Austerity and Fascism

Photograph by Nathaniel St. Clair

After four years on the outs with the establishment press, the national security and surveillance states and the PMC, one might imagine that Donald Trump is unelectable. And given near daily warnings of incipient fascism, one might imagine that the intellectuals and academics of the age are offering developed theories of its origins for all to consider. More specifically still, one might imagine that a competing political party would understand the risks of the historical moment and rise to the occasion by offering the public whatever is needed to defeat the threat. Alas, an object lesson in how so-called civilizations unravel is underway.

Institutional constraints, in the form of defenses of capitalism in its neoliberal form, go far in explaining the Democrats’ paucity of programs to fix what ails us. In historical terms, it’s as if nothing like the current predicament had ever played out before. As if to demonstrate the intellectual vacuity of the political analyses of the last four years, a film directed by Frank Capra for the U.S. Department of War in 1942 recently resurfaced. Intended as rally-the-troops propaganda, the film gives a more nuanced understanding of the rise of European fascism than the endless ‘psychology of fascism’ pablum produced by left intellectuals since 2016.

To cut to the chase, the New Deal provided enough jobs for economic refugees from the Great Depression to reduce the allure of European style fascism in the U.S. The film was commissioned by the Roosevelt administration, so in that sense the administration was touting its own programs with the thesis. However, the intellectual roots of the ‘fascists cause fascism’ theory currently in vogue are more compromised still. That argument was crafted by capitalist economists after WWII to exorcise the role that the Great Depression played in creating the material conditions in which European fascism arose.

Graph: from the 2016 election of Donald Trump forward, liberals claimed that fascism and racial intolerance were ascendant. As with so much in American politics, the claim began with a premise and then facts were created to back it up. The number of racist and fascist groups in the U.S. follows the unemployment rate higher and lower. And it has been falling since 2008, the peak of the Great Recession. It continued to fall, along with the unemployment rate, through Mr. Trump’s term. With the Covid-19 downturn now underway, these benign conditions no longer exist. Source: Southern Poverty Law Center.

The cause-or-effect conundrum from the 1940s gets to the heart of the 2020 presidential election. With the current contest taking place between a right-wing demagogue and an austerian, neoliberal, neoconservative Democrat, both ‘sides’ of the capitalist party are courting disaster. While European-style fascism requires a right-wing demagogue to motivate it, it seems that a right-wing demagogue won’t ascend to power outside of material conditions conducive to fascism. Donald Trump has been in office for nearly four years now and good, old-fashioned, American police-state violence is as close as the U.S. has come to European-style fascism.

But good, old-fashioned, American police-state violence, when combined with political control by capital and the rich, murderous and seemingly unstoppable foreign policy that supports the needs of capital, and the largest and most intrusive carceral system in the world, reads a lot like fascism. And whatever one thinks of Donald Trump and the Republicans, the creation of this state of affairs is 1) rooted in American history from slavery to convict leasing to for-profit prisons, 2) has seen a resurgence coincident with the rise of neoliberalism and 3) required liberal support to get past opposition from traditional Democratic constituencies.

Interestingly, the film alludes to the charge made by German fascists that the U.S. built its industrial base using the same methods and economic practices that the Nazis were being condemned for using. Historian Adam Tooze wrote The Wages of Destruction around 2006 to make a related argument derived from Nazi source materials. It’s fine and well, necessary, and the only morally and politically appropriate response, that the Americans would take the argument to heart and come out on this side of WWII firmly rejecting the social, political and economic practices that the Nazis learned from the U.S. But that isn’t what happened.

Neoliberal theorists, including economists Milton Friedman and Friedrich Hayek, created an idealist explanation of the rise of European fascism in which fascist leaders used propaganda to convince weak-willed followers to follow them over the cliff to the utter catastrophe of WWII. Fair enough as far as it goes. Left out were the material conditions of the Great Depression. The Weimar back-and-forth, settling on austerity in the form of cutting social expenditures while millions of German workers were out-of-work and destitute, left them vulnerable to promises of economic salvation from the fascists.

Part of what is alarming about the debate is the contention that the material conditions of the Great Depression were incidental to the appeal of fascism. This has been the position of the American left for the last four years. It is the view from a well-cushioned armchair, not from the losing side of a decades long battle with capital. It also explains the class divisions that came to the fore after the 2016 election. The insightfulness-lite of using an effete, and opportunistically clipped, explanation of European fascism to call the economically dispossessed ‘fascists,’ would seem a right-wing caricature of the latte-sipping-left had it not actually happened.

