Liberal Fascism Reconsidered

Anyone who followed me back when I was Enlightened Layperson knows that for a time I became obsessed with Jonah Goldberg's Liberal Fascism, without (I admit) actually going so far as to read it.  I generally agreed, however, with whoever it was who said that the book had already been written in 1944 under the title of The Road to Serfdom, and that Liberal Fascism was just a dumbed-down version.  In effect, any departure from libertarian minarchism that stops short of Communism is fascism.  And certainly any challenge to the will of the omnipotent and omniscient Free Market placed us on the Road to Serfdom.  And nowhere did I wax so indignant as on the subject of German Social Democrats who, after all, were champions of the eight-hour day, unemployment insurance, union representatives on corporate boards, and many other departures from strict libertarian economics, yet were the staunchest supporters of liberty and the Weimar Republic.  I said:

[I]f Goldberg's definition of fascism is broad enough to encompass the modern-day Democrats, there can be little doubt that the SDP would also be (inadvertently) caught in his net. . . . [D]oubtless it can be established that Social Democrats and fascists (as well as New Dealers) would agree on some (but not all) economic policies. But Nazis and Social Democrats were truly antipodes on the issue that mattered most of all -- respect for democratic norms and individual rights. 

If Goldberg wants to dismiss that aspect of fascism (and Nazism) as insignificant in order to score a few cheap points in the context of US politics, well, American liberals and Democrats can afford a thick hide. We are not being menaced by jackbooted Storm Troopers, after all. But to every brave German Social Democrat who stood up for democracy when the conservatives went along with Hitler, to every Social Democratic martyr who paid the price with loss of home and job, harassment, persecution, exile, prison, torture or murder for defending the democracy no one else was willing, Goldberg owes an apology.

I wrote that on January 31, 2008, aware at the time that our economy had some problems, but thinking of them as little more than distant events on the horizon, and certainly seeing the Great Depression has highly salient to understanding fascism, but of mostly historical interest.  I certainly did not foresee that a remarkably similar series of events would be playing out within the next few years!  But events then and now have forced me to learn more about international economics in general and the Great Depression in Europe in particular.  And what I have learned has compelled me to the conclusion that Goldberg, if he chose, could build up an ideological divide that would place Hitler, some of Hitlers conservative coalition partners, Mussolini, Japanese militarists, and Franklin Delano Roosevelt on one side (along with some Scandinavian Social Democrats as acceptable collateral damage); and German Social Democrats, the Catholic Center Party (ancestor to modern Christian Democrats), libertarians, and British politicians, Conservative and Labour, on the other.

The divide, of course, is Keynesian economics.  The German Social Democrats favored  social welfare programs, labor protective legislation, union representation on corporate boards, and other un-libertarian economic policies, but they were not Keynesians.  They never questioned the need to balance the budget but only suggested that cuts come from the military instead of unemployment insurance.  The German Social Democrats were prisoners of a semi-Marxist ideology, one that attempted to make Marxism a humanitarian ideology by keeping its indignation over the (genuine) abuses and flaws of capitalism, while rejecting the parts about violent revolution and hoping to achieve the grand utopia by reform instead.  In good times, this effectively meant building capitalism with a human face, but it left them completely paralyzed and unable to act in the face of the Great Depression.  Communists rejoiced in what seemed the final death throes of capitalism and prelude to the glorious socialist revolution.  Libertarians treated the downturn as a necessary shakeout to be endured.  And less ideologically rigid people, from Keynes on the left to elements of the German military on the right began calling for public works to revive the economy.  But German Social Democrats rejected such proposals.  As humanitarians they were horrified at the suffering they saw around them and by the prospect of revolution, but they were still too Marxist to be willing to save the capitalist system when it seemed to be destroying itself.  The British Labour Party, though less ideological, also embraced austerity.

In short, if you regard Keynesianism as fascism's original sin -- not its worst sin, but its initial sin from which all others flowed -- then I suppose one could absolve the German Social Democrats of any ties to fascism while roping in FDR even if he did not go as far as Mussolini, let along Hitler. Not having read Liberal Fascism, I do not know to what extent Goldberg blames everything on Keynes. Probably not that much, to judge from reviews, that seem to place more emphasis on turn-of-the-century Progressives that Keynesianism as such.

If Goldberg had written that book now, he would no doubt put more emphasis on the evils of Keynes. Because it is happening all over again.  Once again, countries have fallen into economic crisis are are prevented from recovering by a currency beyond their control -- gold in the 1930's; now euros.  Once again, creditor nations insist on full payment without regard to debtors' ability to pay.  Once again, all respectable parties are calling for austerity and ever more austerity.  And once again, when all respectable parties call for self-destructive economic policies, people increasingly turn to disrespectable parties.  Or, as Matt Yglesias says:

From Spain to France to Italy to Finland, social democrats feel paralyzed by the bounds of the eurozone. They don't have a strategy for changing the rules and they don't have the guts to tear up the rulebook. You have to turn to a LePen or a Beppe Grillo to see someone willing to say that if leaving the eurozone is the only way to reemploy the population, then it's time to leave the eurozone.

 And rightly so!  I begin to see how liberals of the 1930's might have started to admire Mussolini, and even to applaud Hitler for his ability to revive the German economy.  Just as I am beginning to have a guilty admiration for Marine LePen.  Unfortunately, sensible economic policies are being accompanied by a hefty dose of ethnic scapegoating.  And if you are going to argue that Keynesian economics is the original sin of fascism, I suppose it would follow that ethnic scapegoating simply flows from it.  Indeed, the National Review is accusing Bernie Sanders of being a "National Socialist" (though not, of course, a Nazi) because of he protectionism in trade and the acknowledgement of some of his followers that a strong welfare state is easier to achieve under conditions of ethnic homogeneity.  At the same, time, the article acknowledges:

F.A. Hayek’s Road to Serfdom notwithstanding, corralling off foreign-made cars does not lead inevitably to corralling off foreign-born people, or members of ethnic minorities, although the Asians-and-Latinos-with-their-filthy-cheap-goods rhetoric in and around the Bernieverse is troubling. There are many kinds of Us-and-Them politics, and Bernie Sanders, to be sure, is not a national socialist in the mode of Alfred Rosenberg or Julius Streicher.

Ultimately, the author acknowledges that Sanders' sin is in punching up, not kicking down.  But he does appear to see Sanders as a liberal fascist and at least try to tar him with ethnic scapegoating. The problem, of course, is that while in Europe the party that favors Keynesian economics and the one that engages in ethnic scapegoating are the same, it then U.S., they are not.  And if you are going to denounce fascism both for its Keynesianism and its ethnic scapegoating, there is no getting around the fact that in Europe those things go together, but in the US they do not.  Which places US libertarians of the Goldberg type in the awkward spot of having to decide which sin is worse.