Socialism and Fascism: A Political-Economic Spectrum Analysis

0:00I want to begin by saying that it is an honor and a privilege and a pleasure for me to be here amongst people who are supporters of the Mises Institute. I regard the Mises Institute as the last best hope for civilization and I regard you people who are the supporters as crucial elements in this because without you there's no building, there's no professors here, there's no nothing. So, thank you for letting me be part of your meeting. What I want to do is to try to distinguish fascism from socialism, and I want to do this through the eyeglasses of the political spectrum, or spectra. Why do I want to do this? Well, categorization is important. Taxonomies are crucial to biology and chemistry.

0:48Indeed, one might say that chemistry and biology consist of almost nothing more than divisions and categorizations and I think that always helps me at least to think about these things. Notice I don't have physics envy, but I have chemistry and biology envy. Socialism and fascism seem both bad to me, both equally bad to me, and yet they're considered so differently by the powers that be. For example, Prince Harry of England wore Nazi regalia to some party and it was as if someone had stolen the crown jewels and stomped on him or something. I mean, he was excoriated all over the place and only his tender age let him escape from anything worse.

1:37But suppose he had worn commie stuff, the hammer and sickle. Nobody would have said squat. Nobody would have said boo. Another instance of this phenomenon is you see young teenagers with Che Guevara on their t-shirt or Stalin or Lenin, mass murderers. You don't see anyone with a t-shirt with Goebbels or Heimrich Kimmler or Hermann Göring or our man Adolf. I mean, where are the Adolf t-shirts? You just don't see them. We have Che being celebrated in the motorcycle diaries. Why not some of these other guys celebrated in a movie? I mean, you know, where's the movie for, well, the exception of the producers, but that's a different kind of a movie.

2:22Then, too, there are commie parties everywhere. There's a U.S. commie party, and Canada is a commie party, and Europe, there are commie parties that actually take part in the government. Where are the Nazi parties? I mean, not that I'm calling for them, please understand me, I don't know if you understand me but I'm just saying that we're treating them so differently and yet in terms of mass murder, if anything the commies are worse. I have some back of the envelope calculations here. Mao gets credit for 60 million people killed, Stalin 20 million, Hitler only 11 million, 6 million Jews according to the calculations and 5 million homosexuals and gypsies and others.

3:09Well, the score is, I don't know, according to my calculations, 81 million for the commies and 11 million for the Nazis, so the commies are worse. So why this disparate treatment? It's very puzzling. Could it be racism? That the fascists were more racist than the commies? The commies were sort of equal opportunity killers and somehow that's okay because they weren't prejudiced. You know, as they shoot you, you say, well, you know, nothing personal, but, you know, whereas the Nazis were evil because they would pick these guys and not those guys. And, you know, somehow that, I can't believe that that explains all of it. So what I want to do is to try to analyze these two systems through a series of political spectrums and see if we can't make any sense that way.

3:59And I start off with the usual spectrum. Here's left and there's right. I'm trying to be repertorial now. And people are put on these spectrums in accordance with the views that they're supposed to have. So, for example, we might put JFK on the left and Ronald Reagan on the right. I'm trying to be repertorial here. I brook no disagreement here, I'm just using these as examples. We might put Michael Moore over here and maybe the producers of South Park over here. We might put the ACLU over there and maybe the National Rifle Association here.

4:46We've certainly put Ron Paul over here, maybe Kerry over here, maybe Bush over here, sort of in the middle. In other words, this is the way the political spectrum is usually constituted by most people. There are grave problems with this way of looking at things. First of all, where do you put Stalin and Hitler? Well, Hitler, you put way over here on the right, because he's the most extreme rightist, and you put Stalin way over there on the left, and immediately you have a problem, because people are supposed to be close on the spectrum who are close in ideology and far apart on the spectrum, who are far apart in ideology, and yet there might be a dime's difference between Hitler and Stalin, but there's not a quarter's difference between them, so they belong together.

5:39Where do you put Mother Teresa? Is she a right-winger? No! Ma Teresa is over there on the left with her buddy Stalin, which is a juxtaposition from, I don't know, juxtaposition hell. I don't know, who do you put as a good right-winger? Well, I guess Ron Paul and Hitler are together, you know, buddies. So this is a problem, and this will not help us solve anything. Now, the libertarians, what they do, some libertarian members of the libertarian party, what they do is say, here is economic freedom, and here is personal freedom, and they make some sort of triangle like that, and they give you, the more economic freedom, the more you go in this direction, the more personal freedom, Freedom, the more you get in that direction. You've all seen these small political quizzes, and it ends up here are the centrists, and here are the libertarians, and here are the, I guess you'd call them, statists, which is okay, but now these people over here are, I don't know, conservatives or fascists, but that doesn't really fit because they don't believe in economic freedom much,

7:04And you put liberals here or commies over here, but they don't believe in personal freedom, so this is problematic as well. Plus, really it's three issues that we're involved with, not just economics or personal liberty, but also war and peace. Where is war and peace here? It's not there. So this is a problematic way of looking at it also. I like to look at it this way. Here is good. Here is bad. Here is right. And here is left. You'll notice a certain symbolism here. It's purely accidental. By good I mean those people who adhere to the libertarian axiom of non-aggression and private property rights.

