Why Fascism? by Edward Conze and Ellen Wilkinson 1935
Planning is a weapon. The Russian Soviet system has taught the capitalist nations that. The period of anarchic free capitalism is over. Fascist planning is the answer of capitalist countries at a certain state of confusion to the Soviet system. It is an experiment in the art of securing the advantages of Socialism while preserving the fundamental contradictions of capitalism. It sees only the need for planning, but it cannot cope with the necessary consequence, the adjustment of the purchasing (consuming) power of society to its powers of production.
The fact that production is outstripping effective demand is wrecking capitalist society. When the economic breakdown is imminent, capitalism cannot help producing a sort of Socialism out of itself. Far-sighted capitalists would prefer a development towards a kind of state capitalism controlled by themselves and if necessary avoid the threatened proletarian revolution by war. A modern war demands all the energies available and uses up the surplus products without altering the existing social relationships. Preparation for war raises the demand for raw materials and provides employment and internal markets for a time. This planning is based not on the desire to supply the needs of the population, but on the perpetuation of the poverty and distress of the masses.
Nazi planning is a planned rationing of raw materials and of goods. Its eye is on the war situation which demands the planning of the production of goods needed in a war within Germany’s own frontiers. The irrational scarcity of goods which competitive capitalism produces is not real scarcity. For the warehouses are glutted with unsaleable products while the machines and labour are there to produce more. But the high prices and profits of the cartels and the rent demands of the landlords make the goods too dear to buy with the wages the masses are allowed.
This artificial scarcity reaches a point at which, in full view of the capacity to produce, human intelligence cannot be expected to tolerate it any longer. The old myths have worn thin, whether the myth of the Able American Business Man or of the Super-Efficient German Industrial Leaders. The Nazi attempt at rationing artificial scarcity in the midst of plenty has had to produce a new myth. It calls this process ‘The Building Up of National Socialism’. The rationing is ‘the accumulation of reserves once provided by loans from foreign capitalists but now to be provided out of the sacrifices of the German people’. The ‘hunger period’ of the Russians who started to build Socialism in an empty land is adduced as support for the myth that the rationing measures of the Nazi government are a proof that it really is Socialistic.
Fascist planning cannot avoid depression. Fascist Italy was hit as much, and as soon, by the world depression as other capitalist countries. Inevitably therefore the German and Italian Fascists are driven to short-circuit the contradictions of capitalism which their own system can do little to remove, by planning for war. The optimistic way in which eminent foreign journalists dismiss Mussolini’s war speeches as ‘only the ballyhoo which the lads expect from him’ misses the whole point of the present world situation which has produced Fascism. Fascism can be defined as that form of political rule of big business which plans for war as an alternative to the immediate breakdown of its capitalist system, and which has to take measures to secure if not the enthusiastic cooperation at least the silent consent of the majority of the population.
One of two alternative powers can form the driving force behind an economic system – the interest in profit or the interest of the consumer. Of course, even if the system is primarily concerned with the making of profit the interest of the consumer must be considered in so far as the satisfaction of the consumer conduces to the making of profit. But the problem of the profit system is not the satisfaction of consumers’ demands, but how to make consumers who have sufficient demand. It is on this dilemma that a profit system breaks down, for it is impossible for such a system to raise the standard of living of the population so high that they can buy back all that is produced. If they could there would be no ‘profit’ in an economic sense. It is this surplus of goods created by competition which is the cause of all the trouble.
The Mosley Plan: In Britain Sir Oswald Mosley is still in the cheerful stage of irresponsible demagogy. He has been a Socialist. He understands that this problem of the surplus products for which capitalism has somehow to find an outlet is at the root of the troubles of the capitalist world. So he is concerned to show that there is no difference as regards success between the Socialist and the Fascist planning for the solution of this, the most fundamental of the contradictions of capitalism.
The first condition of his solution is an insulated and self-sufficient Empire:
Great Britain is primarily a producer of manufactured products and the remaining countries of the Empire are still primarily producers of foodstuffs and raw materials. Imperial planning can arrange by a variety of methods for production in the various parts of the Empire according to suitability for production.
It is a matter of course that the close collaboration with the Empire and the development of its resources will be the task of any government, Conservative, Fascist or Socialist. The demand of Canada for freedom to set up protective tariffs not only against foreign goods but against the British had to be conceded as early as 1859, and has been one of the corner-stones in the policy of keeping the Empire together ever since. In Greater Britain Mosley himself gives the figures which show the rapid industrialisation of the Empire, particularly the Dominions and India. At the same time he says:
We will never seek in any way to interfere with the right of the Dominions to choose their own methods of government and develop their own policies. That right will be as carefully preserved as the complete autonomy of other Fascist movements in the Dominions with which we are related and which now develop rapidly throughout the Empire.
