The NSDAP's anti-Papen Stance Set Loose a Torrent of Anti-Capitalism; Papen Was Accused of Supporting "Manchestertum" (a Derisive Term for Laissez-Faire)

The NSDAP's anti-Papen stance quickly put it on a collision course with big business, as the party's assault on the chancellor and his cabinet set loose a torrent of Nazi anti-capitalism. On the very day of the no-confidence vote and dissolution, the Nazis launched an abrasive election campaign that left no doubt about their decision to resort to demagogic socio-economic radicalism. To open the campaign, they had ready for release that day a pamphlet that branded as reactionary both Papen and his cabinet. The chancellor had, it charged, aligned himself completely with the "private capitalistic system" by issuing emergency decrees that "lacked any spark of social justice." The pamphlet pilloried the cabinet's efforts to reduce wages and undermine the sanctity of contract wages, pledging the NSDAP to resist both. It described Papen's reductions in social benefits as "social robbery" perpetrated against "the mass of working people" in order to bestow a gift on a "small gang" of big business entrepreneurs. Papen's close and one-sided ties with the business community revealed, the pamphlet announced, that his entire economic policy amounted to nothing more than a throwback to Manchestertum (a derisive term for laissez-faire economic policies) designed to fill the bank accounts of those "gentlemen."

--Henry Ashby Turner Jr., German Big Business and the Rise of Hitler (New York: Oxford University Press, 1985), 278-279.

On Hitler's Economics: Hitler Repeatedly Showed Himself Incapable of Accepting Even the Simplest Fact of Economics, the Scarcity of Goods

With Hitler, it is misleading to speak of economic thought in the usual sense. Although his acquisition of dictatorial authority over one of the most advanced industrial nations of the world eventually forced him to grapple with concrete economic problems for more than a decade, often with remarkable success, he never attained even a basic grasp of the formal discipline of economics. From the testimony of those who served him, as well as from his own writings and recorded utterances, it is obvious that he knew virtually nothing about micro-economics and had no more grasp of macro-economics than could be gained by reading newspapers. Once in power he repeatedly showed himself incapable of accepting even the simplest fact of economics, the scarcity of goods.

--Henry Ashby Turner Jr., German Big Business and the Rise of Hitler (New York: Oxford University Press, 1985), 71.

In Corporatist Systems, the State Controls Prices, the Movement of Labor, and the Allocation of Raw Materials but Turns Over this Regulatory Authority to Delegates of Business; Corporatist Bargaining Systems Entail Creeping Inflation

One of the hallmarks of a corporatist system, according to Maier, was that "the state claimed important new powers to control prices, the movement of labor, and the allocation of raw materials, [but] it turned over this new regulatory authority to delegates of business . . . not merely through informal consultation but also through official supervisory boards and committees." This corporatist characteristic also could be used to describe the relationship between the Confederate government and vital industrial sectors like iron companies and railroads.

Another similarity between the Confederacy and other avowed corporatist governments is inflation. Historian Charles Maier argues that corporatist states use inflation "as a tempting if spurious way to purchase social peace," and that inherently the "corporatist bargaining system entailed creeping inflation."

--Michael Brem Bonner, Confederate Political Economy: Creating and Managing a Southern Corporatist Nation, Conflicting Worlds: New Dimensions of the American Civil War (Baton Rouge: Louisiana State University Press, 2016), 190.

The Confederate Central Government Was a Form of "War Socialism"; A Central State as Well Organized and Powerful as the Confederacy Did Not Emerge Until the New Deal and World War II Mobilization

The large and powerful Confederate state presents another anomaly for the “limited government” interpretation. Although southerners rebelled against growing centralization of the federal government, they had no qualms about establishing a strong national state of their own. Scholars have classified the Confederate central government as a form of “war socialism.” The Confederacy owned key industries, regulated prices and wages, and instituted the most far-reaching draft in North American history. The Confederacy employed some 70,000 civilians in a massive (if poorly coordinated) bureaucracy that included thousands of tax assessors, tax collectors, and conscription agents. The police power of the Confederate state was sometimes staggering. To ride a train, for example, every passenger needed a special government pass. Designed to ferret out deserters and draft dodgers, the pass system curtailed civil liberties and inconvenienced travelers, who often had to wait in long lines to get their passes. Political scientist Richard Franklin Bensel writes that “a central state as well organized and powerful as the Confederacy did not emerge until the New Deal and subsequent mobilization for World War II.”

