Lecture 5 of 19 · The Economics of Fascism
Thoughts on Fascism
Thoughts on Fascism by Ralph Raico is a free audio lecture (31:56) at freecapitalists.org, part of the 19-lecture series The Economics of Fascism.
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0:00Incidentally, as David pointed out, the name of Hitler's party and government was not Nazi, but National Socialist. Okay, Nazi was a nickname derived from the first two syllables of the term in German. Nationales Sozialistische Nazi. The Nazis never called themselves Nazis, they called themselves National Socialists. and they had very good reason to call themselves a variety of socialists as will become apparent in the conference from Professor Hoppe and others but referring to them as any kind of socialists made some people on the left very uncomfortable so they always call them Nazis or simply fascists or German fascists. Now, why is it misleading to call cases of police brutality especially brutality against political opponents of the regime fascist? To begin with using American violence against political enemies is a very old story with many kinds of regimes.
0:59And as far as European history in the 20th century goes, such massive violence on a grand scale did not originate in Italy or Germany, it originated in Lenin's Russia. First exercised by the Red Guards before the revolution, political violence, including and Mass Killings was institutionalized in the first incarnation of the Soviet secret police, the Cheka, which went through many different names, finally becoming the KGB. The victims were political enemies, real or imagined, but also largely class enemies, meaning not aristocrats who had largely fled the country, but middle-class people, anyone who owned property, and their families too, of course.
1:47As Karl Marx said, what is communism? Communism is the abolition of private property and communism will be the final perfect society once we get rid of merchants and bankers, manufacturers, traders, speculators, people who own land, landlords, just to get rid of them and we'll have utopia. In the Soviet Union, persons captured in the midst of acts of speculation, say townspeople who were starving, who brought some linen or crystal or whatever to some place out in the forest and traded it with some farmers for a few sacks of potato, were subject to summary execution. The checker was established in 1918 and the first several years of its existence is a period of the first Red Terror, Lenin's Terror, to be followed in the 1930s by Stalin's Great Terror.
2:44The first Great Terror claimed probably around a hundred or two hundred thousand lives, not counting those who were killed for fighting against the communists. Peasants, for instance, who resisted the confiscation of their crops. In fighting such hostile enemies, enemies of the people, the Reds committed atrocities on a grand scale. Of course, in the Civil War, there were atrocities on both sides, the Reds and the Whites, but the Reds' atrocities far out, far surpassed the atrocity of the anti-communists. The Reds took hostages, killed them by the thousands, and at least in one case, death camps were set up where prisoners were gassed to death, which was already in the early 1920s.
3:31Anybody who wanted to find out about it, find out the truth, knew about the slaughterhouse that was Lenin's Russia in those years. and such. Massive political violence was exposed, for instance, in the conservative press, the Catholic press, but also by other non-Leninist socialists in many different countries, by anarchists like Emma Goldman, for instance, by emigres like the famous Harvard sociologist Petro Sorokin. So people knew about this. This didn't await the 1956 destabilization speech by Khrushchev. As far as violations of civil liberties go, freedom of speech, the press and so on, here too the Soviets were the pioneers and carried through the repression more systematically even than the Nazis, let alone Mussolini's fascists.
4:23The reason was that the communists totally abolished private property and also crushed, meanwhile, the Christian churches. The communists had no need of censorship in any traditional sense, since all of the newspapers, all of the meeting halls, all the publishing houses were owned by the state and staffed by communist cadres. In Italy, they were still privately owned so that non-fascists, even some anti-fascists, could occasionally have their writings published. In Russia, the communists imprisoned and massacred Christian priests wholesale. This the Nazis were not able to do in Germany, much as many of the Nazi leaders would have loved to. After all, they were only in power for 12 years.
5:08The outstanding example of the limitation on Nazi power is the Catholic Bishop of Münster, Clemens von Gallen. When Bishop Gollin heard that so-called mercy killings were taking place in hospitals and insane asylums, that meant that the people deemed unworthy of life were simply being killed, he gave a series of famous sermons, this is in the middle of the war in 1941, with the Germans fighting on the eastern front, in which he denounced the policy. And in the midst of the war, incredibly enough, Hitler was forced to modify his policy. So communists led by Lenin established in Russia the first and greatest terrorist state of modern history.