7:50And by bad I mean those people who don't. And the left and right is just rhetoric. The left and right is silly. So now we can put Hitler over here, he's a right winger. Stalin here. And what they have in common is that they're about as bad as you can get on the good-bad scale. And you can put Mother Teresa here and Ron Paul here. And they're both good. And the differences between them aren't really worth much. And this, I think, is a better way to look at it, and the point is, if you're going to have a spectrum or a dimension or something, you can only have one thing on it. You can't have two or three things going on it. And the problem with the left-right spectrum is that you have economics, personal liberty, and war and peace all put together, and you get great anomalies that way.

8:42Let's then do what I just said, namely, try the single spectrum, not good, bad, but let's take economics, personal liberty, and war and peace, and make three spectrums for each of them, because my view, I think reasonable, is that you can only do one thing on a dimension. You can't be putting two or three things on, which is the problem with the usual left-right dimension. So how does this work out? Well, on economic freedom, it seems that the commies and the fascists are both way at the bad end of that, if this is better and this is worse.

9:30More economic freedom to the right, less to the left. because the difference between them economically with some risk of oversimplifying is that the communists believe in public ownership of the means production and the fascists believe in private property or at least the veneer of private property but underlaid with all sorts of regulations and control so the communists will nationalize everything, the fascists won't but they'll control everything and in terms of economic freedom, there's not much difference. Now, Gortney Lawson and I did a book on this, also the Heritage Foundation does a book on this, where we rate the economic freedom of about 100 or 200 different countries on 15 or 20 different criteria.

10:17And the fascists and the socialists or the communists have very little economic freedom. So there's not much distinction to be made there. Well, what about personal freedom? Is there much personal liberty under socialism or under fascism? And again, both socialism and fascism get poor marks, so you can't distinguish them on this basis. Well, what about war and peace? And here I would have to say that the fascists are a little worse than the socialists. Murray used to say that just because Russia was is an evil country domestically. It doesn't mean that they're necessarily intent on world dominion.

11:03Now, I speak under correction from the historians and the military theoreticians here, but my understanding is that Hitler was much more expansionist than some of the other Russian countries. But at least this gives some sort of difference. Maybe I shouldn't put the socialists all the way up there. I could put them a little closer but maybe some distinction could be made there. I don't know. All I'm doing is offering a taxonomy. I'm not really expert in who's to be put there, but my surmise is that there might be that distinction. While I'm on this point of one dimension for one concept, there is such a thing as the Austrian business cycle triangle, where this would be money and this would be time and also stages of production and one of the problems with the Austrian Triangle as I see it in my co-author Bill Barnett and I have a paper now making the rounds criticizing the structure of production in that it is trying to do two things

12:07and sometimes time and stages of production are in sync but they need not always be and when they're not there are problems with the triangle Well, now we have two more dimensions here, and this would be regulation and control, and this would be public ownership, government ownership. And this would be public ownership, government ownership. And here you can make a big difference between the two. There is very little regulation and control over the private sector under socialism, so they're pretty good because there's no property to control, right?

12:56So the socialists are pretty good on business regulation. They don't have any, because they own it all and they decide what's to be done, where as the fascists are very bad on that one, where as on the other one, namely government ownership, now the socialists are horrible and I suppose the fascists are a little bit better because at least there's some sort of veneer of private property there's not much, but there's better than there would be Now, another point that's interesting, and that is that a lot of the times we use socialism as a bad word, not fascism For example, I was once in a debate with Milton Friedman on privatizing the roads and he was against it and I was in favor of it, so I called him a road socialist. Why didn't I call him a road fascist? I don't know, it just sort of came naturally, road socialism.

13:48We have socialized medicine, not fascistized medicine, and yet one of the previous speakers mentioned that the Hillary plan was really fascism in terms of corporatism and regulation. and Regulation. We have social housing. Why not fascist housing? Maybe it's because the lefties favor this and the last thing they want to do is be associated with fascism. That might be the explanation of that. We have social studies, sometimes called socialist studies. Why not fascist studies or fascist housing or water fascism or water socialism? and that would be the people who refuse to engage in or defend private ownership of the oceans and rivers and the lakes which would be very relevant to what's going on in New Orleans.

