Mussolini Asks, “Where Is America Headed?” Il Duce Answers, “It Is on the Road to Corporatism”

In his review of the Italian edition of New Frontiers, a book written by Roosevelt’s secretary of agriculture, Henry A. Wallace, Mussolini wrote:

The book as a whole is just as “corporativistic” as the individual solutions put forth in it. It is both a declaration of faith and an indictment of economic liberalism. . . . Wallace’s answer to the question of what America wants is as follows: anything but a return to the free-market, i.e., anarchistic economy. Where is America headed? This book leaves no doubt that it is on the road to corporatism, the economic system of the current century.

—Wolfgang Schivelbusch, Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939 (New York: Picador Henry Holt and Company, 2007), Kobo e-book.

People Produce for Profit But To Imply That Production for Profit Does Not Mean Production to Satisfy Needs, Is Entirely False

We refer to the objection that in capitalist societies prices are used as indicators of profitability. People produce for profit, it is said. This statement is correct. If the commodity to be produced, or resold, is not demanded at a price that covers costs, it will not be produced or bought at that price. On the other hand, to imply that production for profit does not mean production to satisfy needs, is entirely false. The contrary is the case. The producers' and traders' every effort is directed towards anticipating and satisfying the needs of the buyers, in the last resort the needs of the public, such as they are expressed in effective demand. The success of producers and traders will depend on their ability to do this. Their ability to anticipate correctly will decide whether the result will be profit or loss, which in the long run will decide whether they can stay in business or not.

Professor Boris Brutzkus goes so far as to say that the producer and trader in a capitalist country, strictly speaking, does not need to keep books or to calculate, as prices will give him all necessary indications. If he does not take heed of prices, he risks losing his fortune and his position. In socialist countries where the state is the only owner of the means of production and the only distributing agency, this automatic purging process does not exist, so that, as Brutzkus says, “economic calculation is of far greater significance in the socialist, than in the capitalist society.” (Economic Planning in Soviet Russia, p. 11.)

—Trygve J. B. Hoff, appendix A of Economic Calculation in the Socialist Society, trans. M. A. Michael (London: William Hodge and Company, 1949), 198, 198n.

Marx Bristled at the Charge, Evidently a Tired Old Cliché by 1871, that Communism Was Impossible

In 1920 an Austrian economist named Ludwig von Mises published a short article in which he claimed that socialism was not a practical possibility (Mises 1920). Two years later this article was incorporated in a book (Mises 1922) which became widely read and much debated on the European continent. At that time socialism still appeared to be in the ascendant. Its recent disappointments in Germany, Austria, and Hungary seemed temporary setbacks, and the construction of a completely new economic order was triumphantly under way in, of all places, Russia. To many observers of socialism, friendly, apprehensive, or hostile, its eventual triumph appeared inescapable. Yet Mises contended that, however powerful the socialist movement might become, and no matter how many people wanted socialism, howsoever ardently, they would always be powerless to bring socialism into being, because socialism was inherently unfeasible.

There was nothing new in the assertion that socialism could not work in practice. Malthus’s 1798 Essay on the Principle of Population was written primarily to show that Godwin’s socialism (a form of agrarian anarchocommunism) was impossible. A passage in Marx’s Civil War in France shows him bristling at the charge, evidently a tired old cliché by 1871, that “communism” was “impossible.” What was new to Mises’s readers was his specific argument for the impossibility of socialism. Most earlier arguments had rested either on an appeal to human nature (especially the alleged need for appropriate material incentives) or on the Malthusian population theory. Arguments from human nature or motivation suffer from weaknesses which render them rather ineffective, and the Malthusian argument, though it was extraordinarily effective for a century, was eventually recognized to be unsound. Mises’s argument against the practical feasibility of what he calls “socialism” does not hinge upon questions of motivation, but rather claims that, with the best will in the world, humans are not able to operate a society on ‘socialist’ lines, because modern industry cannot be successfully guided or administered without the information provided by market prices of factors of production. Mises claims that even where there’s a will, there’s no way. It is part of Mises’s definition of socialism that factors of production are not exchanged on the market, so that under socialism there cannot be market prices of factors of production. Whether this really is integral to socialism is one of the questions I consider later. Mises’s argument, known as the Wirtschaftsrechnung or ‘economic calculation’ argument, had been proposed by several earlier writers, but little notice was taken, and no serious debate ensued until 1920.

—David Ramsay Steele, From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation (La Salle, IL: Open Court Publishing, 1992), e-book.