5:54Along with that came the first great Russian famine of the Soviet period, causing the deaths of another 2 or 3 million people. To his limited credit, Lenin permitted American relief to come in, supervised by Herbert Hoover. This was the Leninist system of the Communists, now proposed to spread to the whole world. Their instrument was the Comintern, the Communist International or the Third International.
6:41In conventional histories of the interwar period, one thing that you must never do is view the history channel, read all the books instead. In conventional histories of the interwar period, the Comintern is a 600 pound gorilla that is Missing. In 1918, in the creation of the Common Turn, its mission was to bring communism to every country and explicitly and openly, they didn't make any bones about it through illegal as well as legal means. Through any means that fit the situation, including violence, killings where appropriate, assassinations and so on. The first head of The Communist International, Gregory Zinoviev, said that if necessary, the communists would do away with 10 million people in Russia alone.
7:40In the end, it turned out to be an underestimation. The communists gained power briefly in Hungary and Bavaria. The Red Army invaded Poland, offering bounties, as we know now from the Soviet archives, offering bounties for the heads of Polish aristocrats, priests, and so on. Oddly enough, the Polish farmers and workers resisted the communist message, stood firm against the invasion of their country, and the Red Army was stopped at the Vistula River right outside Warsaw. Back in 1848, the Communist Manifesto, Marx and Engels, wrote that communism was a specter haunting Europe, that was just a bit of propaganda, hope and aspiration.
8:29After the Bolshevik Revolution, Communism was really the specter haunting Europe and the world.
8:39What about the frequent equation of fascism with anti-Semitism and exterminationist racism? As far as the Italian example goes, Italian fascism, that's another myth. Until the late 1930s, there was no trace of anti-Semitism in Italian fascism. In the early In the early years of the movement and in the regime, some of the leaders were Jewish, Italian Jews. In fact, at least in one case, one of Mussolini's many girlfriends was Jewish. And the Italian fascist ideology was nationalist, not racist. It was only in 1938 that Mussolini promulgated some anti-Semitic laws, prohibiting intermarriage between Jewish and Gentile Italians, excluding Jews from university positions and so on.
9:24Even here, exceptions were allowed. Why did Mussolini take this route? By this late date, it was clear that Hitler was redrawing the map of Europe and the political momentum was on Hitler's side. Mussolini, in the true tradition of Italian statesmen, wanted to be in on the division of the spoils, some signs of anti-Semitism he thought would be welcomed by the Nazis. Most Italians, almost all Italians, were disgusted by the measures against the Jews. The Italians had no hatred towards their Jews, a very small community integrated for centuries and centuries into Italian society. It was Hitler that most Italians despised. When the war came and then the Nazi roundup of the European Jews, it was not very successful in Italy. Many books have been written about this. The Italians kept throwing monkey wrenches into the Nazi Project, and that was true of the Italian bureaucracy, of the Italian army, even of the fascist party. The Catholic Church hid hundreds of Jews in the monasteries and convents
10:30of Italy with the threat of death for the monks and the nuns. Thousands of Jews were saved. One small incident illustrates the situation. When the Germans occupied Vichy France, the When the Jewish synagogue in Nice was attacked by an anti-Semitic French mob, the Italian Carabinieri protected it and kept it from being destroyed. The Jews of Nice were so grateful that they raised money to send to the Italian civilian I think this goes to show that World War II, the last good war, was a little more complex than many people think.
11:27So how were these fascists able to come to power in Italy in 1922? Mussolini was always an opportunist with no fixed principles. He began his political career as a socialist and the spokesman for the most radical wing The beginning of the Italian Socialist Party. It railed against the Italian state, especially against Italian imperialism in the war against Turkey over Libya. But by the time World War I came, Mussolini had become a nationalist, an extreme nationalist, and campaigned for Italian entry into the war. He kicked out of the Socialist Party, kicked out as editor of their major newspaper, started his own paper, and continued in his nationalist direction. The end of the war Mussolini seemed to be through. He tried to start a political movement of his own, but it got nowhere.
