Left and Right: The Prospects for Liberty

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Originally
published in Left
and Right,
Spring 1965, this essay is collected in Egalitarianism
as a Revolt Against Nature and Other Essays, 2nd Edition
.

The Conservative
has long been marked, whether he knows it or not, by long-run pessimism:
by the belief that the long-run trend, and therefore time itself,
is against him. Hence, the inevitable trend runs toward left-wing
statism at home and communism abroad. It is this long-run despair
that accounts for the Conservative's rather bizarre short-run optimism,
for since the long run is given up as hopeless, the Conservative
feels that his only hope of success rests in the current moment.
In foreign affairs, this point of view leads the Conservative to
call for desperate showdowns with communism, for he feels that the
longer he waits the worse things will ineluctably become; at home,
it leads him to total concentration on the very next election, where
he is always hoping for victory and never achieving it. The quintessence
of the practical man, and beset by long-run despair, the Conservative
refuses to think or plan beyond the election of the day.

Pessimism,
however, both short-run and long-run, is precisely what the
prognosis of conservatism deserves, for conservatism is a dying
remnant of the ancien rgime of the preindustrial era, and,
as such, it has no future. In its contemporary American form,
the recent Conservative revival embodied the death throes of an
ineluctably moribund, fundamentalist, rural, small-town, white Anglo-Saxon
America. What, however, of the prospects for liberty? For
too many libertarians mistakenly link the prognosis for liberty
with that of the seemingly stronger and supposedly allied Conservative
movement; this linkage makes the characteristic long-run pessimism
of the modern Libertarian easy to understand. But this chapter contends
that, while the short-run prospects for liberty at home and abroad
may seem dim, the proper attitude for the Libertarian to take is
that of unquenchable long-run optimism.

The case for
this assertion rests on a certain view of history which holds, first,
that before the eighteenth century in Western Europe there existed
(and still continues to exist outside the West) an identifiable
Old Order. Whether the Old Order took the form of feudalism or Oriental
despotism, it was marked by tyranny, exploitation, stagnation, fixed
caste, and hopelessness and starvation for the bulk of the population.
In sum, life was u201Cnasty, brutish, and shortu201D; here was Maine's
u201Csociety of statusu201D and Spencer's u201Cmilitary society.u201D The ruling
classes, or castes, governed by conquest and by getting the masses
to believe in the alleged divine imprimatur to their rule.

The Old Order
was, and still remains, the great and mighty enemy of liberty; and
it was particularly mighty in the past because there was then no
inevitability about its overthrow. When we consider that
basically the Old Order had existed since the dawn of history, in
all civilizations, we can appreciate even more the glory and the
magnitude of the triumph of the liberal revolution of and around
the eighteenth century.

Part of the
dimensions of this struggle has been obscured by a great myth of
the history of Western Europe implanted by antiliberal German historians
of the late nineteenth century. The myth held that the growth of
absolute monarchies and of mercantilism in the early modern era
was necessary for the development of capitalism, since these served
to liberate the merchants and the people from local feudal restrictions.
In actuality, this was not at all the case; the king and his nation-State
served rather as a super-feudal overlord reimposing and reinforcing
feudalism just as it was being dissolved by the peaceful growth
of the market economy. The king superimposed his own restrictions
and monopoly privileges onto those of the feudal regime. The absolute
monarchs were the Old Order writ large and made even more despotic
than before. Capitalism, indeed, flourished earliest and most actively
precisely in those areas where the central State was weak or nonexistent:
the Italian cities, the Hanseatic League, the confederation of seventeenth-century
Holland. Finally, the Old Order was overthrown or severely shaken
in its grip in two ways. One was by industry and the market expanding
through the interstices of the feudal order (for example, industry
in England developing in the countryside beyond the grip of feudal,
State and guild restrictions). More important was a series of cataclysmic
revolutions that blasted loose the Old Order and the old ruling
classes: the English Revolutions of the seventeenth century, the
American Revolution, and the French Revolution, all of which were
necessary for the ushering in of the Industrial Revolution and of
at least partial victories for individual liberty, laissez-faire,
separation of church and state, and international peace. The society
of status gave way, at least partially, to the u201Csociety of contractu201D;
the military society gave way partially to the u201Cindustrial society.u201D
The mass of the population now achieved a mobility of labor and
place, and accelerating expansion of their living standards, for
which they had scarcely dared to hope. Liberalism had indeed brought
to the Western world not only liberty, the prospect of peace, and
the rising living standards of an industrial society, but above
all, perhaps, it brought hope, a hope in ever-greater progress that
lifted the mass of mankind out of its age-old sinkhole of stagnation
and despair.

Soon there
developed in Western Europe two great political ideologies, centered
around this new revolutionary phenomenon: one was liberalism, the
party of hope, of radicalism, of liberty, of the Industrial Revolution,
of progress, of humanity; the other was conservatism, the party
of reaction, the party that longed to restore the hierarchy, statism,
theocracy, serfdom, and class exploitation of the Old Order. Since
liberalism admittedly had reason on its side, the Conservatives
darkened the ideological atmosphere with obscurantist calls for
romanticism, tradition, theocracy, and irrationalism. Political
ideologies were polarized, with liberalism on the extreme u201Cleft,u201D
and conservatism on the extreme u201Cright,u201D of the ideological spectrum.
That genuine liberalism was essentially radical and revolutionary
was brilliantly perceived, in the twilight of its impact, by the
great Lord Acton (one of the few figures in the history of thought
who, charmingly, grew more radical as he grew older). Acton
wrote that u201CLiberalism wishes for what ought to be, irrespective
of what is.u201D In working out this view, incidentally, it was Acton,
not Trotsky, who first arrived at the concept of the u201Cpermanent
revolution.u201D As Gertrude Himmelfarb wrote in her excellent study
of Acton:

