Fascism Deconstructed: The Policies of National Socialism

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Fascism Deconstructed: The Policies of National Socialism” was originally published by the Liberty Institute of Freedom and Economics (LIFE).

Fascism is a pejorative in society, but does society truly understand what it means to be a fascist? The socialists have deceived the public into believing that fascism is the most grotesque evolution of capitalism, but this simply is not the case. This article will cut through the societal definitions of the fascists, giving the true meaning of national socialism, paying attention to the philosophical, political, and economic roots of fascism. As the article lays out the totalitarian, anti-property, and subjectivist nature of fascism, it will transition into the development of a true antifascist strategy, which will include advocacy for decentralization, private property, free trade, lower taxes, the right of association and disassociation, the removal of the State from private life and the physical removal of those who would implement such an authoritarian system upon our communities.

What the Nazis have to say about Fascism

On February 24, 1920, the Nazis released their party platform. Among their 25 planks are policies such as old age pensions, the territorial expansion of the State (imperialism), universal employment (public works), the abolition of income without “labor,” the end of interest and rent, the nationalization of industry, wealth redistribution, a dedication to the common good, the provision of free higher education, and the prohibition of child labor.

Looking at the Nazi Party Platform, we can see that capitalism and small government has nothing to do with fascism. To partake in understatement, the free market, personal liberty, and self-ownership does not exist within a national socialist state. The Nazis believed that classical liberalism had failed the world and that the State was the remedy to whatever illness the world could ever face. As the Nazi Platform shows, adherents to national socialism had no concern for the basic laws of economics (this article will soon show that the Nazis did not even believe in the laws of economics).

Perhaps most damaging is the Nazis’ dedication to the common good. As individuals become just a part of a whole, they become expendable. This dedication to violent, state-sponsored collectivism is exactly what allowed Hitler to demonize the Jews and other minorities so that he could commit the horrific acts of genocide within the Holocaust.

Fascism opposes Economics.

In a 1937 speech, Hitler stated the following:

I am not going to tell you That in place of these economic theories Of the others I am now going to put it a national Socialist economic theory. I would like to avoid the term theory altogether. Yes I would even like to say that what I am going to tell you today Is not intended to be a theory at all. Because if I recognize any dogma at all in the economic sector, then it is only the one dogma that there is no dogma in this sector, no theory at all.

In the statement, Hitler rejects the very concept of economics. He rejects supply and demand, the law of diminishing marginal returns, the socialist calculation problem, and every other insight economics has provided humanity.

This rejection of economics, however, is not original to Hitler. It largely originates from the German Historical School, spear-headed by Gustav von Schmoller. The German Historical School was of the persuasion that economic law was a sham. Rather than looking at economics as a set of universal propositions, advocates of the Historical School saw economics as a series of empirical incidents that will vary across time and place. To these individuals, there are no laws of economics that could hold back an omnipotent government.

In “The Historical Setting of the Austrian School of Economics,” Ludwig von Mises shows how Hitler was largely inspired by the German Historical School. It makes sense that he would be, after all. Economic law inherently limits a dictator. Hitler needed to find a way to get past the basic economic laws which confine humanity, and he found a theory that rejects these limitations in the Historical School. For more information on the German Historical School, please see Dr. David Gordon’s “The Philosophical Origins of Austrian Economics.”

In Human Action, Mises discussed this anti-capitalistic mentality that intoxicated Hitler, and still continue to intoxicate the masses today:

The issue has been obfuscated by the endeavors of governments and powerful pressure groups to disparage economics and to defame the economists. Despots and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law. Are they not the supreme legislators? Don’t they have the power to crush every opponent? No war lord is prone to acknowledge any limits other than those imposed on him by a superior armed force. Servile scribblers are always ready to foster such complacency by expounding the appropriate doctrines. They call their garbled presumptions “historical economics.” In fact, economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics.
It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics as such is a challenge to the conceit of those in power. An economist can never be a favorite of autocrats and demagogues. With them he is always the mischief-maker, and the more they are inwardly convinced that his objections are well founded, the more they hate him.
If one tries to refute the devastating, criticism leveled by economics against the suitability of all these interventionist schemes, one is forced to deny the very existence—not to mention the epistemological claims—of a science of economics, and of praxeology as well. This is what all the champions of authoritarianism, government omnipotence, and “welfare” policies have always done. They blame economics for being “abstract” and advocate a “visualizing” (anschaulich) mode of dealing with the problems involved. They emphasize that matters in this field are too complicated to be described in formulas and theorems. They assert that the various nations and races are so different from one another that their actions cannot be comprehended by a uniform theory; there are as many economic theories required as there are nations and races. Others add that even within the same nation or race, economic action is different in various epochs of history. These and similar objections, often incompatible with one another, are advanced in order to discredit economics as such….