A sentence like this shows how superficially Mosley has thought out the implications of his policy. The industries in the Dominions represent the solid economic interests of powerful people, trade unionists as well as employers. Are they going back to the land because it would be very nice for Great Britain if they did? Is it suggested that this would be the policy of the Fascist movements in the Dominions ‘with which we are related’, even supposing they got power? If there is one thing more than another that all Fascist movements stand for it is exaggerated nationalism. Does Sir Oswald Mosley really think that a Fascist Canada would be more likely to heed the claims of Great Britain to be the wealthy workshop of the Empire than a Liberal Canada? Who has the big industry has the power in war-time. Has Sir Oswald some means of bluffing the Canadian or South African Fascists out of that piece of useful knowledge?
Let us suppose the celebrated Mosley eloquence could achieve even this, can he guarantee to deliver the goods in times of difficulty, particularly the supreme difficulty of war? A casual glance at a map of the world shows the scattered character of the British Empire and the difficulty of guaranteeing trade and food routes. It was difficult enough in the last war when the German fleet was bottled up to begin with and the big naval powers of Japan and later America were on the British side and never against them. But with the developments of war in the air and under the sea, could the British, for example, guarantee industrial products to Australia if they were at war with Japan or America? Not even Sir Oswald Mosley’s romanticism can say that such possibilities are never likely to arise. Australia has certainly had to consider the possibility. It is one of the reasons behind her drive since the war to secure an autarchic industry at very great cost. Apart from that the mere growth of the population in an infertile country compels to industrialisation.
An Autarchic Empire: Mosley sees quite clearly that big and important parts of the Empire belong to other economic units. He gives the figures, for example, of the extent to which Canada buys her manufactured goods from her powerful neighbour, the USA, in whose orbit she obviously moves. Can such strong economic trends be altered by administrative measures? Sentiments of loyalty to the Crown and the feeling of Great Britain as ‘home’ are very real sentiments among the British elements in Canadian life, as anyone who has been there knows. But no one, least of all the Canadians themselves, have ever suggested that these would stand in the way of business advantage.
Of course, if Britain could offer really bigger advantages, then even Canadians will listen. This is what the British tried to do at Ottawa, and they have achieved a slight increase in the imports of paints and varnishes, electrical apparatus, machinery, soap and coal from Britain to Canada. But the British consumer is becoming increasingly restive at the price he has been asked to pay.
Mosley, however, does not even want to pay that price. At the same time that he assumes that the Dominions will, to please him, become at least not more industrialised, he demands that Britain shall become more agrarian. Mr Elliot, with his quotas and restrictions to encourage agriculture, is in the classic Fascist tradition. Not even Mosley can have things both ways. And if he thinks it possible to get advantages from the Dominions without paying the full price in return, perhaps a quiet dinner-party of all the Dominion Secretaries still living, not excluding for the occasion his late chief, Mr JH Thomas, would supply enlightenment over the port.
A condition for the insulated Empire is either the miracle of all the Dominions turning Fascist at once and acknowledging Mosley’s leadership, or that in the Fascist tradition he can treat Canada and South Africa as Hitler is treating Austria and the Saar. He himself sees that the latter is impossible.
Even the India of 1934 is not the India of Lord Curzon – and Curzon’s high-handed actions created more problems than his successors have yet been able to settle. Sir Oswald Mosley claims the right of ‘conquest’ in India, and proposes to cut through with steam ploughs not only the land, but hereditary landowning interests, religious custom and convention. India is to remain an agricultural country.
If he proposes, as he does in Greater Britain, to crush the Indian bourgeoisie by ruining the nascent Indian industries for the benefit of the British manufacturer, then how does he propose to keep down India during the operation? He says, quite truly, that the breaking of the grip of the moneylender, the alteration of out-of-date methods of landholding, new methods of cooperative marketing, would raise the standard of life of the peasant. But that takes time – a long time, considering the present state of Indian agriculture. It would need a civil service bigger than any the Indians can pay for, even supposing they were willing for the operation to be done fairly quickly. This reorganisation can’t be done quickly – but the ruin of Indian industry could be undertaken overnight. What does he think the Indian capitalists will be doing, while the humanitarian, if authoritative, [1] mind of Sir Oswald Mosley is trying to help the peasants? Could any army the British are likely to pay for keep the Indian masses, when mobilised by their own bourgeoisie, held down while Sir Oswald prepares the ground for these benefits to be bestowed upon them?
