The Corporate Origins of Fascism and Unemployment

Structure Nazism

Yesterday I came across a copy of Robert Brady’s The Spirit and Structure of German Fascism, published by Victor Gollancz in 1937. Brady was the associate professor of economics at the University of California. His book argued, as the foreword by Harold Laski says

that Fascism is nothing but monopoly-capitalism imposing its will on those masses on those masses whom it has deliberately transformed into its slaves. It is fundamental to its understanding that all the organs of working-class defence are destroyed; it is fundamental to its understanding, also, that society has been merged into a state the outstanding characteristics of which is the imposition of its will by coercion. There is no social revolution: the ownership of the means of production remain in private hands. There has been a political revolution in the sense that those organs through which, prior to 1933, criticism of the social order might be expressed, have been ruthlessly destroyed. What replaces them is essentially a partnership between monopoly-capitalism and the Nazi Party in which that supreme coercive power which is of the state’s essence is used to compel obedience to the new system.

This view of the Nazi state has been rejected by historians, as big business largely only started funding the Nazi party quite late, and always maintained some degree of freedom after they were absorbed into the Nazi system of controls. Despite this, Brady presents an impressive argument on how far the development of monopoly-capitalism – the emergence of vast industrial cartels and industries dominated by only single or at most, two companies paralleled and prepared for the emergence of the Nazi state.

Brady was also alarmed at the prospect of Fascism taking power in other nations, including America. The very last chapter, ‘The Looming Shadow of Fascism’, contained a number of quotations, some from American Fascist ideologues, arguing for certain aspects of Fascism. It includes this quote on using unemployment to control the masses by an economist.

“The next question is, How scarce do jobs have to be? The answer is, just scarce enough so that labourers are not likely to get uppish, make unexpected demands, and get away with them. Just scarce enough, in other words, so that wages are definitely under the control of the employing class, at least so far as abrupt fluctuations are concerned. And under what circumstances can the labouring class be depended upon to sit tight, lick the hand that feeds them, and make no unexpected demands? The answer is when they are all strictly up against it, with just barely enough wages to make ends meet – almost, and distress staring them in the face if they should lose their jobs. And this condition can obtain only when there is a reserve army of unemployed sufficient to keep those who do have jobs in abject fear of losing them” (Finney, “Unemployment, An Essay in Social Control,’ Journal of Social Forces, September 1926.)

As Guy Debord’s Cat has demonstrated on his blog, this is exactly the argument advanced by von Hayek and the Chicago School. They wanted a constant unemployment rate of 6 per cent to keep wages down. Von Hayek was Thatcher’s favourite economist, while Milton Friedman, another member of the school, went down to Pinochet’s Chile to observer for himself how well that Fascist caudillo was putting his theories into practice. And it’s a policy that’s being pursued even today by Thatcher’s successors, Cameron, Clegg and Osborne.

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