The Political Economy of Fascism Myth or Reality or Myth and Reality

New Political Economy
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The political economy of fascism: Myth or reality,

or myth and reality?
David Baker
To cite this article: David Baker (2006) The political economy of fascism: Myth or reality, or myth
and reality?, New Political Economy, 11:2, 227-250, DOI: 10.1080/13563460600655581
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New Political Economy, Vol. 11, No. 2, June 2006
The Political Economy of Fascism: Myth

or Reality, or Myth and Reality?
DAVID BAKER
No comparative study exists of fascist economic systems. Nor is

this surprising. For one can legitimately doubt whether it is appro-
priate to use so distinctive a term as ‘system’ when discussing
fascist economics . . . Nor, in the economic field, could fascism
lay claim to any serious theoretical basis or to any outstanding
economic theoreticians. Were fascist economics . . . anything
more than a series of improvisations, of responses to particular
and immediate problems? Were not the economic actions of any
single fascist regime . . . so contradictory as to make it difficult to
speak of a coherent and consistent economic policy in one
country, let alone of a more general system.1
It is almost 40 years since S. J. Woolf’s observations, yet they remain pertinent. At

the time of writing, a search for the term ‘political economy’ in the index of almost
any serious work on fascism, or via a web search engine, yields distinctly thin
results. Equally, there is still no major comparative monograph dealing with the
question, aside from Charles Maier’s magisterial general political economy of
the period, which concluded:
if it advanced any economic program, fascism proposed an economy

geared for national self sufficiency and war. Autarkic policies rep-
resented a natural outgrowth of their political premises. They
seemed all the more attractive to the dictators as ways to cut
through contradictory interests at home. Faced with a tug of war
among conflicting priorities and bureaucratic agencies, Mussolini
in 1925 and 1936 and Hitler in 1935–6 seized upon autarky to
impose a more comprehensive authority over disputing factions . . . In
a larger sense, fascist economics was not really economics at all. As
Hitler wrote, economic issues were problems to be overcome by pol-
itical will. The original appeal of fascism consisted in part of its
promise that ordinary people need not be powerless against what
often seemed inevitable and overpowering economic trends.2
David Baker, PAIS, University of Warwick, Coventry, CV4 7AL, UK.
ISSN 1356-3467 print; ISSN 1469-9923 online=06=020227-24 # 2006 Taylor & Francis
DOI: 10.1080=13563460600655581
David Baker
Fascism’s economic doctrines and aspirations have, therefore, remained amongst

the least researched elements of classical fascism.3 They also represent one of the
most difficult components of the value-matrix of fascism to probe, encapsulated in
vague statements about the ‘corporate state’ and restoring ‘blood and soil’ agricul-
tural communities, largely abandoned in practice. Equally, a supposed adherence
to forms of ‘third way’ economics, between individualism and collectivism,
appears to be little more than ‘mobilising myths’ to separate fascism from its
chief enemies and rivals – liberalism and socialism/communism – rather than
any developed political economy. There were also glaring contradictions and
inconsistencies in the economic pronouncements of fascist leaders towards
market capitalism and the proper functions of the state.
Further, neo-Marxist scholars consistently conceptualise fascist movements,
parties and regimes as licensed defenders of the interests of monopoly capital,
seeking to rescue the capitalist system from the rising forces of the organised
working class and inherently falling profits, while furthering the international
Imperialist purposes of monopoly capitalism.4 Members of the Frankfurt
School, such as Max Horkheimer, Theodor Adorno, Franz Neumann and Friedrich
Pollock, viewed fascism as a system in which capitalists increasingly acted
through the medium of the authoritarian state. Such a society could eventually
abandon market commodity production and its law of value, as it was replaced
by the state bureaucracy, allowing capitalists to extract surplus value directly
through the state. The market would be completely replaced by a state-owned
and managed economy, and capitalists would no longer be capitalists, but rather
‘owners of the state economy’ through their permanent control of the state.5 As
Maier put it, fascism represented ‘crisis capitalism with a cudgel’.6
As a result, it is often assumed by Marxists and non-Marxists alike, that classical
fascism lacked a properly developed political economy, resorting to an empty rheto-
ric of the ‘third way’ and ‘corporative state’ to cover more basic autarchic and
authoritarian-imperialist intentions, driven ultimately by intolerant and perverted
political impulses.7 The two major recent monographs in the field reinforce this
impression. Richard Evans concludes that ‘corruption, extortion, expropriation
and downright robbery [were] . . . the hallmarks of the [Nazi] regime and its
masters and servants at every level’, while R. B. J. Bosworth suggests that ‘economic
life doubtless had its special style and rhythms but conditioning all activity in Fascist
Italy was charisma’.8 This study may, therefore, prove to be a paradigmatic example
of the proverbial search in a dark room for a black cat that simply is not there.9
Nevertheless, A. J. Gregor has long argued that:
Fascism, [in Italy] prior to its advent to power, advertised a specific

program addressed to immediate problems that afflicted the
national economy . . . [and] entertained a long-range economic pro-
gram . . . articulated in the doctrinal literature of 1921 and 1922 . . .
those programs were autonomous, originating among its principal
ideologues before allies previously unattached to the movement
joined forces with Fascism. Whatever accommodation there
might have been with the established economic interests . . . this
228
The Political Economy of Fascism
accommodation was a contingent, rather than a constituent, charac-

teristic of Fascist economic policy.
Equally, the leading scholar of French fascism, Zeev Sternhell, has argued power-
fully for the sincerely held and relatively sophisticated economic philosophies of
nascent French fascism.10
When attempting to evaluate classical fascist economic doctrines, it is important to
understand classical fascists’ aversions to traditional concepts of political economy,
due to an in-built ideological bias against materialist arguments and an associated hos-
tility towards structural-economistic interpretations of events in history.11 Marxism
and socialism are inherently materialistic, embracing the need to have a highly devel-
oped understanding and appreciation of the interaction of the economic side of human
existence upon the forms of politics and civil society they support. Liberal beliefs also
derive from forms of political economy – a term which emerged in liberal thought in
order to explain the ‘natural’ rise of market-based individualism and liberal notions of
the innate value of ‘freedom’ of action in ‘civil society’.
In his Fascism: Doctrine and Institutions, Mussolini explicitly rejected all such
economic conceptions of history:
Fascism, now and always, believes in . . . actions influenced by no

economic motive, direct or indirect . . . Fascism denies the materi-
alist conception of happiness as a possibility, and abandons it to
its inventors, the economists of the first half of the nineteenth cen-
tury . . . Fascism has taken up an attitude of complete opposition to
the doctrines of Liberalism . . . in the field of economics . . . If the
nineteenth century was a century of individualism . . . it may be
expected that this will be a century of collectivism and hence the
century of the State.12
Fascist anti-materialism ruled out allocating a key role to any independent econ-
omic causation, whether the ‘disciplines’ of the free market or materialist/structur-
alist class-based forms. The roots of fascist ideology lay principally in pseudo-
Nietzschean superman myths, expressed first through the apocalyptic meta-histori-
cal writings of Oswald Spengler and vitalistic opera plots of Wagner, which denied
the significance of mere economics in dictating the upward (and downward) move-
ment of peoples and civilisations. Fascist philosophy was centred on an anticipated
triumph of the ‘will’ of the chosen leader and his devoted disciples over mere
material/structural obstacles. For fascists, when an economy failed or succeeded,
‘someone’, not ‘something’, was responsible.
This anti-materialist aspect of classical fascist political economy was clearly
visible in nascent form in fin de siècle France, where Sternhell’s extensive
researches have borne rich, if contested, fruit.13 For Sternhell, it was the rightist
revolutionaries of the turn of the century that laid the first foundations for
French fascism, through a violent anti-democratic ultra-nationalist new right,
marked by its concern for the deteriorating condition of all distressed classes.
This current was represented at first in Barresian nationalism and later by the
Maurrassians and the Jeune Droite. But it was a related mutation of the ideology
229
David Baker
of the French revisionist ‘neosocialist’ left which gave birth to fully-fledged

fascist ideology.14 A new authoritarian left emerged, inspired by revolutionary
syndicalism and a revolt against historical materialism, and founded on the anti-
rationalist elements of Friedrich Nietzsche, Henri Bergson, Vilfredo Pareto,
Gustav Le Bon and Sigmund Freud. Between the wars this dissident faction
was represented by the neosocialist (‘Planist’) revisions of Marxism by Henri
De Man, Marcel Déat and their ‘dirigiste’ and ‘futurist’ allies. They combined
mystical nationalism with socialism (that is, revolutionary syndicalism and cor-
poratism) to produce forms of ‘socialist nationalism’ and ‘national socialism,’
as expressed through the writings of Georges Sorel, Edmond Berth, Hubert
Lagardelle (a syndicalist, influenced by Pierre-Joseph Proudhon) and Gustave
Herve (a reformist Anarcho-syndicalist), centred around Le Mouvement
socialiste. Sternhell concluded:
The theory of ethical socialism developed by the revolutionary-

syndicalist school now spearheaded this revolt against both
liberal democracy and social democracy . . . The Sorelian synthesis
of the two forces opposed to liberal democracy – socialism and
nationalism . . . began . . . “transcending Marxism,” which reached
its culmination with Henri De Man’s Au-dela du marxisme and
Marcel Déat’s Perspectives socialistes. Going “beyond” Marxism
in practice generally led to positions outside Marxism and very
far away from it . . . a conception of socialism in vitalist, intuitive,
Nietzschean, and Bergsonian terms . . . To Sorelian revolutionary
syndicalists . . . socialism was more pedagogic than economic,
and relatively indifferent to . . . class conflict.15
Through this lethal ideological cocktail they forged ‘a brilliant and seductive
ideology of revolt that the historian identifies as fascism’.16
Fascist political economy: a two regime model