. . . his
philosophy develop(ed) to the point where the future was seen
as the avowed enemy of the past, and where the past was allowed
no authority except as it happened to conform to morality. To
take seriously this Liberal theory of history, to give precedence
to u201Cwhat ought to beu201D over u201Cwhat is,u201D was, he admitted, virtually
to install a u201Crevolution in permanence.u201D

The u201Crevolution
in permanence,u201D as Acton hinted in the inaugural lecture and admitted
frankly in his notes, was the culmination of his philosophy of
history and theory of politics. . . . This idea of conscience,
that men carry about with them the knowledge of good and evil,
is the very root of revolution, for it destroys the sanctity of
the past. . . . u201CLiberalism is essentially revolutionary,u201D Acton
observed. u201CFacts must yield to ideas. Peaceably and patiently
if possible. Violently if not.u201D

[1]

The Liberal,
wrote Acton, far surpassed the Whig:

The Whig
governed by compromise. The Liberal begins the reign of ideas.
. . . One is practical, gradual, ready for compromise. The other
works out a principle philosophically. One is a policy aiming
at a philosophy. The other is a philosophy seeking a policy.

[2]

What happened
to liberalism? Why then did it decline during the nineteenth century?
This question has been pondered many times, but perhaps the basic
reason was an inner rot within the vitals of liberalism itself.
For, with the partial success of the Liberal Revolution in the West,
the Liberals increasingly abandoned their radical fervor and, therefore,
their liberal goals, to rest content with a mere defense of the
uninspiring and defective status quo. Two philosophical roots
of this decay may be discerned. First is the abandonment of natural
rights and u201Chigher lawu201D theory for utilitarianism, for only forms
of natural or higher law theory can provide a radical base outside
the existing system from which to challenge the status quo; and
only such theory furnishes a sense of necessary immediacy to the
libertarian struggle by focusing on the necessity of bringing existing
criminal rulers to the bar of justice. Utilitarians, on the other
hand, in abandoning justice for expediency, also abandon immediacy
for quiet stagnation and inevitably end up as objective apologists
for the existing order.

The second
great philosophical influence on the decline of liberalism was evolutionism,
or Social Darwinism, which put the finishing touches to liberalism
as a radical force in society. For the Social Darwinist erroneously
saw history and society through the peaceful, rose-colored glasses
of infinitely slow, infinitely gradual social evolution. Ignoring
the prime fact that no ruling caste in history has ever voluntarily
surrendered its power, and that, therefore, liberalism had to break
through by means of a series of revolutions, the Social Darwinists
looked forward peacefully and cheerfully to thousands of years of
infinitely gradual evolution to the next supposedly inevitable stage
of individualism.

An interesting
illustration of a thinker who embodies within himself the decline
of liberalism in the nineteenth century is Herbert Spencer. Spencer
began as a magnificently radical liberal, indeed virtually a pure
libertarian. But, as the virus of sociology and Social Darwinism
took over in his soul, Spencer abandoned libertarianism as a dynamic
historical movement, although at first without abandoning it in
pure theory. In short, while looking forward to an eventual ideal
of pure liberty, Spencer began to see its victory as inevitable,
but only after millennia of gradual evolution, and thus, in actual
fact, Spencer abandoned liberalism as a fighting, radical creed
and confined his liberalism in practice to a weary, rear-guard action
against the growing collectivism of the late nineteenth century.
Interestingly enough, Spencer's tired shift u201Crightwardu201D in strategy
soon became a shift rightward in theory as well, so that Spencer
abandoned pure liberty even in theory, for example, in repudiating
his famous chapter in Social
Statics
, u201CThe Right to Ignore the State.u201D

In England,
the classical liberals began their shift from radicalism to quasi-conservatism
in the early nineteenth century; a touchstone of this shift was
the general British liberal attitude toward the national liberation
struggle in Ireland. This struggle was twofold: against British
political imperialism and against feudal landlordism which had been
imposed by that imperialism. By their Tory blindness toward the
Irish drive for national independence, and especially for peasant
property against feudal oppression, the British Liberals (including
Spencer) symbolized their effective abandonment of genuine liberalism,
which had been virtually born in a struggle against the feudal land
system. Only in the United States, the great home of radical liberalism
(where feudalism had never been able to take root outside the South),
did natural rights and higher-law theory, and consequent radical
liberal movements, continue in prominence until the mid-nineteenth
century. In their different ways, the Jacksonian and Abolitionist
movements were the last powerful radical libertarian movements in
American life.

[3]

Thus, with
liberalism abandoned from within, there was no longer a party of
hope in the Western world, no longer a u201CLeftu201D movement to lead a
struggle against the state and against the unbreached remainder
of the Old Order. Into this gap, into this void created by the drying
up of radical liberalism, there stepped a new movement: socialism.
Libertarians of the present day are accustomed to think of socialism
as the polar opposite of the libertarian creed. But this is a grave
mistake, responsible for a severe ideological disorientation of
libertarians in the present world. As we have seen, conservatism
was the polar opposite of liberty; and socialism, while to the u201Cleftu201D
of conservatism, was essentially a confused, middle-of-the-road
movement. It was, and still is, middle-of-the-road because it tries
to achieve liberal ends by the use of conservative means.

In short, Russell
Kirk, who claims that socialism was the heir of classical liberalism,
and Ronald Hamowy, who sees socialism as the heir of conservatism,
are both right; for the question is on what aspect of this confused
centrist movement we happen to be focusing. Socialism, like liberalism
and against conservatism, accepted the industrial system and the
liberal goals of freedom, reason, mobility, progress, higher
living standards for the masses, and an end to theocracy and war;
but it tried to achieve these ends by the use of incompatible, conservative
means: statism, central planning, communitarianism, etc. Or rather,
to be more precise, there were from the beginning two different
strands within socialism: one was the right-wing, authoritarian
strand, from Saint-Simon down, which glorified statism, hierarchy,
and collectivism and which was thus a projection of conservatism
trying to accept and dominate the new industrial civilization. The
other was the left-wing, relatively libertarian strand, exemplified
in their different ways by Marx and Bakunin, revolutionary and far
more interested in achieving the libertarian goals of liberalism
and socialism; but especially the smashing of the state apparatus
to achieve the u201Cwithering away of the Stateu201D and the u201Cend of the
exploitation of man by man.u201D Interestingly enough, the very Marxian
phrase, the u201Creplacement of the government by men by the
administration of things,u201D can be traced, by a circuitous route,
from the great French radical laissez-faire liberals of the early
nineteenth century, Charles Comte (no relation to Auguste Comte)
and Charles Dunoyer. And so, too, may the concept of the u201Cclass
struggleu201D; except that for Dunoyer and Comte the inherently antithetical
classes were not businessmen versus workers, but the producers in
society (including free businessmen, workers, peasants, etc.) versus
the exploiting classes constituting, and privileged by, the State
apparatus.