To summarize Mises, it is the ego of a dictator and a democratic mass that endangers the public. Their blatant disregard for economic law sets a society on a path to destruction and ruin, and the history of government resoundingly proves this. Hitler’s deliberate ignorance of economics only adds to the anti-human nature of national socialism.

National Socialism Needs a Centrally Planned Economy

Hitler, when addressing the concept of economic freedom versus state planning, made the following statement:

If Germany intends to live, then it must run its whole economy in a manner that is clear and planned. We cannot manage without a plan. If we were to let things run on according to the principle that everyone may do as he likes, then in a very short time this freedom would end upon a terrible famine. No, we have to conduct our business and run our economy according to plan. Therefore the National Socialist government cannot be dependent on any individual interests. It cannot be dependent on the city or the country, not on workers and not on employers. It cannot be dependent on industry, on the crafts, on trade or on finance. It can only accept one obligation… The nation alone is our master, and we serve this nation to the best of our knowledge and belief.

What the following statement demonstrates is that Hitler did not see the market as the means to prosperity. Rather, he believed that the State can plan a society to create prosperity. If it was economic, Hitler believed the government could do it better than the market could. Simply put, Hitler did not believe in economic freedom. He believed in the State.

The National Socialists Reject Honest Money

In 1939, Hitler gave his position on the gold standard:

Today we smile about a time when our political economists actually did believe that the value of a currency depended on the amount of gold and foreign currency reserves piled up in the safes of the state banks and that it was guaranteed by these. We have learned instead of the value of a currency lies in the production capacity of a nation, that increasing production is what holds up a currency, even revalues it under certain circumstances, whereas any declining production results must sooner or later lead to an automatic devaluation of the currency. And at a time when the financial and economic theologists in the other countries prophesied our collapse every 3 to 6 months, the National Socialist state stabilized the value of its currency by increasing production most extraordinarily. An actual relationship was created between increasing German production and the currency in circulation.

Hitler saw fiat currency as an incredible moral virtue. Such a currency would give the State massive influence over the population, which is the true defining characteristic of National Socialism. It is with all this in mind that we can see that Hitler and the Nazis clearly rejected capitalism. They did not see the free market, private property, or self-ownership as a path to prosperity. They only valued omnipotent government.

Fascism: The State Above All Else

While one may simply dismiss Hitler and the Nazis’ economic ignorance as the ramblings of a madman, but it makes sense when you understand the philosophical aim of fascism: the State having complete and total control. Fascism placed the power of the State above all else, which explains their disregard for the economic law, their admiration for central planning, and their dedication to fiat currency.

But the national socialists did not just place the State above economics. They placed the State above you.

Fascism is another Color of Socialism

In Omnipotent Government, Mises pointed out that fascism was a “third way” between capitalism and communism. While the national socialists were not communists, they were socialists. Mises expounds on German National socialism in the following:

The German pattern differs from the Russian one in that it (seemingly and nominally) maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets. There are, however, no longer entrepreneurs but only shop managers (Betriebsfuhrer). These shop managers do the buying and selling, pay the workers, the contract debts, and pay interest and amortization. There is no labor market; wages and salaries are fixed by the government. The government 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.

So, while the people owned private property according to German Law, the ownership of private property was in name and in name only.

Fascism is the Rejection of Private Property

Mises was not the only person to identify the lack of private property in Nazi Germany. In fact, the Nazis openly embraced this, and it crippled German Business. Hitler elaborated upon his views on private property here:

Our socialism reaches much deeper. It does not change the external order of things. It orders solely the relationship of man to the state. Then what do property and income count for? Why should we need to socialize the banks and the factories? We are socializing the people.

So, the businesses can have property by decree, but it doesn’t matter. The people are owned by the State in a National Socialist economy. In truth, Hitler’s socialism runs deeper than the socialism of the Soviet Union. It doesn’t matter if you own “private property” in a fascist state (or a state in general), for the State owns you.

Doing Business under Fascism

If the socialist lie that fascism is late stage capitalism was true, then the ease of doing business must certainly be irrefutable. This, however, is not the case. In The Vampire Economy, Gunter Reimann described what it was like to do business under the Nazis. To put it shortly, business owners did not own their businesses. Workers did not own their bargaining rights. No one but the State-owned anything.

Things became so bad for the businessman in Nazi Germany, that they were described as “white Jews” in a letter Reimann retrieved from a German businessman. In that same letter, the businessman laments the lack of price flexibility, the increase in regulations, the increase in taxation, the confiscation of private property, and the complete revocation of the right to use your profit as you see fit.