12:17It was the Italian socialists who came to his aid. Italy was in turmoil and the Socialist Party had become further radicalized. Lenin looked on Italy as a particularly promising area for revolution. The Italian Socialist Party came under the control of the Maximalists, who viewed themselves as Leninists and looked to the common term for ideological direction. In the program that the Socialist Party adopted in 1919, they proclaimed the start of a period of revolutionary struggle to bring about the forcible suppression of the bourgeoisie within a short time. and they called for the armed insurrection of the proletarian masses and proletarian soldiers to institute the dictatorship of the proletariat.
13:06This was after the Bolshevik Revolution and everything that the Reds were doing in Russia. They declared that the proletariat must have recourse to the use of violence for the conquest of power over the bourgeoisie. We must use new and proletarian organizations such as Workers' Soviets. We must adhere to the Third International. Well, general elections took place in Italy in 1919. The Socialists became the largest party in Parliament, as well as the best organized. Its spokesmen and agitators hail the coming socialist revolution. The party newspaper Avanti went so far as to state that soon all the parties will be eliminated.
13:52Now, socialist violence had long been a feature of public life in Italy. It had been, up until now, directed against employers' property and especially against non-striking workers. and Workers, systematically practiced by the socialist labor unions in the course of any industrial dispute. There was a great Italian classical liberal economist named Alfredo Pareto. In 1906, Pareto complained that the right to strike had been turned into what he said, He said, the freedom for the strikers to bash in the brains of workers who wish to continue to work and to set fire to the property of the employers with impunity.
14:37This was typical of the action of labor unions in Europe, in America, then as now. Now, union violence in Italy was not confined to the industrial centers. Systematic coercion was introduced into the countryside by the socialist agricultural unions. There were wildcat strikes all the time. The country was in constant economic turmoil. In the countryside, the ultimate aim of the socialist agricultural union, Almost a million members was to collectivize the farms, as in Russia, which would be worked by cooperatives.
15:25What the employers especially resented was the socialist demand to control the social, this was step-by-step towards their ultimate aim, to control the labor supply and employment opportunities. In the end, the employers were forced to recognize the employment offices run by the socialists as the exclusive source of labor power. In 1920, representatives of the General Confederation of Labor signed a pact in Moscow adhering to the Social Revolution and the Universal Republic of Soviets. In September, workers in Milan, Turin, and Genoa hoisted the red flags, seized control of the factories, proceeded to run them.
16:10In Turin, workers' councils were formed, which Antonio Gramsci welcomed as the Italian version of the Russian Soviets. Local elections in 1920 put control of most of the municipal and provincial councils in the hands of socialists, especially in central Italy and northern Italy. Sometimes declaring their towns revolutionary republics, the local socialists announce their intention to use the communes as a springboard for revolution. Socialist councils use their powers to raise taxes on wealth and property, increased spending on public services, Millions in this connection favored workers cooperatives and municipal contracts and subsidized consumer cooperatives to undercut the private retail and distribution trades.
17:09Millions of Italians in the middle class became convinced that Bolshevism was on the point of overwhelming the country. Nowadays, a typical historian of the period acts as if the only people who could have Benito Mussolini, the second from the right, I think he should be further over to that gentleman on the left. Nowadays people say this communist threat was all bluff verbal revolution. That's not how it was viewed by contemporaries. From their actions and their speech, there was every reason to suppose that the socialists were aiming to turn Italy into another version of the Soviet Union.
18:04Meanwhile, the government vacillated. The government officially assumed a posture of neutrality and labor disputes, which meant no protection for the rights of property or of non-striking workers. Now, of course, all governments are incompetent, all governments to some degree corrupt, but I have to say in my own studies of modern history, the Italian government makes FEMA look like the Sony Corporation. The fascists counted, now the fascists counted, started countering socialist violence with their own. At the time, even well-known anti-fascists like Alcida di Gasperi, the Christian Democratic Premier of Italy after the war, testified that in the beginning the fascist violence was largely defensive, the protection of the rights of non-striking workers and of farmers and of factory owners.