That scholarly effort which has been devoted to understanding fascist political
economy has naturally concentrated on the regime phases of fascism in Italy
and Germany,17 the only examples of mature fascist dictatorships.18 The
problem with regime models, however, is that the realisation of the economic
intentions of regimes depends upon their relative autonomy from the existing
socioeconomic structures and power blocs inherited from the previous state, and
the degree of pragmatism and/or force of will shown by the new leadership in
overcoming a variety of external economic barriers to their plans.19 In both
cases, the wishes and desires of both dictators were undoubtedly modified by
the inherited exigencies of the pre-existing economies and by external forces in
the international economy, undermining any genuine ‘fascist’ political economy
(producing, in the case of Italy, shallow corporatism and, in Germany, single-
minded preparations for total war). Besides, Alan Milward argues that ‘economic
policy . . . remained not only subordinate to but also an integral part of the
ideological and political ambitions of the fascist movement . . . the ideological
230
framework within which economic decisions were made often had even more
weight than the practical questions of satisfying the economic wishes of those
groups which supported the regime’.20 Nevertheless, if elements of fascist politi-
cal economy can be discerned behind regime practices, this may partly explain the
nature of the Italian and German economies under their dictatorships. In order to
investigate this, a comparative analysis of the two regimes is undertaken below,
divided into three discrete historical phases, to capture the multi-layered ideologi-
cal and/or contingent practices underlying fascist economic policies.
Phase one: radical ideas and reformist leaderships

Early fascism was militantly anti-capitalist and violently anti-Bolshevik, strongly
in favour of reclaiming and unifying the lost national territories, and located on the
‘left’ of the fascist spectrum in the more radical elements within the early move-
ments, many of which emerged from authoritarian-leftist and anti-capitalist right-
ist splinter groups. Consequently, such impulses produced programmes which
were extremely anti-market capitalism, authoritarian and ultra-nationalist.
The Italian Fascist programme of 1919 demanded a heavy capital levy, a tax
on war profits, generous minimum wage rates, participation by workers in
management, confiscation of church property and the allocation of surplus land to
peasants’ co-operatives. Leading Italian Fascist intellectuals spoke of a ‘post-
capitalist’ economic system with collective ownership of a corporative economy.21
The Nazi programme of 1920 sought the abolition of unearned income, outright
confiscation of excess war profits, nationalisation of trusts, land reform and the
strengthening of the ‘middle orders’.22 Calls were also made for closing the
stock exchanges and nationalising the banks, while on taking power, radical
Nazis launched a campaign against department stores which were hit with
special tax legislation and by consumer boycotts.23 Artisan and small business
groups sought to ban certain services from large chain stores and cooperatives.
Even the concept of the industrial corporation was challenged by Nazi populists
who dreamed of a return to the old system of patriarchal management.24 In both
countries, early fascists displayed a visceral mistrust of ‘big capital’, especially
‘rapacious’ finance capital in Germany, as opposed to ‘creative’ industrial
capital, while Fascists in Italy distinguished between the ‘productive’ and the
‘parasitic’ elements of the bourgeoisie and promised wholesale nationalisation
of industry and commerce.
In Italy, the revolutionary syndicalism and corporativism of the more radical
Ras (regional Fascist leaders) lay behind such anti-capitalist beliefs, while in
Germany national–bolshevist ‘left-Strasserism’ of the ‘North German faction’ was
responsible for much of the high-profile argumentation within the Nazi movement.25
But, arguably, the most important doctrine of this kind was the ‘ordo-liberalism’
of Wilhelm Roepke, Walther Eucken and Carl Schmitt.26 Schmitt, in particular,
theorised the possibility of a natural compatibility between liberal economics
and a total state. But he was far from alone. As Philip Manow observes,
To achieve a ‘healthy economy within a strong state,’ Rüstow and

others tolerated, even proposed to use authoritarian means.
231
David Baker
Müller-Armack, who was later to become the first section chief of

the newly founded Grundsatzabteilung (planning section) of the
ministry of economic affairs and state secretary under Ludwig
Erhard from 1958 to 1963, sympathized with Italian fascism . . . and
after 1933 warmly welcomed the ‘new order’ . . . He joined the
Nazi party the very same year. Eucken had become a sympathizer
of the National Socialist party as early as 1931 . . . His 1932 article
was nothing less than a total damnation of the ‘system of Weimar’.
For Eucken, parliamentarism and particularism had become syno-
nyms. He shared with Rüstow, Müller-Armack and Röpke the pro-
found distaste for the ‘amorphous mass’ and favored a strictly
elitist conception of political leadership.27
Of course, these were authoritarian liberal intellectuals – Roepke was driven into
exile by Nazism – but in terms of the impact of their ideas on Nazi thinkers and
bureaucrats, there is a case perhaps to be made for a distinctive German authori-
tarian doctrine of national economic development.28
But in neither case did this potential radicalism pass far into the regime stage of
fascism. When close to gaining power, both leaders condemned ‘wasteful’ commer-
cial capitalism, but praised the entrepreneurial virtues of big business. In his address
at Udine in September 1922, and again on 16 October, Mussolini suggested to
business leaders that fascism actually proposed an end to state intervention:
‘Basta con lo Stato ferroviere, con to Stato postino, con to Stato assicuratore’
(‘Enough of the railroad state, the postal state, the state as insurance agent’).29
Hitler famously made similar overtures to Ruhr magnates at the Dusseldorf
Industrieklub in January 1932. Praising German entrepreneurial skills, he
claimed that, like him, they were men of decision who needed liberation from
bureaucratic restrictions on their freedom to control their businesses.30 Both
men appealed to technocratic myths and lauded engineers and businessmen
above ‘valueless’ financiers and commercialists. This ‘productivism’ stressed
the virtues of productive’ industrialists (portrayed as engineers or technocrats)
over the ‘parasitic’ rentier.31
Significantly, Hitler (a studied agnostic on economic affairs) quickly moved
against the leftist economic aspirations within the movement after taking total
control of the party in 1925– 6. Mussolini had also purged or sidelined most of
his more extreme technocratic economic zealots by 1935.32
Phase two: practical accommodations, syndical states and proto-autarchy