--John Majewski, introduction to Modernizing a Slave Economy: The Economic Vision of the Confederate Nation, Civil War America (Chapel Hill: University of North Carolina Press, 2009), 6-7.

Despite Massive Leftist Propaganda that Hitler Was the Paid Agent of Capitalism, He Garnered Only Limited Financial Support from Big Business; Nazis Campaigned to Rescue Germany from "High Capitalism"

Like Mussolini during 1921–22, Hitler worked during 1931–32 to establish ties with influential sectors of society, cooperating part of the time with the right and trying to reassure businessmen that they had no reason to be apprehensive of Nazi “socialism.” Yet despite massive leftist propaganda that Hitler was the paid agent of capitalism, Hitler garnered only limited financial support from big business. While there was considerable support for Hitler among small industrialists, most sectors of big business consistently advised against permitting him to form a government. The Nazi Party was primarily financed by its own members.

When Hindenburg’s presidential term expired in 1932, Hitler decided to challenge his reelection, knowing that Hindenburg was reluctant to appoint him chancellor. Though Hindenburg failed by a narrow margin to gain an absolute majority in a three-way race with Hitler and the Communist candidate, in a runoff he easily bested Hitler by 53 to 37 percent. Hindenburg’s right-wing advisers then convinced him to appoint as chancellor another right-wing Center Party figure, the aristocrat Franz von Papen. This he did in mid-July. Papen’s goal was much the same as Brüning’s: to convert the German government into a more authoritarian and rightist presidential system. Seeing the Nazis as his main rival, he obtained permission to hold new elections, but in the balloting of July 31 the Nazi vote zoomed to 37 percent, giving the party 230 Reichstag seats and making it the largest single party in Germany. Papen could not possibly dominate such a parliament with only a minority of votes behind him. Soon after the parliament convened in September, he called yet another election, hoping this time to break the Nazis’ momentum. In this he was partially successful; for the first time the National Socialist vote fell, but only to 33 percent and 196 Reichstag seats.

During the electoral campaigns of 1932, the Nazis claimed that only they could save Germany from civil war. They promised security from Marxism but campaigned vigorously against “reaction” in the form of Papen’s right-wing “cabinet of barons,” promising also to rescue Germany from “the American system, or high capitalism.”

--Stanley G. Payne, A History of Fascism, 1914-45 (London: Taylor and Francis e-Library, 2003), 167-168.

Revolutionary Syndicalists Encouraged the Full Development and Maturation of Capitalism to achieve Collectivism; Marx and Engels Endorsed British and French Imperialism and the American Conquest of Texas

Increasingly, revolutionary syndicalists held that, as Marxists, they must encourage the full development and maturation of Italian capitalism, since without a fully developed capitalism there could be no successful revolutionary collectivism. Moreover, in Italy the revolutionary movement could never achieve success on the basis of the working class alone. To triumph it must become a cross-class movement, drawing the support of farmers, farmworkers, and as much as possible of the productive middle classes as well. Nor was it a mistake to support “proletarian nationalism” in national war and colonial expansion, for Marx and Engels had themselves consistently endorsed British and French imperialism, together with the American conquest of Texas, as bringing progress to benighted regions. By 1910, therefore, a process was under way by which many revolutionary syndicalists would become nationalist syndicalists.

--Stanley G. Payne, A History of Fascism, 1914-45 (London: Taylor and Francis e-Library, 2003), 67.