19:05The great increase in fascist membership and influence came initially in the rural areas where the fascist squads or blackshirts were formed. And these were largely middle class young men, the sons of some of these small property owners, many of them veterans of the war. and they were hailed by all non-communist, non-socialist, communist, really indistinguishable in Italy, elements in the country. The socialist program had alienated even many sharecroppers and tenant farmers, especially in the Po Valley.
19:52So these were the people who started equipping and financing these blackshirts. And it was called by later historians, some later historians, basically a movement of middle-class self-help. One thing I sort of like, it was the non-union workers, the scabs, right, together with the fascist blackshirts who broke the labor monopoly on the Genoa docks. And when in the area of Carrara, the local socialist government threatened to nationalize the marble quarries while they were forcefully stopped.
20:38Of course, the fascist violence was not merely defensive. It went far beyond that. They tended to root out the socialist infrastructure. They applied physical violence that their opponents could not match, you know, union goons though they were, and destroyed socialist-run town halls, union headquarters, newspapers, and tax-subsidized cultural centers. Now, anti-communists in Italy and overseas applauded the fascist victory over the socialists, that is, when Mussolini came to power in 1922. In 1927, Winston Churchill visited Italy and met with Mussolini, and Churchill publicly praised fascismo's triumphal struggle against the bestial appetites and passions of Leninism, claiming it had proved the necessary antidote to what he called the communist poison.
21:36Poison. When the fascists were on the point of assuming power, Mussolini reversed his earlier anti-monarchical and anti-Catholic views, and he even quoted the support of Italian free-market economists, of which there was a small but very prestigious group that had access to major newspapers. There's a parallel in French history with Napoleon and the ideologues, That's another subject, and because of my limited time, I'm not able to go into it, but if we, you know, certainly have, could do it in an hour and a half, I suppose. And so Mussolini did this with the Italian free market economists, as I say, a small but prestigious group.
22:30Mussolini even used the term Manchesterism in one of his talks. Now you have to understand, for decades already, any hint of Manchesterism, which is laissez-faire, was anathema. It's the worst thing that you could say in most of Europe. That and the real danger, as they saw it, of a Leninist takeover, led all of the Italian free-market economists to endorse Mussolini's commitment to power in 1922. His supporters included Luigi Ainaudi, a famous economist admired by Mises and Hayek. Afterwards, Ainaudi became the first president of the Italian Republic and one of the founding members of the Mont Pelerin Society, Society, probably the most famous classical liberal in Europe at that time. But in 1922, since they felt they had a choice between Lenin and Mussolini, that's what Ainaudi and the others did. At first, it appeared that Mussolini would actually realize the wishes of the free market economist. He appointed as his finance minister, professor of economics, Alberto de Stephanie, who proceeded to enact a liberal economic policy, including lowering
23:41Taxes, abolishing numerous anti-growth regulations and promoting free trade. But his policies alienated the leaders of the armaments, metal and chemical industries, constituencies, powerful constituencies in the North. These are what the public choice economists would call rent-seeking groups. They were deeply offended by de Stephanie's free trade ideas and his refusal of state Subsidies to their Private Businesses. In 1925, he was forced to resign. And there's another parallel with the French history in Turgot. Now, with the departure of de Stephanie, the fascist regime became basically more interventionist and steadily interventionist. There was, first of all, the growth of the state bureaucracy, the bane of modern states, but most particularly of Italy. After all, jobs had to be found for of Good Fascist Cadres, phony baloney jobs, so that they could take a siesta, maybe four hours work to begin with, interventionism of the fascist regime, which will doubtlessly be detailed during our conference, reached its heights in the 1930s with the creation of the Institute for Industrial Reconstruction, the IRI, an enormous state-holding company
25:08that controlled numerous firms in many different fields. By 1939, the IRI, the state-holding company, held 18 percent of the total capital of Italy. As one historian has noted, Mussolini's government controlled a proportionately larger section of the national economy than any other government in Europe except the Soviet Union. It appears that the Italian fascists coined the term totalitarian and used it in a positive sense, everything was to be done for the state, against the state and so on. But this was a real bombast and bluster. There was a fascist secret police called the OVRA and typically, seriously, the initials stood for nothing at all.