Faced with the realities of power, and having made extravagant ‘bread and work’
promises to their voters and activists, the leaderships in both Italy and Germany
recognised that large private industrial and financial complexes could only be
challenged by massive direct state intervention, at considerable risk of destabilis-
ing their economies. Against vocal protests from leftist fascists, both regimes
abandoned any attempt to alter radically the structure of economic organisation,
and instead modified and worked within inherited liberal macroeconomic
232
structures to further their long-term economic aims. The Nazi word for this was
Wehrwirtschaft, denoting a domestically oriented defensive economy geared ulti-
mately to warfare and strategic self-sufficiency. In the process, three major goals
dominated: full employment; ruralism; and autarchy.
The Nazis conducted their electoral campaigns around promising Arbeit und
Brot and, in June 1933, the ‘Law to Reduce Unemployment’ was enacted. There-
after unemployment fell rapidly from nearly 6 million to, officially, almost
nothing – with conscription eventually absorbing over 1 million people and con-
centration camps, forced emigration and summary executions literally ‘removing’
others. Full employment was a core ideological component of Nazi political
economy, rather than just an expedient introduced to fulfil an election promise
or overcome any present crisis. Otto Dietrich, the economist heading Hitler’s
press bureau, identified German national socialism with the right to work: ‘Our
socialism is no utopia, alienated from the real world, but natural life, full of pul-
sating blood . . . the sole egalitarian economic demand it grants all the people is the
right to work.’33 Indeed, this commitment lay at the heart of most varieties of
fascist economics, since unemployment and under-consumption were viewed by
fascists as the result of the ‘selfish materialistic and internationalist forces’ of
the era. Mass unemployment was also the endemic scourge of capitalism in this
period and therefore a key concern of many of the radical anti-democratic
leftist and rightist currents that flowed into early fascism. Naturally, unemploy-
ment also sapped national strength.
The breakdown of the international capital market with the world depression,
coupled with fears inherited from past depressions and a threat of the flight of
capital abroad, was, in both regimes, checked by exchange controls while credit
institutions were employed to absorb public debt. Although envisaging the
gradual reintegration of Germany into the international trading and financial
system after a full recovery, the coopted liberal Nazi Economics Minister,
Hjalmar Schacht, was faced with immediate credit shortages; consequently,
government orders were paid for by bills accepted by Metallurgichen-Forschungs
GmbH (Mefo), created jointly by industry and the Nazi government. ‘Mefo bills’
circulated as payment for other goods and were also employed by banks to
expand credit. This policy was also generated by the refusal of fascist governments
to contemplate foreign loans, which violated their vehement rejection of liberal
rentier capitalism and their goal of achieving closed, self-sufficient, militarised
economies.
The creation of corporativistic QUANGO-like bodies 34 in Italy was largely jus-
tified to rationalise and modernise the fascist economy and presented as a tempor-
ary expedient to counter the impact of the continuing world depression. As in
Germany, the industrial sector was allowed to remain in private hands but was
charged with meeting ‘national needs’. Corporativism was Mussolini’s answer
to curbing and developing capitalism, not abolishing it, allowing the claim that
fascism possessed an economic strategy that separated it from traditional liberal
capitalism. The system of compulsory sectoral organisation and government of
industry was proclaimed as eliminating the opposed interests of capital and
labour, in contrast to the divisive class concepts of capitalism and communism,
since it controlled and integrated not only workers but also capitalists. But
233
David Baker
corporativism was in practice often bypassed by other state organs, or the dictator
himself, and ultimately the ‘public contract’ was probably the most effective
instrument of state control over industry. By 1944, 71 per cent of banking
assets were held in government securities compared with 20 per cent prior to
1933. Ultimately, ‘corporatismo’ centred mainly on the brutal dismantling of
the independent trade unions and the obligatory incorporation of workers within
corporations under fascist peak organisations – an essential component of both
economic systems.
Thus, while Italian corporativist theories urged this as a solution to Italy’s econ-
omic underdevelopment and as a modernisation strategy, its Nazi equivalent
sprang from social protectionist impulses in which the Mittelstand – small
businesses, handicrafts organisations and the small farmer – would be shielded
from ‘unfair’ competition from both big business and organised labour.35 In
neither case, therefore, did ‘Homo Corporativus’ replace ‘Homo Economicus’.
In practice, direct state interventionism and public ownership was extended
piecemeal by both regimes, but was often made necessary (especially in Italy)
to maintain the stability of the industrial and financial systems. The much-
hyped Industrial Reconstruction Institute (IRI) in Italy was hastily created to
forestall the imminent collapse of the core banking system, which controlled a
considerable sector of heavy industry and was only belatedly trumpeted as
‘Fascist’. This system was also employed to create new industries where capital
was naturally risk averse or its product central for purposes of armament. Thus,
both fascist states intervened directly to create enterprises to exploit fuel and
chemical deposits and/or develop replacement synthetic materials. Nazi direct
investment in the chemical industry increased after 1936 to replace private
capital’s unwillingness to develop the substitute materials required for the drive
towards autarchy. The paradigmatic example was the huge Reichworks
Hermann Goering, created by the state to exploit the uneconomic low-grade
Salzgitter ore, to the disbelief of traditional iron masters.
Major expansions of each state’s bureaucratic machinery were one major
consequence of this mixture of corporatism and state intervention. A matrix of
multi-level governing departments, agencies, and corporations was created,
which nominally controlled the infrastructural and demand elements of the
fascist economies. But this proved a far from coherent system, containing a mul-
titude of quasi-autonomous bodies and strong local leaders – ‘Ras’ or ‘little
Hitlers’. In both systems, the power remained partially located in local interest
groups, especially in areas such as Catholic Bavaria and the rural and remote
south of Italy.36 Achieving influence, or the need to repay local support, often
weighed more heavily than national economic assessments; corruption was rife
in Italy (in line with the preceding liberal regimes) and in Germany where the
Reichworks Hermann Goering degenerated into a system of rank corruption.
Trade patterns were highly deformed by the increasingly closed economies,
especially in Germany. German imports fell from 14.5 milliard RM in 1928 to
4.75 milliard in 1938, and exports fell in similar measure. Bilateral trade
became the norm, based on hugely complex clearing/barter agreements and
heavily subsidised exports. As a result, German trade patterns shifted increasingly
to underdeveloped south-east and south-west Europe and to Latin America. In
234
Italy the regime introduced, and closely policed, a similar mixture of high tariffs,
barter/bilateral trade agreements, strict exchange controls and draconian import
licences.
Ruralism – a return to the land and its peasant values – was a long held
shibboleth of fascist propaganda in both countries. But, in reality, both regimes
spearheaded drives to increase agricultural production and achieve self-sufficiency
in bulk foodstuffs, which undermined this restorationist aim. Mussolini’s much
hyped ‘battle of wheat’ pushed up production considerably, at the cost of
greatly reducing local production of vital export cash crops. Consequently,
neither economy was in any way ‘ruralised’, with the movement of rural popu-
lations into the cities accelerating as war approached. However, Milward contends
that fascist economic policy under both regimes was ‘extraordinarily favourable
towards the agricultural sector [landowners] as it was unfavourable to industrial
labour. Both in direct subsidies and in indirect financial benefits agriculture was
one of the main beneficiaries of the public purse in both countries.’37
In a major break from any ‘totalitarian’ identification with communism, private
property in industry was, by and large, the norm in Fascist Italy and the Third
Reich. German firms, despite rationing and controlled licensing activities by the
state, had ample abilities to choose their own production and investment patterns.
Even in war-related projects, freedom of contract was often respected and, instead
of force, the Nazi state offered firms a bundle of contract options to choose from as
an incentive. Buchheim and Schemer suggest that this was in part a belief that
‘private property provided important incentives for increasing efficiency’. Indeed,
The ideal Nazi economy would liberate the creativeness of a mul-

titude of private entrepreneurs in a dominantly competitive frame-
work gently directed by the state to achieve the highest welfare of
the Germanic people. But this ‘directed market economy’ . . . had
not yet been perfected because of the exigencies of war. Therefore
a way to characterise the actual . . . economy of the Third Reich . . .
would probably have been ‘state-directed private ownership
economy’ instead of using the term ‘market’.38
Otto Ohlendorf, a high-ranking SS officer in the Reich Economics Ministry

attacked Speer’s quasi-cartel/slave war economy in 1943 for undermining small
and medium-sized firms. In his opinion, the aim of National Socialist economic
policy should be ‘to restrict as little as possible the creative activities of the
individual . . . Private property is the natural precondition to the development
of personality. Only private property is able to further the continuous
attachment to a certain work.’39
The Social Darwinian ‘survival of the fittest’ ideology was perfectly suited to
the Nazi mentality and was used to set up rival Einsatz-commando killing
squads in the occupied east.40 Evidence of this attitude can also be found in the
re-privatisation of state enterprises. As Buchheim and Schemer observe, ‘the
Nazi regime did not want at all a German economy with public ownership of
many or all enterprises: therefore it generally had no intention whatsoever to
nationalise private or to create state firms. On the contrary the reprivatization of
235
David Baker
enterprises was furthered wherever possible . . . In 1940 the Genshagen airplane

engine plant operated by Daimler-Benz was privatized; Daimler-Benz bought
the majority of shares held by the Reich earlier than it wished to.’41 Private com-
petition, under state direction, was apparently central.
During phase two, therefore, the structures of the two fascist economies were
created partly in an ad hoc and defensive manner – reacting to external events
rather than controlling them – and certainly not according to any economistic
blueprint espoused by fascist ideologues. Policies were initially constructed in
response to the effects of the depression and to reassure existing elites that
fascism was not root-and-branch radicalism in the economic field, but also to
achieve national independence and the essential growth (and full employment)
promised in their respective rise to power. In reality, of course, there were deep
autarchic and imperialist intentions behind these macroeconomic policies.
Phase three: autarchic economies

It is only in this third and final period, and especially in Germany when the regime
initiated an all-out armaments drive, that a temporary mastery of economic cir-
cumstances can be demonstrated. Nazi autarchy was always latent within the
ideology of Lebensraum, while by 1926 Mussolini had created centralised state
controls over banking and foreign exchange, provided tariffs and subsidies for
the ‘Battle for Grain’42 and stabilised the lira at 90 lira per pound, undermining
market-oriented export industries while favouring the chemical and electrical
businesses with protection and government contracts.
But there remained a sharp contradiction between Hitler’s and Mussolini’s
respective political and economic aims, reflected in the lack of top-level coordi-
nation in the quasi-centrally controlled economies and the urgent autarchic
requirement for direct ownership as well as tight control. Indeed, the political
motivations which underlay the entire reshaping of these economies proved con-
tradictory to the continued expansion of both. For the political aim was expansion
by military aggression, while the economies of the fascist countries were geared to
defensive rearmament and self-sufficiency. This transition occurred insufficiently
rapidly for total war, as the Nazi state still required 40 per cent of its raw materials
to be imported in 1939.
Ian Kershaw accurately concluded that the underpinnings of the political
economy of the Third Reich are best viewed through an alliance of power
cartels, comprising the army, big business, the inner Nazi group and, from
1936, an increasingly powerful SS/police state bloc. But although the Nazi/
SS/SD43 bloc enhanced its position in this cartel during the late 1930s, policy
remained at least partially linked to the broad interests of sections of big
capital. With regard to the ‘primacy of politics’ model embodied in the full
scale genocide after 1941,44 Kershaw, while admitting that this did contradict
the aims of big business, argues that it was also the consequence of the broader
policies of war and brutal conquest which were framed partly in their interests.
He also brilliantly encapsulates the relative bureaucratic anarchy of the Nazi
regime in his model of ‘working towards the Fuhrer’, in which lower level officials
could win personal power by authoritatively claiming to have properly interpreted
236
the Fuhrer’s wishes. Thus ‘initiatives were taken, pressure created, legislation
instigated . . . without the dictator necessarily having to dictate’, and Hitler
directed one of the most repressive regimes in history through this mechanism.45
The Nazi system was also organised around economically costly neo-Darwinian
competitions, across deliberately constructed overlapping competencies between
organisations operating in the same administrative area.46
By 1939, the measures adopted had arguably created two ‘exceptional’ author-
itarian capitalist states in Italy and Germany and Woolf’s summation appears
accurate:
if one adopts so broad a categorization, it is essential to note the