The power of machine-gun and howitzer are considerable. Mr Gandhi is convinced that they cannot prevail against ideas. In the long run, perhaps not, but Japan has shown that they can be very effective for their immediate purposes. Does Sir Oswald Mosley think, however, that he could get sufficient British officers imbued with the Japanese tradition to do the job in India? Remember that that means such incidents as the shooting of 10,000 Koreans, unarmed and inoffensive people, after the big Japanese earthquake, not because they had even contemplated rebellion, but because the Japanese thought it wise to impress the Koreans with the fact that Japanese military power was unimpaired even though an earthquake had ruined Kobe. Amritsar was a slight incident compared with the activities of Japanese militarism in Shanghai. But on page 147 of Greater Britain, Sir Oswald assures us that it is wrong to assume that ‘a highly organised Empire must be jingoistic and must pursue a policy of old-fashioned and aggressive imperialism’. In India he must apply it. The Japanese policy is on the most up-to-date imperialist lines, the latest model, in fact. But it would cause some straining of language for even a Fascist to prove that such methods are not ‘aggressive’.
The Economic Empire: While engaged on these somewhat drastic measures of reorganisation within the Empire, Sir Oswald proposes to sacrifice the Economic Empire out of hand, because it is not painted red on the map, and does not sing God save the King at the end of its theatrical performances. Let Argentina pay for the extension of the British market to the Empire. Argentina only benefits the investor in foreign loans to the detriment of British industries and agriculture, whose products it displaces, and whose necessary capital for development it consumes. But Britain owns the Argentine railways. Four hundred million pounds of British money are invested in Argentina, on which the interest is paid in beef and similar products. This is tribute paid to Britain. If the Fascists give up this tribute, not only will British investors lose, but British workers will pay considerably more for their meat. What is true of Argentina is also true of the rest of the Economic Empire or Sterling Bloc... those countries so financially interlocked with Britain that they went off the Gold Standard automatically when she did. Sir Oswald Mosley is against British investors financing foreigners. He thinks they do it because they are internationally minded, or because they have not the correct patriotic feelings. It has always been part of the peculiar Fascist mentality that they cannot admit that anyone has good reasons for what he does, different from their ideas of what he ought to do.
British investors sent their money abroad because of the high profits they obtained, and obtained largely, though not entirely, because of the lower wages paid there. If the Fascist government takes measures that will, in fact, mean that this source of tribute is either given up or so ruined that future tribute cannot be paid, then the British investors will suffer. The workers might be expected to take that calmly, but Fascist planning is admittedly planning by the middle classes with the consent of the capitalists, instead of by replacing the capitalists. How can Sir Oswald induce the capitalists to give up these profitable sources of investment? Not temporarily, be it noted, as in a war emergency, but as a permanent state of business. Even if this miracle be performed there remains a powerful element which has benefited considerably if not directly from this tribute. The Fascists and the Empire Free Traders alike speak as though these loans to foreigners were detrimental to British workers, but it is a matter both of past history and present arithmetic that the high standard of the British workers compared to other European nations is partly attributable to the drain from colonies and foreign countries in the form of tributes. That the Fascists will be allowed to smash the highly-profitable Economic Empire of Britain, for the very debatable advantages secured by trading with autonomous states because they speak the same language is, to say the least, a highly romantic conception.
Fascist Planning in Britain: Strange things happen in our mad world, and an economic system desperately trying to stabilise itself may be driven to strange expedients. Let us suppose that the bed-time stories come true, that Oswald-in-Wonderland gets what he wants, this autarchic, this self-sufficient Empire, carefully insulated from all shocks from the outside. His is then the responsibility to plan Britain according to his ideas. What then?
To do Mosley justice, he sees that the fundamental problem is to raise wages ‘to the point where increased purchasing power will absorb modern production in the home market’. Mosley claims that under a Fascist system the wages can be raised:
(i) Because the rate of production rather than the rate of wages is the main factor in the cost of production in large-scale industry.
(ii) Because it is in the well-understood interest of the capitalist class as a whole.
(iii) Because a strong political organisation and state will enforce this common interest against individuals.
Tariffs and protection are to be made ‘conditional upon industrial efficiency, upon good wages to the workers and upon low prices to the consumers’.
