David R. Henderson  

The Socialist Economics of Italian Fascism

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On numerous occasions, Benito Mussolini identified his economic policies with "state capitalism"--the exact phrase that Vladimir Lenin used to usher in his New Economic Policy (NEP). Lenin wrote: "State capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic." After Russia's economy collapsed in 1921, Lenin allowed privatization and private initiative, and he let the people trade, buy and sell for private profit. Lenin was moving towards a mixed economy. He even demanded that state-owned companies operate on profit/loss principles. Lenin acknowledged that he had to back away from total socialism and allow some capitalism.
This is from Lawrence K. Samuels, "The Socialist Economics of Italian Fascism," the Econlib Feature Article for July.

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COMMENTS (29 to date)
Greg G writes:

We don't live in a world of pure Platonic forms. There is so such thing as a perfectly straight line and there is no such thing as an economy that does not combine capitalist and socialist ideas. Authoritarians don't care about economic theory. They care about personal power. That usually means they want economic as well political power.

The conventional understanding of right versus left (or capitalist versus socialist) relies most heavily on the fact that right tends to be nationalistic while left tends to be internationalist. And left tends to be egalitarian while right tends to be hierarchical.
That is the reason why Italian Fascism is usually thought of as a right wing movement and it is a pretty good reason.

Andrew_FL writes:
And left tends to be egalitarian while right tends to be hierarchical.

I hear this said a lot but it seems to me that this is how the left views the right, and has nothing to do with the reality of the matter.

"We're in favor of egalitarianism. They oppose all our ideas for imposing equality, that must mean they're in favor of inequality."

David R. Henderson writes:

@Greg G,
And left tends to be egalitarian while right tends to be hierarchical.
They’re both incredibly pro-hierarchy. In the Soviet Union, the nomenklatura had huge privileges.

David R. Henderson writes:

@Greg G,
Here’s a quote from an article I co-authored:
As one discontented Soviet put it, “Everything is maskirovan- noye—masked” (qtd. in Smith 1976, 41). Leonid Brezhnev, general secretary of the Soviet Communist Party and president of the USSR, for example, had Rolls Royce, Mercedes, Cadillac, Lincoln Continental, Monte Carlo, Matra, and Lancia Beta automobiles (Goldman 1983, 104, as cited in Lebergott 1993, 29). Of course, the value of these high-quality vehicles never showed up in Brezhnev’s reported income.
See David R. Henderson, Robert M. McNab, and Tamas Rozsas, "The Hidden Inequality in Socialism,” Independent Review, v. IX, n. 3, Winter 2005, pp. 389–412.

Andrew_FL writes:

@David R. Henderson

I'm reminded of a story Reagan liked to tell:

And it has to do with when Brezhnev first became President. And he invited his elderly mother to come up and see his suite of offices in the Kremlin and then put her in his limousine and drove her to his fabulous apartment there in Moscow. And in both places, not a word. She looked; she said nothing. Then he put her in his helicopter and took her out to the country home outside Moscow in a forest. And, again, not a word. Finally, he put her in his private jet and down to the shores of the Black Sea to see that marble palace which is known as his beach home. And finally she spoke. She said, "Leonid, what if the Communists find out?"
Greg G writes:

You'll get no argument from me about the Soviet leadership enjoying a lot of luxuries that they never intended to make available to the general public. There used to be a joke in the Soviet Union that Brezhnev was showing his mother his cars, his dacha and his luxurious lifestyle and his mother replied, "This is all great Leonid but what happens if the Reds come back?"

My point was that left wing ideologies (not individual dictators) are more egalitarian while right wing ideologies are more inclined to rank people for various reasons both real and imagined.

The whole right/left dichotomy began with the French Revolution. This predated communism, socialism and libertarianism.

Andrew_FL writes:

Well if right wing means monarchists then America has never really had a right wing since the beginning. Glad we cleared that up.

Greg G writes:

I see that Andrew posted essential the same joke while I was writing my comment. I first heard it when visiting the Soviet Union in 1968 with a high school Russian class. Anyway, I guess I owe you a different joke.

Here is another that is equally funny but less relevant to the original post. It does accurately evoke the Russian attitudes of the time: What is the only country in the world totally encircled by hostile communist countries? The Soviet Union.

Greg G writes:

Andrew,

As much as anything else, right wing means, and has always meant, conservative. Whether or not a tradition of monarchy is the thing conservatives want to conserve depends on the particular history in question.

So then, British conservatives have always had a fondness for the monarchy and its traditions In the USA, which was formed in a repudiation of monarchy, conservatives have no such attachment to monarchy.