intermediary nature of the fascist economic system as one stage
(though not, of course, the only possible stage) of capitalist devel-
opment. For in no full sense was the fascist economy ‘planned’ – a
further distinction from the Soviet economy. It was a closed, cen-
trally controlled economy, which could be regarded as effectively
planning investment, production and wages and less effectively
distribution and prices. Where it failed most significantly was in
manpower planning.47
Equally, the modernist dynamism and economic prosperity of both states was
largely an illusion, since their economies had been distorted and deformed by
the deliberate emphasis on rearmament and its necessary complement, closed
autarchy.
After that point, the war economies of the two regimes was mirrored by those of
the Allies, as they too were forced to take direct command and control of their
economies to prosecute and win a ‘total’ war. But the Nazi economy remained
exceptional, underpinned by the genocidal SS state under the guidance of
Hitler’s near-suicidal ‘primacy of politics’ directives.48 In the death throes of
the Nazi regime, Richard Grunberger aptly describes the attitude of German big
business as that of ‘a conductor of a runaway bus who has no control over the
actions of the driver but keeps collecting the passengers’ fares right up until the
final crash’.49
As with Italian Fascism, the chief aim of Nazism by 1937 was to achieve autar-
chy and a closed economic system designed to wage war and conquest. But in con-
trast, the Nazis inherited the power and dynamism of a supremely advanced
technological economy and society. In addition, the gradual demolition of rival
power blocs outside the inner core of the Nazi ‘power cartels’ (which after
1936 included I.G. Farben and some other big industrial interests) chiefly rep-
resented by Hitler’s inner circle, the SS and the army, allowed the Nazi leadership
to move towards a grotesque genocidal ‘primacy of politics’ once war had broken
out in the East. Hitler’s brutal super-human volkisch economics (basically a gen-
ocidal slave and permanent war economy) had taken the Nazi state far beyond the
practice of Mussolini’s Fascism.50 However, the exigencies of meeting ‘bread and
work’ demands and sealing off an economy formerly embedded in the world
system, had deformed any novel forms of Nazi political economy long before
the lurch to ‘total war’. Karl Hardach suggests:
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David Baker
during the peace years . . . the German version of fascism, aimed in

general at the creation of a new economic system that would be an
alternative of capitalism and communism, combining so-called
responsible economic self-administration with comprehensive gui-
dance by the state . . . [however] such attempts had to take a back
seat to the solving of the more pressing problems of the day.
Surmounting the domestic consequences of the world economic
crisis, initiating rearmament, and developing safeguards against
economic warfare – without significant upward pressure on
prices and impairment of the standard of living – took priority
until September 1939.51
Thus, peacetime fascism in Germany failed to deliver an economic system that

differed, at root, from that which Western liberal economies were forced to
implement to face, successively, world slump, depression and war. Only the
advent of ‘total war’ changed this, as the Nazis lurched towards an SS-slave state
and a genocidal primacy of politics over economics, driven by social Darwinian com-
petition and the decentralised decision making observed by Kershaw. This finding
undermines the claims of a Nazi ‘totalitarian state’ paralleling Stalinist state com-
munism, but it also fails to establish a distinctive and authentic political economy
of fascism, because pure politics was clearly the impulse behind this departure.
The role of political culture and epoch

All forms of political economy are indelibly coloured by the epoch and political
culture in which they emerged. Liberalism emerged from the absolutist state at
the start of the growth of the market and the burgeoning freedom of the individual
in Great Britain and Holland. Socialism arose in the era of exploitative capitalism,
rival imperialisms, mass societies and the growing power of the industrial prole-
tariat in Germany, France, Russia and England. Fascism emerged in the era of
early mass democracy, revolutionary marxist internationalism, triumphant materi-
alism and endemic capitalist depression. Its various political economies reveal this
legacy, with a rejection of both liberal and marxist forms of materialism, faith in
authoritarian state planning, corporatist organisation at the purely national level,
and an obsession with ending class warfare through national reconciliation, full
employment and ethically constrained consumption.
Sternhell suggests: ‘[f]ascism, like liberalism, socialism, and communism, was
a universal category with regional and cultural variants’.52 Thus, fascists differed
as much as communists, socialists, conservatives and liberals on the key ontologi-
cal principles upon which they should base their ideals. Giovanni Gentile, the
‘philosopher’ of Italian Fascism, acknowledged that fascism contained a wide
spread of beliefs and motivations and openly acknowledged that some fascists
were willing to violate acceptable ethical codes of fascism in pursuit of personal
gain.53 Therefore, some forms of classical fascism contained developed forms of
political economy, while others bore only traces of economic rationale.
Hitler provides a case in point: although a fanatical fascist, he was largely inno-
cent of economics, by choice and inclination, and did not base his beliefs on such
238
thinking.54 In October 1935, Price Commissioner Goerdeler sent Hitler a highly

critical analysis of Germany’s increasingly untenable economic position, explain-
ing that drastic market-based remedial action should be taken, which Hitler
ignored and for which he later dismissed him. Instead, Hitler reoccupied the
Rhineland, to widespread popular acclaim, and Goering unveiled the autarchic
Four Year Plan, putting the economy firmly on a rearmament and war footing.
Hitler cared little that the policies the Nazi state had pursued had created the
crisis of food production and acute currency instability. This simply confirmed
his preconceptions of the primacy of politics. In the secret memorandum on
which Goering’s Four Year Plan was launched, he wrote:
Above all, it is not the task of the governmental economic insti-

tutions to rack their brains over production methods. This matter
does not concern the Ministry of Economics at all. Either we
have a private economy today, then it is its task to rack its brains
about production methods, or we believe that the determination
of the production methods is the task of the government; then we
do not need the private economy any longer.55
Again, in a speech in 1937: ‘A lot is talked about the question of a private enter-
prise economy or a corporative economy, a socialised economy or a private prop-
erty economy. The decisive factor is not the theory but the performance of the
economy . . . It is in the nation’s interests for its economy to be run only by able
people and not by civil servants . . . I place orders. Who completes them I regard
as irrelevant.’56 Hitler was unconcerned as to whether the Nazi economy was
entirely private and state directed, or entirely publicly owned and directly state
controlled, as long as it delivered the military hardware, kept the German indus-
trial machine turning over and was ‘Jew-Free’. For him, the ‘correct’ political ends
justified any (non-Jewish) economic means capable of delivering them.
This was largely due to the fact that Hitler’s variety of fascism arose out of the
occultist, irrationalist, ultra-nationalist, militarist and biologically racist traditions
of the German extreme right, honed in the trenches of 1914 – 18. Hitler’s obses-
sions lay in Austro-Germanic culture, art and architecture emerging from the
semi-bohemian underside of German society, rather than imbued with the Germa-
nic autarchic economic ideals of Jean-Charles-Léonard Simonde de Sismondi,
Claude Henri Comte de Saint-Simon, Friedrich List, Johann Gottlieb Fichte and
Carl Rodbertus-Jagetzow as filtered through the academic writings of the Katheder
Sozialisten (Historical Economists).57
But the British fascist Führer, Oswald Mosley, was obsessed with the ‘economics
of plenty’ in contrast to the ‘cultural idealist’ fascism of A. K. Chesterton, his
Director of Publicity and Propaganda and first leader of the postwar National
Front.58 Mosley’s fascist political economy was based on rational thought,
rather than instinct and emotion, and this marked an unbridgeable gap between
their ideals. What Robert Skidelsky characterised as Mosley’s ‘cold, rational,
logical’ cast of mind,59 coupled with an acceptance of certain tenets of ‘material-
ist’ philosophy, caused him to become an ‘authoritarian moderniser’ and pioneer
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David Baker
of Keynesian interventionism. In 1925 he published Revolution by Reason, which

cut through contemporary financial orthodoxy and proposed the raising of living
standards through consumer credits, along with the stimulation of purchasing
power in order to match the power of industry to produce.
Throughout his wayward career in British politics, Mosley was concerned
above all with the degraded material circumstances of most of his fellow
Britons, and his decision to form the British Union of Fascists (BUF) in 1932
rested largely upon his despair at the economic inertia and timidity of conventional
liberal and social democratic politicians when faced with depression and long-
term mass unemployment (a classic fascist preoccupation).
Mosley’s economic side made him a technocratic fascist, concerned to seek and
apply ‘rational’ solutions to pressing economic and social problems via authoritarian
means, having lost his faith in liberal democracy and socialism during the depression
years. Consequently, he tended to place less emphasis on the ‘spiritual’ and irrational
appeal of the fascist creed and his vision of the fascist utopia ended with the techno-
crat in control of the planned ‘statistical state’.60 With his leading intellectual subor-
dinate, Alexander Raven Thompson, Mosley fitted well the Italian and French fascist
traditions – a belief in the technological prowess of a modern managerial elite able to
create class harmony and enter an age of wealth and prosperity beyond the wildest
dreams of the ‘old gangs’ of liberal and social democratic politicians.
What emerged from this was a wide range of attitudes to economics and
technocracy encountered not just between different fascist movements, but also
within individual movements. In addition, there exists clear continuity between
Hitler, Mussolini and Mosley in terms of their shared belief in the possibility,
through the exercise of heroic will, of reversing decadence and the perceived
crisis of national confidence. Nietzsche and Spengler also informed Mosley’s
voluntarist attitude towards the capability of a leader-led movement to institute
a new historical epoch. As Richard Thurlow suggests: ‘Behind the pragmatic
action necessary to cure unemployment in a reborn Britain, Mosley’s fascism is
dripping with the palingenetic quest to create the new man . . . [seeking to] syn-
thesize Nietzschean dynamic activism with the Christian ideal of service, to
create a new society at a higher level of civilization.’61
Fascist political economy: a preliminary assessment

