Fascist and Nazi Economic Systems Were Quite Similar to the Rest of the Left

Chapter 3.4: Management or ownership—it all spells 'socialism.'

Why this book | Title Page | Table of Contents
Preface | Introduction
PART 1
Chapter 1 (1.1) (1.2) | Chapter 2 (2.1) (2.2) (2.3) | Chapter 3 (3.1) (3.2) (3.3)(3.4)
PART 2
Chapter 4 | Chapter 5 | Chapter 6
PART 3
Chapter 7 | Chapter 8 | Chapter 9 | Chapter 10 | Chapter 11 | Chapter 12 | Chapter 13 | Chapter 14
PART 4
Chapter 15 | Chapter 16 | Chapter 17 |
PART 5
Chapter 18 | Chapter 19 | Chapter 20 | Conclusion
Appendix | Works Cited

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3.4
Fascism/Nazism vs. Orthodox Leftism

• Economics

  • Property

  • Command economy 

Economics

Three-fourths of [the] Italian economy, industrial and agricultural, is in the hands of the state.
—Benito Mussolini

As part of a bastard offshoot of the socialist family tree, the fascists and national socialists did not have the same encumbrances as the orthodox left. They still hated all the same things that socialists hated—free markets, representative democracy, individual rights, and the rest of classical liberalism—but without the millstone of Marxian doctrine on their necks, they had more freedom to innovate.¹

They understood early on that socialist economic models had to the adapted to fit the reality of the need for production. They began with similar motivations and assumptions—that a large, intrusive state was needed to control production and reduce economic inequality—but they made practical concessions in order to keep production flowing. Fascist states opted for management, rather than outright ownership, of the means of production. They nationalized some industries, but they allowed most private property to remain, nominally at least, in private hands. Organizing economic production by sectors, the state worked with business and labor to ensure the economy was serving the national interest. Unsurprisingly, the national interest was whatever the state said it was.

This was not nearly as efficient as a real market economy, but it was more efficient than “pure” socialist economies. Indeed, if Italy and Germany had not exhausted themselves in conquest and ultimate defeat, they might have proven more durable than the Marxist-Leninist powers to the East.

Property

Orthodox leftists, in their assiduous efforts to perpetuate the myth of the Marxist continuum, claim that the fascists and Nazis were “capitalist,” because they allowed some private ownership of the means of production. This claim is so misleading that we might as well call it a lie. The fact that the fascists and Nazis did not nationalize all industry or private business does not represent the kind of doctrinal respect for individuals’ property rights at the core of capitalism and classical liberalism. It was, rather, a moderate alteration to basic socialist principles. As Mises explains, they simply opted for control of business rather than outright seizure of it:

The second pattern [of socialism] (we may call it the Hindenburg or German pattern) nominally and seemingly preserves private ownership of the means of production, and keeps the appearance of ordinary markets, prices, wages, and interest rates. These are, however, no longer entrepreneurs, but only shop managers (Betriebsführer in the terminology of the Nazi legislation). These shop managers are seemingly instrumental in the conduct of the enterprises entrusted to them; they buy and sell, hire and discharge workers and remunerate their services, contract debts and pay interest and amortization. But in all their activities they are bound to obey unconditionally the orders issued by the government’s supreme office of production management. This office (the Reichswirtschaftsministerium in Nazi Germany) tells the shop managers what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. It assigns every worker to his job and fixes his wages. It decrees to whom and on what terms the capitalists must entrust their funds. Market exchange is merely a sham.²

Under such a system, the entrepreneur is a business “owner” in name only. The state is running the show. It is a command economy masquerading as a market economy. Adolf Hitler himself made the matter clear with surprising candor. By allowing property to remain nominally in private hands, he explained, they created a useful illusion:

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