Liberal Fascism: The Secret History of the American Left, from Mussolini to the Politics of Meaning

by Jonah Goldberg

  As we've seen, World War I offered a golden opportunity for Croly's agenda. Big business and the Wilson administration formed the Council of National Defense, or CND, according to Wilson, for the purpose of redesigning "the whole industrial mechanism...in the most effective way." "It is our hope," Hudson Motor Car Company's Howard Coffin explained in a letter to the Du Ponts, "that we may lay the foundation for that closely knit structure, industrial, civil, and military, which every thinking American has come to realize is vital to the future life of this country, in peace and in commerce, no less than in possible war."13

  When the war broke out, the CND was largely folded into the War Industries Board, or WIB. Run by "dollar-a-year men" from the world of finance and business, the WIB set prices, trade quotas, wages, and, of course, profits. Trade associations were formed along vaguely syndicalist lines. "Business willed its own domination, forged its bonds, and policed its own subjection," wrote Grosvenor Clarkson, a WIBer and historian of the effort. The aim was for the "concentration of commerce, industry and all the powers of government." "Historians have generally concluded," writes Robert Higgs, "that these businessmen-turned-bureaucrats used their positions to establish and enforce what amounted to cartel arrangements for the various industries."14

  Many industrialists wanted to keep the War Industries Board going after World War I, and politicians, including Herbert Hoover, tried to grant their wish. The war, horrible as it was, had proved that national planning worked. Stuart Chase, who coined the phrase "New Deal," explicitly cited two models for what America needed to do, the Soviet Gosplan and the war socialism of World War I. Rexford Tugwell gushed that laissez-faire had "melted away in the fierce new heat of nationalistic vision."15

  The propaganda of the New Deal--"malefactors of great wealth" and all that--to the contrary, FDR simply endeavored to re-create the corporatism of the last war. The New Dealers invited one industry after another to write the codes under which they would be regulated (as they had been begging to do in many cases). The National Recovery Administration, or NRA, was even more aggressive in forcing industries to fix prices and in other ways collude with one another. The NRA approved 557 basic and 189 supplementary codes, covering roughly 95 percent of all industrial workers.

  It was not only inevitable but intended for big business to get bigger and the little guy to get screwed. For example, the owners of the big chain movie houses wrote the codes in such a way that independents were nearly run out of business, even though 13,571 of the 18,321 movie theaters in America were independently owned. In business after business, the little guy was crushed or at least severely disadvantaged in the name of "efficiency" and "progress." The codes for industries dealing in cotton, wool, carpet, and sugar were--"down to the last comma"--simply the trade association agreements from the Hoover administration. And in almost every case big business came out the winner. In "virtually all the codes we have examined," reported Clarence Darrow in his final report investigating Hugh Johnson's NRA, "one condition has been persistent...In Industry after Industry, the larger units, sometimes through the agency of...[a trade association], sometimes by other means, have for their own advantage written the codes, and then, in effect and for their own advantage, assumed the administration of the code they have framed." We may believe that FDR fashioned the New Deal out of concern for the "forgotten man." But as one historian put it, "The principle...seemed to be: to him that hath it shall be given."16

  Indeed, FDR's pragmatism and experimentalism, so cherished by liberals then and now, were of a deeply ideological sort: social planners should be given a free rein to do what they like until they get it right. Thurman Arnold, the theorist behind the new "religion of government" and director of FDR's antitrust division, abandoned the standard liberal antipathy for cartels, monopolies, and trusts and instead emphasized consumption.

