ownership of the means of production.

However, while a signifant amount of control over private property is argued to be a core characteristic of the facscist economies, some others note additional aspects they believe to be essential. For example, author and journalist John T. Flynn, in 1944 noted three elements: "1) The institution of planned consumption of the spending-borrowing government. 2) The planned economy 3) Militarism as an economic institution" . However, Lawrence Dennis, in his 1936 book The Coming American Fascism promotes what he called a non-militaristic "fascist" economic system for the U.S.; he argues that in the absence of war that laissez-faire cannot satisfy the needs of the masses.

As a solution to the percieved problems of laissez-faire

Those who have promoted fascism have done so with the stated mission of correcting what they percieve to be the problem of disorganization occurring in a laissez-faire economy. Mussolini said that government planning would "introduce order in the economic field." Likewise, the America Lawrence Dennis, in his 1936 book advocating "fascism" for America, claimed that "history and present day experience are full of demonstrations that the more there is of what is commonly called laissez-faire, economic freedom, democracy or parliamentary government, the more economic maladjustments there will be, and the more difficult of readjustment they will prove." Fascist economic planning seeks to coordinate the economy to serve the what is held to be in the interests of the "common good" rather than allowing "private initiative" seek its own course.

Political economy of Nazi Germany

In his book Economy and Class Structure of German Fascism, Alfred Sohn-Rethel used class analysis in his assessment of the fascist economy in Germany. This was built upon years of experience secretly working in the offices of the Mitteleuropäischer Wirtschaftstag or MWT - the headquarters of the German big business association. Sohn-Rethel argued fascist rule in Germany as part of the reconsolidation of bourgeois rule with the political triumph of financially unsound and unstable groups of big and small business (the Harzburg Front) over parts of the economy that were well adapted to the financial conditions of the time. However he argues than it is a mistake to see the the "Nazis as the direct agents of a monopoly capital in command of capital in command of profits..." and that "profit-making itself had gone into the red before the Nazis could exploit the now unresolvable contradictions and get the better of finance capital." The strengthened state took over the entrepreneurial, managerial functions but capital remains in private hands even though the state sets prices, profit margins and the allocation of raw materials. This was part and parcel of the suspension of normative legal environs (both social and financial) in Germany.

Sohn-Rethel continues: "Capital is only in possession of its private initiative to dispose freely over its means of production while it keeps to the market rules. But only if one sees the crisis as an economic catastrophe which shatters all these rules can one get the measure of its immense dangers. In this case capitalism can survive in the paradoxical shape of the 'corporate state' in which the contridiction between the social character of production and the private appropriation of capital assumes the form of a state-run economy on private account". The bourgeoisie needed the defeat of the worker's class solidarity and further the depreciation in overall working conditions. This was in order to increase in the rate of surplus value and profit from wage freezes. The drive in the increased exploitation of the proletariat was greatly assisted by anti-semitism and resurgence of the war economy that reached fruition with the Nazi party's capture of power during the early 1930's. As Sohn-Rethel puts it: "the (world) capitalist was lifted off the rocks of stagnation only by means of the arms race forced upon the world powers through the initiative of German fascism preparing for world war."

A large component of the labour force of the Third Reich was made up of slave labour. This practice started from the early days of labour camps or colonies of undesirables (German:unzuverlässige Elemente) such as the homeless, homosexual and criminals as well as political dissidents, Jews and anyone that the regime wanted ou of the way. Slave labour use became much more prevalent during World War II with hundreds of thousands if not millions of Jews, Slavs and other conquered peoples literally owned by German corporations such as Thyssen (who backed Hitler almost from the start), IG Farben and even Fordwerke - a subsidiary of the Ford Motor Company.

Thomas DiLorenzo, notes that the Nazis in Germany demanded in their economic program, among other things, "abolition of interest; a government-operated social security system: the ability of government to confiscate land without compensation (wetlands regulation?); a government monopoly in education; and a general assault on private-sector entrepreneurship..."

At the end of World War II germany was divided between the Western Allies dominated by the United States, and the Soviet Union. De-nazification was different in the two zones with Eastern Germany (later to become the DDR) having a much more thorough system of removing those associated with the Nazi party. During the subsequent Nuremburg Trials, American prosecutors dealing with the directors and heads of the German corporations involved, avoided any criticism of market economy .

Political economy of Fascist Italy

Benito Mussolini said: "For if the nineteenth century was a century of individualism (Liberalism always signifying individualism) it may be expected that this will be the century of collectivism, and hence the century of the State."

Sheldon Richman explains how fascism replaced a laissez-faire system in Italy: "From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign."

Maria Sophia Quine, in Italy's Social Revolution, discusses the rise of a welfare state with the development of fascism in Italy. She says in the introduction of the book that it is discussed "how Italian governments from liberalism to fascism attempted to build a welfare state atop a charitable foundation that was fast set in the Middle Ages." No longer was charity relied upon, but citizens were taxed to care for those percieved to be in need. Systems such as a national healthcare system and employment insurance were set up.

Political economy of Franco's Spain

Miguel Primo de Rivera controlled the government of Spain, with the acquiescence of King Alfonso XIII, in the 1920's. He believed in state planning and government intervention in the economy, while being opposed philosophically to socialism.

In 1933 Miguel Primo's son, Jose Antonio Primo de Rivera, founded a political movement known as the Falange, or "phalanx." The Falange was not successful in the elections of 1936, elections that resulted in the creation of a Popular Front government.

When conservative elements of Spanish society supported Francisco Franco and the military in his war against the Popular Front, the Falange became associated with Franco's side in that war, and the government that arose from Franco's successes appropriated the ideas and some of the terminology of the Falange, including a nostalgia for the interventionism of Miguel Primo de Rivera.

