THE US IS BORROWING ITS WAY TO FASCISM
By Richard D. Wolff, Information Clearinghouse.
September 13, 2020 | EDUCATE!
Above photo: Wikipedia.
"Fascism Merges Private Capitalism And The State.
Political power then enforces capitalism's basic rules: the economic
dominance of the major shareholders and their top directors and managers."
Viewing the GOP convention seemed a little like binge-watching the last
several years' parade of none-too-subtle signs of incipient fascism. We saw
extreme nationalism, scapegoating immigrants and foreigners in general,
white supremacy, "strong (narcissistic)-man" government, aggressive foreign
policies, and hysterical red-baiting. Those signs reflect how capitalism's
deepening crisis undermines both the centre-left (Democrat) and centre-right
(GOP) and shifts politics further right and further left. Trump represents
the anti-centre right, Bernie Sanders the anti-centre left. Most capitalists
want neither; the centre worked very well for them over the last 75 years.
As that political centre implodes, U.S. capitalists favor the right over the
left. They see the difference between fascism and socialism very clearly.
They are not fooled by the crumbling old centre's self-serving efforts to
equate socialism and fascism.
Fascism can indeed "happen here," but in unique fashion. Fascism, like all
other systems, has varying forms. As 20th-century fascisms took shape in
Italy, Germany, Japan, and Spain-to take some major examples-the same basic
system interacted differently with each country's particular history and
conditions. The fascism where U.S. capitalism is now headed will display
unique features as well.
The fascism taking shape here is not primarily the crude political theatre
that today's wannabe fascists offer. The Trump regime's courting of white
supremacists and other extreme nationalists, its virulent scapegoating of
immigrants, Latinx, and African Americans, and its encouragement of police
repression are too often counterproductive. Those symbols are similar enough
to many of 20th-century fascism's horrors that they are too easily
recognized as dangerous. Today, the United States moves more quietly and
more effectively toward fascism via its fast-evolving credit system. It's
time to expose borrowing as a path to fascism.
Today's crisis-ridden capitalist economy is more dependent on credit than at
any time in the system's history. More than ever, credit sustains the
purchasing power of consumers and of government programs. Capitalists depend
on that purchasing power. Corporations now routinely carry more direct debt
than at any time in the nation's history. Zombie corporations-those whose
profits no longer suffice to service their direct debts-now figure sizably
in U.S. capitalism.
Once it was mostly private entities-rich families, banks, insurance
companies, and pension funds-that were the chief lenders to corporations.
They bought and held the corporate bonds and IOUs. Now those private lenders
increasingly sell their corporate bonds to the Federal Reserve. That happens
when the corporate loans get packaged into asset-backed securities sold to
the Federal Reserve. More recently, the Fed has undertaken the market
purchase of exchange-traded funds (ETFs) composed of corporate bonds and of
corporate bonds direct from their private issuers. It has also made "credit
facilities" directly available to corporations, tax-exempt entities, and
municipalities. As the lender of last (and fast-growing) resort, the state
becomes ever more the social basis of credit. The Federal Reserve is thus
gathering the means to directly control the allocation of credit in a
credit-dependent capitalism deeply threatened by its inherent cyclical
instability, a major viral pandemic, accumulated domestic social problems,
and growing international competition and isolation.
Key deals and intimate relationships between major non-financial
corporations and their banks once drew the special attention of careerist
politicians, students of capitalism, and also capitalism's critics. "Finance
capitalism" became an important new concept. As credit proliferated into all
aspects of capitalism and grew ever more central to its functioning, another
new term emerged, "financialization." Once mostly private, that is no longer
the case.
Perhaps we should call this latest phase: "state financialisation." The
state's central bank has become ever more important in controlling the
conditions and pathways of credit in capitalism. That has been increasingly
evident as capitalism lurched from the 2000 dot-com crisis to the 2008
subprime mortgage crisis and since. Credit provision by the Federal Reserve
is now crucial to U.S. capitalism's passage through the COVID-19 megacrisis
and beyond. It is crucial to capitalism's very survival.