Were it not for liberal support for police state institutions and tactics, it would be relatively easy to answer the ‘law and order’ canard that Mr. Trump is now offering as a campaign slogan. The multi-tiered American legal system, where the rich have immunity from prosecution, the PMC will occasionally be charged, but can generally afford adequate legal representation, while the poor can be shot on sight with impunity, is the product of history and the existing distribution of power. Part of this history includes Democrats arming and empowering the police to act with impunity against the poor. Whether or not this constitutes fascism likely depends on which end of the gun one finds oneself.

The problem for both parties is that the party leaderships and patrons would be at risk if ‘law and order’ were ever applied to them. While the (George W.) Bush administration bears major responsibility for war crimes in and against Iraq, ‘PAYGO Nancy’ Pelosi had a senior oversight role on the House Intelligence Committee when she was informed of illegal torture being conducted by the CIA. Barack Obama ran out the clock on prosecuting financial crimes by knowingly letting the statutes of limitation expire. Economic sanctions carried out by both parties could be argued to be forms of collective punishment, a war crime.

Graph: working people, the poorer 90% of the population, haven’t gotten a pay raise in five decades, while the richest 0.1% have gotten fabulously rich. The promise of neoliberalism, as it was sold by liberals, was that it would produce widespread prosperity. The political value of liberals to capital is that they can sell right-wing economic programs that Republicans were largely unsuccessful in selling. NAFTA was a non-starter until Bill Clinton sold it to labor as a job creation program. Income distribution is a proxy for the distribution of political power in political economy where wealth equates with power. Source:

As not constructive as Donald Trump’s time in office has been, were he the potential dictator that his critics claim, he has had four years in office to claim the title. What has been missing are the material conditions conducive to the rise of fascism. As the top graph illustrates, the tendency toward fascism, at least in terms of the racist and fascist groups that the SPLC (Southern Poverty Law Center) counts, has been declining since 2008, the peak of the Great Recession. With the Covid-19 induced downturn now underway, these superficially benign conditions have now changed for the worse. This bodes poorly for the rest of us no matter which party wins the presidency.

To reiterate: by the outset of the U.S. entry into WWII, it was evident to the American political and military planners that austerity in the face of mass deprivation was folly that led to very bad social consequences. Liberals can blame Donald Trump for the problems for which he is blameworthy. There are many. But he didn’t create the material conditions that elevated him to the presidency. Liberal experts, many with advanced degrees, did. This would be water over the proverbial dam if the same logic, motivated by the same interests, and bound by the same institutional constraints, weren’t what the Democrats currently have on offer.

The arguments against re-electing Donald Trump are compelling and multitudinous. On the one hand, a fascist-adjacent president whose tenure coincides with material conditions conducive to the rise of fascism seems a particularly poor— and risky, combination. On the other hand, the liberal certainty that austerity is politically benign is the stuff of revolutions. Beyond the question of the political wisdom of the Democratic takeover of the patrician wing of the Republican party, combining disdain for the poorer three-quarters of the population with ongoing policies of immiseration seems conceived to provoke a popular uprising.

The refusal of liberals to take responsibility for the economic conditions that emerged from the Obama presidency, not just those of the restored PMC, but the mass immiseration that produced deaths of despair and declining life expectancies, is deserving of a robust political response. With no left political party, and the Democratic leadership promising austerity and absolutely nothing for the people, there is no political space except on the right. Assuming that Democrats win in 2020, residual economic conditions from the pandemic will more likely than not call for a New Deal type response. Joe Biden and his advisors are the wrong people to craft an adequate response.

As has been the case since the early 1990s, neoliberals appear determined to recreate the material circumstances that facilitated the rise of European fascism. It isn’t necessarily their intention to do so, any more than the growth of the carceral state and the militarization of the police emerged from the logic of neoliberal capitalism. The willingness to assign state power to private interests produces a unified control of political economy that facilitates the extraction of profits. The surveillance state is premised on ‘private’ surveillance being economic in nature, rather than political. But economic control is political when state and private interests have merged (and before). Social control is the more certain route to corporate profits.

It is more than a bit ironic that in 1942, military propagandists put together a richer picture of the ascendance of European fascism than the leading intellectuals on the American left have in recent years. A robust picture requires the redistribution of political and economic power if fascism is to be avoided. This isn’t to suggest support for capital on the left. The neoliberal explanation that dominates in the U.S. has been around since 1948. It is what is taught in universities. It has a place in American cultural history. Actually thinking about it is apparently a step too far.

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