Reviewing Robert Paxton’s The Anatomy of Fascism, published in 2004, Adrian
Lyttleton considered the author had dismissed fascist macroeconomic policies
too readily:
Certainly the aim of fascism was not welfare but power. But it was
just this emphasis that makes it possible to speak of a distinctive
fascist political economy, which can best be summarised as the cre-
ation of a wartime economy in peacetime . . . The ‘consortialist state’
would be a more accurate name for it . . . ‘Productivism and an
appeal to innovation and managerial engineering’ . . . Ultimately,
the closed economy could only be maintained through conquest.62
240
For Littleton, therefore, fascist political economy represents a ‘consortialist

state’ based on power seeking, managerialism, autarchy and war economics, con-
ducted in peacetime. Yet, as we have seen, in its doctrinal and practical dimen-
sions, fascist political economy was genuinely intended to provide for the
welfare of its own citizens (although ‘citizenship’ was invariably defined narrowly
and prejudicially).
In practice, mature fascist political economy was broadly favourable towards
controlled forms of capitalism captured in Christoph Buchheim and Jonas Sche-
mer’s ‘state-directed private ownership economy’,63 rather than state ownership
of the means of production, distribution and exchange, which fascism only
adopted when the market would not, or could not, intervene. At Nuremberg,
Hitler’s personal adviser on economics, Walther Funk, volunteered that Hitler
had opposed state socialist intervention and a planned economy.64 In Hardach’s
view this system ‘combin[ed] so-called responsible economic self-administration
with comprehensive guidance by the state’.65 Avraham Barkai even claims that the
Nazis ‘were not altogether unprepared with regard to an overall economic philos-
ophy; they . . . adopted proposals for immediate economic measures in order to
relieve unemployment . . . and . . . their success also arose from their ability to inte-
grate new concepts in economic theory with their [novel] notion of the state’s role
in society and the economy’.66
But, as Axis Europe edged towards another military catastrophe, an increas-
ingly autarchic political economy deformed both Italian and German neo-capital-
ism into closed, centrally controlled economies, increasingly reliant upon state
contracts and war production (with Italy increasingly dependent on German
military contracts). Both had become ‘deformed capitalist states’ which could no
longer have operated in the developing international economy. As a ‘military-
industrial complex’ formed an increasingly important element of fascist political
practice and dominated foreign relations, autarchy grew in importance.67 Roland
Sarti captures the deforming nature of autarchic policies on the Italian state:
Italian Fascism was orientated towards autarchy by international

developments that no single nation could control. But fascist fond-
ness for total solutions, and the emotional reaction to the economic
sanctions imposed by the league of nations during the Ethiopian
war, transformed what might have been simple economic adjust-
ments into a crusade for political independence [in international
affairs]. The economically wasteful diversification of production
stimulated by the pursuit of autarchy increased the interdependence
between different sectors of the economy and between various geo-
graphical regions . . . [Thus e]conomic and social stability was
achieved at the expense of mobility and dynamism . . . The façade
was totalitarian; the reality atomistic.68
Thus, if one judges fascist political economy exclusively in terms of actual pol-
icies in Italy and Germany, then, as Milward points out, ‘the central importance
of war [has] . . . to be incorporated’. But this is not essential when judging
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David Baker
fascism in purely ideological terms, as the single-minded push for autarchy and
war emerged from the political, rather than the economic, impulses of fascism.
In fact, an ‘open’ system of compulsory sectoral organisation and government
control of industry was proclaimed by leading fascist ideologues as a genuine
method of eliminating the opposed interests of capital and labour, in deliberate
contrast to the ‘narrow’ class concepts of capitalism and communism, by integrat-
ing both workers and capitalists under the ‘neosocialist’ theory of ‘intermediate
regimes’.69
Indeed, all forms of fascist political economy divided the world between ‘good
capital’ nationally based and oriented to production – and ‘parasitic capital’ –
considered international, profit maximising and anti-nationalistic (and, in its
racist-conspiratorial forms, closely linked to anti-semitism). In Marco Guido’s view,
[t]hese classical fascisms were ultimately centred on a belief in

achieving a utopian ‘synthesis’ in the socio-economic realms, com-
bining free-enterprise with state control, and elitism with egalitar-
ianism . . . the latter was not an authoritarian version of the
paternalist and organicist economic tradition, but a peculiar and
original application to economic problems of a statist tradition of
political thought. This tradition was alternative, as a language
and a discursive practice, both to individualistic economic liberal-
ism and to the moderate-liberal, antiindividualistic vision of social
organisation.70
In short, there existed a genuine fascist desire, as Roger Eatwell argues, to

transcend both capitalism and socialism, and to produce a macroeconomic
‘third way’.71 And such beliefs went beyond any simple autarchic ‘siege
economy’ to prepare for conquest and war. Edward Tannenbaum best summed
this up when he wrote of the Italian Fascist leadership: ‘Balbo and Farinacci,
Rossini, and Lanzillo hated the existing [liberal capitalist] political, social, and
cultural orders, whose leaders looked down on them as low-class rabble-rousers
and who were only interested in using them in order to quell those revolutionaries
who wanted to destroy the economic order as well . . . Their goal was not counter
revolution but another revolution.’72
Equally, the evidence confirms that no single form of classical fascist political
economy existed. Early ‘left-wing’ fascism was virulently anti-materialist and
sought the complete overthrow of big capitalism and landlordism, as much as it
did Bolshevism. Other forms simply offered the planned and centralised national
state and corporatist forms of political economy as the answer to materialism and
class conflict, while some, including De Man in Belgium, Déat in France, Balbo in
Italy and Mosley in Britain, were authoritarian modernisers, seeking to abolish
capitalist depressions and improve the material (and thereby the spiritual) health
of their classless unified nations through a new nationalistic elite of political
managers and elite technocrats.
Chronic unemployment and under-employment, which shrank markets and
caused under-consumption, was a common obsession of classical fascist beliefs.
242
This also emerged through the ‘beauty of work’ aspects of fascist ideology. Fascist
political economy was often a genuine fight against what appeared to be the
endemic economic diseases of unfettered capitalism, characteristic of the period,
as well as a useful propaganda weapon to attack its established political enemies.
Yet, unsurprisingly, those most animated by the promised economic benefits of
fascism were never amongst the most influential fascists, in either the German or
the Italian regimes. Instead, classical fascism was dominated by racial and cultural
ultra-nationalist fascists who engaged hardly at all with matters of economics. They
sought to synthesise the state and civil society into a single mobilised and militarised
nation and race, forge a powerful primary producer-based war economy as an
‘instrument of steel’ for ruthless conquest, achieve a unification of pure race and
culture and gain greater ‘living space’ for their specially ‘chosen’ peoples.
In its Hitlerien/SS state manifestation, this created and sustained a genocidal
war economy intended to purge the earth of ‘Jewry’, operating under an exclusive
‘primacy of politics’.73 In Hitler’s view, ‘the Volk does not live on behalf of the
economy, its economic leadership, or economic and financial theories, but rather,
finance and economy, economic leadership, and every theory exists only to serve
in the struggle for our people’s self determination’.74 Hitlerien Nazism emerged
from anti-materialist impulses, lacking meaningful economic justifications with
its promises of distributive plenty fostered to achieve sinister occult political
ends. As Feldman suggests, the Nazi leadership was often characterised by its
‘purely instrumental and decisionist approaches to economic problems’.75 These
dangerous epiphenomena emerged between 1918 – 23 through the impact that
the unexpected and humiliating military defeat and catastrophic economic col-
lapse had upon the vitalistically inclined and anti-democratic elements in
German culture. Once in power, this irrational political impulse became an obses-
sion and Kershaw correctly concluded that ‘[u]ltimately, the madly escalating
nihilistic dynamic of Nazism was incompatible with the lasting construction
and reproduction of any economic order’.76
Roger Eatwell first argued for the existence of an authentic fascist political
economy, in his important definition of generic fascism in the early 1990s.77
Here, it is fascism’s ‘syncretism’ which chiefly explains the political success of
Italian and German fascism, since both sought to merge what were regarded as
the best elements of capitalism (the naturalness of private property and its com-
petitive dynamism) and socialism (its concern for the general good of the commu-
nity and its welfarism) into a genuine ‘third way’. Far from being irrational as a
strategy for power, at that time fascism was able to project such principles as
being based on a ‘scientific’ understanding of human nature through ‘its syncretic
ideology’s ability to be interpreted differently by different groups: it could appeal
to those who sought some form of collective rebirth and to those whose concerns
were essentially individualistic . . . fascism succeeded where it achieved syncretic
legitimation, the ability to appeal to affective and more individualistic voters, and
to convince at least a section of the mainstream elites that it could serve their
purpose better than existing parties’.78
Eatwell’s ‘holistic third way’ model succinctly captures fascism’s project to
escape the twin ‘evils’ of individualistic liberalism and materialistic communism,
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David Baker
which was clearly a major binding element of most forms of fascist political
economy. But the difficulty is that it was seldom expressed in such a recognisable
or logical form and was deformed in practice by everyday economic realities,
‘necessary’ political accommodations and the clamour of the factions obsessed
with war and pushing for crude autarchy and rapid conquest.
Fascist political economy: a doctrinal model