  All this was done with the acquiescence of the liberal establishment, later called the "new class" of managers, experts, and technocrats. The idea was that the smartest people should be immune to the rules of chaotic capitalism and vulgar politics. The "best practices" of business and engineering should be applied to politics. These schemes went by any number of labels--syndicalism, Fordism, Taylorism, technocracy--but the underlying impulse was the same. Businessmen were part of this new conventional wisdom. Gerard Swope, the president of GE, provides a perfect illustration of the business elite's economic worldview. A year before FDR took office, he published his modestly titled The Swope Plan. His idea was that the government would agree to suspend antitrust laws so that industries could collude in order to adjust "production to consumption." Industry would "no longer operate in independent units, but as a whole, according to rules laid out by a trade association...the whole supervised by some federal agency like the Federal Trade Commission." Under Swopism, as many in and out of government called it, the state would remove the uncertainty for the big-business man so that he could "go forward decisively instead of fearsomely."17

  As transparently fascistic as all this sounds today, it sounded even more fascistic back then. New Deal staffers studied Mussolini's corporatism closely. Fortune and the fairly liberal BusinessWeek both devoted considerable space to praising the Italian "experiment." "The Corporate State is to Mussolini what the New Deal is to Roosevelt," proclaimed Fortune. During both the Hoover and the early Roosevelt administrations, hosts of independent economists from across the ideological spectrum noted the similarities between Italian and Nazi economic policies and American ones. William Welk, a leading scholar of Italian Fascist economics, wrote in Foreign Affairs that the NRA codes seemed like imitations of their Italian counterparts, only the Italian Fascists had paid much more attention to social justice.18

  The view from abroad was little different. "We have not yet been informed whether, now that Rooseveltism has become openly and unmistakably Fascist, the British Trades Union Council means to withdraw its blessing and support from America's attempt to reform Capitalism," wrote Fenner Brockway, the British pacifist, socialist, and journalist, in the New Leader. Giuseppe Bottai, the Fascist minister of corporations until 1932, wrote an essay for Foreign Affairs, "Corporate State and the N.R.A.," in which he suggested that while the similarities were real, the Italian system treated labor better.19

  The Nazis saw the similarities as well. "There is at least one official voice in Europe that expresses understanding of the methods and motives of President Roosevelt," began a New York Times report in July 1933. "This voice is that of Germany, as represented by Chancellor Adolf Hitler." The German leader told the Times, "I have sympathy with President Roosevelt because he marches straight toward his objective over Congress, over lobbies, over stubborn bureaucracies."20 In July 1934 the Nazi Party's newspaper, Der Volkische Beobachter, described Roosevelt as America's "absolute lord and master," a man of "irreproachable, extremely responsible character and immovable will," and a "warmhearted leader of the people with a profound understanding of social needs." Roosevelt's books Looking Forward (which, as mentioned earlier, had been favorably reviewed by Mussolini himself) and On Our Way were translated into German and received lavish attention. Reviewers were quick to note the similarities between Nazi and New Deal policies.

  So what was the essence of this "revolution from above"? In the economic sphere it was most often called "corporatism," a slippery word for dividing up industry into cooperative units, guilds, and associations that would work together under the rubric of "national purpose." Corporatism simply seemed like a more honest and straightforward attempt at what social planners and businessmen had been groping toward for decades. Other names proliferated as well, from "syndicalism" to "national planning" to, simply, the "Third Way." The new sense of national purpose, it was thought, would allow business and labor to put aside their class differences and hammer out what was best for everyone, in much the same way the war planners had in Germany, America, and throughout the West. The Third Way represented a widespread exhaustion with politics and a newfound faith in
science and experts.

  The image of the fasces conjures the spirit of the idea: strength in unity. Corporations or syndicates representing different sectors of the economy would, like the sticks around the fasces, bind tightly together for the "public interest."21 Fascists agreed with Marxists that class conflict was a central challenge of economic life; they merely differed--often only at a theoretical level--on how the conflict should be resolved. By making citizens see themselves as Germans or Italians rather than as workers or bosses, corporatists hoped to make Hitler's declaration "There are no such thing as classes" a reality. Hitler in fact believed in classes--siding culturally and politically with the workers over the rich--but he, like most fascists, believed that class differences could be subordinated to the common good through nationalistic fervor. Under the Third Way, society would get all the benefits of capitalism with none of the drawbacks. The market would exist, but it would be constrained within "healthy" and "productive" borders. As the Italian Fascist procurator general Senator Silvio Longhi put it, "The state recognizes and safeguards individual property rights so long as they are not being exercised in a way which contravenes the prevailing collective interest."22

