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Daniel Guerin: Fascism & Big Business-2March 8, 2006
[ 1 | 2 | 3 | 4 ]
Guerin: Fascism as an Instrument of Big Business
According to Guerin (and other orthodox Communists), the state has always been the instrument by which one class rules over other social classes. A change of state suggests that a new social class may be rising to power, but when this is not the case, then it is obligatory to wonder what the ruling class gains by this change of state. With the transition from the democracies of Europe to fascism, the Communists believed, the bourgeoisie had shifted from one instrument of domination to another. Instead of parliamentary democracy that constrained the state (chiefly from nationalizing the means of production), a section of the bourgeoisie now enjoyed the barbaric violence of a loyal bodyguard.
Divisions within Big Business
Guerin takes pains to point out that it does this less out of serious dread of a proletarian revolution, than out of the impending collapse of their own system. But there are sectional divisions of the bourgeoisie, chiefly that between heavy industry and the finished goods industry. Heavy industry includes (for Guerin) steel and coal mining, shipping and major construction. Light industry includes the production of finished goods for consumers, like food processing, clothing, small construction, and smallish durable goods. This is because heavy industry has a high concentration of fixed capital per worker, and operating units are so large. If a home builder suffers a strike, his losses are comparatively small.
The large manufacturer is largely indifferent to the impact of wage cuts on the economy, since he manufactures for a global market. Steel supposedly has a market everywhere, and there's a long lag between the effective demand of the workers and the demand for steel. In contrast, the smaller manufacturer is likely to be more concerned about local markets for consumer goods, and less enthusiastic about a deflationary monetary policy.
However, light industry does not seriously resist heavy industry when it acts to implement fascism, because of its inherent class solidarity. Guerin, in the latter part of Chapter I (pp.29-36), spells out specifically which industries backed the early fascist groups, and how the light industrial associations sought to stop them. The resistance of the latter, he avers, was ineffectual because of class solidarity. In Italy, Premier Giolitti took several measures to hamstring the powers of the big war contractors, while economic debacle stalked the big combines. Only state intervention could save them from complete insolvenecy, and so they turned to Mussolini. In Germany, the rural basis of fascism was added to the mix; the big junker farmers, suppliers of grains for feed (rather than of meat or produce), got tariff protection for grains, while the small farmers were squeezed between those high prices and the plummeting prices of farm commodities. Brüning and von Schleicher fought the ascendancy of the Nazis as representatives of the Fertigindustrie; von Papen, in contrast, was a relentless servant of the steel makers and the junkers. [Boldface type added for clarity—JRM]
After the war the antagonism was particularly violent between the two groups—Stinnes and Thyssen, magnates of heavy industry, versus [Walter] Rathenau, president of the powerful AEG (the General Electric Association). The Fertigindustrie rose up against the overlordship of heavy industry, which forced it to pay cartel prices for the raw materials it needed. Rathenau publicly denounced the dictatorship of the great metal and mining industries: just as medieval nobles had scoffed at the German Emperor and divided Germany into Grand Duchies, the magnates of heavy industry were dividing Germany into economic duchies "where they think only of coal, iron, and steel, and neglect, or rather absorb, the other industries." The social policy of the Fertigindustrie was built around class collaboration. While the Stinnesses and Thyssens were dreaming of taking back from the proletariat the concessions made, and subsidizing anti-labor militia, Rathenau worked out plans for "corporatism," for collaboration between employers and wage earners. While the former accepted only grudgingly the Weimar republic and dreamed of dictatorship, Rathenau entered the cabinet of the democratic government of the Reich. In foreign affairs, heavy industry, though also dependent on exportation, had mainly nationalist and protectionist tendencies. The Fertigindustrie, oriented chiefly toward export trade, and closely connected with the powerful American company, General Electric, which had an important interest in the German AEG, was for free trade and international collaboration. Rathenau signed the Wiesbaden agreement with France, the treaty of Rapallo with Russia, and accepted the principle of reparation of German capitalism. A significant detail: when he was assassinated in June, 1922, by young nationalists, it was proved that the car used by the murderers had been put at their disposal by a great industrialist in Saxony. The Fertigindustrie did not want the triumph of National Socialism. It still feared above all else the hegemony of heavy industry. But the statesmen who were connected with the Fertigindustrie temporized with National Socialism, because it was a "national" movement. Chancellor Brüning imagined that, having tamed the socialists, he could tame National Socialism the same way. The latter, once "parliamentarized," would serve as a useful counterbalance to the proletarian forces. In the spring of 1930 he dissolved the Reichstag. But he succeeded only in putting Hitler in the saddle by giving him the opportunity for his great electoral success. Still, he persisted in his error. He flattered himself that he would trap Hitler in his net; sober him, "lay at the feet of the President of the Reich, like a rare catch, this masterpiece of his policy." In January, 1932, he had an interview with the Fuehrer and tried to bring him around. But his plan failed. Schleicher was no more successful a few months later in taming the moderate wing of National Socialism (Gregor Strasser) and in reconciling it with the moderate wing of the labor movement (Leipart).