Expressed through the two regimes, fascist economics certainly produced two
‘exceptional’ forms of capitalism, even when drifting into autarchy and war econ-
omics (although not the form Nicos Poulantzas ascribed to them).79 Both Musso-
lini and Hitler tolerated an economic discourse, but viewed economics largely
instrumentally. In practice, therefore, fascist political economy was largely a
‘myth’. And, from the evidence reviewed above, the ideological premises of
fascist political economy did not significantly shape fascist economics in practice.
But fascist economic ideology was a ‘reality’, as expressed in a variety of ‘non-
zero-sum’, single race/culture/nation utopianisms, represented by a multiplicity
of heterogeneous doctrines. These emerged in the economistic and nationalistic
utopias of ‘left fascists’, ‘revolutionary syndicalists’, ‘planists’, ‘dirigists’,
‘productivists’, ‘modernist-managerialists’, ‘futurists’, ‘corporativists’, ‘authori-
tarian modernists’, ‘neo-mercantilists’, ‘actualists’, ‘neo-Hegelians’, ‘statists’
and ‘neo-socialists’.80 Such ideals were drawn from the disparate writings of
Saint-Simon, Nietzsche, Sorel, Pareto, Michels, Spengler, Proudhon, Bergson,
Le Bon, Taylor and Freud and were often promoted most forcefully by smaller
and politically less influential proto-fascist groupings of anarcho-syndicalist and
corporatist intellectuals, as in France and Italy. Thus, the sources of fascist politi-
cal economy did not lie in the regime phases in Italy and Germany, but rather
within certain intellectual elements of fascist movements and parties (later
sidelined in the two regimes).
As Sternhell observed, French fascism ‘remained theoretical, and never had to
make the inevitable compromises that to some degree always falsify the official
ideology of a regime. Thus . . . one is able to apprehend the true significance of
the phenomenon . . . in examining its ideology in its origins’.81 On this premise,
Sternhell definitively traced the economistic side of French fascism back to its
intellectual roots, and while his final conclusions – that generic fascism excludes
Nazism because of its core racial dynamics and lack of a vitalist, intuitive
syndicalist-socialism – are questionable, his detailed analysis of the ideological
traditions of political economy from which French (and Italian) fascism drew
their inspiration, remains a highly significant indicator of the location and
nature of fascist economic models.
In Italy these ideas were promoted and popularised by Arturo Labriola, Enrico
Leone, Ugo Spirito, Giovanni Gentile, Alfredo Rocco, Bertrando Spaventa,
Filippo Carli, Massimo Fovel, Gino Arias and Arnaldo Fioretti, and in France
by the founders of neo-socialism Déat, Marquet and Montagnon, and by the
‘social nationalists’ De Man, Bergery and Jouvenel. In Germany, the autarchic
ideals of Sismondi, List, Fichte, Robertus and Hildebrand were filtered through
the academic writings of the Katheder-Sozialisten and embodied in the left Nazi
244
programmes of Otto and Gregor Strasser and the ordo-liberals, while in England
fascist political economism emerged through the writings of John A. Hobson,
Chevalier de Lamarck, John Maynard Keynes and Oswald Spengler, as filtered
through Mosley and Alexander Raven Thompson in their quest to create ‘the
ethical economics of plenty’.
Fascist models of state interventionism differed considerably from their liberal
counterparts, promoting this as a comprehensive alternative system to market
capitalism and collectivist socialism, by uniting all the victims of ‘hyper-capitalism’
against big business and high finance under a corporative and authoritarian state,
placing national objectives before international ones.82 Corporatism, variously
interpreted, often lay at the core of the fascist/neo-socialist systems – the key
element in a new ‘intermediate regime’ between capitalism and communism in
which, for some, a new breed of state-technicians would replace the politicians’
state with a rationalised and purely national ‘composite economy’ organised on
authoritarian Taylorist managerial principles.83 The corporation itself was
regarded as a public association intimately connected with the whole national
community, invested with the task of eliminating ‘the wild, disloyal competition
of liberalism’, because ‘a concern for the general interest is undoubtedly a matter
for its authorized guardian, the state . . . The state has the right to intervene, which
it does by means of its agents.’84
Corporatism also offered the possibility of creating an equilibrium of forces
between employers and workers since, as Sternhell suggests, ‘it sought to create
a new, modern, efficient world, a civilization of producers, fascism (here one
sees the influence of Sorel) required a working class that is enthusiastic, eager
for progress, headed by bold captains of industry who will lead the whole national
economy toward a prosperity that today we can hardly imagine’.85 In Reflexions
sur l’economie dirigee, De Man suggested that Planism represented a rationalis-
ation of capitalism which would transform it into a ‘productive and antiparasitic’
system.86
One of the most significant points to emerge from this analysis is that ‘left
fascism’ often underlay the more economistic forms of classical fascist ideology,
since such ideas emerged from the reformist traditions of the revolutionary left in
Europe after 1890, seeking to transcend Marxist and liberal forms of materialism
by offering a third option of ‘intermediate regimes’ between full-blooded capital-
ism and proletarian revolutionism. De Man, Déat, Mosley and Gentile were exem-
plars of this left-leaning fascist political economy. In France this strand combined
mystical nationalism with revolutionary syndicalism and corporatism, to produce
‘socialist nationalism’ and ‘national socialism’ in the writings of Sorel, Berth,
Lagardelle, and Herve as expressed through Le Mouvement socialiste. In short,
established distinctions between Left and Right (always a crude typology) became
blurred as democratic socialist impulses declined.87
These ideologues believed passionately in genuine (if utopian) grand schemes
to create new forms of relationship between contemporary economic and political
life, able to transcend both the biased class-based politics of communism and the
inequalities and vagaries of market capitalism. Most forms of fascist political
economy were also based upon controlled forms of capitalism, captured in
Buchheim and Schemer’s ‘state-directed private ownership economy’88 and
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David Baker
Woolf’s ‘closed, centrally controlled economy’.89 It might, therefore, be more

