From: *Travis*
Date: Fri, Jul 10, 2009
Subject: Headed to National Socialism
**
*See Also...
Mathematics Versus Economic Logic <http://mises.org/story/3540> by Ludwig
von Mises*
Headed to National Socialism
*Mises Daily* by Llewellyn H. Rockwell,
Jr.<http://mises.org/articles.aspx?AuthorId=275>| Posted on 7/10/2009
It was common on the Left to intimate that George W. Bush was like Hitler, a
remark that would drive the *National Review* crowd through the roof but
which I didn't find entirely outrageous. Bush's main method of governance
was to stir up fear of foreign enemies and instigate a kind of nationalist
hysteria about the need for waging war and giving up liberty through
security.
Hitler is the most famous parallel here, but he is hardly the only one. Many
statesmen in world history have used the same tactics, dating back to
ancient times. Machiavelli wrote in his *Art of War* advice to the ruler:
To know how to recognize an opportunity in war, and take it, benefits you
more than anything else.
But what's the point of studying Hitler's rise to power unless it is to
learn from that history and apply the lessons? One lesson is to beware of
leaders who come to power in troubled times, and then use foreign threats
and economic crises to bolster their own power. Unless we can draw out
lessons for our own times, history becomes nothing but a series of dry data
points with no broader relevance.
Certainly Bush used 9-11 to consolidate his power and the neoconservative
intellectuals who surrounded him adopted a deep cynicism concerning the
manipulation of public opinion. Their governing style concerned the utility
of public myth, which they found essential to wise rule. The main myth they
promoted was that Bush was the Christian philosopher-king heading a new
crusade against Islamic extremism. The very stupid among us believed it, and
this served as a kind of ideological infrastructure of his tenure as
president.
Then it collapsed when the economy went south and he was unable to sustain
the absurd idea that he was protecting us from anyone. The result was
disgrace, and the empowering of the political left and its socialistic
ethos.
The talk of Hitler in the White House ended forthwith, as if the analogy
extended only when nationalist ideology is ruling the day. What people don't
remember is that Hiterism was about more than just militarism, nationalism,
and consolidation of identity politics. It also involved a substantial shift
in German domestic politics away from free enterprise, or what remained of
it under Weimar, toward collectivist economic planning.
Nazism was not only nationalism run amok. It was also socialism of a
particular variety.
Let's turn to *The Vampire
Economy*<http://mises.org/store/Vampire-Economy-Doing-Business-Under-Fascism-The-P371.aspx>by
Guenter Reimann (1939). He begins the story with the 1933 decree that
all
property must be subject to the collective will. It began with random audits
and massively new bookkeeping regulations:
Manufacturers in Germany were panic-stricken when they heard of the
experiences of some industrialists who were more or less expropriated by the
State. These industrialists were visited by State auditors who had strict
orders to "examine" the balance sheets and all bookkeeping entries of the
company (or individual businessman) for the preceding two, three, or more
years until some error or false entry was found. The slightest formal
mistake was punished with tremendous penalties. A fine of millions of marks
was imposed for a single bookkeeping error. Obviously, the examination of
the books was simply a pretext for partial expropriation of the private
capitalist with a view to complete expropriation and seizure of the desired
property later. The owner of the property was helpless, since under fascism
there is no longer an independent judiciary that protects the property
rights of private citizens against the State. The authoritarian State has
made it a principle that private property is no longer sacred.
The rules begin to change slowly so that enterprise could no longer make
decisions in the interest of profitability. The banks were nationalized. The
heads of major companies were changed. Hiring and firing became heavily
politicized. The courts ruled not on justice but on political priorities. It
was no longer enough merely to obey the laws. The national will must trump
economic concerns:
The capitalist under fascism has to be not merely a law-abiding citizen, he
must be servile to the representatives of the State. He must not insist on
"rights" and must not behave as if his private property rights were still
sacred. He should be grateful to the Fuehrer that he still has private
property. This state of affairs must lead to the final collapse of business
morale, and sound the death knell of the self-respect and self-reliance
which marked the independent businessman under liberal capitalism.
Price controls were next, enforced intermittently and with them grew up a
large gray economy, with businesspeople spending more time getting around
the rules than producing wealth.
To increase his prices a dealer must have a special permit from the Price
Commissar. A request for a price increase must first be certified to by the
group leader; it must be accompanied by a detailed statement of necessity
and other pertinent data, such as production and distribution costs.
State production mandates were next. Goods were to be produced according to
political goals.