26:02To compare the overwrought to the Gestapo or the Soviet secret police is ridiculous. Stanley Payne is an excellent historian of fascism at the University of Wisconsin, as he says. During the entire history of the fascist regime, about 5,000 persons were given prison sentences for Political Reasons, with about 10,000 sent into internal exile. It's 1922 to 1943. Up until 1940, the war, political executions amounted to nine altogether, mostly of Slovenian terrorists, so-called. During the war years, 1943, another 17 political executions took place. What was that? A half an hour at Treblinka or a half an hour at Vorkuta or Kolyma in the way of deaths in the Blue Log.
26:59Now, one thing that might be mentioned, although again, I don't know what I did to upset Jim so much, or maybe, I don't know, the powers that be, limiting me to the Nobel laureate, not exactly, sorry, a Schlaubam laureate, to the same amount of time as the, you know, I don't want to say undistinguished, but at least not There are in fact many significant connections between fascism, Italian fascism even, and the Jacobins during the French Revolution, and those could be detailed.
27:55There was one writer on fascism who was himself a fascist and survived the war I find particularly interesting. His name is Maurice Bardet and he was a group of Parisian fascists, not Vichy people, hated Vichy or despised Vichy, but actual fascists who lived in Paris during the German occupation. a book called What is Fascism? And he declares that the ultimate goal of fascism was the production of a new man. Just as, almost in the same words that Ropespear and the Jacobins used in the French Revolution, he would be Spartan man. And the essential goal of fascism was the creation of the Order of Sparta. That is total self-abnegation, total living for So, finally, what can we say were the characteristic traits of fascism, including German national socialism?
28:57There was, first of all, the militarization of society, the spread of military values and institutions. These reached a very high degree of achievement in Germany, but it was rather feebly attempted in Italy as well. Let's keep in mind that in the 1920s and 1930s, this was still an age of world imperialism. Mussolini somewhat vaguely aimed to break through the chains of British and French imperialism. Hitler aimed at something beyond that. Now, this is, I think, suggestive. As for militarism, Andrew Bacevich of Boston University has written a disturbing study quite recently entitled The New American Militarism, How Americans are Seduced by War and unconsciously how military values and putting the military above everything else, if they had it their The Second Defining Characteristic of Fascism in the Broader Sense was the Third Way. The middle ground between what people thought was English and American laissez-faire capitalism, dreadful as that was, that was on the one hand.
30:36On the other hand, there was Soviet Communism. Fascism would be the middle ground, not total nationalization of the means of production. No one wanted the chaos and misery of Soviet Russia. Maybe Russians could put up with that, but not Italians, certainly not Germans. Fascism would end the dog-eat-dog competitive system of the West. As this French fascist wrote after the War. Fascism maintained private property in name, but it imposed its will on the egoism of liberal capitalism. This third way of fascism was praised by many conservatives and progressives around the world, by businessmen and labor unions, and it would finally do away with the awful world of laissez-faire, where the market rules, and it would bring about a true community of all the classes in society.
31:39And I think that how that evolved in fascist regimes is going to be outlined in detail in further talks.
Part of a series
The Economics of Fascism
19 lectures, 9.1 hours. See the full series or subscribe by RSS.
Speakers: Butler Shaffer, David Gordon, George Reisman, Hans-Hermann Hoppe, Jeffrey A. Tucker, Jeffrey M. Herbener, Joseph T. Salerno, Jörg Guido Hülsmann, Llewellyn H. Rockwell Jr., Murray N. Rothbard, Paul Gottfried, Ralph Raico, Robert Higgs, Robert P. Murphy, Roderick T. Long, Thomas E. Woods, Jr., Thomas J. DiLorenzo, Walter Block, William H. Peterson.
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