accurate to describe it as a ‘closed, neo-mercantilist, state directed, quasi-
private ownership economy’.
Ultimately, most significant examples of fascist political economy appear to
represent, in varying degrees, the anti-materialistic triumph of politics over econ-
omics, since both the Italian Syndicalists and French Planists placed their centrally
planned economies under the strict control of a politically directed authoritarian
and ‘ethical’ state. They were also ultra-nationalist in their thrust, offering a
non-zero-sum vision in which there were to be no domestic losers (that is,
amongst those designated as the ‘chosen’ race/culture).
Together, these beliefs represented one element of broader fascist economic
beliefs, including the common aspirations of fascists to eliminate depression,
unemployment and resulting under-consumption, and to maximise purely national
wealth through authoritarian state direction and territorial expansion. Finally, it
was generally agreed that ‘hyper-capitalist’ forms of finance and mass conump-
tionist capitalism were positively dangerous to any nation’s economic health.
Let us then return to the central question posed at the outset. Classical fascist
political economy was a ‘myth’ if judged purely in terms of regime practice,
where it proved little more than opportunistic rhetoric designed to capture and
mobilise support. But it was a ‘reality’ when viewed as an authentic if, in practice,
marginalised component of broader fascist ideology. In short, such beliefs rep-
resented authentic (albeit utopian) forms of fascist political economy, in contrast
to the fascist dictators’ false claims that their regimes were driven by meaningful
economic motives. And as the politically inspired expansionist impulse of fascism
led towards war, the increasing primacy of politics in both regimes finally silenced
any meaningful voice of economistic fascist ideology.
The only remaining linkage between the political and economic lay in the
Social Darwinian beliefs of most fascists who viewed the wider world as the
mere object of conquest, domination and exploitation, through an inevitable
clash of inferior and superior nations and civilisations. This allowed many fascists
to rationalise authoritarian state intervention (corporativism) and even the Nazi
slave economy (seen as a continuation of the great slave civilisations of the
past – Egypt, Greece, Rome) in order to inaugurate a new age in which domestic
liberal-humanist culture would also be swept away by superman economics.
Notes
The author wishes to thank the anonymous reviewers of this article for their excellent comments and useful
suggestions.
1. S. J. Woolf, ‘Did a Fascist Economic System Exist?’, in S. J. Woolf (ed.), The Nature of Fascism (Random
House, 1968), p. 119.
2. Charles S. Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge Univer-
sity Press, 1987), pp. 86–7.
3. Classical fascism refers to the phenomenon which existed between 1919 and 1945. Fascism, large ‘F’, is
reserved for the original Italian movement/party and small ‘f’ for the generic concept. The author considers
Nazism a form of ‘Germanic fascism’ in line with the extensive writings of Roger Eatwell, Roger Griffin and
Stanley Payne.
246
4. See Ian Kershaw’s excellent discussion of the issues raised by and for Marxists when dealing with Nazism in
his The Nazi Dictatorship: Problems and Perspectives of Interpretation, fourth edition (Arnold, 2000),
especially pp. 48–56.
5. See Mutualist.Org, ‘Free Market Anti-Capitalism (G). The Frankfurt School: Fascism and Abandonment of
the Law of Value’, http://mutualist.org/id93.html (accessed 10 July 2005). This includes a quotation from
Frederick Pollock, ‘State Capitalism: Its Possibilities and Limitations’, Studies in Philosophy and Social
Science, Vol. IX, No. 3 (1941), pp. 200–25. For Adorno, Horkheimer and Neumann on this subject, see
Michael Harrington, The Twilight of Capitalism (Simon & Schuster, 1976), pp. 216 –18.
6. Maier, In Search of Stability, p. 71.
7. The first suggestion that there was no room for ‘economic man’ in a fascist society was in Peter F. Drucker,
The End of Economic Man (Heinemann, 1939).
8. Richard J. Evans, The Third Reich in Power (Penguin Books, 2005), p. 410; R. J. B. Bosworth, Mussolini’s
Italy (Penguin Books, 2005), p. 313.
9. In a famous article published in 1979, the historian Gilbert Allardyce employed the metaphor of a black cat in
a dark room to suggest that with regard to generic fascism there was indeed nothing to be found in the con-
ceptually empty room. Gilbert Allardyce, ‘What Fascism is Not: Thoughts on the Deflation of a Concept’,
American Historical Review, Vol. 84, No. 2 (1979), pp. 367–98.
10. A. James Gregor, Italian Fascism and Developmental Dictatorship (Princeton University Press, 1979),
pp. 126 –7. In his most recent book, Mussolini’s Intellectuals (Princeton University Press, 2005), Gregor
demonstrates the impact of Spirito’s corporatist agenda on Fascist policy that was oriented along liberal
lines prior to the Matteotti Affair. See also Zeev Sternhell’s two major statements on this subject: Neither
Left Nor Right: Fascist Ideology in France (Princeton University Press, 1995) and The Birth of Fascist Ideol-
ogy: From Cultural Rebellion to Political Revolution (Princeton University Press, 1994).
11. Oswald Mosley was an exception to this. See Robert Skidelsky, Oswald Mosley (Macmillan, 1975), p. 137.
12. Benito Mussolini, Fascism: Doctrine and Institutions (Ardita, 1935). The anti-intellectualism of Mussolini
was a form of anti-rationalism (as against irrationalism) and a form of hostility to many Enlightenment
views. He also considered that intellectuals were ‘bourgeois’, ‘safe’ and ‘predictable’.
13. Sternhell has been rightly attacked for drawing the conclusion that France was the key incubator of
classical fascist ideology and Nazism is not a form of fascism, as well as for overstressing the significance of
fascist ideology in French political culture in the first half of the century and for seeing all true fascism
as essentially a revision of Marxism. See Robert Soucy, French Fascism: The Second Wave, 1933–39 (Yale
University Press, 1995); Robert Wohl, ‘French Fascism Both Right and Left: Reflections on the Sternhell Con-
troversy’, The Journal of Modern History, Vol. 63, No. 1 (1991), pp. 91–8; Antonio Costa-Pinto, ‘Fascist Ideol-
ogy Revisited: Zeev Sternhell and his Critics’, European History Quarterly, Vol. 16, No. 4 (1968), pp. 465–83.
14. The three founders of neo-socialism were Déat, Marquet and Montagnon. To critics who have suggested that
such groups were never influential in France, Zeev Sternhell has repeatedly pointed out that the relative lack of
impact of these ideas should not be allowed to disguise their significance as examples of authentic and early
fascist ideology. He also points out that that while the true fascists were relatively small in number, there
existed a wide variety of ‘quasi-fascist channels of transmission’, including intellectuals, movements, journals
and study circles attacking materialist decadence and its liberal, Marxist and democratic manifestations, creat-
ing an intellectual climate promoting a fascist values. See Sternhell, Neither Left Nor Right, pp. 270, 295.
15. Ibid., p. 16
16. Ibid., p. 302.
17. On the general question of fascist economics in practice, see Barkai Avraham, Nazi Economics: Ideology,
Theory, and Policy (Berg, 1990); Berenice Carroll, Design for Total War: Arms and Economics in the
Third Reich (Mouton De Gruyter, 1968); Richard J. Overy, The Nazi Economic Recovery 1932–1938,
second edition (Cambridge University Press, 1996); John R. Gillingham, Industry and Politics in the
Third Reich: Ruhr Coal, Hitler and Europe (Columbia University Press, 1985). For Italy, see Roland
Sarti, Fascism and the Industrial Leadership in Italy (University of California Press, 1971); A. James
Gregor; Italian Fascism and Developmental Dictatorship (Princeton University Press, 1979); David
D. Roberts; The Syndicalist Tradition and Italian Fascism (Manchester University Press, 1979). For a rare
political economy approach see Alan S. Milward, ‘Towards a Political Economy of Fascism’, in Bernt
Hagtvet & Reinhard Kuhnl (eds), Who Were The Fascists? (Stockholm University Press, 1980), p. 56.
18. Franco’s Spain is regarded by the author as a Catholic authoritarian monarchist regime and contemporary
Japan as an emperor-worshipping form of pre-modern authoritarianism. Both are excluded from any
fascist typology.
247
David Baker
19. For the best attempt at this approach, see Aristotle Kallis, ‘The “Regime-Model” of Fascism: A Typology’,
European History Quarterly, Vol. 30, No. 1 (2000), pp. 77–104.
20. Milward ‘Towards a Political Economy of Fascism’, pp. 61, 63.
21. These included proto-fascists such as Sergio Panunzio, Ottavio Dinale, Agostino Lanzillo, Angelo Oliviero
Olivetti, Michele Bianchi and Edmondo Rossoni, and fascists such as Mussolini’s only credible rival in the
early years, Dino Grandi, his academic guru, Giovanni Gentile, and of course Mussolini himself.
22. The ‘middle orders’ (‘Mittelstand’) were epitomised by small-town middle class individuals, sometimes
described as the ‘old middle class’ as opposed to the rising middle class, which was more commercially
attuned and adapted for the new markets.
23. ‘Anti-capitalist’ is a more accurate term than ‘left’ for this phenomenon, especially in Germany, as these
were mainly ‘Jewish’ targets.
24. Alexander De Grand, Fascist Italy and Nazi Germany: The ‘Fascist’ Style of Rule (Routledge, 1995), p. 42.
25. The Strasser brothers, Gregor and Otto, exhorted Hitler to instigate a revolution that would be socialist as
well as nationalist. Otto joined the Nazi party in 1925 and Gregor in 1920 and became the leader of the
SA. Both opposed Hitler’s links to big business. Gregor was murdered in the Night of the Long Knives
purge; Otto fled abroad, returning to Germany later. Strasserism was later influential on the neo-fascist ‘Inter-
national Third Position’.
26. Ordo-liberalism was developed between the 1930s and 1950s by German economists such as Röpke, Eucken,
Franz Böhm and Hans Großmann-Doerth and later employed to create the German social market economy.
For Röpke and his colleagues the state’s task was to protect the weak and limit market power when necessary,
although thy believed in free markets as the basis of civilisation. See A. Labrousse & J.-D. Weisz, ‘Insti-
