Fascism and Big Business

By Daniel Guerin

Pathfinder Press 1939, 1965

The Second World War is one of the most written about events in the history of the world.  However, few books give an accurate view of why the political economic system of fascism erupted in Germany and Italy.  Daniel Guerin is one of the very few who gave a comprehensive view of why the monstrous system of fascism became a reality in these two countries.

In order to explain the relationship between fascism and big business, first we need to give some background.  The first theoreticians of capitalism were David Ricardo and Adam Smith.  Both these economists understood that the underlying forces of capitalism move the system towards a complete collapse.

Corporate officers routinely strive to increase sales and cut costs.  Because the priority of corporations is profits, this means that eventually there are more commodities on the market than people will buy.  First, there are recessions, then depressions.  Both seek to do away with the excess commodities by reducing production and eliminating jobs.  However, with depressions there is no guarantee that the economy will ever recover. 

This is one of the reasons why Karl Marx and Frederick Engels argued that the only way for humanity to escape this reality will be with a revolution of workers and farmers.

The First World War

In the early years of the twentieth century the British empire was falling apart.  British capitalists had effectively dominated the economies of the world for quite a long time.  Then revolutions erupted in Iran, Russia, China, and Mexico.  Although these revolutions did not achieve their objectives, the days of British domination of the world were numbered.

The emerging world powers attempting to replace the British were Germany and the United States.  The defeat of Germany in the First World War was followed by the Treaty of Versailles.  This treaty forced the German people to pay for the war and contributed to the collapse of the economy in that country.  However, by 1929 the capitalist system plunged the entire world into an international depression.

When capitalists loose their ability to profit off of investments, they continue to have resources they use to revive their economy.  In Germany and Italy capitalists used their enormous resources to fund fascist political organizations.  German capitalists actually funded the fascist civilian standing army known as the SA.  This army was used to attack demonstrations of workers in an attempt to break up any resistance.

Worker’s resistance and the lack of political leadership

We should also understand that working people had a militant history in Germany.  Before the rise of the Nazis, German workers had been able to force numerous concessions from capitalists.  While there continued to be discrimination against Jews, that discrimination had been weakened over the years.

Then, after the defeat of Germany in the First World War a revolution erupted in that country.  The working class movement was not properly organized, and two of the principal leaders, Karl Liebknecht and Rosa Luxemburg were murdered while in the custody of the authorities.  Working people of Germany have not had a leadership of the caliber of Luxemburg and Liebknecht since that time.

Adolf Hitler and many officials of the German National Socialist Party understood that their movement could have easily been crushed in its first years.  When armed thugs of the Nazi SA attacked demonstrations of workers, the so-called leaders of those years told workers not to defend themselves.  They argued that it was the obligation of the capitalist government to defend their so-called right to demonstrate.

However, before these demonstrations of workers the police would disarm the demonstrators making it difficult to defend themselves from armed Nazis.  This state of affairs caused the Nazis to gain confidence, and for workers to become demoralized. 

However, even after the Nazis took power, the majority of German workers refused to support their rule.  In fact, Hitler called his organization the National Socialist Party because he understood that the idea of socialism was immensely popular with workers.

There was another problem with the so-called leaders of the German Social Democratic Party and the Communist Party.  These were the parties of the German Workers and together they controlled a majority of the votes.  The officials of these parties refused to form a block to prevent the Nazis from taking power.

After the Nazis took power the German congress called the Reichstag was burned to the ground.  The Social Democratic Parties and Communist Parties were outlawed and the Nazis sent their officials to prison. 

The myth and reality of Adolf Hitler

The Nazis argued that they would improve the lives for the German people.  However, Daniel Guerin gives the true history of what happened during their rule.

Wages of workers and farmers were slashed in half.  Anyone who promoted a strike to protest these conditions could be sent to prison.  Even insubordination on the job was grounds for a prison sentence.  Workers needed to belong to the fascist unions where they paid union dues.  This meant that resigning from a job was against the law.  Civil rights vanished and Germany became a dictatorship.

These were the conditions that German capitalists needed to continue to gouge out their obscene profits.  The problem was that since German workers had considerably less money, there didn’t appear to be anyone to purchase their products.

So, the Nazi government became the primary customer of German corporations.  The Nazis purchased new roads and built a few new buildings.  However, the commodities the Nazi government wanted most were armaments to be manufactured in peacetime.  Therefore, the Nazi strategy for rescuing the German economy was to militarily dominate the nations of the world.

Why did masses of German people support the Nazis?         

We should keep in mind that there were masses of people who supported the Nazis.  This is why fascism is different from a military dictatorship where the military has little support from the people.

As I mentioned, after the First World War, Germany experienced one of the worst depressions in the world.  Inflation was astronomical and most middle class families experienced poverty.  Because of the lack of a competent working class leadership, the middle class looked for alternatives. 

The Nazis promised that they would bring back the old days when the middle class had a better standard of living.  As we have seen, when the Nazis took power the standard of living for workers deteriorated. 

Adolf Hitler was able to maintain power by murdering anyone who opposed his regime.  This included some of his most ardent supporters.  The Nazi regime achieved a bit of stability because of their war against workers, their military spending, and their occupation of other nations.

What are the lessons for today?

In order to understand the reality we face today, I believe we need to look at a bit of history.  From the years 1877 through 1934 the labor movement in this country took part in numerous strikes against employers.  Most of these strikes ended in defeat.

Then, in 1934 there were three victorious strikes that transformed the labor movement.  During the next twenty years millions of workers joined unions, participated in numerous strikes, and raised the standard of living. 

The Civil Rights movement of the 1950’s and 1960’s followed the enormous strikes of the labor movement of the 1950’s.  Then, the capitalist class of the world changed one of the ways they functioned.

As I mentioned, the capitalist system will eventually move towards collapse.  For this reason capitalists are continually driven to drive down wages.

Since working people in this country had made gains, capitalists made the investments to move many of their enterprises to other countries.  By doing this they lowered their production costs, and created new markets for their commodities.  The United States changed from being a largely manufacturing to a service based economy.

This shift of where commodities are manufactured enabled capitalists to avoid depression for a half a century.  So far, they did not need to place a fascist government in power.  However, the current international economic crisis means that the relative stability of capitalism is over.

We should keep in mind that when the fascists took power in Germany, they threw out everyone who held a government office in the old regime.  This means that if a fascist government were to take over in this country the entire government would be replaced.  Even the most hateful politicians of today will not be acceptable if fascists take power.    

Understanding this working people will have the opportunity of preventing a fascist takeover.  When we think of the Black, Latino, and working class communities of this country, my opinion is that they will not sit idly by while fascists attack their communities.

Today many liberals favor gun control and non-violent disobedience.  Well, this only works if one’s opponent chooses to be non-violent.  The words of Malcolm X continue to ring true.  The Black community will defend itself “by any means necessary.”

Understanding this reality means that working people have the potential to prevent a future fascist takeover.  Yes, we have the potential to make this a world where everyone will have a real opportunity to live a rewarding life.  My opinion is that these are the issues working people need to consider today.