Fascism: The Trains Did Not Run on Time
In today’s public discourse, fascism is most often associated with the far right wing; with nationalism, racism, and an abundance of dangerous patriotism. And indeed, in the nations where fascism rose to power, those factors did exist and played a prominent role in creating the conditions conducive to political revolutions in places like Italy and Germany.
However, though reliant upon populist nationalism to ascend to power, fascism in practice is an economic system. And as such, it’s really just a sibling to socialism.
Italy’s Benito Mussolini is generally regarded as the father of fascism. He was a well-known socialist who decided socialism didn’t quite get it right and so created a new system.
Mussolini distilled fascism down for us when he wrote,
“The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential; the deciding power in this question cannot be the individual, but the State alone.”
Fascism clearly resembles socialism in its desire to “organize the nation” at the expense of personal freedom. Freedom, it argues, is often useless and possibly dangerous, and so individuals must be freed from liberty. Which liberties are dangerous is decided by “the State alone.” You can see how with enough populist fervor a fascist government could quickly become a dictatorial one, where despite its rhetoric about leaving some “margin of liberty to the individual,” the state ends up directing just about everything.
Where fascism differs from socialism is that under socialism the government owns business whereas under fascism government merely “directs” it. In practice this is really a distinction without a difference, but by keeping a nominally privately owned economy fascism gets to kill capitalism while pretending it’s still running things. It’s socialism in capitalist clothing.
Upon gaining control of the Italian government, rather than appropriating industry as socialism would do, Mussolini set up a Ministry of Corporations, which directed what would be produced, how much would be produced, and who did the producing. There were no free markets, no entrepreneurs, and no economic liberty just as there was no personal liberty. Private enterprise existed so long as it aligned itself with the goals of the government. When it did not, or when it failed, it was bailed out or taken over by the state.
But history must be understood in context, and the 1930s were not a pleasant economic time for many people. Consequently, figures like Mussolini were able to take advantage of a public looking for something, anything, to be done. And for a long time people were willing to overlook Mussolini’s dictatorial excesses because he “made the trains run on time.” In other words, fascism, for all its faults, worked.
But was it true? No, as it turns out. Despite fascist Italy’s best efforts, the trains didn’t run on time. The government had a vigorous public relations campaign aimed at convincing outsiders and tourists that things were running smoothly, but in the end that’s all it was – a PR campaign. The trains in fact ran embarrassingly late, and Italy’s infrastructure was so neglected it couldn’t even get enough coal into the country. GDP growth slowed, employment stagnated, and wages fell.
But it wasn’t just Italy. The economics of fascism have never worked. But this hasn’t stopped elements of it from being tried over and over. The fascist subterfuge proved to be Italy’s most popular export: nominal existence of private enterprise but with government in charge of business – deciding what’s produced and in what quantities, and bailing out important industries.
We mandate ethanol production for spurious reasons, and then feel a ripple effect of higher food prices around the globe. When the health care industry becomes bogged down from overregulation and malincentives, we double down on government direction, mandating customers to big insurance companies and promising them bailouts if anything goes wrong. When the financial industry gets into trouble we deem some firms too big to fail, and while we don’t nationalize them we do pour public money into their coffers, ensuring their profits are private while losses are public. And now, when government taxes are so high that U.S. corporations are moving overseas, the U.S. government, in the name of patriotism, demands corporate loyalty oaths to stay in the government’s good graces.
These are not signs of a healthy government or a healthy economy. Government-directed economies do not work. Industries where government has heavily inserted itself – health care, agriculture – have become albatrosses on the entire economy.
Instead of seeing those economic anchors as an excuse for further government control and destruction of markets, informed citizens will understand why those industries are so dysfunctional and demand their elected representatives unwind the myriad cables weighing down the economy.
Article: Mussolini’s Trains
Article: Loyalty Oaths
Article: Corporate Inversion and Patriotism
Book Review: Under the Axe of Fascism
Article: ACA Risk Corridors