Economic Decline and the Threat of Fascism

Photograph Source: srslyguys – CC BY 2.0

With the recent addition of twenty-six million people to U.S. unemployment rolls, and millions more in the informal economy cast adrift by actions taken to address the coronavirus pandemic, a political response of sorts is sure to be underway. While superficial economic comparisons to the Great Depression are already being put forward, the U.S. has now had three-plus years of political comparisons to the rise of European fascism without the economic conditions of the Great Depression. Both are off-base for reasons specified below.

The economic comparisons ignore the government response in the form of increased and extended unemployment benefits for those lucky enough to be counted as officially unemployed. At a high level, as millions are experiencing extraordinary economic hardship, some time has been bought before absolute catastrophe proportionate to the Great Depression is cemented as our fate. While it is little solace to those suffering, the systemic problem should the pandemic ease is that already tenuous economic relationships will take some time to be rebuilt.

Enough of these tenuous relationships have already been broken so that widespread and deep economic misery will persist. A Federal Job Guarantee could in theory provide useful employment at a living wage for those who don’t get hired / rehired due to frictions like businesses permanently closed by the pandemic. As the corporate bailouts demonstrate, the Federal government has spending capacity limited only by real resources. However, four decades of neoliberal ‘reforms’ have rendered ad hoc mobilizations in the public interest improbable.

State capitalism (corporatism) has produced a division of labor amongst the political class, with Republicans serving dirty industries while Democrats serve Wall Street. Social expenditures can be either publicly or privately funded. Wall Street profits from private funding. The Democrat’s austerity policies are imposed to boost this private funding. This currently finds Republicans leading calls for bailouts for their patrons as Democrats feign ignorance of how public finance works to ask how public expenditures in the public interest will be paid for?

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Adolf Hitler was appointed Chancellor of Germany in 1933, in the very pit of the Great Depression, on a platform of economic renewal attached to racial scapegoating. The American explanation of this rise proceeds from racial scapegoating without mention of the American contribution to it, the material circumstances of the Great Depression or the Nazi platform of economic renewal. Source:

This is roughly analogous to the roles of liberals and conservatives in Weimar Germany before the political ascent of the Nazis. The difference now is that the West isn’t yet in a new Great Depression. The broader question of whether this is a relevant analogy has had little impact on the banal and simplistic analogies being made. However, it would be foolish, given the circumstances, not to think the question through and act if needed. The ‘American view’ that ideology drives history was developed after WWII to explain the rise of European fascism without addressing the role of capitalism in creating the Great Depression.

To understand the improbability, instances of well fed, well housed and well employed people who were motivated by ideology to join fascist movements in material numbers have little historical precedence. The best known case in the U.S. was the ‘Business Plot’ of 1933 led by Wall Street financiers. Again, the backdrop was the Great Depression and the financiers sought to reverse New Deal reforms they claimed impinged on their liberty. The plot was revealed by self-proclaimed ‘gangster for capitalism,’ U.S. General Smedley Butler, who the coup plotters had tried to enlist.

The notion of ideology as driver of history— in present circumstances European fascism, was developed by members of the Mont Pelerin Society where neoliberalism was founded as ‘pragmatic’ capitalism. Founding member and erstwhile philosopher Karl Popper lent a left-wing patina to the economics of the radical right— to what came to be known as the ‘Chicago School,’ through studiously ignoring or misrepresenting the work of Marx and Heidegger to create an American view. The philosophical problem with pragmatism is that it depends on unstated premises. What is pragmatic for the rich—say reducing wages, may be its opposite to workers.

According to SPLC (Southern Poverty Law Center) data, the number of white racist groups in the U.S. peaked in recent history in 2008, at the onset of the Great Recession. Despite U.S. President Donald Trump’s toxic racist chatter, this number has been falling throughout his tenure in the White House. Last year, 2019, saw the lowest number of white racist groups since 2008. While any number greater than zero is too many, charges that Mr. Trump is leading a fascist resurgence aren’t borne out by this data. Source: SPLC.

Through this American view, a morally and politically corrupt leader uses psychological coercion to lead weak willed followers into the fascist abyss of racialized, militarized slaughter. The myth that Nazis were a working class revolt led from below is belied by the close ties of the Nazi leadership to leading industrialists in Germany and the U.S., and even the British royals. That ideological accounts leave as a footnote, or exclude entirely, the role of the Great Depression in creating the material conditions in which the logic of fascism took hold suggests that they are motivated by willful ignorance and / or economic interests.