  "I believe," proclaimed FDR in 1932, "that the individual should have full liberty of action to make the most of himself; but I do not believe that in the name of that sacred word, a few powerful interests should be permitted to make industrial cannon fodder of the lives of half of the population of the United States." Such Third Way rhetoric had a familiar echo in much Nazi propaganda as well. In a typical editorial, written on May 27, 1929, Goebbels explained that the party "was not against capital but against its misuse...For us, too, property is holy. But that does not mean that we sing in the chorus of those who have turned the concept of property into a distorted monstrosity...A people of free and responsible owners: that is the goal of German socialism."23

  THE NAZI GLEICHSCHALTUNG

  Fascism is the cult of unity, within all spheres and between all spheres. Fascists are desperate to erode the "artificial," legal, or cultural boundaries between family and state, public and private, business and the "public good." Unlike communist Jacobinism (or Jacobin communism, if you prefer), which expropriated property and uprooted institutions in order to remake society from the ground up, fascism pragmatically sought to preserve what was good and authentic about society while bending it to the common good. Interests or institutions that stood in the way of progress could be nationalized, to be sure. But if they worked with the regime, if they "did their part," they could keep their little factories, banks, clubs, and department stores.

  It's revealing that corporatism has many of its roots in Catholic doctrine. The 1891 papal encyclical Rerum novarum proposed corporatism or syndicalism in response to the dislocations of the Industrial Revolution. In 1931 an updated encyclical, Quadragesimo anno, reaffirmed the principles of Rerum novarum. The two documents formed the backbone of progressive Catholic social thought. The Church's interest in corporatism stemmed from its belief that this was the best way to revive medieval social arrangements that gave man a greater sense of meaning in his life.

  In short, corporatism was in large measure a spiritual project. Both the cold impersonal forces of Marx's history and the unloving dogma of Adam Smith's invisible hand would be rejected in favor of a Third Way that let the "forgotten man" feel like he had a place in the grand scheme of things.

  The Nazis had a word for this process: Gleichschaltung. A political word borrowed--like so many others--from the realm of engineering, it meant "coordination." The idea was simple: all institutions needed to work together as if they were part of the same machine. Those that did so willingly were given wide latitude by the state. "Islands of separateness"--be they businesses, churches, or people--were worn down over time. There could be no rocks in the river of progress. In effect, the entire society agreed to the fascist bargain, in which they bought economic, moral, and political security in exchange for absolute loyalty to the ideals of the Reich. Of course, this was a false security; the fascist bargain is a Faustian bargain. But that is what people thought they were getting.

  The Fuhrer Principle was a key mechanism of the Gleichschaltung. Under the Fuhrerprinzip, all of civil society was supposed to operate like a military unit with each cell reporting loyally to its leader, and those leaders to their leaders, all the way up to Hitler himself. For German businesses this was an easy transition because they already implemented something like a Fuhrerprinzip in their organizations. In this sense German business culture contributed to the rise of Nazism, partly by laying the groundwork for a German Swopism, but indirectly as well, by readying the German mind for the sort of social control the Nazis wished to impose.

  The Krupp Konzern--the reviled armory for the Third Reich--blazed the trail for the fascist bargain in the nineteenth century with Alfred Krupp's General Regulations. In the 1870s Krupp instituted a health service, schools, life insurance, workmen's compensation, a pension scheme, hospitals, even an old-age home for his employees. His General Regulations served as a mini social contract between him and his workers. In return for their loyalty--that is, eschewing labor unions and socialist agitation--Krupp provided all the perks the socialists were fighting for. "What may strike the Auslander as odd," writes William Manchester, "is that Alfred's General Regulations were regarded--and in Essen are still regarded--as liberal. For the first time a German firm was spelling out its duties to its men."24 Krupp's General Regulations became one of the central progressive documents for reform in Bismarck's Prussia and, by extension, much of the West. Today companies with similar policies get fawning profiles on 60 Minutes.