This is a system somewhere between capitalism and Socialism. It is Marxism made temporarily acceptable to Lord Rothermere. The Corporate State, it is claimed, within an insulated Empire, can so adjust consuming power to productive capacity that the fundamental contradiction of capitalism will have been solved without abolishing the capitalist system.
This attractive proposition needs more careful examination than it has so far received from the Socialist movement in Britain. There is a tendency to treat Mosley’s economic theories as being of somewhat less importance than the cut of his elegant trousers. But the promise to produce the best of both worlds, without undue disturbance of any existing class interest, is proving a highly valuable asset to the Fascist movement – as Hitler and Mussolini found before him. The claims of the Corporate State merit more attention than a superior smile and an allusion to rubber truncheons.
The Corporate State of ‘Greater Britain’: Mosley’s varying and vague theories about the Corporate State must be examined under three possible heads:
(i) That there is competition in the Corporate State.
(ii) There is regulated competition.
(iii) There is no competition in the Corporate State.
He sometimes assumes the one, sometimes the other of these possibilities and in that way adorns his Corporate State with the advantages of all of them without admitting that they exclude one another.
i) There is Competition in the Corporate State: If there is to be competition, in any real sense, as the capitalist world has understood it up to now, then, as has been proved in practice over and over again, and as Mosley says himself, it is impossible to adjust production and consumption. Competition between capitalists producing similar goods keeps wages down because wages are an important factor in determining price, and the price must be kept low because of competition. As wages go down, profit goes up, because competition compels the capitalists to look for high profit. In a highly competitive system, big capital generally ruins or absorbs the small capital, therefore it becomes necessary for each individual capitalist, or capitalistic group, to accumulate as much capital as possible by profit-making and wage cutting in order to avoid annihilation. In the struggle for markets, too great a proportion of this profit goes into the financing of further production at the expense of the amount allowed for consumption, and therefore it is impossible for all these goods to be bought back. The surplus accumulates, and we are back in a period of depression.
The BUF writers claim, however, that the organisation of the Corporate State would be able to modify these simple laws of the competitive system. The individual capitalists in one branch of production would be united into one monopoly trust, with certain state influences, and would then constitute a ‘corporation’. Competition between different capitalists in the same industry would thus be abolished: ‘The syndicates of employers and workers’ organisations in particular industries will be dove-tailed into the corporations covering larger and interlocking spheres of industry.’ [2]
How would these ‘monopoly trusts’, or ‘corporations’ actually be organised? Would the cotton industry, or the immense woollen industry, form one corporation, or would cotton, woollen and all other textiles, including the newest and fiercest competitor of them all, artificial silk (rayon) be put together in one ‘corporation'? This is not an academic question of detail, but one that goes to the root of the problem. For if these big textile industries were separate corporations, the competition would not be any less than it is now – in fact, the internal reorganisation of an industry as chaotic as the cotton trade would obviously increase its possibilities of competing with rayon.
If the answer is, ‘But, of course, all textiles would be in one great corporation’, then the difficulties of these corporations are exposed at once. For it is possible to plan the respective shares of such highly competitive materials in a socialised textile industry, where the needs of the consumer and not the profit of the producer are the main concern. But if each of these branches of the industry is being exploited by different capitalists for their own profit, with only the general understanding that they fit into a general plan of ‘a national corporation or council of industry – cooperating with the government for the direction of economic policy’, then it needs little imagination to envisage the struggle that would go on within the councils of the Textile Corporation between rayon and cotton for their share of the great market of fashion.
Mosley and all the other Fascist writers state again and again that they want to preserve the spirit of enterprise, which is assumed to be pretty much the same thing as the spirit of competition. The competition between individual capitalists of the same branch will be abolished. But the competition between the different branches of industry for their share in the market will remain.
Enlarging the Market: These branches will then have to compete for the share of the total income which is to be devoted by the public to the purchase of the particular goods which each industry produces – and this can only be done by one industry at the expense of the others. To a certain extent, of course, new needs would be created. It is interesting, for example, to work out where the money has come from to purchase the new wants that the motor and radio industries have created. They have been purchased by people who were apparently living up to their small incomes before they acquired a motor-bicycle or two-seater. The joke that has appeared in the comic papers of a young couple discussing whether they should have a baby or a Baby Austin does actually express a real social revolution. The no-child or one-child family can afford industrial products quite out of the reach of the seven-child family. The young man who wants a motor-bike is not the sole provider of chocolates and treats for his ‘girl’, or even of the future home, as was the case barely 30 years ago. The girl has an income as a typist or clerk, supplies her share of the future furnishings, and thus enlarges the market. Because of social factors of this kind, the suppliers of light luxury goods have been able to expand their business during a time when the heavy industries have been suffering from the worst slump in history.