Revolutionary Syndicalists Called Themselves Marxists; Arturo Labriola Developed His Concept of Italy as a "Proletarian Nation" Exploited by the International Division of Labor

Revolutionary syndicalism began to grow in Italy after 1900, based particularly on the Camere del Lavoro, regional labor exchanges in northern Italy designed to remedy the numerical weakness of the regular trade unions. Though the revolutionary syndicalists called themselves Marxists, their doctrines and tactics were unorthodox, and they had left the Italian Socialist Party by 1907. During 1907–8 they led a radical strike wave and by 1909 had mostly withdrawn from the predominantly Socialist trade union federation, the CGL, three years later organizing a smaller Unione Sindacale Italiana (USI) with no more than a hundred thousand members.

In the process, the ideas of the revolutionary syndicalist leaders became increasingly radical and heterodox. Arturo Labriola, one of their main theorists, had briefly emigrated abroad and had observed discrimination against Italian workers. He developed his own concept of the “proletarian nation”—that Italians as a nationality, rather than merely as a class, were the objects of exploitation by the international division of labor, and that revolutionary transformation must therefore be concerned not merely with one class but with the entire society.

--Stanley G. Payne, A History of Fascism, 1914-45 (London: Taylor and Francis e-Library, 2003), 66.

The Nucleus that Founded Fascism Did Not Stem from the Cultural Elite or from the Right-Wing Nationalists, but from the Transformation of Part of the Revolutionary Left

The nucleus that eventually founded Fascism in Italy did not, however, stem either from the cultural elite or from the right-wing nationalists, but from the transformation of part of the revolutionary left, particularly the sector known as revolutionary syndicalists. Revolutionary syndicalism originated in France early in the 1890s, as a reaction against the weakness and moderation of socialism and the trade union movement. It sought to overcome such limitations through “direct action” or what its proponents termed la manière force (the tactics of force), with the goal of achieving revolution through a grand general strike that would make it possible to restructure society around the syndicates (trade unions). Revolutionary syndicalists detested reformism, compromise, and parliamentary government, or what they called “the superstitious belief in majorities.” They were more influenced than most socialists by the cultural crisis of the fin de siècle, particularly by Social Darwinism, the importance of group conflict, and Sorelian ideas about the moral value of violence. In France their apogee occurred in 1902–6, after which their influence quickly waned.

--Stanley G. Payne, A History of Fascism, 1914-45 (London: Taylor and Francis e-Library, 2003), 66.

Socialism Is Not a Historical or a Social-Science Term at All, but Ultimately a Messianic, indeed a Quasi-Magical Term, a Secular Religion

Thus it becomes clear that “socialism,” strictly speaking, does not mean anything. First, it is meaningless, intrinsically, because its economic programs do not, and cannot, realize its moral ideal in a manner that compels recognition as true socialism. Second, it is meaningless, historically, because it has been claimed by so many mutually incompatible social formations that it loses all concrete focus. So when people profess socialism we never know just what they mean, or what they can be expected to do if they come to power. This imprecision certainly smoothed the Bolsheviks’ way to total power—and eased periodic Popular Front collaboration with them.

Thus socialism is not a historical or a social-science term at all, but ultimately a messianic, indeed a quasi-magical term; in fact, it has often been claimed that the more ardent forms of socialism have something of a secular religion about them. Masses of humanity could once surge through Red Square chanting “forward to the victory of socialism!” but it is quite inconceivable that shareholders should march down Wall Street mouthing such rousing slogans about capitalism. And it is an exercise in futility when champions of the free market answer Marx with “Non-Communist” or “Capitalist” Manifestos, as if faith could be vanquished by growth statistics. But such is the potency of the socialist idea that most men—its foes no less than its friends—perennially mistake it for a social science category or a putative stage of history, to the enduring confusion of what we are talking about whenever we utter “socialism.”

--Martin Malia, The Soviet Tragedy: A History of Socialism in Russia, 1917-1991 (New York: The Free Press, 1996), e-book.