Karl Popper’s ‘pragmatic’ philosophy of science saved the American technocratic view of it as method divorced from ideology. While few who have spent more than a few minutes thinking about it support this view— the ‘structural’ ontological premise of subject-object dualism is wholly ideological, it was realized after WWII when the U.S. brought dozens of Nazi scientists to the U.S. to work in American industry in what was dubbed ‘Operation Paperclip.’ That these Nazis were able lift themselves up to contribute to American genocides in Korea, Vietnam, Laos, Cambodia and so forth and so on is heartwarming in an evil-incarnate kind of way.

Coming after WWII, this newfound pragmatism was used to separate the modern American era from three centuries of slavery, genocide against the indigenous population that was still ongoing when the Nazis came to power, the American eugenics program that is still found in state law in the U.S. in 2020, and the genocidal tendencies of the imperial era. If ideology motivates history, what ideology motivated this history? Before answering, you may wish to ask yourself if you agree with the Nazis that race is an ontological, rather than a historical, category.

The difference is crucial. What it means in plain language is that if race is an intrinsic quality, then racist tropes like black criminality can be attributed to natural differences between the races rather than to the history of racialized class relations, strategies of economic expropriation like slavery and convict leasing, and the use of the law to support and maintain exploitative class relations. As Karl Popper’s science has it, there is remarkably little support for the claim of intrinsic distinctions outside of historical class relations. This doesn’t reduce race to a class issue, so-called class reductionism, but by placing it in history, it takes it away from the Nazis.

A question that Americans should probably ask themselves, but almost certainly won’t, is: would they recognize a fascist government if they were its beneficiaries? Of course, the question assumes that there are any beneficiaries of fascist governance. But what if these Americans lived in nice houses and had their fill of consumer goods while the state created the largest prison system in human history in both absolute and relative terms, turned the civil police force into a military force with impunity to kill some classes of citizens, and wealthy oligarchs and corporate executives assumed de facto control of the state?

The point isn’t the pulp right-wing theme of lost liberty, but rather the idea that unless you’re on the losing side of history, abhorrent conditions for other people tend to be invisible. The perennial question for Germans a generation ago was how many knew of Nazi atrocities? Separately, a significant literature arose around the Nazi economic miracle. Adolf Hitler ascended to power in 1933, the pit of the Great Depression. The circumstances in which he rose to power, and his ability to put large numbers of unemployed Germans to work, produced different realities for ‘ordinary’ Germans and the millions of victims of the Nazis.

None of this is to argue moral, political or historical equivalence between the U.S. and the Nazis. There are points of intersection and divergence. The question is: can there be radically different lived experiences of so-called liberal Democracy? How can a ‘free’ nation have the largest absolute and relative carceral population in world history? Military production might explain why surplus military equipment would be made available to civil police forces, but the availability of equipment doesn’t explain the militarization of the police. And the presence of militarized police has different meaning in poor neighborhoods than in rich.

It would be encouraging if the liberal class, which includes most of the American left, were looking at economic conditions when worrying publicly about the threat of ascendant fascism. If people are well employed (Job Guarantee), have shelter and food security (Green New Deal) and a functioning healthcare system (Medicare for All), the threat of ascendant fascism is minimal, no matter what foul blather emanates from on high. Again, the number of racist groups has been falling throughout the last four years, not rising as MSNBC, CNN and the New York Times have spent recent years asserting.

But the issue cuts deeper still. The liberal class is willing to live with deplorable conditions for an already large and sure to be growing proportion of the population. And its role as agent of the rich makes it morally and politically culpable for these conditions without the benefit of being rich. This gives a material basis to its preference for ephemeral— ideological, explanations of the rise of European fascism. If blame can be placed with an errant leader rather than serial crises of capitalism, then changing leaders means they can keep capitalism.

The neoliberal solution to the fascist threat was / is pragmatic capitalism. Anyone with a leftish understanding of capitalism knows that there is no such animal. What is pragmatic for one class isn’t for another. For instance, the 2009 bailouts came on the backs of working people (austerity) and bank borrowers (foreclosures). This makes austerity particularly not constructive for those worried about ascendant fascism. It was the austerity that followed earlier bailouts that set the stage for Donald Trump. As profoundly not constructive as Donald Trump is, he didn’t create the conditions that led to his political ascendance. Liberals did.


Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.