[4]

Saint-Simon at one time in his confused and chaotic life was
close to Comte and Dunoyer and picked up his class analysis from
them, in the process characteristically getting the whole thing
balled up and converting businessmen on the market, as well as
feudal landlords and others of the State privileged, into u201Cexploiters.u201D
Marx and Bakunin picked this up from the Saint-Simonians, and the
result gravely misled the whole left-socialist movement; for, then,
in addition to smashing the repressive State, it became supposedly
necessary to smash private capitalist ownership of the means of
production. Rejecting private property, especially of capital, the
left socialists were then trapped in a crucial inner contradiction:
if the State is to disappear after the revolution (immediately for
Bakunin, gradually u201Cwitheringu201D for Marx), then how is the u201Ccollectiveu201D
to run its property without becoming an enormous State itself in
fact, even if not in name? This was a contradiction which neither
the Marxists nor the Bakuninists were ever able to resolve.

Having replaced
radical liberalism as the party of the u201Cleft,u201D socialism, by the
turn of the twentieth century, fell prey to this inner contradiction.
Most socialists (Fabians, Lassalleans, even Marxists) turned sharply
rightward, completely abandoned the old libertarian goals and ideals
of revolution and the withering away of the State and became cozy
conservatives permanently reconciled to the State, the status
quo, and the whole apparatus of neomercantilism, State monopoly
capitalism, imperialism, and war that was rapidly being established
and riveted on European society at the turn of the twentieth century.
For conservatism, too, had re-formed and regrouped to try to cope
with a modern industrial system and had become a refurbished mercantilism,
a regime of statism, marked by State monopoly privilege, in direct
and indirect forms, to favored capitalists and to quasi-feudal landlords.
The affinity between right socialism and the new conservatism became
very close, the former advocating similar policies but with a demagogic
populist veneer. Thus, the other side of the coin of imperialism
was u201Csocial imperialism,u201D which Joseph Schumpeter trenchantly defined
as u201Can imperialism in which the entrepreneurs and other elements
woo the workers by means of social welfare concessions which appear
to depend on the success of export monopolism.u201D

[5]

Historians
have long recognized the affinity, and the welding together, of
right-wing socialism with conservatism in Italy and Germany, where
the fusion was embodied first in Bismarckism and then in fascism
and national socialism – the latter fulfilling the Conservative
program of nationalism, imperialism, militarism, theocracy, and
a right-wing collectivism that retained and even cemented the rule
of the old privileged classes. But only recently have historians
begun to realize that a similar pattern occurred in England and
the United States. Thus, Bernard Semmel, in his brilliant history
of the social-imperialist movement in England at the turn of the
twentieth century, shows how the Fabian Society welcomed the rise
of the imperialists in England.

[6]

When, in the mid-1890s, the Liberal Party in England split
into the radicals on the left and the liberal-imperialists on the
right, Beatrice Webb, co-leader of the Fabians, denounced the radicals
as u201Claissez-faire and anti-imperialists,u201D while hailing the latter
as u201Ccollectivists and imperialists.u201D An official Fabian manifesto,
Fabianism and the Empire (1900), drawn up by George Bernard
Shaw (who was later, with perfect consistency, to praise the domestic
policies of Stalin and Mussolini and Sir Oswald Mosley),
lauded imperialism and attacked the radicals, who u201Cstill cling to
the fixed-frontier ideals of individualist republicanism (and) noninterference.u201D
In contrast, u201Ca Great Power . . . must govern (a world empire) in
the interests of civilization as a whole.u201D After this, the Fabians
collaborated closely with Tories and liberal-imperialists. Indeed,
in late 1902, Sidney and Beatrice Webb established a small, secret
group of brain-trusters, called The Coefficients; as one of the
leading members of this club, the Tory imperialist, Leopold S. Amery,
revealingly wrote:

Sidney and
Beatrice Webb were much more concerned with getting their ideas
of the welfare state put into practice by anyone who might be
prepared to help, even on the most modest scale, than with the
early triumph of an avowedly Socialist Party. . . . There was,
after all, nothing so very unnatural, as [Joseph] Chamberlain's
own career had shown, in a combination of Imperialism in external
affairs with municipal socialism or semi-socialism at home.

[7]

Other members
of The Coefficients, who, as Amery wrote, were to function as u201CBrain
Trusts or General Staffu201D for the movement, were: the liberal-imperialist
Richard B. Haldane; the geopolitician Halford J. Mackinder; the
Imperialist and Germanophobe Leopold Maxse, publisher of the National
Review; the Tory socialist and imperialist Viscount Milner;
the naval imperialist Carlyon Bellairs; the famous journalist J.
L. Garvin; Bernard Shaw; Sir Clinton Dawkins, partner of the Morgan
Bank; and Sir Edward Grey, who, at a meeting of the club first adumbrated
the policy of Entente with France and Russia that was to eventuate
in World War I.