For any such enlargements of the market there would be the keenest possible competition between the industries, and equally for the margin of income that can be spent on luxuries. By advertisement, and by ‘gifts’, by reductions in prices and various other devices, it is possible to influence the amount spent on beer or cigarettes, railway or motor-coach travelling, para-rubber or leather-soled shoes.
But the Fascist might argue that such competition only affects a margin of the national income. That the amount spent on necessaries remains a fairly constant proportion, and that this would, in itself, provide a stable home-market, enabling the corporations to plan their production, and reducing competition between the corporations to the narrowest possible limits.
Sir Oswald Mosley himself, in his speeches and writings, insists that the amount available for the purchase of ‘necessaries’ will rise – that it is part of the Fascist policy to increase it. But if that be so, then the amounts spent on the various kinds of necessities will vary. It is one of the grievances of the salariat that the cost of living index of the Ministry of Labour is based on the distribution of income for necessaries of a working-class household, with its 60 per cent expenditure on food. The demand for necessities is, in fact, very elastic. The working man, on two pounds a week, and the middle-class man, who complains that he is down to bare necessities, which to him include a small car and a golf club subscription, provide considerable possibilities of competition for the suppliers of their necessaries.
If the competition between the trusts or corporations is allowed within these margins then it will be real competition, and must involve as a corollary competitive reductions of wages. If it involves reductions in wages then the claim of the Fascists that the Corporate State can adjust consumption to production is obviously unsound, unless he wants to restrict production. The Corporate State will have increased the disparity and thus precipitated and deepened the crises it was set up to avoid.
But, says Mosley, reductions of wages will not be allowed by the Corporate State. All other weapons of competition will be allowed to the capitalists except that one. Something of the same idea was tried out in Britain just after the war by the Regulation of Wages Act, and later the Miners Minimum Wage Act. The trade board system was also considerably extended, and Joint Industrial Councils were set up for certain better-organised industries. It is true that the trade board system has not been broken by the depression, and the rates are still enforced, but these dealt with sweated industries and the wages fixed are low. In such trades as the chocolate and tobacco industries, which have Joint Industrial Councils, there has been no drive for wage reductions by the employers largely because of the positively catastrophic fall in the cost of their raw materials. But there is nothing in all this machinery which prevents wages being reduced if the capitalists can make out a case. The point is that even this amount of regulation has been bitterly resented by the employers as a whole, and all attempts to extend the system, as for example, Miss Bondfield’s attempt to have a trade board for the catering trades, met with bitter opposition from the employers’ associations.
Reducing Wage Costs: Apart from wage reductions, what other weapons are left to the capitalists in their competitive fights? It is possible to maintain the same weekly rate of wages while reducing the total wage cost in relation to the selling price of the article. This increases the amount of profit. Part of this profit may go into reducing the selling price, the other part invested in producing more of the article. This would be smiled upon as good business. But look what actually has happened. Suppose, for the sake of illustration, that at a wage of £4 per week, the wage cost of a pair of shoes costing 20s was 10s. By improved organisation it is possible to reduce the wages cost to 8s per pair, while still paying £4 per week. This extra profit of 2s per pair is then divided. One shilling reduction is made on the selling price, the other shilling goes into the fund for increasing the production of shoes now at 19s. The lower price induces a certain increase in sales, but the extra shillings spent on producing more cause many more shoes to be available, which the stable wages cannot absorb. So once again we are faced with this contradiction in capitalism that, so long as competition and profits exist, consuming power cannot be equated to production power, and therefore crises must arise.
When Mosley says that ‘the iron reality of the Fascist state’ will not allow the capitalists to reduce wages, he is thinking of the money paid at the end of each week, and obviously not of the various expedients by which wages costs can, in fact, be reduced. The iron reality of the Fascist state thus bites on the granite reality of capitalist interests. But Fascist planning is planning with the consent of the capitalist. The assumption is that the well-understood interest of the capitalist class as a whole coincides with the interest of the nation. But the main interest of the capitalist class is just in this factor of ‘profit’ which, by its reinvestment, produces goods which cannot at any rate of wages which allows of that profit, be bought back by the consumers – and so the crisis comes again in due course.