During the French Revolution, when this right/left dichotomy was begun, it had a great deal to do with whether or not you were a conservative with regard to religious institutions.

This whole right/left dichotomy never did have good place for libertarians. So you have right libertarians and left libertarians neither of which is a great fit. And this is precisely the problem with dichotomies. Everybody gets shoehorned into a label that might not fit that well.

Andrew_FL writes:

@Greg G- It's hard to see how a historically contingent category is a logical "ideology" or how it makes sense to simultaneously say right wing is defined contingent on the historical circumstances and is inherently hierarchical. This is a complete contradiction: you'd have to conclude that the Conservatives and right wingers in an egalitarian society are simultaneously those who want to preserve the existing lack of hierarchy, and also find it important to have a hierarchy.

Although maybe I just have a very different understanding of what "right wing" means because the way I understand it right wing is more or less libertarian, and "left libertarian" is mostly an oxymoron. That's probably because I define left and right as ideological categories, not historically contingent categories, and even more because I don't think it's useful to distinguish between an imagined conflict between egalitarians and hierarchists.

Greg G writes:

Andrew,

Language is based on convention not logic. If you want to understand language conventions, you do indeed need to understand the historical contingencies involved.

When this particular convention developed during the French Revolution, the revolutionaries wanted much MORE equality than the conservatives wanted. "Liberty, equality, fraternity" and all that. The revolutionaries were seated on the left at the political assembly, the conservatives on the right. Ever since that time putting a high value on equality has been seen as more left wing than right wing. Recognizing that there may be some good reasons to treat people unequally has been seen as more right wing.

The first people to call themselves "libertarians" were left libertarians who were hostile to capitalism. Much later, the term began to be more commonly used by those perceived to be on the political right and pro-capitalist. The association of the right with relatively more nationalism, conservatism, religiosity and hierarchy has remained.

I am always amused when libertarians complain about prevailing language conventions. Language is the most perfectly libertarian of all human practices. Every single person gets to decide for themselves what the words they speak and hear mean to them. If you have to argue against the prevailing convention then you are losing the argument.

Zeke writes:

Greg G:

The absence of a pure capitalist or communist state does not imply that all states are essentially the same mixed capitalist/socialist states. Some are more capitalist than others. Just as certain lines are straighter than others.

Greg G writes:

Zeke,

Of course it is true that not all states "are essentially the same" mix of capitalism and socialism. Is that really what you thought I was claiming?

My point was that that the original post listed all the features that Italian Fascism shared with socialism while ignoring all the reasons that the overwhelming majority of English speakers see Italian Fascism as a right wing movement.

Roger McKinney writes:

Hayek wrote Road to Serfdom because Brits thought Nazi Germany was capitalist.

Socialists have convinced people that the USSR was the only socialist nation that ever existed. But socialists called the Soviet model communism. It was an extreme form of socialism.

The most common form, what Lenin called state "capitalism" was invented by Germany in 1870. Socialists have always known that communism would not work for long and they would need a small space for markets. It's not state capitalism or crony capitalism, it's the most common form of socialism.

I would argue that the US is more socialist than capitalist.

Andrew_FL writes:

@Greg G-

Language is based on convention not logic. If you want to understand language conventions, you do indeed need to understand the historical contingencies involved.

The historically contingent approach to defining such terminology is pernicious, if it causes us to define monarchists and capitalists on the same side of the political spectrum. It is illogical. The term as applied to history should mean what it does today, not what it meant then.

I am always amused when libertarians complain about prevailing language conventions. Language is the most perfectly libertarian of all human practices. Every single person gets to decide for themselves what the words they speak and hear mean to them.

And yet I tell you what the words mean to me, and I'm wrong.

But there's nothing the least libertarian about language. It's collectively held property, and it deteriorates exactly the way you'd expect such a thing to.

Tell me language is libertarian, when people can own words as personal property.

If you have to argue against the prevailing convention then you are losing the argument.

And yet losing the argument doesn't make one incorrect. It just means that one side uses the lack of clarity of language to their advantage. To, for example, equate monarchism with libertarianism as "right wing." Any definition of "right wing" which encompasses such desperate ideas, is dangerously misleading.

Greg G writes:

Andrew,

There is no objectively correct language underlying conventional meanings. Several generations of philosophers and linguists did earnestly search for such a thing until the whole project went down in flames.

I am not telling you that you are wrong in comparison to some metaphysically objective standard that I am comparing your word choices to. You are wrong "only" in the sense that you are out of step with most (but not all) conventional usage.

The thing is that conventional usage just is the most relevant standard - not the way everyone would speak if they spoke in the way you take to be logical or in the way that you think conforms to what they "should mean."