14:33If the Mississippi and Lake Pontchartrain were privately owned, we wouldn't have any of this problem. I think what the Army Corps of Engineers did is raise the Mississippi River and lower New Orleans, which is not a good combination. There is another way of defining socialism. The main economic way of defining socialism is ownership of the means of production. You can own your shoes and your bicycle, but that's about it. Another way of defining socialism is from each according to his ability to each according to his need. It's not so much an economic way, but it's not an irrelevant way of defining socialism.

15:19And when you define socialism that way, you get socialism versus capitalism. And here you get voluntary and involuntary. See, most people think that the political debate is between socialism and capitalism. But if you define it this way, it's not really so much between socialism and capitalism as it is between volunteerism and coercivism or involuntarism because you can have voluntary socialism voluntary socialism might be the kibbutz, it's not a perfect example because the government does subsidize that or the commune or the nunnery all these things are run in accordance with, from each according to his ability to each according to his need The average family is run in that socialist way. The little three-year-old girl doesn't eat in accordance with her ability to produce income.

16:16She eats in accordance with her need, which is usually determined by the mother, who determines pretty much everything in these cases. Then, of course, we have involuntary or coercive socialism, which would be Cuba or North Korea or USSR, and that would be coercive socialism. And then we have voluntary and involuntary capitalism, and I think the benefit of looking, well let me give examples and then I'll try to say what I think the benefit of looking at it in this way is. Obviously the voluntary capitalism would be laissez-faire capitalism. What would be involuntary capitalism? Well this would be fascism. And so many people, especially in Latin and South America, confuse these two. They think, ah, capitalism, I know what capitalism is. That's a lot of fundia where the 12 families own 90% of the country based on land theft.

17:08Or they believe that capitalism is where George Bush's cronies in business get vast government subsidies, things like that. And since they're against that, they think they're against capitalism. But they don't make that distinction. So we have fascism here or nazism or whatever you want to call it. And one of the ways of trying to convert people or at least shocking them or at least debating with socialists, I was once introduced to some young lady and she was introduced to me as a socialist. So my question to her was, are you a coercive socialist or a voluntary socialist? And she sort of went like that, you know. At least it's a new ploy. It didn't work, but what the heck, you know.

17:55At least you've got something to try. So I recommend this to you on that basis. Similarly, I once was at a conference. I go to a lot of strange conferences where there are a bunch of actual Nazi young men. And I said, look, we libertarians will give you a better shot. We'll let you goose-step, we'll let you sing songs, we'll let you have the swastika, we'll let you have ovens. You can't put people in there without their permission, but you can have ovens and, you know, any volunteers. And I said, it's true, we won't allow you to initiate coercion because that's against the libertarian idea, but at least we'll give you a better shot than those liberals will. It didn't work either, but you keep trying. You do what you can.

18:46Another spectrum that we could relate them both on is democracy. How much democracy is there? And here the fascists do a little bit better than the socialists because Hitler, God bless him, I don't think I should say that. I'd hate to have that just little snippet come out and, you know, here's Block, God bless Hitler. No, I didn't mean that. Our man Hitler came to power through a democratic process. Now he didn't win the election. He won a plurality and there was some complication with the president of Germany but he got appointed somehow through the democratic process. Whereas in the Soviet Union and Cuba and all these other places there was not a scintilla of democracy. Not that I haven't benefited from Hans' book on on Democracy, because we could put, well, where do we put monarchy?

19:54And where do we put anarcho-capitalism here? Well, the anarcho-capitalist is obviously the least democracy. And here, the less democracy would be better, if you look at it that way. So the anarcho-capitalist would be here. I guess the monarchist would be here. And the Democrats would be over there, as Hans, I think, very aptly says, that Ceteris Paribus, and you have to have Ceteris Paribus here, other things equal, monarchy is better in some sense than democracy, because democracy, you're only in there for four years, and you, what is it, make hay while the sun shines, and, you know, if you're only in there four years, you grab. Whereas if you're the monarch, you can stay in there for 20 years, and then your kid can get in there, and you don't want to ruin Another point that's of interest is where does the U.S. fit? Is the U.S. more socialist or is it more fascist?

21:00Well, if we get back to the original definition of socialism, the pure economic definition of ownership of means of production, It seems to me that the U.S. is more fascist than socialist because how much really does the U.S. government own? And I was trying to make a list and there's not that much that they own outright. The Bureau of Land Management owns a lot of land, the Park Service owns stuff, then there's the buildings that they own, the post office, the roads, the Mint, the Fed, depending on how you count it. I tried to make a list of what do they actually own outright and there wasn't much. So, they're not that socialist. Now, how much do they regulate? Well, they regulate everything. Toilet bowls, ladders, you name it, they regulate it.