Matters weren’t any better for the German worker either. Whereas the Nazis demanded a “fair wage,” the workers’ hours drastically increased. The workers who worked just six hours per day were forced to work anywhere from eleven to twelve hours per week. The Nazis would also force women and children into employment to make family income look even better.

Just like all socialists, fascists reject private property.

As alluded to before, the fascist’s reverence for the State led to the destruction of private property. Reimann points this out by telling the story of a German landowner known as Herr V, who was forced to even quarter German troops in his home. After having enough, Herr V decided to go to a bank to invest his funds in something the State cannot touch by purchasing a farm in West Africa. The banker informed him that the State will not allow you to leave with your property. One can “own” property in Nazi Germany, but we all know the State is the true owner under fascism.

With businesses, it was just as bad. The State had the authority to go through the books of businesses. Any errors would lead to a fine of millions of Marks. These regulations were just another means of expropriating private property from the people. In fact, the Nazi regime repealed the right to private property on February 28, 1933, with the abolition of article 153 of the Weimar Constitution.

The business owners were replaced with Betriebsführer or business managers. Since you did not truly own your property, you were just a tenant of this “fiat” property. In other words, in order to keep “your” property, you must not only follow the law. You must be completely servile to the State. In fascism, the State owns you.

The Reality of Fascism in America

This article would seem irrelevant if we believed the only fascist regimes were those of Nazi Germany, Mussolini’s Italy, and Franco’s Spain. But that simply is not the case. We must accept the reality that the United States has become a fascist government.

The US has been a fascist country since FDR ushered in the administrative state through the New Deal. Under Roosevelt’s policies, businesses were directed to produce for “the common good” instead of individual profit. The welfare state grew exponentially to compel dependence upon the State from the people.

The economic law has been entirely rejected. The central banks and the bureaucracy have the authority to regulate as they see fit. Private property is a sham. The government taxes and regulated everything. On top of the welfare state is a massive warfare state.  The private sector has been cartelized, production has been heavily subsidized. The people revere the police state as the source of peace. Our rights are denied in the name of security.

Another indicator is the US’s worship of its leaders. Paul Craig Roberts identified this by saying, “Like Brownshirts, the new conservatives take personally any criticism of their leader and his policies. To be a critic is to be an enemy.” the Left has adopted this as well. Any criticism of Barack Obama or Hillary Clinton is seen as treason. If the people are sensitive of criticisms of Trump and Obama, they are intolerable to criticisms of individuals such as Lincoln or FDR. But if this isn’t enough, consider John Flynn’s Eight Marks of Fascist Policy.

  1. Government is totalitarian because it acknowledges no restraint on its power.
  2. Government is a de facto dictatorship based on the Leadership Principle.
  3. The government administers a “capitalist” system with an immense bureaucracy.
  4. Producers are organized into cartels in the way of syndicalism.
  5. Economic planning based on the principle of Autarky.
  6. Government sustains economic life by spending and borrowing.
  7. Militarism is a mainstay of government spending.
  8. The military has imperialist aims.

Toward an Antifascist Alliance

As Lew Rockwell points out in Fascism vs. Capitalism, the federal government has turned the US into a fascist nation, and therefore we must fight fascism in America. Rockwell did give us a brief word on anti-fascist strategy. In essence, we must be capitalists to fight fascism.

“I can think of no greater priority today than a serious and effective antifascist alliance. In many ways, one is already forming. It is not a formal alliance. It is made up of those who protest the Fed, those who refuse to go along with mainstream fascist politics, those who seek decentralization, those who demand lower taxes and free trade, those who seek the right to associate with anyone they want and buy and sell in terms of their own choosing, those who insist they can educate their children on their own, the investors and savers who make economic growth possible, those who do not want to be felt up at airports, and those who have become expatriates.
It is also made of the millions of independent entrepreneurs who are discovering that the number one threat to their ability to serve others through the commercial marketplace is the institution that claims to be our biggest benefactor: the government.” Lew Rockwell, Fascism vs. Capitalism.

In other words, to fight against fascism, we must fight for freedom. One of the top flaws of fascism is its reactionary nature. It was built to stop communism but ultimately became just as bad, with an even deeper socialism in which the people become socialized. We cannot continue with negative activism. We must have a positive goal. Being in favor of freedom first inherently makes one against communism, fascism, and all other forms of statism. This is how to fight American fascism.

Recommended Reading

“Hitler and Economics” by Tom Woods (delivered at Mises University 2018)

The Vampire Economy by Gunter Reimann

Fascism vs. Capitalism by Lew Rockwell

Omnipotent Government by Ludwig von Mises

“Nazi Socialism” by F. A. Hayek

A Theory of Socialism and Capitalism by Hans-Hermann Hoppe

The Wages of Destruction by Adam Tooze

Hitler: The Policies of Seduction by Rainer Zitelmann

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