Mosley meets this position by saying that the rate of wages does not matter as long as the industry can work to full capacity. He swallows the case of the technocrats that in rationalised industry the rate of wages are those paid to the employees in the concern, and, as such, form no considerable proportion of the cost of production. In the statistical table that he uses to illustrate this in Greater Britain (pp 119-20), he creates the impression that wages are only 10 per cent of the cost in rationalised industry. He forgets that in the 50 per cent accounted for by raw materials, heat, light and power, wages are also included. In actual fact the national income thus divided would be about 50 per cent to labour and 50 per cent to capital – so that in each commodity a cost of approximately 50 per cent for wages is included.
That wages do matter is admitted by Mosley himself when he attributes the failure of British industry to the low wages paid by foreigners. If immense production compensates for high wages, what is the need for state interference? Why do not the British manufacturers produce on this vast scale and so drive the foreigners from their home market? If it be objected that production to supply the British market is not sufficient, then the same argument would apply under the Corporate State. Foreign subsidies cannot be used as the excuse because, apart from shipping, they are of little importance as compared to the 33.3 per cent protective duty, with the addition of the 25 per cent practical tariff supplied by the depreciation of the British pound.
But also the everyday events of capitalist society show that wages matter. Reduction of wages has been one of the main purposes of that process of rationalisation which has been going on for 500 years. The whole story of capitalism as it began in the fifteenth century with the first machines has been to reduce the variable costs as compared with the constant capital. That this process has been going on with greater intensity during the last 10 years or so than ever before does not make this a new thing. It is one of the unalterable laws of the capitalist system.
Mosley assumes that rationalisation in itself, if not connected with a decrease in production, does not affect the wages – and therefore the purchasing power – of the working class. In the illustration he gives in Greater Britain he assumes that rationalisation reduces the labour cost by 50 per cent, from 20 to 10. If this industry works only half-time, then this labour cost will be reduced to five, but the standing charges will be higher. He argues that a guaranteed market will be able to keep the rationalised number of workers fully employed, that is go back from five to 10. But he does not claim that the guaranteed market will put back the other 10 thrown out by rationalisation, and so get back to at least the 20 men he started with in his illustration.
Therefore, as is clearly seen even in his own illustration, he has not solved the problem caused by the rationalisation of industry, but only the problem caused by the rationalised industry working short time. But the higher rate of profit which is the main attraction of rationalisation leads to further rationalisation, as Mr Neville Chamberlain pointed out in a famous speech. This leads to further unemployment, for Mosley cannot, and does not, prove that the home market, even if guaranteed to the extent of actual prohibition of foreign products, can absorb these men successively displaced in the process of rationalisation.
The Profit Remains: But in order to show how superficial is his argument, let us grant to Mosley every concession that he can possibly desire. As we have granted the ‘insulated empire’ as a possibility, let us now grant him an extension of the home market on the scale which he envisages. How will this help the adjustment of consumption to production? For what matters in this adjustment is not the absolute amount of profit and the absolute amount of wages, both of which will of course be increased by an extension of the market, but the proportion between profit and wages. The whole case against capitalist rationalisation is that too great a proportion goes to the account of profit. The means of production in which this profit is invested produce too many goods compared with the purchasing power which, though it may be higher than it was before, is nevertheless decreased by the amount of this profit, and therefore is not available to buy back the goods which are now produced.
There is no suggestion in any Fascist publication that we have been able to find as to what force could be used to compel the capitalist to alter the present proportion between profit and wages. We have seen no suggestion that this proportion needs to be altered at all. Mosley seems to have completely overlooked the necessity for this to be done before his airy promises to adjust consuming power to productive capacity can have any reality whatsoever.
In order to secure any effective control for the Corporate State over industry it is not sufficient to demand ‘decent wages and low prices’ as all the Fascists’ leaders in whatever country continually do. It would be necessary to fix by legislation or administrative decree both wages and prices. The effect of measures of this kind depends on the degree of liberty of decision which is left to the capitalists. If this liberty has been left untouched by the new regime, and the new decrees displease the capitalists, the government can be defeated by the threat of closing their works. Over and over again since the war, whether the revolution has been to the left or the right, it has been shown that this threat is sufficient to bring to its knees any government which is unwilling itself to take over the ownership and control of industry, and which has in this unwillingness its very raison d'être. For ‘the function of the state will in no case be the conduct of industry’. [3]
It has been the invariable experience that if the government lowers the prices, the goods simply disappear from the market. The price-fixing methods of Mussolini cannot be adduced as a counter-argument. The decrees of Mussolini simply take the existing price level for granted and deduct from wages and prices as they exist in equal 10 per cent. By this only the proportion between the quantity of circulating goods and the quantity of circulating money, and of course the value of the money, is altered, but not the value of the goods in proportion to each other. This is not a price policy but a policy of monetary deflation which has as its aim the stabilisation of the internal, and incidentally the external, value of the lira.