Now there are some special language conventions that libertarians use mostly in talking to each other and they seem to work fine for that. For the purpose of these conventions taxes may be referred to as theft and everyone who wants more government than you do is a socialist. The problem comes when you talk to non-libertarians.

The penalty for bucking language conventions is that you may not be understood the way you want to be or people may tune you out when they realize you are speaking a different kind of language.

Languages are constantly changing. You are, and should be free to campaign for any usage you like. People have been complaining that language is deteriorating for as long as there have been languages. Professional linguists are entirely unconcerned. Seriously, this is a fascinating topic and you should read up on it.

You can in fact own words as personal property if you would like to copyright something. This is a quite commonplace property right that has existed for a long time.

philemon writes:

@Greg

I'm sort of a big fan of linguistic conventions too. But consider:

The conventional understanding of right versus left (or capitalist versus socialist) relies most heavily on the fact that right tends to be nationalistic while left tends to be internationalist. And left tends to be egalitarian while right tends to be hierarchical.

But aren't there two slightly different distinctions:

(1) There's the (ideological) right vs. the (ideological) left, and here, I have the same (linguistic) intuition as you have.

(2) There's also capitalism vs. socialism. Here, my sense is that the former is associated with things such as private ownership and direction of the means of production while the latter with collective ownership/direction of the means of production.

Now, there is the common enough intuition that socialism is ideological left (as defined above) while capitalism is ideological right (as defined above). But that connection does not follow from the linguistic conventions. It is either an empirical and falsifiable claim about how *people* who hold to one end of the ideological spectrum would tend to gravitate towards one of the two views about political economy, or that the ideologies themselves have entail ideas about political economy. But that's hardly to be assumed. There is no special reason why socialism cannot entail--or a socialist cannot gravitate towards--hierarchy, or a capitalism cannot entail--or a capitalist cannot gravitate towards equality. As far as I can tell, all four combinations are logically possible.

Of course it's also possible that by "socialism" *all* the person meant is really just "ideological left" and by "capitalism", *all* that is meant is just "ideological right". I suspect this is one of the possible usages as well, though if so, it needs to be distinguished from the previous usage. And if this is the usage that is in view, then again, nothing in the logic of the usage entails that you can't have ideologically left people who gravitate towards private ownership of the means of production or ideologically right people who prefers collective ownership of the means of production.

Greg G writes:

philemon,

You raise a number of good points which I would put in a slightly different way. Fascism is not really "about" a particular economic system in the same way that communism and socialism are. Fascism is relatively much more "about" ideas of national pride, honor, destiny etc. Socialism tends and intends to be economically leveling. Fascism tends and intends to be enthusiastically Nietzschean.

ALL the nations participating in WWII took placed extraordinary central controls on their economies. In some cases these controls lined up comfortably with their economic ideologies. In other cases they were just viewed as temporary and necessary expedients in mobilizing for total war.

Of course you are right that all these tendencies exist on a spectrum and many various combinations are possible. Much of the history of capitalism has entailed a gravitation towards more equality and the much of the history of communism has entailed a gravitation towards less equality.

Andrew_FL writes:

@Greg G- I under took the necessary endeavor to explain what words mean to me, and you still insist on pretending you don't understand me because I don't use the "conventional" meanings, i.e. the meanings as understood by you.

And no, you cannot own words, not in any meaningful sense, where I could own the word "conservative" and sue you for misusing it.

Greg G writes:

Andrew,

I am not pretending I don't understand you. You have been quite clear about what these words mean to you. I am just pointing out that you are choosing to use some words in a way that is different from the prevailing convention. And that language is conventional all the way down. You implicitly acknowledge this by complaining about the way the language is deteriorating to include more word usages you don't approve of.

It is true that uncopyrighted words are not property. So what? That doesn't mean that libertarians don't have views about the liberties that people have in choosing their word meanings.

The language conventions that you disapprove of evolved in an emergent bottom up way as the result of countless free choices by individuals. That is what I meant by saying that language develops in a libertarian way. You are free to redefine anything anyway you like. Good luck with that. How is it going so far?

philemon writes:

@Greg

Fascism is relatively much more "about" ideas of national pride, honor, destiny etc. Socialism tends and intends to be economically leveling.

That said, I don't think it's accidental that the Fascists gravitated towards a socialist political economy and make noises about leftish ideology. After all, the national pride, honor, destiny version of Nietzsche (in contrast with Nietzsche Nietzsche, just to be clear) is exactly that--about the *group* whether it's call a nation or volk--rather than individuals. If the manifest destiny of the nation or the volk has to come first, then what better way--the Fascist might think--to enshrine this than economic collectivism of some sort. And by the same token, if the nation or volk has a value that transcends mere individuals, then one way this might be instantiated is a sort of leveling down of all in face of the state as the most visible expression of the collective. Hence I am doubtful that Fascism and State-Socialism are merely temporary friends.