21:46If it moves, they regulate it. If it doesn't move, they regulate it. Since everything either moves or doesn't move, they regulate everything. So, the US is not so much moving towards socialism as it is moving towards fascism, if you look at the economic definition of that. Gabriel Kolko was named. I think Butler mentioned him. I want to talk a little bit about Kolko and Stigler. Stigler had this thing called Capture Theory. What was Capture Theory? Capture Theory was a theory of regulation where initially you have say the Food and Drug Administration or the Meat Inspection Act or something like that. And the reason we have that is because, you know, capitalists can't be trusted, they're fraudulent, they're invasive, they're bad guys, so we have to have the government to come in and regulate them.

22:40The problem is that the regulators don't make as much of a salary as the vice presidents of the regulatee, and if they regulate them in a nasty way, they can't later get a job there. So they have to regulate them in a nice way. Namely, they get captured by the very people that they're supposed to be regulating. And if you look at the careers of some of them, they start off as a low-level bureaucrat. They get a middle job in private industry. They get a higher job in the bureau. And then they get a much higher job, sort of a revolving door. That's the Stigler theory. Pretty good. It's got some truth. But the Kolko theory is much better. The Colco Theory, I think it's called the triumph of conservatism, where he shows that right from the get-go, right from the outset, the impetus for regulation did not come from aggrieved consumers or any of that, nor did it come from small competitors. It came from the big companies like

23:41Swift and Armore and Meatpacking. They were the ones that wanted the regulation. Why? You might say, well why? According to the Ayn Rand view, you know, this is hard to explain. The reason is that the large meat packers were losing market share to the small ones and they didn't much like that. Free enterprise wasn't all it's cracked up to be if these lowlifes are taking our markets away. So they came up with this ingenious idea. Let's have government regulation. We, the biggies, have economies of scale in filling out paperwork. So anytime there's a law or regulation, we can do it cheaper than they can so we now have a competitive advantage over them. And secondly, who do you think is going to staff those bureaus? The people who are going to staff those bureaus are from us because we're setting it up in the first place.

24:28So, Kolko, I think, is much preferable, the Kolko story is much preferable and much more radical than the theory of Stickler. Now, there's an interesting story behind Kolko. Kolko is a Marxist, but he's also a historian. and he's a competent historian. All he did is he went back to the records. He said, well, you know, the Meat and Spectrum Act came out in 1890 or 1880. I'm no historian, so don't count on me for closeness of dates here. And he just looked at the newspapers and he saw big ads from Swift and R. Moore saying, yes, we need regulation, let's have regulation. So he was a Marxist and what happened when libertarians heard about him is they started inviting him to their conferences because this is a very libertarian message.

25:14and Kolko would come and he'd give a speech or two and he'd come again and finally he refused to come. And the reason he refused to come is he was aiding and abetting the libertarian enemy by giving his own speech. The libertarians were embracing him and we weren't saying you have to give a free enterprise law. Just speak about what was in your book and somehow this was not acceptable. Let me end on a regulatory joke. I have to tell my antitrust joke. If you've heard it before, don't give the punch line away. There were three businessmen in the Soviet Union and they were all in the gulag and as prisoners do, they compare notes as to why you're in jail.

26:00The first guy said, well, I'm in jail because I came to work late and they accused me of cheating the state out of my labor services. Next guy says, well, I came to work early, every day, and they accused me of brown-nosing. The third guy said, well, I came to work exactly on time, every day, and they accused me of owning a Western wristwatch. I once told this joke to a bunch of antitrust lawyers and economists, and this joke got a big laugh. Second joke. There were three businessmen in the U.S. also in jail on antitrust crimes. And the first guy says, well, I charge higher prices than everyone else and they accuse me of profiteering and price gouging. The second guy said, well, I charge lower prices than everyone else and they accused me of throat competition and predatory pricing.

26:52The third guy said, well, I charge the same price as everyone else. It's hard to see how he could have with these other guys, but let that slide. And they accused me of collusion and cartelization. Dead silence. Dead silence because these guys knew where I was coming from. What I was going to say and what I'll say to you now is that this is not a law. A law is supposed to distinguish between good behavior and bad behavior. You know, you do good, you're okay, you do bad, you're in jail. But here, no matter what you do, high or low or the same, you go to jail. I mean, the reason they were after poor Bill Gates is he wasn't giving money to the people in Washington. Now he's set up all sorts of foundations and this and that and the other and he's giving money I predict there will be no more antitrust cases against Bill Gates, at least in the United States.

27:38I'll end at this point. Thanks for your attention.