[8]

The famous
betrayal during World War I of the old ideals of revolutionary pacifism
by the European Socialists, and even by the Marxists, should have
come as no surprise; that each Socialist Party supported its u201Cownu201D
national government in the war (with the honorable exception of
Eugene Victor Debs's Socialist Party in the United States) was the
final embodiment of the collapse of the classic Socialist Left.
From then on, Socialists and quasi-Socialists joined Conservatives
in a basic amalgam, accepting the state and the mixed economy (=
neo-mercantilism = the welfare state = interventionism = state monopoly
capitalism, merely synonyms for the same essential reality). It
was in reaction to this collapse that Lenin broke out of the Second
International to reestablish classic revolutionary Marxism in a
revival of left socialism.

In fact, Lenin,
almost without knowing it, accomplished more than this. It
is common knowledge that u201Cpurifyingu201D movements, eager to return
to a classic purity shorn of recent corruptions, generally purify
further than what had held true among the original classic sources.
There were, indeed, marked u201Cconservativeu201D strains in the writings
of Marx and Engels themselves which often justified the State, Western
imperialism, and aggressive nationalism, and it was these motifs,
in the ambivalent views of the masters on this subject, that provided
the fodder for the later shift of the majority Marxists into the
u201Csocial imperialistu201D camp.

[9]

Lenin's camp turned more u201Cleftu201D than had Marx and Engels themselves.
Lenin had a decidedly more revolutionary stance toward the State
and consistently defended and supported movements of national liberation
against imperialism. The Leninist shift was more u201Cleftistu201D in other
important senses as well. For while Marx had centered his attack
on market capitalism per se, the major focus of Lenin's concerns
was on what he conceived to be the highest stages of capitalism:
imperialism and monopoly. Hence Lenin's focus, centering as it did
in practice on State monopoly and imperialism rather than
on laissez-faire capitalism, was in that way far more congenial
to the Libertarian than that of Karl Marx.

Fascism and
Nazism were the local culmination in domestic affairs of the modern
drift toward right-wing collectivism. It has become customary among
libertarians, as indeed among the Establishment of the West, to
regard fascism and communism as fundamentally identical. But while
both systems were indubitably collectivist, they differed greatly
in their socioeconomic content. Communism was a genuine revolutionary
movement that ruthlessly displaced and overthrew the old ruling
elites, while fascism, on the contrary, cemented into power the
old ruling classes. Hence, fascism was a counterrevolutionary movement
that froze a set of monopoly privileges upon society; in short,
fascism was the apotheosis of modern State monopoly capitalism.

[10]

Here was the reason that fascism proved so attractive (which
communism, of course, never did) to big business interests in the
West – openly and unabashedly so in the 1920s and early 1930s.

[11]

We are now
in a position to apply our analysis to the American scene. Here
we encounter a contrasting myth about recent American history which
has been propagated by current conservatives and adopted by most
American libertarians. The myth goes approximately as follows: America
was, more or less, a haven of laissez-faire until the New Deal;
then Roosevelt, influenced by Felix Frankfurter, the Intercollegiate
Socialist Society, and other u201CFabianu201D and communist u201Cconspirators,u201D
engineered a revolution which set America on the path to socialism,
and further on beyond the horizon, to communism. The present-day
libertarian who adopts this or a similar view of the American experience,
tends to think of himself as an u201Cextreme right-wingeru201D; slightly
to the left of him, then, stands the conservative, to the left of
that the middle-of-the-road, and then leftward to socialism and
communism. Hence, the enormous temptation for some libertarians
to red-bait; for, since they see America as drifting inexorably
leftward to socialism and, therefore, to communism, the great temptation
is for them to overlook the intermediary stages and tar all of their
opposition with the hated Red brush.

One would think
that the u201Cright-wing Libertarianu201D would quickly be able to see some
drastic flaws in this conception. For one thing, the income tax
amendment, which he deplores as the beginning of socialism in America,
was put through Congress in 1909 by an overwhelming majority of
both parties. To look at this event as a sharp leftward move toward
socialism would require treating President William Howard Taft,
who put through the Sixteenth Amendment, as a Leftist, and surely
few would have the temerity to do that. Indeed, the New Deal was
not a revolution in any sense; its entire collectivist program
was anticipated: proximately by Herbert Hoover during the depression,
and, beyond that, by the war-collectivism and central planning that
governed America during World War I. Every element in the New Deal
program: central planning, creation of a network of compulsory cartels
for industry and agriculture, inflation and credit expansion, artificial
raising of wage rates and promotion of unions within the overall
monopoly structure, government regulation and ownership, all this
had been anticipated and adumbrated during the previous two decades.

[12]

And this program, with its privileging of various big business
interests at the top of the collectivist heap, was in no sense reminiscent
of socialism or leftism; there was nothing smacking of the egalitarian
or the proletarian here. No, the kinship of this burgeoning collectivism
was not at all with socialism-communism but with fascism, or socialism-of-the-right,
a kinship which many big businessmen of the twenties expressed openly
in their yearning for abandonment of a quasi-laissez-faire system
for a collectivism which they could control. And, surely, William
Howard Taft, Woodrow Wilson, and Herbert Clark Hoover make far more
recognizable figures as proto-Fascists than they do as crypto-communists.

The essence
of the New Deal was seen, far more clearly than in the Conservative
mythology, by the Leninist movement in the early 1930s; that is,
until the mid-thirties, when the exigencies of Soviet foreign relations
caused a sharp shift of the world communist line to u201CPopular Frontu201D
approval of the New Deal. Thus, in 1934, the British Leninist theoretician
R. Palme Dutt published a brief but scathing analysis of the New
Deal as u201Csocial fascismu201D – as the reality of fascism cloaked
with a thin veneer of populist demagogy. No Conservative opponent
has ever delivered a more vigorous or trenchant denunciation of
the New Deal. The Roosevelt policy, wrote Dutt, was to u201Cmove to
a form of dictatorship of a war-typeu201D; the essential policies were
to impose a State monopoly capitalism through the NRA, to subsidize
business, banking, and agriculture through inflation and the partial
expropriation of the mass of the people through lower real-wage
rates and to the regulation and exploitation of labor by means of
government-fixed wages and compulsory arbitration. When the New
Deal, wrote Dutt, is stripped of its u201Csocial-reformist u2018progressive'
camouflage,u201D u201Cthe reality of the new Fascist type of system of concentrated
State capitalism and industrial servitude remains,u201D including an
implicit u201Cadvance to war.u201D Dutt effectively concluded with a quote
from an editor of the highly respected Current History Magazine:

The new America
[the editor had written in mid-1933] will not be capitalist in
the old sense, nor will it be socialist. If at the moment the
trend is towards fascism, it will be an American fascism, embodying
the experience, the traditions, and the hopes of a great middle-class
nation.

