Bear with me for a few paragraphs. We need to begin this commentarywith a brief discussion of economic systems.
A capitalist system (such as we have here in the U.S.) is a system in which the means of production and distribution are owned by individuals, or by groups of individuals. The Amalgamated Widget Corporation is owned by a group of stockholders. It’s managed by people hired by the stockholders because those managers are very good at what they do.
A socialist system is one in which the means of production and distribution are owned by the state. It’s managed by people who work for the state. Those managers might be very good at what they do, but it’s more likely they got their jobs because they’re loyal members of the ruling party or relatives of some high-ranking party official.
As a result, socialist systems aren’t very efficient. Widgets manufactured by the Amalgamated Widget Corporation are reasonably priced, of good quality, and available in adequate quantities. Widgets manufactured by the State Widget Company cost twice as much, are of poor quality, and are always in short supply.
“What about communism?” I heard someone say. We don’t need to include communism in this discussion because as any economist (other than Karl Marx, perhaps) will tell you, communism is just socialism by another name. The theory is slightly different but in practice the two are identical.
Historically, capitalism has required a democratic or republican form of government to thrive. It has never done well under an aristocracy or a monarchy. The individuals who own the means of production and distribution tend to become the rulers (i.e., the state) and the system devolves into socialism.
In the years following World War One, much of Europe was in political chaos. The Treaty of Versailles had forced a constitutional republic on Germany, and England was still a stable monarchy, but the other nations of Europe were besieged by a variety of groups trying to seize power. Most of those groups advocated either socialism or communism because both those systems concentrate power in the hands of the state.
In Italy something a little different was going on. A group headed by Benito Mussolini wanted to seize power, but they had studied history. They knew that capitalist economic systems were much more efficient than socialist systems, but history told them that capitalist systems didn’t do well under a dictatorship. The problem was how to retain Italy’s capitalistic economic system but put it under the control of a dictatorial state, without it devolving into socialism.
They finally decided it could be done by using a combination of laws and regulations that could be enforced or not, as the government chose; punitive taxation to punish companies that resisted government demands; and lucrative government contracts to reward companies that did as they were told.
Mussolini’s group was called the National Fascist Party, and their methodology of maintaining and controlling capitalism in a dictatorship soon became known as “Fascism.”
In 1924 the Italian people elected Mussolini and his National Fascist Party to head their government. The Fascists were elected in a free and open democratic election, but within two years the Fascists had turned Italy into a totalitarian dictatorship. They ruled Italy for nineteen years, from 1924 until the Allied invasion of Italy in 1943.
Adolf Hitler was a great admirer of Mussolini, so much so that he even changed the way the German people were to address him. Early in his political career Hitler had given himself the title of der Chef, “the Chief.” When Mussolini came to power in Italy he adopted the title il Duce, “the Leader.” Shortly thereafter, Hitler decreed that he would no longer be known as der Chef. He would henceforth be known as der Fuhrer, “the Leader.”
Under the Weimar Constitution, Germany had a capitalist economic system. Hitler realized it would be best if he could retain Germany’s capitalist system after the Nazis came to power. He studied Mussolini’s fascist ideology and decided he could use the same methodology to control Germany’s economy.
After becoming Chancellor in 1933, Hitler began imposing the same controls on German industry that the Fascists were using in Italy. The Nazi government wrote regulations that were so rigid they could literally prevent businesses from operating, then enforced those regulations only against businesses that resisted government control. They imposed taxes that were targeted against specific industries and in some cases, specific companies.
They used government contracts to pick winners and losers. Companies that did as they were told got lucrative government contracts. Those that resisted not only didn’t get contracts but were placed on a “blacklist.” Other companies with government contracts were forbidden to do business with them.
Hitler didn’t interfere in the day to day running of German companies, but if a company’s performance wasn’t up to the standards he thought it should meet he didn’t hesitate to demand the firing of top-level executives. He also put high-ranking Nazis on corporate boards of directors to assure that the companies went in the direction he wanted them to.
He appointed “ministers” over all branches of German life. The Minister of Aviation told the aircraft companies what kinds of airplanes to design and build. He told the German airlines what kind of airplanes to buy, and from which manufacturers.