Backed by the General Staff of the army, Nazi bureaucrats have been able to
embark upon schemes which compel the most powerful leaders of business and
finance to undertake projects which they consider both risky and
unprofitable.
Bankers were required to act as state actors.
Under fascism, big bankers, formerly independent — except, of course,
'non-Aryans' — have become State officials in everything but name. They are
often in high and influential positions, but they are all members of the
compact, centralized State machine. Their independence, their individual
initiative, their free competitive position, all the principles for which
they once fought fervently, are gone.
If you think that the parallels stopped after Bush left power, consider this
passage from Reimann:
The totalitarian State reverses the former relationship between the State
and the banks. Previously, their political influence increased when the
State needed financial help. Now the opposite holds true. The more urgent
the financial demands of the State become, the stricter measures are taken
by the State in order to compel these institutions to invest their funds as
the State may wish.
Once the banks were forced wholly under the control of the government, they
became the means by which all property became subject to the state:
The totalitarian State will not have an empty treasury so long as private
companies or individuals still have ample cash or liquid assets. For the
State has the power to solve its financial difficulties at their expense.
The private banks themselves, the financial institutions which previously
dictated the terms on which they were willing to lend money, have built up
the system of siphoning off liquid funds. This financial system is now
utilized by the totalitarian State for its own purposes.
So it was for the stock market, which was regarded as a national asset.
Speculation was forbidden. Public companies were entirely subject to
bureaucratic rule. Order replaced the old spontaneity, while speculation of
the old sort became an entirely underground activity. The largest companies
didn't entirely mind the course of events.
The disappearance of small corporations gives rise to a tendency among
small investors not to risk their capital in new competitive enterprises.
The larger the big corporations grow and the closer they become connected
with the State bureaucracy, the fewer chances there are for the rise of new
competitors.
So too for insurance companies, which were compelled to buy government
paper.
The tendency toward ever more economic regulation resulted not in socialism
as such but fascist planning.
The fascist State does not merely grant the private entrepreneur the right
to produce for the market, but insists on production as a duty which must be
fulfilled even though there be no profit. The businessman cannot close down
his factory or shop because he finds it unprofitable. To do this requires a
special permit issued by the authorities.
The national demand for "stimulus" replaced private decision making
entirely, as businessmen were required to produce and avoid any economic
downturns that might embarrass the state.
The Nazi government has expressly threatened the private entrepreneur with
increased State coercion and reduction of personal rights and liberties
unless he fulfills adequately the 'duty to produce' according to the State's
demands.
But stimulus could not and would not work, no matter how hard the party
officials tried, because the very institutions of private property and
competition and all market forces had been overwritten.
The totalitarian regime has annihilated the most important conservative
force of capitalism, the belief that private property ought to be a sacred
right of every citizen and that the private property of every citizen ought
to be protected. Respect for private property has penetrated the spirit of
the people in all capitalist countries. It is the strongest bulwark of
capitalism. Fascism has succeeded in destroying this conservative force …
People still have to work for money and have to live on money incomes.
Possession of capital still provides income. But this income is largely at
the mercy of State bureaucrats and Party officials.
Reimann sums up:
In Nazi Germany there is no field of business activity in which the State
does not interfere. In more or less detailed form it prescribes how the
businessman may use capital which is still presumably his private property.
And because of this, the German businessman has become a fatalist; he does
not believe that the new rules will work out well, yet he knows that he
cannot alter the course of events. He has been made the tool of a gigantic
machine which he cannot direct.
<http://mises.org/store/Vampire-Economy-Doing-Business-Under-Fascism-The-P371.aspx>
The regime also dramatically increased social and medical legislation,
providing lifetime pensions to friends and conscripting doctors in the
service of its dietary and medical goals.
Now, if any of this sounds familiar, it is because the principles of
intervention are universal.
The Nazi regime represented not a unique evil in history but rather a
now-conventional combination of two dangerous ideological trends:
nationalism and socialism.
We know both all too well.
[VIEW THIS ARTICLE ONLINE] <http://mises.org/story/3564>
<http://www.mises.org/store/Left-The-Right-and-The-State-The-P550.aspx>
_______________________
Llewellyn H. Rockwell, Jr. is chairman of the Ludwig von Mises Institute in
Auburn, Alabama, editor of LewRockwell.com <http://www.lewrockwell.com/>,
and author of *The Left, the Right, and the
State*<http://www.mises.org/store/Left-The-Right-and-The-State-The-P550.aspx>.
Send him mail <[email protected]>. See his article
archives<http://mises.org/articles.aspx?AuthorId=275>.
Comment on the blog <http://blog.mises.org/archives/010255.asp>.
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