[13]

Thus, the New
Deal was not a qualitative break from the American past; on the
contrary, it was merely a quantitative extension of the web of State
privilege that had been proposed and acted upon before: in Hoover's
administration, in the war collectivism of World War I, and in the
Progressive Era. The most thorough exposition of the origins of
State monopoly capitalism, or what he calls u201Cpolitical capitalism,u201D
in the United States is found in the brilliant work of Dr. Gabriel
Kolko. In The
Triumph of Conservatism
, Kolko traces the origins of political
capitalism in the u201Creformsu201D of the Progressive Era. Orthodox historians
have always treated the Progressive period (roughly 1900–1916) as
a time when free-market capitalism was becoming increasingly u201Cmonopolisticu201D;
in reaction to this reign of monopoly and big business, so the story
runs, altruistic intellectuals and far-seeing politicians turned
to intervention by the government to reform and to regulate these
evils. Kolko's great work demonstrates that the reality was almost
precisely the opposite of this myth. Despite the wave of mergers
and trusts formed around the turn of the century, Kolko reveals,
the forces of competition on the free market rapidly vitiated and
dissolved these attempts at stabilizing and perpetuating the economic
power of big business interests. It was precisely in reaction to
their impending defeat at the hands of the competitive storms of
the market that big business turned, increasingly after the 1900s,
to the federal government for aid and protection. In short, the
intervention by the federal government was designed, not to curb
big business monopoly for the sake of the public weal, but to create
monopolies that big business (as well as trade associations of smaller
business) had not been able to establish amidst the competitive
gales of the free market. Both left and right have been persistently
misled by the notion that intervention by the government is ipso
facto leftish and antibusiness. Hence the mythology of the New-Fair
Deal-as-Red that is endemic on the right. Both the big businessmen,
led by the Morgan interests, and Professor Kolko, almost uniquely
in the academic world, have realized that monopoly privilege can
only be created by the State and not as a result of free-market
operations.

Thus, Kolko
shows that, beginning with Theodore Roosevelt's New Nationalism
and culminating in Wilson's New Freedom, in industry after industry,
for example, insurance, banking, meat, exports and business generally,
regulations that present-day rightists think of as u201Csocialisticu201D
were not only uniformly hailed, but conceived and brought about
by big businessmen. This was a conscious effort to fasten upon the
economy a cement of subsidy, stabilization, and monopoly privilege.
A typical view was that of Andrew Carnegie; deeply concerned about
competition in the steel industry, which neither the formation of
U.S. Steel nor the famous u201CGary Dinnersu201D sponsored by that Morgan
company could dampen, Carnegie declared in 1908 that u201Cit always
comes back to me that government control, and that alone, will properly
solve the problem.u201D There is nothing alarming about government regulation
per se, announced Carnegie, u201Ccapital is perfectly safe in
the gas company, although it is under court control. So will all
capital be, although under government control.u201D

[14]

The Progressive
Party, Kolko shows, was basically a Morgan-created party to reelect
Roosevelt and punish President Taft, who had been overzealous in
prosecuting Morgan enterprises; the leftish social workers often
unwittingly provided a demagogic veneer for a conservative-statist
movement. Wilson's New Freedom, culminating in the creation of the
Federal Trade Commission, far from being considered dangerously
socialistic by big business, was welcomed enthusiastically as putting
their long-cherished program of support, privilege, and regulation
of competition into effect (and Wilson's war collectivism was welcomed
even more exuberantly). Edward N. Hurley, chairman of the Federal
Trade Commission and formerly president of the Illinois Manufacturers
Association, happily announced in late 1915, that the Federal Trade
Commission was designed u201Cto do for general businessu201D what the ICC
had been eagerly doing for the railroads and shippers, what the
Federal Reserve was doing for the nation's bankers, and what the
Department of Agriculture was accomplishing for the farmers.

[15]

As would happen more dramatically in European fascism, each
economic interest group was being cartelized and monopolized and
fitted into its privileged niche in a hierarchically-ordered socioeconomic
structure. Particularly influential were the views of Arthur Jerome
Eddy, an eminent corporation lawyer who specialized in forming trade
associations and who helped to father the Federal Trade Commission.
In his magnum opus fiercely denouncing competition in business
and calling for governmentally-controlled and protected industrial
u201Ccooperation,u201D Eddy trumpeted that u201CCompetition is War, and u2018War
is Hell'.u201D

[16]

What of the
intellectuals of the Progressive period, damned by the present-day
Right as u201Csocialisticu201D? Socialistic in a sense they were, but what
kind of u201Csocialismu201D? The conservative state socialism of Bismarck's
Germany, the prototype for so much of modern European – and
American – political forms, and under which the bulk of American
intellectuals of the late nineteenth century received their higher
education. As Kolko puts it:

The conservatism
of the contemporary intellectuals . . . the idealization of the
state by Lester Ward, Richard T. Ely, or Simon N. Patten . . .
was also the result of the peculiar training of many of the American
academics of this period. At the end of the nineteenth century
the primary influence in American academic social and economic
theory was exerted by the universities. The Bismarckian idealization
of the state, with its centralized welfare functions . . . was
suitably revised by the thousands of key academics who studied
in German universities in the 1880s and 1890s.

[17]

The ideal of
the leading ultraconservative German professors, moreover, who were
also called u201Csocialists of the chair,u201D was consciously to form themselves
into the u201Cintellectual bodyguard of the House of Hohenzollernu201D –
and that they surely were.