tutional Economics in France and Germany: German Ordoliberalism versus the French Regulation
School’, Economic Systems, Vol. 26, No. 1 (2002), pp. 73–6.
27. Philip Manow, ‘Modell Deutschland as an Interdenominational Compromise’, Working Paper 003 Program
for the Study of Germany and Europe, pp. 8–9, http://www.ces.fas.harvard.edu/publications/
Manow.pdf21/07/05 (accessed 30 September 2005).
28. I am grateful to Paul Petzschmann of St Anthony’s College, Oxford for discussing this idea with me.
29. Cited by Maier, In Search of Stability, p. 74.
30. Alan Bullock, Hitler: A Study in Tyranny (Harper & Row, 1952), p. 155.
31. David D. Roberts, The Syndicalist Tradition and Italian Fascism (University of North Carolina Press, 1979),
pp. 257 –60.
32. Cf. Stanley, G. Payne, A History of Fascism: 1914–1945 (UCLA Press, 1997), pp. 157–61 and 218–19.
33. Otto Dietrich, Das Wirtschaftsdenken im Dritten Reich (Berliner Verlag, 1936), p. 14.
34. A UK term denoting ‘Quasi-Autonomous Non-Governmental Organisations’.
35. Maier, In Search of Stability, pp. 79–80
36. Catholic industrialist Clemens Lammers critiqued the economic rationale of Nazism in his Autarkic, Plan-
wirtschaft and berufstdrrdischer Staat? (Heymann, 1932), cited in Henry A. Turner, Jr., German Big
Business and the Rise of Hitler (Oxford University Press, 1985), p. 251 and Maier, In Search of Stability,
p. 79. For Catholic conservative resistance to Hitler’s propaganda, see Ian Kershaw, Popular Opinion and
Political Dissent: Bavaria, 1933–1945 (Oxford University Press, 1983).
37. Milward ‘Towards a Political Economy of Fascism’, pp. 56–7.
38. Christoph Buchheim & Jonas Schemer, ‘The Role of Private Property in the Nazi Economy: The Case of
Industry’, unpublished paper, University of Mannheim, 2004, p. 23, http://emlab.berkeley.edu/users/
webfac/cromer/e211_F04/buchheim.pdf (accessed 10 September 2005).
39. Buchheim & Schemer ‘The Role of Private Property in the Nazi Economy, pp. 20–1; Richard J. Overy,
‘Heavy Industry and the State in Nazi Germany: The Reichswerke Crisis’, European History Quarterly,
Vol. 15, No. 1 (1985), pp. 313–40.
40. Christopher Browning, Ordinary Men: Reserve Police Battalion 101 and the Final Solution in Poland
(Harper Collins, 1993).
41. Buchheim & Schemer, ‘The Role of Private Property in the Nazi Economy’, p. 17; also Neil Gregor,
Daimler-Benz in the Third Reich (Yale University Press, 1998).
42. The ‘Battle for Grain’ was devised for propaganda purposes (to boost Fascist morale) and because Mussolini
wanted to make Italy economically stronger and self-sufficient in basic foodstuffs to a level suited to his
autarchic policies of a well-fed militarised population. Large farmers were guaranteed a good price for
grain and grew rich on the proceeds, but at the expense of high-value exports of olive oil, wine and citrus
fruit and of the Italian diet.
248
43. Der Sicherheitsdienst des Reichsfuehrer SS (SD) was the intelligence agency of the SS until June 1934, when
it took over this function for the entire Nazi Party. The Gestapo and the SD were linked together in 1936,
when Reinhard Heydrich, the Chief of the SD, was promoted to chief of the Security Police, which included
the SD, Gestapo (Die Geheime Staatspolizei) and the Criminal Police. Both the Security Police and SD were
voluntary organisations.
44. This model was famously promoted by the neo-Marxist Tim Mason in ‘Primacy of Politics: Politics and Econ-
omics in National Socialist Germany’, in Stuart J. Woolf (ed.), The Nature of Fascism (Random House, 1968).
45. Ian Kershaw, Hitler, 1936–1945: Nemesis (Penguin, 2001); also Kershaw, The Nazi Dictatorship, chs 3–4.
Kershaw’s thesis also explains why there is no solid evidence or paper trail linking Hitler to the Holocaust.
46. Otto Dietrich, Hitler (Henry Regnery, 1955). Dietrich was Hitler’s press secretary.
47. S. J. Woolf (ed.), The Nature of Fascism, p. 143.
48. Near-suicidal, because in the face of huge odds once the Americans had entered the war, Hitler’s policy of
mass genocide arguably took a huge toll on the ability of the Nazi war machine to operate, diverting funds
and manpower to extermination and away from the front line. Even the slave labour camps operated by Speer
were relatively low in productivity because of the starvation rations the inmates were kept on.
49. Richard Grunberger, A Social History of the Third Reich (Penguin, 1974), pp. 258–9.
50. Cf. Kershaw, The Nazi Dictatorship, pp. 47–68.
51. Karl Hardach, The Political Economy of Germany in the Twentieth Century (UCLA Press, 1980), p. 7.
52. Sternhell, Neither Right Nor Left, p. 28.
53. Giovannia Gentile, Fascismo e cultura (Treves, 1928), pp. 54–5.
54. For Hitler’s limited grasp and use of economic ideas, see Turner, German Big Business, pp. 71– 83.
55. Nuremberg Military Tribunal, Volume VII, pp. 789 –80, http://www.mazal.org/archive/nmt/07/NMT07-
T0787.htm. See also Ian Kershaw, Hitler, 1889–1936: Hubris (Penguin, 1999). Goering was a significant
choice since he was equally innocent of economic theory, but also equally familiar with war.
56. Adolf Hitler, Speech to building workers, 21 May 1937, in John Hite & Chris Hinton, Weimar & Nazi
Germany (John Murray, 2000), p. 236.
57. For a survey of this authoritarian nationalist historical tradition of German political economy, see Paul Hayes,
Fascism (Allen & Unwin, 1973), pp. 89–105.
58. David Baker, Ideology of Obsession: A.K. Chesterton and British Fascism (I. B. Tauris, 1996), pp. 178–83.
59. Skidelsky, Oswald Mosley, p. 137.
60. Another classic example is provided by Alexander Raven Thompson, The Coming of The Corporate State
(BUF, 1935); John Beckett & Alexander Raven Thompson, The Private Trader and Co-operator: The
Fascist Solution to the Problem of the Distributive Trades (BUF, 1935).
61. Richard C. Thurlow, ‘Review of Breeding Superman: Nietzche, Race, and Eugenics in Edwardian and Inter-
war Britain by Dan Stone’, The Journal of Modern History, Vol. 76, No. 2 (2004), pp. 182 –4.
62. Adrian Lyttleton, ‘What Was Fascism?’, New York Review of Books, Vol. 51, No. 16 (2004), pp. 1–4.
63. Buchheim & Schemer, ‘The Role of Private Property in the Nazi Economy’, p. 23.
65. Hardach, The Political Economy of Germany, p. 7.
66. Barkai, Nazi Economics, p. 183. This is something of an exaggeration, however.
67. For an excellent analysis of Nazism as an autarchic phenomenon in foreign policy terms, see William
M. Carr, Arms, Autarky and Aggression: A Study in German Foreign Policy, 1933–1939 (Arnold, 1979).
See also Overy, ‘Heavy Industry and the State in Nazi Germany’, pp. 313–40.
68. Roland Sarti, ‘Fascist Modernisation in Italy: Traditional or Revolutionary?’, American Historical Review,
Vol. 75, No. 3 (1970), p. 1044.
69. See Antonio Costa Pinto, ‘Elites, Single Parties and Political Decision-Making in Fascist Era Dictatorships’,
University of Lisbon Working Papers, WP 4 –01, November 2001, http://www.ics.ul.pt/publicacoes/work-
ingpapers/wp2001/WP4-2001.pdf (accessed 10 August 2005).
70. Marco E. L. Guidi, ‘Corporatist Theory and The Italian Tradition of Political Economy: A Research Project’,
paper presented to the conference on International Economic Thought in Southern Europe, Porto, 27–28
November 1998, p. 27.
71. Roger Eatwell pioneered this approach. See ‘Towards a New Model of Generic Fascism’, Journal of Theor-
etical Politics, Vol. 4, No. 2 (1992), pp. 161–94; ‘On Defining the Fascist Minimum: The Centrality of Ideol-
ogy’, Journal of Political Ideologies, Vol. 1, No. 3 (1996), pp. 303–19.
72. Edward Tannenbaum, ‘The Goals of Italian Fascism’, American Historical Review, Vol. 74, No. 4 (1969),
pp. 1183–204.
249
David Baker
73. In Italy the Military/SS/secret police state was less significant in the drive to autarchy than the industrialists,
who promoted autarchic politics after 1935 because by then protectionism had driven the relatively weak
Italian production system inwards and to turn back was now impossible. The high number of agricultural-
industrial cartels formed after 1935 was due to their growing protectionist identity of interests. See
Roland Sarti, Fascism and the Industrial Leadership in Italy 1919–1940: A Study of the Expansion of
Private Power under Fascism (UCLA Press 1971), pp. 104– 12.
74. Cited in Dietmar Petzina, Autarkiepolitik im Dritten Reich: Der nationalsozialistische Vierjahresplan
(Deutsche Verlags-Anstalt 1968), pp. 50–1.
75. Gerald D. Feldman, ‘The Economic Origins and Dimensions of European Fascism’, in Harold James & Jakob
Tanner (eds), Enterprise in the Period of Fascism in Europe (Aldershot, 2002), p. 5.
76. Kershaw, The Nazi Dictatorship, p. 67. This does not suggest, however, that Nazism is not ‘fascism’. See
Roger Griffin’s extensive writings on this, especially The Nature of Fascism (Routledge, 1993).
77. Eatwell, ‘Towards a New Model of Generic Fascism’, pp. 1–68; Eatwell, ‘On Defining the Fascist
Minimum’.
78. Roger Eatwell, Fascism: A History (Penguin, 1996), p. xxi.
79. See especially Nicos Poulantzas, Fascism and Dictatorship (New Left Books, 1984).
80. Marco E. L. Guidi, ‘Corporatist Theory’, p. 26. ‘Productivism’ provided Mussolini with an ideology to trans-
fer from socialism to Fascism, since it sounded leftist, but appealed to managerial elites and leading members
of the Confindustria. This was paralleled in Germany by the Schtirtheit der Arbeit, which combined ‘sober
modernism and technological aesthetic even within the unpromising framework of National Socialism, with
its other emphases on blood and race’. See Maier, In Search of Stability, pp. 77 –8. See also Anson
Rabinbach, ‘The Aesthetics of Production in the Third Reich: Schonheit der Arbeit’, Journal of Contemporary
History, Vol. 4, No. 4 (1969), pp. 37–58; Jeffrey Herf, Reactionary Modernism (Cambridge University Press,
1985). ‘Non-zero-sum’ is also from Maier, In Search of Stability, p. 115.
82. ‘Hypercapitalism’ was a term adopted by the Belgian ‘Rexist’ fascists.
83. Marcel Deat, ‘Syndicalisme et corporation’, La Vie socialiste, 17 March 1934, p. 1.
84. F. Bacconnier, La Monarchie de demain’, L’Action Francaise, 15 October 1902, pp. 472–4, quoted in
Sternhell, Neither Right Nor Left, p. 63.
86. Henri De Man, Réflexions sur l’économie dirigée (L’Églantine, 1932), p. 5.
88. Buchheim & Schemer, ‘The Role of Private Property’, p. 23.
89. S. J. Woolf, ‘The Economics of Fascism’, in Woolf (ed.), The Nature of Fascism, p. 143.
250

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