To attempt a policy of fixing wages and prices would only bring to a head the dilemma which the Corporate State must face – either it must yield to the demands of the capitalists, in which case it is ineffective and superfluous and had better have left capitalism to run its own show; or else it takes over the means of production, in which case it is transformed into a system not of competitive but of what they at present call ‘bureaucratic’ economics which they state it is their main purpose to avoid.
The Ideal Fascist State: The difficulty of arguing with Fascists is that they assume that it is possible to get the advantages of both a competitive and a non-competitive system by the simple process of attributing to the Corporate State at one moment all the advantages of competition, and at the next moment all the advantages of Socialism, blissfully disregarding the incompatibility of the two systems. But easy as this may be on a platform, however effective it may sound as a peroration before a not-too-critical audience, in actual life it simply is not possible thus to do it both ways. A system either has competition or it has no competition, or it may have a regulated form of competition which, as we have shown, is only a new competitive capitalism which reproduces the disadvantages of the old one on a higher scale.
The English Fascists have availed themselves fully of the advantage that a system of rigid state capitalism is in many ways almost indistinguishable from a system of state socialism, that to this extent Stalin and Ford could meet harmoniously in the Brave New World. All Mosley’s arguments are interpenetrated by a vision of an iron patriarchal state which at last, somehow, adjusts consumption to production. From Marx he got the idea that it is the sting of competition which creates this disproportion between consumption and production, and as we have seen this disproportion remains as long as competition lasts. Mosley’s Corporate State is such a muddle precisely because he realises this, and yet at times speaks as though he could get rid of competition without getting rid of capitalism.
Apart from Socialism there is only one system which might be able to adjust consumption and production. That is state capitalism, which we may consider as the Ideal Fascism, dimly appearing at times as a sketchy background in Fascist writings. But this ‘Ideal Fascism’ cannot be left in this shadowland. It must be examined, and the conditions under which alone it can fulfil this task must be fully realised. A clear understanding of these conditions will show that the ‘ideal Corporate State’, the real rival of Socialism, is not something which can be brought into being by Mosley, but is a state of society which may (or may not) happen after several generations have tried every possible alternative, but who until they reach the goal of the final adjustment find no relief from the contradictions of capitalism, but are ever more and more oppressed by them.
The entire country would be run by a state capitalistic trust. The classes in this society would be:
(i) Small controlling class.
(ii) Income drawers.
(iii) Serfs.
The control of the means of production would be in the hands of a few capitalists who collectively, together with some officials of the Fascist Party, would own all the means of production. Around them would be a largely parasitic class, which derives an income from production without having any control over it. The majority of the population would be in a state of ‘serfdom’. They might be well fed and well treated, better off in this sense than the ‘free workers’ of today. But the free market for labour would have been abolished with competitive capitalism. Without putting any moral indignation into the term ‘serf’ one must note that the distinguishing marks of the free worker are his right to change his master, to withdraw his labour, to choose his place of residence, and to take an interest in, perhaps (though not necessarily) part in, the political affairs and government of his country. Tendencies towards limiting these rights exist in the present world. Germany now limits the entry into professions, and limits the right of entry of workers into towns with a high rate of unemployment. The English Poor Law has long had the right to return the worker needing assistance to his place of origin. Demands that those who have received relief during the previous 12 months should be deprived of the right to vote are frequently made by certain sections of public opinion.
In the ideal Corporate State the competition of workers for the workplace would also be missing. So the working classes would settle down into conditions which in theory would not be so different from those of the feudal Middle Ages, though the physical conditions might be infinitely better.
The capitalists, because they controlled the entire country, would be less interested in the height than in the stability of their incomes. They would thus be in a position to restrict, not the amount spent by the income-drawing classes on luxuries, which does not matter, but the amount spent on the reinvestment in production, which is the part that really matters. Those arguments about the rich providing work have a certain validity. But the people who use them do not realise the corollary that it is the good, the abstinent, the reinvesting capitalists, those who have been the objects of paeans of praise since the days of the Bible who in the conditions of modern large-scale industry are the danger, that is wrecking the system.
It is assumed that the small controlling class aiming at stability above all things will realise this. They may give an extra proportion of the profit to the rentiers to waste which may cause social irritation, but which not upsets the system. Their power would actually be best safeguarded by keeping the serfs reasonably satisfied anyway. They can quite easily do this, having abolished competition by adjusting consumption to production.