One Way of Redefining Economic Insecurity Is to Explain It Away As the Result of "Sexism" in the Workplace

One important way of redefining economic insecurity is to explain it away as the result of "sexism" in the workplace. Here it is asserted that women's economic insecurity is caused by discrimination on account of their sex, without which they would be better off than they are. Sometimes this takes the form of the supposition that women make less than men for the same work. This charge is made despite the fact that this would make organizations subject to expensive lawsuits, and despite the fact that if women would do the equivalent work more cheaply. it would be hugely profitable for them to replace the men with women. Not surprisingly specific examples of such discrimination are rarely cited.

--Howard S. Schwartz, The Revolt of the Primitive: An Inquiry into the Roots of Political Correctness (New Brunswick, NJ: Transaction Publishers, 2003), 67.

Central to Political Correctness Is the View that Western Society Has Been Dominated by "the White Male Power Structure" and Everybody but White Heterosexual Males Has Suffered Repression

The term "political correctness" made its way into public consciousness through an article by Richard Bernstein in the New York Times (1991). It referred to a strain of postmarxist leftist thought in which the struggle between economic classes has been replaced, as a primary ontological framework, with a more differentiated set of oppositions based on such differences as sex, race, and sexual orientation. Thus, as Bernstein put it:

Central to pc-ness, which has its roots in 1960's radicalism, is the view that Western society has for centuries been dominated by what is often called "the white male power structure" or Patriarchal hegemony." A related belief is that everybody but white heterosexual males has suffered some form of repression and been denied a cultural voice. 

He added that, to many of those concerned with this phenomenon, the disturbing thing about political correctness ("PC") has not been the content of its ideology, but the principle of argumentation that it has employed:

 more than an earnest expression of belief, "politically correct" has become a sarcastic jibe used by those, conservatives and classical liberals alike, to describe what they see as a growing intolerance, a closing of debate, a pressure to conform to a radical program or risk being accused of a commonly reiterated trio of thought crimes: sexism, racism and homophobia. 

--Howard S. Schwartz, The Revolt of the Primitive: An Inquiry into the Roots of Political Correctness (New Brunswick, NJ: Transaction Publishers, 2003), 113-114.

Mussolini Believed It Was the Right Moment to "Bring up to Date" the Concept of Socialism through a Revision Based upon the Concept of Revolutionary Idealism

Mussolini’s mix of Marxism and of idealism, of Pareto and of Nietzsche, represented something original in the ideological tradition of Italian socialism. Mussolini claimed the right to be heretical as he saw it as a quest to give new vitality to Marxism, basing it upon current events and the new requirements of new situations.

Having reached the leadership of the party and after a decade of expounding a consistent policy of revolution, Mussolini believed that it was the right moment to “bring up to date” the concept of socialism and the party’s policies through a theoretical and practical revision based upon the concept of revolutionary idealism that he himself had developed over the previous ten years. However, at the end of 1913—owing to his position as a member of the revolutionary leadership that had taken control of the party and, above all, due to his role as Avanti!’s editor—Mussolini did not feel sufficiently free to engage in this work of theoretical revision. This explains why he founded the magazine Utopia, which defined itself in its subtitle as “The fortnightly journal of Italian Revolutionary Socialism.” He wrote to Prezzolini on March 25, 1914, “I did not found it so much for myself as to discover amongst today’s young people—both Socialists and non-Socialists—minds that have been overlooked and are able to rejuvenate theory with a new interpretation, be it orthodox or heterodox.”

--Emilio Gentile, "A Revolution for the Third Italy," in Mussolini 1883-1915: Triumph and Transformation of a Revolutionary Socialist, ed. Spencer M. Di Scala and Emilio Gentile (New York: Palgrave Macmillan, 2016), 264.

The Relative Ease with which a Young Communist Could Be Converted into a Nazi or Vice Versa Was Generally Known in Germany, Best of All to the Propagandists of the Two Parties

No less significant is the intellectual history of many of the Nazi and Fascist leaders. Everyone who has watched the growth of these movements in Italy or in Germany has been struck by the number of leading men, from Mussolini downward (and not excluding Laval and Quisling), who began as socialists and ended as Fascists or Nazis. And what is true of the leaders is even more true of the rank and file of the movement. The relative ease with which a young communist could be converted into a Nazi or vice versa was generally known in Germany, best of all to the propagandists of the two parties. Many a university teacher during the 1930s has seen English and American students return from the Continent uncertain whether they were communists or Nazis and certain only that they hated Western liberal civilization.