The Fertigindustrie understood finally that National Socialism had become an independent force that could not be restrained—except by the use of armed force. But the general interests of the owning classes forbade that "national" forces tear each other to pieces. [The point here is that, on the eve of the fascist takeover, heavy industry accounted for 60% of the total net increase in industrial output; it had suddenly grown to the largest sector, despite being limited in application.—JRM]
For several years after 1935, until the outbreak of the European war, the output of the textile and other light industries, spurred by the need for foreign exchange, continued to increase. The proceeds of these exports, however, supported by a lavish expenditure of Japan's gold reserve and gold production, were largely diverted to the construction of a war economy. After 1937 the flow of investment capital was channeled ever more rigorously into the munitions and strategic industries. In the 1931-1935 period the value output of the heavy industries had trebled. The second period, from 1937 to 1941, witnessed a more urgent development, with a differentiation between light and heavy industries undertaken as a deliberate policy. Curtailment was first applied to the consumption industries. Between 1939 and 1941, however, export markets were progressively limited by the spread of war, including the spread of Japan's aggressive activities. This process culminated in the Anglo- American-Dutch freezing regulations of July 1941. Textile and other light industrial exports thus declined steadily in the later years of the 1937-1941 period. Production shifted to the heavy industries, which were undergoing a planned expansion and supplying the armed services with increasing amounts of finished munitions.
[...]
By the close of 1944 the output of light industry had been reduced to a minor segment of total industrial production. Only the barest minimum, devoted to essential civilian requirements, was retained. War production, centered in the basic steel and light metals industries, the munitions and aircraft factories, and the shipbuilding yards, had become the overwhelmingly predominant feature of Japan's economy.1  An indirect measure of the scope of this transformation exists in the form of periodic Japanese statements on the distribution of national income, usually made when the new budgets are under consideration. In the 1941-1942 fiscal year, out of a total national income of approximately forty billion yen, seventeen billion were allotted to civilian consumption. Since then the corresponding figures have been fifteen billion out of forty-five in 1942-1943, thirteen billion out of fifty in 1943-1944, and eleven billion out of sixty-five in 1944-1945. The civilian economy, which absorbed 42.5 percent of the national income in 1941-1942, thus took but 18.5 percent in 1944-1945. In one aspect, this sharp decline reflects the extent of the tribute exacted from the Japanese people, and rendered even greater by price [increases], commodity shortages, and deterioration in the quality of consumer goods. Equally obvious, however, is another aspect: the degree to which the industrial structure of Japan has been modified over the past four years. It must be assumed that war industry, which means heavy industry, today accounts for more than four-fifths of Japan's total industrial output.At the close of the war, almost all formal economic activity was devoted to prosecuting it, and the Japanese were conditioned to speak of "dying as one" rather than face defeat; yet, even as the demagogues spoke of the physical extinction of the people, these bourgeoisie were demanding ongoing control over the enterprises they owned, evidently disregarding the imminent apocalypse as mere bluff.2 Parallels in the Democracies While the Fasci came to power in Italy in 1922, and established a dictatorship in 1925, they actually suffered an economic crisis similar to Germany's in 1930-32, which was papered over at the time, and stimulated a parallel movement of the fascist movements towards bolting down of the composition of industry. At the time, this was not widely known; many in the Western democracies, such as Gen. Hugh Johnson, administrator of the Reconstruction Finance Corporation (RFC), took seriously the alleged successes of the Italian Fascist government in defeating the depression. The RFC itself was an American attempt to replicate the Italian Investment Institution (IMI)—and its putative successes, through a similar method of direct subsidies of big industry.3 Interestingly, despite Guerin equating the New Deal with the fascist programs of subsidizing industry, he is on flimsy ground. The RFC was introduced by the Hoover Administration to replicate the WW1-era War Fincance Corporation (WFC), and was supposed to have confidentially lent large sums to insolvent enterprises to allow them to run at capacity. This component of the RFC was almost immediately scuppered when Roosevelt was inaugurated, in favor of the Works Progress Administration (a public works program) and the National Recovery Adminstration. Its existence as a sort of US version of IMI lasted less than a year, and of course, while the fascist regimes effectively banned the labor unions, the US government liberalized union organizing with the National Labor Relations Act (NLRA). In other countries, such as the UK, early multiplier stimulus ("Keynesian") programs involved mobilizing sinking funds used by estates to cover reconstruction. Guerin, like all early Marxists, professed to be disgusted by the entire concept of monetary policy. Since the Depression, the track record of monetary policy has been surprisingly good, as far as responsible use goes. If one examines the record for the industrial democracies over the last two generations, it would appear that it has not exposed national governments to risks of default, and has no parallel to any fascist economic policies. (Part 3) [Fascism] |[Totalitarianism] | [Communism]
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