Incidentally, even in the earlier definition of left vs. right, there are at least two distinct distinctions:

(1a) Equality (left) vs. hierarchy (right)
(1b) Internationalism (left) vs. nationalism (right)

They aren't the same things again, and there isn't any special reason why there can't be nationalism-egalitarianism. Think of someone complaining about inequality in his own country, while somehow not registering that said inequality is a very small fraction of the inequality between countries. Or for that matter, internationalism-hierarchy. And I don't mind throwing in another one:

(1c) Individualism vs. Collectivism

While I'm a sort of fan of linguistic convention, I'm a bigger fan of making sure that we don't conflate distinctions.

Greg G writes:

philemon,

Again, we are mostly in agreement here. Nationalism, by definition really, elevates the collective of the nation over the individual. The military aggression of Napoleonic France was a good example of the kind of nationalistic egalitarianism you speak of. Of course that predated the capitalist/socialist debate.

This is yet another reason I think libertarians don't fit comfortably on the left/right axis and shouldn't try to. Many people have correctly observed that, as politics gets more extreme, the extreme left and extreme right begin to resemble one another. Both begin to think the end justifies the means. They hate each other precisely because they end up competing for the allegiance of the same authoritarian personality types. Authoritarians are a threat to all your freedoms and yes that does include your economic freedoms.

Andrew_FL writes:

Greg, you're completely wrong, and I told you why already. Language is not libertarian, there's nothing about language that is the least bit libertarian. Emergent phenomenon that result from individual actions are not automatically libertarian things. You're confusing the normative with the positive. Outcomes can come about as the result of millions of individuals making decisions and acting in socialist states as well as capitalist ones.

Public language is just like public land: no individual has ownership of any part of it, we all share it, and wouldn't you know it, it falls apart.

So I think you know exactly how it's going so far, since you revel in the bad outcomes of public property language since they are so helpful to you.

Greg G writes:

Andrew,

I agree that the RESULT of emergent processes is not always (or even usually) libertarian. My point was that the PROCESS of determining conventional meanings is as libertarian and coercion free as it could be. How is it that you think it could be made more libertarian? Certainly not by reducing individual choice and forcing your ideas of what words "should mean" on everyone.

I would love to hear your ideas on when the golden era of correct language usage was before the current deterioration and how the "ownership" of language worked at that time. Sorry about all the reveling. I can't help it. This is just too much fun.

Andrew_FL writes:

Greg, most people in the United States are taught the meanings of words in public schools. How free of coercion is that, exactly?

Greg G writes:

Andrew,

First of all, most people (except for the profoundly learning disabled) are speaking pretty fluently when they enter public school. This is how teachers are able to communicate effectively with them on the first day.

Schools should and do seek to further educate their students on the prevailing language conventions. This does not restrict their freedom. It expands it. You can only choose whether or not to conform to a language convention if you know the convention. Before that you are flying in the dark with much less ability to anticipate the effect of your words.

Languages are constantly changing and usually not in the way public schools teach. I don't know anyone who always talks the way their public school teachers taught them to speak. Do you?

I am still eager to hear when this time was before language started to "fall apart" and what the property arrangements around language were at that time.

Andrew_FL writes:

Greg, there's no point in having a discussion with someone who actually thinks public schools "expand freedom" I guess this is just another word whose meaning you've enjoyed seeing change to something more useful to you.

Greg G writes:

Andrew,

"More useful"? There never was a time when language was less useful to me or anyone else. This is precisely why you have been unable to identify the time when language was spoken in an objectively correct way (you know, before it began to "fall apart"). Language does provide, and always has provided many ways to express a given idea.

So then, if it offends you for me to say that learning about language conventions in public schools expands a person's freedom, I could say instead that it expands the number of choices available to people to know these conventions. That is equally "useful" to me. Is it less offensive to you?

Lawrence Samuels writes:

It should be noted that Mussolini's economy did not only turn socialistic in the 1930s, but that Mussolini himself was an avowed Marxist and Revolutionary Syndicalists (trade unionism) for much of his early years. He ran for office in 1919 under what he called the "Fascist Revolutionary Party." He boasted about his collectivist movement belonged on the "Left" side of the political spectrum in his "Political and Social Doctrine of Fascism", writing: "that this will be a century of authority, and century of the Left, a century of Fascism." (Jane Soames's authorized translation, 1933, p. 20) See http://hipav6.wix.com/history-uncensored Also see http://fascistcontroversies.weebly.com/

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