It is true, of course, that in Germany before 1933, and in Italy before 1922, communists and Nazis or Fascists clashed more frequently with each other than with other parties. They competed for the support of the same type of mind and reserved for each other the hatred of the heretic. But their practice showed how closely they are related. To both, the real enemy, the man with whom they had nothing in common and whom they could not hope to convince, is the liberal of the old type. While to the Nazi the communist, and to the communist the Nazi, and to both the socialist, are potential recruits who are made of the right timber, although they have listened to false prophets, they both know that there can be no compromise between them and those who really believe in individual freedom.

--F.A. Hayek, The Road to Serfdom: Text and Documents, The Collected Works of F.A. Hayek 2, ed. Bruce Caldwell (Chicago: The University of Chicago Press, 2007), e-book.

Fascism Is the Stage Reached after Communism Has Proved an Illusion, and It Has Proved as much an Illusion in Stalinist Russia as in pre-Hitler Germany

While “progressives” in England and elsewhere were still deluding themselves that communism and fascism represented opposite poles, more and more people began to ask themselves whether these new tyrannies were not the outcome of the same tendencies. Even communists must have been somewhat shaken by such testimonies as that of Max Eastman, Lenin’s old friend, who found himself compelled to admit that “instead of being better, Stalinism is worse than fascism, more ruthless, barbarous, unjust, immoral, antidemocratic, unredeemed by any hope or scruple,” and that it is “better described as superfascist”; and when we find the same author recognizing that “Stalinism is socialism, in the sense of being an inevitable although unforeseen political accompaniment of the nationalization and collectivization which he had relied upon as part of his plan for erecting a classless society,” his conclusion clearly achieves wider significance.

Mr. Eastman’s case is perhaps the most remarkable, yet he is by no means the first or the only sympathetic observer of the Russian experiment to form similar conclusions. Several years earlier W. H. Chamberlin, who in twelve years in Russia as an American correspondent had seen all his ideals shattered, summed up the conclusions of his studies there and in Germany and Italy in the statement that “socialism is certain to prove, in the beginning at least, the road NOT to freedom, but to dictatorship and counter-dictatorships, to civil war of the fiercest kind. Socialism achieved and maintained by democratic means seems definitely to belong to the world of utopias.” Similarly a British writer, F. A. Voigt, after many years of close observation of developments in Europe as a foreign correspondent, concludes that “Marxism has led to Fascism and National Socialism, because, in all essentials, it is Fascism and National Socialism.” And Walter Lippmann has arrived at the conviction that “the generation to which we belong is now learning from experience what happens when men retreat from freedom to a coercive organization of their affairs. Though they promise themselves a more abundant life, they must in practice renounce it; as the organized direction increases, the variety of ends must give way to uniformity. That is the nemesis of the planned society and the authoritarian principle in human affairs.”

Many more similar statements from people in a position to judge might be selected from publications of recent years, particularly from those by men who as citizens of the now totalitarian countries have lived through the transformation and have been forced by their experience to revise many cherished beliefs. We shall quote as one more example a German writer who expresses the same conclusion perhaps more justly than those already quoted.

“The complete collapse of the belief in the attainability of freedom and equality through Marxism,” writes Peter Drucker, “has forced Russia to travel the same road toward a totalitarian, purely negative, non-economic society of unfreedom and inequality which Germany has been following. Not that communism and fascism are essentially the same. Fascism is the stage reached after communism has proved an illusion, and it has proved as much an illusion in Stalinist Russia as in pre-Hitler Germany.”

--F.A. Hayek, The Road to Serfdom: Text and Documents, The Collected Works of F.A. Hayek 2, ed. Bruce Caldwell (Chicago: The University of Chicago Press, 2007), e-book.

