Wednesday, May 5, 2010

Fascist Political Economy, the "Compression of Liberalism", and the "Presumption of Ideological Orthogonality"

I had a recent private correspondence where the idea of a "fascist political economy" came up. It's an issue I find interesting, but what I found a little disconcerting was that my correspondent (who is no wild-eyed ideologue) suggested that the U.S. economy "bears a resemblance" to fascist political economy. The argument is specifically that we are "corporatist", and the line is then drawn between corporatist and fascist economics.
[UPDATE: Just to make clear - below, this post gets into issues and points that weren't made at all in my correspondence. That discussion simply got the gears in my head turning.]

First, I find the "corporatist" label itself hard to swallow. Usually, what people point to in this regard are the bank and auto bailouts, as well as health reform. It seems to me that a "corporatist" position would require support of the normal functioning of a corporation in regular cooperation with an industry association, the state, and perhaps a labor association. The idea that this characterized the bailouts is ludicrous. Whatever your views on the bailouts (I supported the bank bailouts, but opposed the auto bailouts), you can't convincingly argue that they were anything but a temporary attempt to stop the hemorrhaging in an already battered economy. It may have been unwise policy, and it may even look like corporatism, but it's no more real corporatism than Somalian anarchy is "real libertarianism". There is no permanence to the relationship between the state and the corporations set up by the bailout, and there is no clear point to it except to protect the "real economy" from the fall-out of multiple failed institutions. Health reform is trickier. Obviously there hasn't been any nationalization, but there has been quite a bit of regulation, and we will have exchanges which I suppose might resemble a corporatist organization to some people. I opposed the mandate, but I also have to wonder about anyone that thinks this rises to the standard of "corporatism". While I don't think the availability of health care is in any sense a "right" (I'm a negative rights sort of guy), I do think it's in a vague public good/humanitarian good territory that free societies might consider providing publicly. It's the same with education. If you completely jettisoned all sense of context, perhaps our public education system could be considered "corporatist", and then you could leverage that into an accusation of "fascist". But the liberal tradition has always recognized the reality of "public goods" (to varying degrees depending on the writer, of course). It seems to me that a corporatism that seems exclusively directed towards these "public goods" may or may not be good policy, but should avoid the "corporatist" label effectively and be considered firmly rooted in the liberal tradition. The distinction of fascist political economy, it seems to me, is that unlike the liberal tradition that recognizes only limited scope for "public goods" based on some very well defined properties, the fascists and socialists see all goods as inherently "public goods". This is not the perspective we see in the United States.

Fascist political economy emphasizes the submission of all economic activity to the needs of the nation or the state rather than the needs of the individual. To achieve this, cooperative organizations between business, government, and labor are formed. The state sets production goals and priorities and businesses and labor cooperate in an effort to meet these goals. Where in the U.S. do we see this? Nowhere. Even in the bailouts discussed above, the only "goal" to speak of is "please don't implode while unemployment is so high". It's hardly reminiscent of the 20s and 30s in Italy and Germany.

I think the source of these concerns about fascist political economy comes from what I would call the "compression of Liberalism" that is adopted by many libertarians as well as Tea Party types with somewhat less ideological clarity. "Classical liberalism" no longer means what it used to mean - it has become a synonym for libertarianism. All the differences of opinion between the classical liberals, and all liberals through the ages, are jettisoned and a libertarian core alone is maintained as legitimate.

This sort of "compression of Liberalism" inevitably leads to what you might call the "presumption of ideological orthogonality". Let me provide an example. I'm sure many of you have had someone run through the ten planks of the Communist manifesto for you and check off the several points of the list that we've adopted in the U.S.. The exercise (I suppose) is meant to be some sort of stunning revelation about how Communist we've become. But the argument falls flat. Why? Because it relies on this "presumption of ideological orthogonality". To be convinced that it says anything about the extent to which we're Communist, you have to believe that Communism shares no perspective at all in common with Liberalism. You have to assume that all ideologies are perfectly independent of each other, so that a check list is sufficient for determining how Communist one is. A similar example with fascism is the common claim that the fascists supported public works projects. What does this demonstrate other than that the fascists apparently agreed with a lot of Liberals on the value of the strategic use of public works projects? Why does this observation imply that Liberals who do support public works actually resemble fascists? Why can't it imply that fascists who do support public works are actually secretly Liberals (I don't believe that either, but it's telling that you never hear anyone draw that conclusion - why don't you?). The fact is, economic and political ideologies are not perfectly orthogonal. There are a lot of perspectives out there that support a progressive income tax. My support for a progressive income tax is integral to my Liberalism, which is grounded in my classical liberalism. This doesn't change because Marxists or fascists also support progressive income taxes for their own reasons.

It's extremely disconcerting to me that for a lot of smart people out there the options are apparently libertarianism and corporatist fascism, and that if you depart from libertarianism you "resemble fascism". Analytically, it's a laughable conclusion. But socially, it's disconcerting as well. One of the great things about Liberalism is that historically it has practiced what it preaches with regards to pluralism. Advocates of human liberty and representative government have always maintained disagreements on specific points and emphases. Liberalism is not a homogenizing perspective. It's deeply unfortunate that we've come to the point where departure from one brand of classical liberalism isn't recognized as another version of Liberalism, but an alien ideology.

For further reading on fascist political economy, I highly recommend Adam Tooze's Wages of Destruction: The Making and Breaking of the Nazi Economy. He provides good references to the earlier literature as well.

Carl Schmitt provides insights into the legal underpinnings of fascism (specifically German national socialism). I think these insights and his thinking on the Ausnahmezustand are especially important to keep in mind. There are two fundamental planks of Liberalism: human liberty and representative government. Schmitt highlights how fascism is completely contingent on the abrogation of the latter. Whatever your views of the American response to the economic crisis, it has strictly adhered to the principles of representative and Constitutional government throughout. It's an essential distinction. If I were less charitable, I might even argue that common libertarian complaints about representative government as fundamentally problematic (tyranny of the majority type arguments) also depart from Liberalism's focus on representative government and bear a striking resemblance to Schmitt's judicial philosophy, which doesn't let a pesky thing like the will of the people get in the way of the "correct" policy. But I do think I'm relatively charitable, and I won't make that accusation because I understand and respect the "tyranny of the majority" perspective, regardless of whether similar facetious reasoning gets applied to my brand of Liberalism on occasion.

The best genealogy of Liberalism that I've read is Keynes's The End of Laissez-Faire, which I also highly recommend. He succinctly reviews the differences of opinion in classical liberalism, and traces these differences of opinion into what I've above called the "compression of Liberalism" into two camps: laissez-faire and Marxist socialism. He laments the "compression of Liberalism", as do I.

And for another perspective on fascist political economy, here is Dwight Schrute delivering a speech modified from one delivered by Mussolini. He's tricked into delivering it at a sales conference by Jim, of course, although Dwight's fascist sympathies are revealed at other points in the show as well.


  1. Keynes was never a classical liberal. The fact that he was a mercantilist should undermine such a claim - which means he had far more in common with Mun and Colbert than he did with classical liberals. Furthermore, how could someone be a classical liberal whose main views on the arts should be that they be guided by the state - a man who spouted moronic phrases like "Death To Hollywood!" And then of course there is Keynes desire to label the love of profit as some sort of disease (he took this from Freud). The more one reads Keynes the more realizes that he was infected with the same whimsy to plan society from the top down that was all the rage in the inter-war period.

  2. show me the Facts


All anonymous comments will be deleted. Consistent pseudonyms are fine.