As an exemplar
of the Progressive intellectual, Kolko aptly cites Herbert Croly,
editor of the Morgan-financed New Republic. Systematizing
Theodore Roosevelt's New Nationalism, Croly hailed this new Hamiltonianism
as a system for collectivist federal control and integration of
society into a hierarchical structure. Looking forward from the
Progressive Era, Gabriel Kolko concludes that:

a synthesis
of business and politics on the federal level was created during
the war, in various administrative and emergency agencies, that
continued throughout the following decade. Indeed, the war period
represents the triumph of business in the most emphatic manner
possible . . . big business gained total support from the various
regulatory agencies and the Executive. It was during the war that
effective, working oligopoly and price and market agreements became
operational in the dominant sectors of the American economy. The
rapid diffusion of power in the economy and relatively easy entry
virtually ceased. Despite the cessation of important new legislative
enactments, the unity of business and the federal government continued
throughout the 1920s and thereafter, using the foundations laid
in the Progressive Era to stabilize and consolidate conditions
within various industries. . . . The principle of utilizing the
federal government to stabilize the economy, established in the
context of modern industrialism during the Progressive Era, became
the basis of political capitalism in its many later ramifications.

In this
sense progressivism did not die in the 1920s, but became a part
of the basic fabric of American society.

[18]

Thus the New
Deal. After a bit of leftish wavering in the middle of the late
thirties, the Roosevelt administration recemented its alliance with
big business in the national defense and war contract economy that
began in 1940. This is an economy and a polity that has been ruling
America ever since, embodied in the permanent war economy, the full-fledged
State monopoly capitalism and neomercantilism, the military-industrial
complex of the present era. The essential features of American society
have not changed since it was thoroughly militarized and politicized
in World War II – except that the trends intensify, and even
in everyday life men have been increasingly molded into conforming
organization men serving the State and its military–industrial
complex. William H. Whyte, Jr., in his justly famous book, The
Organization Man, made clear that this molding took place amidst
the adoption by business of the collectivist views of u201Cenlightenedu201D
sociologists and other social engineers. It is also clear that this
harmony of views is not simply the result of navet by big businessmen
– not when such u201Cnavetu201D coincides with the requirements of
compressing the worker and manager into the mold of willing servitor
in the great bureaucracy of the military-industrial machine. And,
under the guise of u201Cdemocracy,u201D education has become mere mass drilling
in the techniques of adjustment to the task of becoming a cog in
the vast bureaucratic machine.

Meanwhile,
the Republicans and Democrats remain as bipartisan in forming and
supporting this establishment as they were in the first two decades
of the twentieth century. u201CMe-tooismu201D – bipartisan support
of the status quo that underlies the superficial differences
between the parties – did not begin in 1940.

How did the
corporal's guard of remaining libertarians react to these shifts
of the ideological spectrum in America? An instructive answer may
be found by looking at the career of one of the great libertarians
of twentieth-century America – Albert Jay Nock. In the 1920s,
when Nock had formulated his radical libertarian philosophy, he
was universally regarded as a member of the extreme Left, and he
so regarded himself as well. It is always the tendency, in ideological
and political life, to center one's attention on the main enemy
of the day, and the main enemy of that day was the conservative
statism of the Coolidge-Hoover administration; it was natural, therefore,
for Nock, his friend and fellow-libertarian H. L. Mencken and other
radicals to join quasi-Socialists in battle against the common foe.
When the New Deal succeeded Hoover, on the other hand, the milk-and-water
socialists and vaguely leftish Interventionists hopped on the New
Deal bandwagon; on the Left only the Libertarians such as Nock and
Mencken and the Leninists (before the Popular Front period) realized
that Roosevelt was only a continuation of Hoover in other rhetoric.
It was perfectly natural for the radicals to form a united front
against Roosevelt with the older Hoover and Al Smith conservatives
who either believed Roosevelt had gone too far or disliked his flamboyant
populistic rhetoric. But the problem was that Nock and his fellow
radicals, at first properly scornful of their newfound allies, soon
began to accept them and even don cheerfully the formerly despised
label of u201CConservative.u201D With the rank-and-file radicals, this shift
took place, as have so many transformations of ideology in history,
unwittingly and in default of proper ideological leadership; for
Nock, and to some extent for Mencken, on the other hand, the problem
cut far deeper.

For there had
always been one grave flaw in the brilliant and finely-honed libertarian
doctrine hammered out in their very different ways by Nock and Mencken;
both had long adopted the great error of pessimism. Both saw no
hope for the human race ever adopting the system of liberty; despairing
of the radical doctrine of liberty ever being applied in practice,
each in his own personal way retreated from the responsibility of
ideological leadership, Mencken joyously and hedonically, Nock haughtily
and secretively. Despite the massive contribution of both men to
the cause of liberty, therefore, neither could ever become the conscious
leader of a libertarian movement, for neither could ever envision
the party of liberty as the party of hope, the party of revolution,
or a fortiori, the party of secular messianism. The error
of pessimism is the first step down the slippery slope that leads
to conservatism; and hence it was all too easy for the pessimistic
radical Nock, even though still basically a Libertarian, to accept
the conservative label and even come to croak the old platitude
that there is an a priori presumption against any social
change.

It is fascinating
that Albert Jay Nock thus followed the ideological path of his beloved
spiritual ancestor Herbert Spencer; both began as pure radical Libertarians,
both quickly abandoned radical or revolutionary tactics as embodied
in the will to put their theories into practice through mass action,
and both eventually glided from Tory tactics to at least a partial
toryism of content.