Scotland (1714-1844) Was Once a Country with a Stable Banking System: No Central Bank, No Legal Tender Laws, No Banking Regulations, No Monetary Policy, and No Restrictions on the Right to form a Bank and Issue Money

There once was a country with a stable banking system the envy of the rest of the world. While there's nothing so extraordinary in that, it was a system with aspects almost everyone would call—were it proposed to them—unworkable. Not only was there no central bank, there were no legal tender laws, no political banking regulations, no monetary policy, and no restrictions on the right of anyone to form a bank and issue his own money. The country was Scotland from 1714-1844. When English law put an effective end to this "free banking" regime, there were 19 different banks issuing their own notes.

--Ron Paul and Lewis Lehrman, The Case for Gold: A Minority Report of the U.S. Gold Commission (Auburn, AL: Ludwig von Mises Institute, 2007), 147.

Unlike Most Economists, Murray Rothbard Views Bank Runs Favorably because Bank Failures Are a Healthy Weapon by which the Market Keeps Bank Credit Inflation in Check

The bank run plays a special role according to Rothbard. Unlike the overwhelming majority of economists, he views bank runs favorably. They function as a constraint on inflationary monetary expansion under free banking. They also "instruct the public in the essential fraudulence of fractional reserve banking." Rothbard seems literally to believe that if one observes a period during which there occur very few bank failures, then this is sure to be a time of inflationary monetary expansion. A case in point is that of Scottish free banking (1765-1845). In discussing Lawrence White's work on Scotland, Rothbard contends that a low rate of bank failure "might indeed mean that the banks are doing better, but at the expense of society and the economy faring worse. Bank failures are a healthy weapon by which the market keeps bank credit inflation in check . . . a lower rate of bank failure can scarcely be accepted as any sort of evidence for the superiority of a banking system."

--Larry J. Sechrest, introduction to Free Banking: Theory, History, and a Laissez-Faire Model (Auburn, AL: Ludwig von Mises Institute, 2008), 145-146

The Principles of Good Economic Management Can Be Expressed in Precisely Four Words: Low Taxes, Stable Money

Arthur Laffer went so far as to claim there are only four major reasons for a country to suffer major economic decline: monetary instability (probably devaluation), high or rising taxes, high or rising tariffs, and excessive regulation, particularly wage and price controls. Since tariffs are simply a form of taxation, the list reduces to only three. And since wage and price controls are usually imposed in reaction to the problems created by monetary instability or destructive tax policy, the list reduces further to two points—low taxes, stable money. The principles of good economic management can be expressed in those four words. If there is some sort of major economic difficulty or disaster in the world, it can usually be traced to some government whose taxes were not low enough (and probably rose sharply) or whose money was not stable enough (and whose value probably fell sharply).

--Nathan Lewis, Gold: The Once and Future Money (Hoboken, NJ: John Wiley and Sons, 2007), 139.

Much of the History of Monetary Theory Reduces to a Struggle between Opposing Mercantilist and Classical Camps

Much of the history of monetary theory reduces to a struggle between opposing mercantilist and classical camps. Mercantilists, with their fears of hoarding and scarcity of money together with their prescription of cheap (low interest rate) and plentiful cash as a stimulus to real activity, tend to gain the upper hand when unemployment is the dominant problem. Classicals, chanting their mantra that inflation is always and everywhere a monetary phenomenon, tend to prevail when price stability is the chief policy concern.

Currently, the classical view is in the driver’s seat. By all rights it should remain there since it long ago exposed the mercantilist view as fundamentally flawed. It is by no means certain, however, that the classical view’s reign is secure. For history reveals that, whenever one view holds center stage, the other, fallacious or not, is waiting in the wings to take over when the time is ripe.

 --Thomas M. Humphrey, Federal Reserve Bank of Richmond annual report, 1998

--Nathan Lewis, Gold: The Once and Future Money (Hoboken, NJ: John Wiley and Sons, 2007), 211.