The Federal Reserve now dispenses credit in historically unprecedented
dimensions. As they keep their system going, capitalists, the Federal
Reserve, and the rest of the government are feeling their way to a
U.S.-style fascism. Step by step, they recognize their mutual dependency and
sense the possibilities of credit as the cement-and perhaps the only
cement-to hold an alliance among them together. Yes, they worry about their
newly created mountain of money and how it might veer away from inflating
the stock market to inflating and disrupting other markets. But that concern
has been eclipsed by the urgency of saving a badly stumbling capitalism
today. Capitalists who once bemoaned soaring government deficits and
exploding national debts are mostly silent. They know that capitalism's
survival requires massive government, corporate, and household debts and
their monetization by the Federal Reserve. The system is teaching its elites
about the need for transition now from capitalism to fascism. Only for many
of those involved, that transition is not yet quite conscious or visible.
Fascism is what happens in capitalism when employers feel that (1) their
system's accumulated problems exceed its capacity to solve them and (2)
strong (often dictatorial) state intervention is needed for the capitalist
system to survive. Fascism can also be capitalism's response when the
victims of capitalism's inequalities (economic, political, and cultural) and
instabilities (business cycles) will no longer tolerate them. If and when
capitalism's critics-especially socialists-build a sufficient mass
consciousness and mobilize mass organizations that threaten capitalism with
major reforms or with revolution, capitalists can seek an alliance with a
strong political counterforce to construct a fascism. Such a strong
counterforce can be a politician or a political party that captures the
imaginations of masses of capitalism's victims but blames not capitalism but
rather immigrants or ethnic or religious minorities. If such politicians or
parties attack and oppose socialism and offer capitalists a mass base they
need but lack, capitalists will support them. Fascism-a merger of private
capitalists and a state that reinforces their system-will have arrived once
a fascist party acquires state power. Where socialists advocate system
change, fascists advocate nationalism understood as a merger of private
capitalism and the state apparatus to exalt some national ideal.
In contrast, socialism is what happens to capitalism when employees feel
that capitalism's accumulated problems exceed the employers' willingness or
the system's capacity to solve them. Socialists are those victims and
critics of capitalism who see it as the problem and system change as the
only real solution. By system change, socialists have typically meant
combinations of socialized (not private) ownership of means of production,
centrally planned (non-market) distributions of resources and products, and
democratic worker-coop-type (non-hierarchical) organizations of enterprises.
Socialists have long been interested in acquiring state power as a means to
accomplish system change. Exactly how much and how far system change should
extend has been fiercely contested among differing kinds of socialists, and
those issues are still hotly debated. Socialists from Marx on to the present
have likewise often associated with anarchists around a goal many shared:
what Lenin called "the withering away of the state." Socialists have usually
advocated internationalism-"workers of the world unite against
capitalism"-as against fascist's nationalism. These are some key differences
separating fascism from socialism.
Fascism merges private capitalism and the state. Political power then
enforces capitalism's basic rules: the economic dominance of the major
shareholders and their top directors and managers. In fascism, that
dominance extends from economic to also political and cultural realms of
social life. It goes well beyond the norm in non-fascist societies based on
capitalist economies. For example, labour unions are suppressed or converted
into state agencies. All independent labour activity is proscribed. For
another example, public education is restructured to serve and feed directly
into employment. Monetary policies, exchange rates, and trade balances are
managed to achieve nationalist objectives. Cultural institutions are
reconfigured and reorganized to celebrate fascism. In the early histories of
some fascist parties, socialist criticisms of capitalism were borrowed and
repeated to attract working-class adherents. Once those parties made their
deals and alliances with capitalists, those early socialist criticisms were
silenced and their authors expelled or worse.
In fascism, major shareholders and the boards of directors they elect make
all the key private enterprise decisions (what to produce, how, and with
which technology and how to use net revenues or profits) as in private
capitalism. However, top state officials wield major influences on
directors' decisions or may join them to take seats on the boards. The
fascist state typically silences capitalism's opponents usually on the
grounds that their activities constitute treasonous disloyalty. It likewise
destroys the political parties of socialists, communists, and other critics
of capitalism. For their part, the employers in fascism celebrate and fund
the fascist party and the state it runs.
U.S. capitalism's passage from a private to a state system of credit
creation is now viewed as necessary by both of its constituent partners.
Private capitalists, on the one hand, and the top political circles in both
major parties, on the other, are thus merging into a particular kind of
fascism. State financialisation facilitates that merger. That some of the
partners disagree with Trump and his traditional manipulations of fascist
symbols does not change the transition to fascism under way and accepted by
the consenting partners.