The national income could thus be divided into three parts:
(i) Wages, salaries, etc.
(ii) Private income of the capitalist class and their parasitic employees and dependents – this is part of the profit.
(iii) That part of the profit which is used for accumulation and for replacement and new machinery generally.
In organised capitalism all the trouble arises because part iii is too big. Under the ‘Ideal Fascism’ it would be so adjusted as to provide only for the necessary replacements and for such new machinery as can be introduced without upsetting the nicely-balanced adjustment of production to consumption. The mechanism of competition which favours big capital now compels each individual capitalist to keep parts i and ii down in order to concentrate more capital in his hands for the competitive fight. If competition is abolished under a system of state capitalism, then the proportion between these three parts could be guided by the demands of the stability of the system.
The propagandist value of a vague sketch of a planned economy of this type is that it can be shown that the system could pay higher wages. All the Fascist writers stress this point. Naturally they are not so explicit, even to themselves, about the other essential features of such a system. First, because they would get a much more rigid bureaucracy than the Socialist one, which is one of their favourite objects of denunciation, and, secondly, because the scheme inevitably involves the annihilation of the many independent small capitalists whose help they desire.
The Fascist writers also leave vague the important question of who is to supply the driving force and the firm basis to secure and maintain this ‘state machinery for the maintenance and correlation of wages’ for which Sir Oswald Mosley asks in Greater Britain (p 110). He says that ‘this great structure of Corporate organisation can only rest with certainty upon the iron reality of modern political organisation’. It obviously cannot rest on the workers, who are chiefly interested in the higher wages, for the system deliberately excludes them from control. It therefore must rest on the insight and interest of the capitalists.
Herein lies the fundamental difference between the Fascist scheme and the Socialist one. The Fascist plan is still capitalism because of the persistence of the essential antagonism between the owners of the means of production and the workers who are excluded from any control of production. There may, theoretically, be no difference between the material well-being of the workers under the two systems, but under the Fascist scheme the workers will depend for that material welfare not on their own planning and control of the means by which such benefits are secured, but on the goodwill of a class which, however benevolently inclined (and this is a big assumption), considers the well-being of the workers as a necessary part of the general stability, like oiling the machinery or any other essential piece of routine work.
We consider this alternative to Socialism to be a logical one which might well come about, though only after a very long time. Such a system would be the climax of a long series of struggles. It could not be introduced automatically by administrative measures, as Mosley rather unthinkingly seems to believe. The chief factor which favours such a solution in comparison with Socialism (or Communism) is the widespread disinterestedness [4] of the working classes in the control of society, though they are interested enough in the immediate conditions of their work and the wages which they are paid. But on this fundamental apathy as regards ultimate control Fascism can build its strength.
What are the implications of such a scheme which we have outlined at its best? The danger which would threaten such a system would be stagnation. There would be no motive for technical progress except war. Two possibilities might arise. One of these gigantic national trusts might be in danger from another nation which had also organised itself on these monopoly lines. Then a fiercely destructive war might ensue, all the more devastating because of the complete organisation of the whole national forces for such purposes. Since power is, as we have seen, the chief motive of the rulers of such a state, for which they sacrifice excess of income, and since the workers count for no more than any other part of the machinery, such rulers would have a strong incentive to extend their power by war.
Alternatively, we will suppose that this is not the case. That the rulers of the great national trusts seek stability above all things, and amicably settle their disputes through some surviving form of the League of Nations. Then in the interest of the stability of the system, revolutionising of technique will be approached with the greatest caution. The spirit behind technical knowledge will wilt. Science will degenerate into ‘recipes for results’. There will be little interest in the reasons for the recipes. People of enquiring mind who want to investigate and invent will be regarded as public nuisances and treated accordingly. This state of affairs has already existed. There is a very close parallel in the early Middle Ages in Europe. Gradually the productive powers of society will be reduced, and the standard of life of the masses will slowly sink back to poverty.
The middle classes call to Fascism for some form of planning which will maintain their own position. This is the sort of thing they are likely to get as an alternative to the active driving forces of the masses in a Socialism where every invention, every piece of new technique, is eagerly welcomed, as lightening the burdens on the workers, and adding to the national dividend.
1. The word ‘authoritative’ should surely read ‘authoritarian’ – MIA.
2. Oswald Mosley, Greater Britain (London, 1930), p 37.
3. Fascist Week, no 5.
4. The word ‘disinterestedness’ should surely read ‘lack of interest’ – MIA.