And so the
Libertarians, especially in their sense of where they stood in the
ideological spectrum, fused with the older Conservatives who were
forced to adopt libertarian phraseology (but with no real libertarian
content) in opposing a Roosevelt administration that had become
too collectivistic for them, either in content or in rhetoric. World
War II reinforced and cemented this alliance; for, in contrast to
all the previous American wars of the century, the pro-peace and
u201Cisolationistu201D forces were all identified, by their enemies and
subsequently by themselves, as men of the u201CRight.u201D By the end of
World War II, it was second nature for libertarians to consider
themselves at an u201Cextreme right-wingu201D pole with the Conservatives
immediately to the left of them; and hence the great error of the
spectrum that persists to this day. In particular, the modern libertarians
forgot or never realized that opposition to war and militarism had
always been a u201Cleft-wingu201D tradition which had included Libertarians;
and hence when the historical aberration of the New Deal period
corrected itself and the u201Cright-wingu201D was once again the great partisan
of total war, the Libertarians were unprepared to understand what
was happening and tailed along in the wake of their supposed conservative
u201Callies.u201D The liberals had completely lost their old ideological
markings and guidelines.

Given a proper
reorientation of the ideological spectrum, what then would be the
prospects for liberty? It is no wonder that the contemporary Libertarian,
seeing the world going socialistic and communistic, and believing
himself virtually isolated and cut off from any prospect of united
mass action, tends to be steeped in long-run pessimism. But the
scene immediately brightens when we realize that that indispensable
requisite of modern civilization – the overthrow of the Old
Order – was accomplished by mass libertarian action erupting
in such great revolutions of the West as the French and American
Revolutions, and bringing about the glories of the Industrial Revolution
and the advances of liberty, mobility, and rising living standards
that we still retain today. Despite the reactionary swings backward
to statism, the modern world stands towering above the world of
the past. When we consider also that, in one form or another, the
Old Order of despotism, feudalism, theocracy, and militarism dominated
every human civilization until the West of the eighteenth century,
optimism over what man has and can achieve must mount still higher.

It might be
retorted, however, that this bleak historical record of despotism
and stagnation only reinforces pessimism, for it shows the persistence
and durability of the Old Order and the seeming frailty and evanescence
of the New – especially in view of the retrogression of the
past century. But such superficial analysis neglects the great change
that occurred with the revolution of the New Order, a change that
is clearly irreversible. For the Old Order was able to persist in
its slave system for centuries precisely because it awoke no expectations
and no hopes in the minds of the submerged masses; their lot was
to live and eke out their brutish subsistence in slavery while obeying
unquestioningly the commands of their divinely appointed rulers.
But the liberal revolution implanted indelibly in the minds of the
masses – not only in the West but in the still feudally-dominated
undeveloped world – the burning desire for liberty, for land
to the peasantry, for peace between the nations, and, perhaps above
all, for the mobility and rising standards of living that can only
be brought to them by an industrial civilization. The masses will
never again accept the mindless serfdom of the Old Order; and given
these demands that have been awakened by liberalism and the Industrial
Revolution, long-run victory for liberty is inevitable.

For
only liberty, only a free market, can organize and maintain an industrial
system, and the more that population expands and explodes, the more
necessary is the unfettered working of such an industrial economy.
Laissez-faire and the free market become more and more evidently
necessary as an industrial system develops; radical deviations cause
breakdowns and economic crises. This crisis of statism becomes particularly
dramatic and acute in a fully socialist society; and hence the inevitable
breakdown of statism has first become strikingly apparent in the
countries of the socialist (that is, communist) camp. For socialism
confronts its inner contradiction most starkly. Desperately, it
tries to fulfill its proclaimed goals of industrial growth, higher
standards of living for the masses, and eventual withering away
of the State and is increasingly unable to do so with its collectivist
means. Hence the inevitable breakdown of socialism. This progressive
breakdown of socialist planning was at first partially obscured.
For, in every instance, the Leninists took power not in a developed
capitalist country as Marx had wrongly predicted, but in a country
suffering from the oppression of feudalism. Second, the Communists
did not attempt to impose socialism upon the economy for many years
after taking power; in Soviet Russia until Stalin's forced collectivization
of the early 1930s reversed the wisdom of Lenin's New Economic Policy,
which Lenin's favorite theoretician, Bukharin, would have extended
onward towards a free market. Even the supposedly rabid Communist
leaders of China did not impose a socialist economy on that country
until the late 1950s. In every case, growing industrialization has
imposed a series of economic breakdowns so severe that the communist
countries, against their ideological principles, have had to retreat
step by step from central planning and return to various degrees
and forms of a free market. The Liberman Plan for the Soviet Union
has gained a great deal of publicity; but the inevitable process
of desocialization has proceeded much further in Poland, Hungary,
and Czechoslovakia. Most advanced of all is Yugoslavia, which, freed
from Stalinist rigidity earlier than its fellows, in only a dozen
years has de-socialized so fast and so far that its economy is now
hardly more socialistic than that of France. The fact that people
calling themselves u201Ccommunistsu201D are still governing the country
is irrelevant to the basic social and economic facts. Central planning
in Yugoslavia has virtually disappeared. The private sector not
only predominates in agriculture but is even strong in industry,
and the public sector itself has been so radically decentralized
and placed under free pricing, profit-and-loss tests and a cooperative
worker-ownership of each plant that true socialism hardly exists
any longer. Only the final step of converting workers' syndical
control to individual shares of ownership remains on the path toward
outright capitalism. Communist China and the able Marxist theoreticians
of Monthly Review have clearly discerned the situation and
have raised the alarm that Yugoslavia is no longer a socialist country.

One would think
that free-market economists would hail the confirmation and increasing
relevance of the notable insight of Professor Ludwig von Mises a
half-century ago: that socialist states, being necessarily devoid
of a genuine price system, could not calculate economically and,
therefore, could not plan their economies with any success. Indeed,
one follower of Mises, in effect, predicted this process of desocialization
in a novel some years ago. Yet neither this author nor other free-market
economists have given the slightest indication of even recognizing,
let alone saluting, this process in the communist countries –
perhaps because their almost hysterical view of the alleged threat
of communism prevents them from acknowledging any dissolution in
the supposed monolith of menace.