  Under the Gleichschaltung, the Nazis merely extended and broadened these arrangements. The state demanded loyalty from Krupp and his ilk in return for the protection of the state. This was merely another way of saying that all of society was to be Nazified--that is, politicized--so that every unit of society did its part for the larger cause. As a result, businesses became transmission belts for Nazi propaganda and values. The Nazi "war on cancer" was taken up by firms that banned smoking. The Nazi war on alcoholism and the Hitlerite emphasis on organic foods slowly pushed the beverage industry away from beer and booze and toward natural fruit juices. Children were a special priority. In 1933 the Nazis banned alcohol advertising aimed at children. In 1936 a new certification system was implemented that labeled some beverages and foodstuffs "fit" or "unfit" for children. (Coca-Cola was ruled unfit for kids.) That same year a full quarter of all the mineral water produced in Germany came from breweries. In 1938 the head of the Reich Health Office, Hans Reiter, declared that henceforth sweet cider was the official "people's drink" (Volksgetrank) of Germany.

  The Nazis--always disproportionately supported by bureaucrats in the "helping professions"--benefited from particularly eager accomplices in the health-care industry. In a nation where democracy and civil liberties were swept aside and experts--doctors, regulators, and "industrial hygienists"--were promoted to positions of unparalleled authority, the Nazis offered a much-yearned-for opportunity to "get beyond politics." For example, the Reich Anticancer Committee proclaimed in its first annual report: "The year 1933 was a decisive one for the war against cancer: the national socialist revolution (Umwalzung) has created entirely new opportunities for sweeping measures in an area that until now has been rather limited...The energetic and unanimous engagement (Einsatz) of the medical profession has shown that new avenues have opened for the struggle against cancer in the new Germany."25

  Vast public and moral health campaigns were put in place to promote safe working environments, along with the production of wholesome organic foods, anti-animal-cruelty measures, and other progressive advances. While many of these reforms were imposed from above by social engineers with the willing compliance of businessmen now freed from the usual concerns about such costly modifications, the Nazis also worked tirelessly to cultivate and encourage demand from below for these reforms. Everyone from the low
liest worker to the wealthiest baron was encouraged to believe and enforce the idea that if you weren't part of the solution, you were part of the problem. German consumers, too, were hectored relentlessly to buy products that promoted the "common good."

  Language itself was bent to what could only be called Nazi political correctness. Victor Klemperer, a professor of Romance languages at the University of Dresden fired for his Jewish ancestry in 1935, dedicated himself to chronicling the subtle transformations of speech and daily life brought about by the Gleichschaltung. "The mechanization of the individual," he explained, "first manifested itself in 'Gleichschaltung.'" He watched as phrases like "Hitler weather"--to describe a sunny day--crept into everyday conversation. The Nazis "changed the values, the frequency of words, [and] made into common property words that had previously been used by individuals or tiny troupes. They confiscated words for the party, saturated words and phrases and sentence forms with their poison. They made the language serve their terrible system. They conquered words and made them into their strongest advertising tools, at once the most public and the most secret."26

  Popular culture, from television and film to marketing and advertising, was an essential tool for this process. Movie studios in particular were eager to work with the regime and vice versa. Goebbels put a great deal of stock in the medium, believing that "film is one of the most modern and far-reaching means of influencing the masses." But he assured the film industry that the government would not be taking over. Rather, this would be a public-private partnership. "We have no intention of obstructing production," he told studio heads in his first address to the industry, "neither do we wish to hamper private enterprise: On the contrary, this will receive a great deal of impetus through the national movement."27 The film industry worked with the government, formally and informally, releasing mostly escapist fare for German audiences as well as a steady stream of allegorically worshipful films about Hitler. Movie audiences were subtly encouraged to change their thinking not merely about, say, Jews and foreign policy, but about what it meant to be a human being in the modern world.