The Minister of Shipbuilding issued the same sort of orders to the shipyards and the shipping companies.
The Minister of Education told the schools what to teach the children, and the approved teachings were all Nazi ideologies.
The Minister of Transportation even ordered Dr. Ferdinand Porsche, automotive genius and owner of the Porsche Automobile Company, to design and build a small, economical car for the German people to drive. Dr. Porsche called the little car the Volkswagen, the “people’s car.”
It’s been 66 years since World War Two came to an end, and yet people are still afraid of the word “fascism.” We never hear or read the word in any context. Even the history books dance around the governments of Hitler and Mussolini, usually referring to them as “socialist” or “capitalist.” In fact, they were neither.
Many Twenty-first Century lexicographers claim the word “fascism” has no clear meaning. They say it means different things to different people, and therefore has no place in modern discourse.
I respectfully disagree. Mussolini and his Fascist Party compatriots defined the word very clearly more than ninety years ago. Fascism is the control of privately-owned companies by a dictatorship, using a combination of draconian regulations, punitive taxation, and lucrative contracts.
If my description of Hitler’s policies in Nazi Germany sounded familiar, it’s because we’re seeing the same actions carried out in Washington today. Consider:
- The Obama administration is strangling the U.S. oil, coal, and natural gas industries with regulations and threats of “windfall profits” taxes, while using taxpayer money to promote favored energy industries like wind and solar power.
- Using the April, 2010, oil spill in the Gulf of Mexico as an excuse, the Obama administration has refused to approve applications for drilling permits, thereby further punishing the oil and natural gas industries.
- Within two months of assuming the office of President, Obama demanded and got the firing of the CEO of General Motors Corporation. He also demanded and got the right to approve the selection of the new CEO.
- Obama saved GM and Chrysler from bankruptcy with massive infusions of taxpayer money, taking as “security” enough stock to control both companies. He then turned the stock over to the autoworkers unions, which put several high-ranking union members on the board of directors of each company.
- In direct violation of two centuries of corporate law, Obama wrote off several billion dollars of GM liabilities against GM bonds, forcing bondholders to accept fifteen cents on the dollar of their investment in a vehicle that was supposedly protected by law.
- Obama forced GM and Chrysler to close more than half their dealerships, and specified which dealerships were to be closed. The dealerships selected for closure weren’t the least profitable dealerships. They were dealerships owned by people who had contributed money to Republican candidates.
- Obama directed GM to develop an electric car, and poured several billion taxpayer dollars into the project. As of October 1, 2011, GM has sold exactly 384 of those cars. So far, each of those cars has probably cost American taxpayers about $10 million.
- The government has banned the use of incandescent light bulbs, mandating instead the use of fluorescent bulbs that are more expensive and contain toxic materials. In so doing, they are telling U.S. companies what they can and cannot manufacture and sell, and telling the American consumer what they must buy and use.
- Obama has (so far) appointed 37 “czars.” There are czars over the automobile industry, the healthcare industry, the pharmaceutical industry, the energy industry, education, the environment, science, and almost every other aspect of American life. Most of these czars are avowed socialists or communists, but they report directly to Obama and are not subject to Senate confirmation.
- The Obama administration is trying to prevent Boeing from building an aircraft assembly plant in South Carolina, where they could build airplanes using non-union labor. They want to force Boeing to continue building all their airplanes in Washington State using union workers.
- The Obama administration has threatened to require all companies bidding on government contracts to list all political contributions made by the company and its executives. The purpose of that threat is clear: if you want to do business with the government, don’t give money to Republican candidates or conservative causes.
- Most recently, the administration is demanding that food manufacturers reformulate most of their most profitable products in accordance with government guidelines. If they fail to do so by 2014, they will not be allowed to advertise those products on the “public” airwaves.
These policies are fascism, as set forth by Mussolini and the Italian Fascists more than ninety years ago. There is no other word for it. But no one—not the Republicans, not the conservatives, not even the national talk radio hosts—want to use the word.
Until we find the courage to call it what it is, it’s not going to stop. Indeed, it’s going to get worse.