One falangist theorist, Federico de Utturia, described the goal of the movement as "to kill the old soul of the liberal, decadent, masonic, materialist and frenchified nineteenth century."

See a work by Stanley G. Payne, Falange. A History of Spanish Fascism Stanford University Press (1961).

Government and business in partnership

Richman explains how fascism replaced a laissez-faire system in Italy: "From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign." The view of many is that business and government collude to profit by engaging in economic intervention. Socialist historian Gaetano Salvemini said in 1936: "In actual fact, it is the State, i.e., the taxpayer who has become responsible to private enterprise. In Fascist Italy the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social." Likewise, Jutta Schmitt, a lecturer in Political Science at the University de Los Andes in Venezuela says that "profit production depends on a considerable degree on State-guaranteed profit and the growing interaction and 'melting' of economic monopolies with their political representation in the State apparatus" and that "the main objective of economic fascism is the elevation of the profit rate in times of economic recession to the detriment of the working class." Schmitt notes that the economy in fascism has been referred to as "planned capitalism." Anarcho-capitalist polemicist Anthony Gregory says that economic fascism is designed for government and business's "mutual benefit: profits for the corporate interests, expanded tax revenue, and augmented central planning powers for the state." Lawrence Britt suggests that protection of corporate power is an essential part of fascism.

Claims of economic fascism in the U.S. economy

Some claim that economic fascism, in a systemic sense, was imported into the U.S. from fascist countries, especially Fascist Italy and Nazi Germany. These criticisms are most often applied to the New Deal but claims are also made that the accumulation of economic intervention policy over time in the U.S. is having the effect is gradually converting the US to a fascist-style planned economy.

A few conservative economists and commentators have drawn parallels between the New Deal and economic fascism. Perhaps the most prominent figure to endorse this view was Ronald Reagan, who in 1976 claimed that "Fascism was really the basis for the New Deal. It was Mussolini's success in Italy, with his government-directed economy, that led the early New Dealers to say 'But Mussolini keeps the trains running on time.'" Journalist John T. Flynn claimed that the New Deal was analagous to Mussolini's and Hitler's economic systems. In 1944 Flynn expressed the opinion that "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." The argument that economic intervention on scales as large as FDR's New Deal are related to fascism is not widely accepted beyond some Austrian school economists, for instance followers of Friedrich von Hayek. More recently, some Austrian School economists have contended that the New Deal is based on economic fascism. Economists who hold this view include Richard Ebeling, Thomas DiLorenzo, George Reisman, Sheldon Richman, and Lawrence Reed.

References

1. Mussolini, Benito Fascism: Doctrines and Institutions 1935.
2. Eddlem, Thomas R. Introduction. And Not a Shot is Fired by Jan Kozak, Appleton, WI: Robert Welch University Press, 1999.
3. Reisman, George Why Nazism Was Socialism and Socialism Is Totalitarianism
4. Buchheim, Christoph and Scherner, Jonas. The Role of Private Property in the Nazi Economy: The Case of Industry University of Mannheim, Germany
5. Coren, Michael Gilbert: The Man Who Was G.K. Chesterton Reed Business Information, Inc, 1990.
6. Richman, Sheldon Fascism Concise Encyclopedia of Economics 1993, 2002.
7. Flynn, John T. As We Go Marching 1944.
8. Dennis, Larence. The Coming American Fascism 1936.
9. Mussolini, Benito Fascism
10. Sohn-Rethel, Alfred Economy and Class Structure of German Fascism, CSE Books, 1978 ISBN 0906336015
11. Wiesen, S. Jonathan German Industry and the Third Reich Dimensions: A Journal of Holocaust Studies Vol. 13, No. 2
12. DiLorenzo, Thomas J. Economic Fascism, 1994.
13. {(note|Quine}} Quine, Maria Sophia Italy's Social Revolution, Palgrave (2002).
14. Beevor, Antony. The Spanish Civil War (1982).
15. Salvemini, Gaetano. Under the Axe of Fascism 1936.
16. Anthony, Gregory Why the Supreme Court Should Have Just Shut Up 2005.
17. Britt, Lawrence, 'The 14 characteristics of fascism', Free Inquiry, Spring 2003, p. 20.
18. Ebeling, Richard M. From The New Mercantilism to Economic Fascism], 1991
19. Interview with Ronald Reagan. Time Magazine. May 17 1976.
20. Ebeling, Richard M. When the Supreme Court Stopped Economic Fascism in America
21. Reed, Lawrence Great Myths of the Great Depression Mackinac Center for Public Policy
22. Ebeling, Richard M. Don't Blame the Thermometer for the Fever Freeman Magazine, 1999.

See also

• Economic nationalism
• Fascism
• Collectivism
• Mercantilism
• Protectionism
• Planned economy
• Statism

External links

• The Role of Private Property in the Nazi Economy: The Case of Industry (pdf) by Christoph Buchheim and Jonas Scherner
• Economic Fascism by Thomas DiLorenzo
• When the Supreme Court Stopped Economic Fascism in America by Richard M. Ebeling
• Fascism by Sheldon Richman - discusses economic fascism
• The Coming American Fascism by Lawrence Dennis - advocates a non-militaristic economic fascism for the U.S. for the benefit of the working class
• The ‘Political Economy of Fascism’: Myth or Reality: or Myth and Reality? by David Baker
• Audio and Video files from various theorists recorded from the Economics of Fascism conference at the Ludwig von Mises Institute Oct 7-8, 2005

• Fascism
• Economic ideologies