[19]

Communist countries,
therefore, are increasingly and ineradicably forced to desocialize
and will, therefore, eventually reach the free market. The state
of the undeveloped countries is also cause for sustained libertarian
optimism. For all over the world, the peoples of the undeveloped
nations are engaged in revolution to throw off their feudal Old
Order. It is true that the United States is doing its mightiest
to suppress the very revolutionary process that once brought it
and Western Europe out of the shackles of the Old Order; but it
is increasingly clear that even overwhelming armed might cannot
suppress the desire of the masses to break through into the modern
world.

We
are left with the United States and the countries of Western Europe.
Here, the case for optimism is less clear, for the quasi-collectivist
system does not present as stark a crisis of self-contradiction
as does socialism. And yet, here, too, economic crisis looms in
the future and gnaws away at the complacency of the Keynesian economic
managers: creeping inflation, reflected in the aggravating balance-of-payments
breakdown of the once almighty dollar; creeping secular unemployment
brought about by minimum wage scales; and the deeper and long-run
accumulation of the uneconomic distortions of the permanent war
economy. Moreover, potential crises in the United States are not
merely economic; there is a burgeoning and inspiring moral ferment
among the youth of America against the fetters of centralized bureaucracy,
of mass education in uniformity, and of brutality and oppression
exercised by the minions of the State.

Furthermore,
the maintenance of a substantial degree of free speech and democratic
forms facilitates, at least in the short run, the possible growth
of a libertarian movement. The United States is also fortunate in
possessing, even if half-forgotten beneath the statist and tyrannical
overlay of the last half-century, a great tradition of libertarian
thought and action. The very fact that much of this heritage is
still reflected in popular rhetoric, even though stripped of its
significance in practice, provides a substantial ideological groundwork
for a future party of liberty.

What the Marxists
would call the u201Cobjective conditionsu201D for the triumph of liberty
exist, then, everywhere in the world and more so than in any past
age; for everywhere the masses have opted for higher living standards
and the promise of freedom and everywhere the various regimes of
statism and collectivism cannot fulfill these goals. What is needed,
then, is simply the u201Csubjective conditionsu201D for victory; that is,
a growing body of informed libertarians who will spread the message
to the peoples of the world that liberty and the purely free market
provide the way out of their problems and crises. Liberty cannot
be fully achieved unless libertarians exist in number to guide the
peoples to the proper path. But perhaps the greatest stumbling block
to the creation of such a movement is the despair and pessimism
typical of the Libertarian in today's world. Much of that pessimism
is due to his misreading of history and his thinking of himself
and his handful of confreres as irredeemably isolated from the masses
and, therefore, from the winds of history. Hence he becomes a lone
critic of historical events rather than a person who considers himself
as part of a potential movement which can and will make history.
The modern Libertarian has forgotten that the Liberal of the seventeenth
and eighteenth centuries faced odds much more overwhelming than
those which face the Liberal of today; for in that era before the
Industrial Revolution, the victory of liberalism was far from inevitable.
And yet the liberalism of that day was not content to remain a gloomy
little sect; instead, it unified theory and action. Liberalism grew
and developed as an ideology and, leading and guiding the masses,
made the revolution which changed the fate of the world. By its
monumental breakthrough, this revolution of the eighteenth century
transformed history from a chronicle of stagnation and despotism
to an ongoing movement advancing toward a veritable secular utopia
of liberty and rationality and abundance. The Old Order is dead
or moribund; and the reactionary attempts to run a modern society
and economy by various throwbacks to the Old Order are doomed to
total failure. The Liberals of the past have left to modern Libertarians
a glorious heritage, not only of ideology but of victories against
far more devastating odds. The Liberals of the past have also left
a heritage of the proper strategy and tactics for libertarians to
follow, not only by leading rather than remaining aloof from the
masses, but also by not falling prey to short-run optimism. For
short-run optimism, being unrealistic, leads straightway to disillusion
and then to long-run pessimism; just as, on the other side of the
coin, long-run pessimism leads to exclusive and self-defeating concentration
on immediate and short-run issues. Short-run optimism stems, for
one thing, from a nave and simplistic view of strategy: that liberty
will win merely by educating more intellectuals, who in turn will
educate opinion-molders, who in turn will convince the masses, after
which the State will somehow fold its tent and silently steal away.
Matters are not that easy. For libertarians face not only a problem
of education but also a problem of power, and it is a law of history
that a ruling caste has never voluntarily given up its power.

But the problem
of power is, certainly in the United States, far in the future.
For the Libertarian, the main task of the present epoch is to cast
off his needless and debilitating pessimism, to set his sights on
long-run victory and to set out on the road to its attainment. To
do this, he must, perhaps first of all, drastically realign his
mistaken view of the ideological spectrum; he must discover who
his friends and natural allies are, and above all perhaps, who his
enemies are. Armed with this knowledge, let him proceed in the spirit
of radical long-run optimism that one of the great figures in the
history of libertarian thought, Randolph Bourne, correctly identified
as the spirit of youth. Let Bourne's stirring words serve also as
the guidepost for the spirit of liberty:

[Y]outh
is the incarnation of reason pitted against the rigidity of tradition;
youth puts the remorseless questions to everything that is old
and established – Why? What is this thing good for? And when
it gets the mumbled, evasive answers of the defenders it applies
its own fresh, clean spirit of reason to institutions, customs
and ideas and finding them stupid, inane or poisonous, turns instinctively
to overthrow them and build in their place the things with which
its visions teem. . . .

Youth is
the leaven that keeps all these questioning, testing attitudes
fermenting in the world. If it were not for this troublesome activity
of youth, with its hatred of sophisms and glosses, its insistence
on things as they are, society would die from sheer decay. It
is the policy of the older generation as it gets adjusted to the
world to hide away the unpleasant things where it can, or preserve
a conspiracy of silence and an elaborate pretense that they do
not exist. But meanwhile the sores go on festering just the same.
Youth is the drastic antiseptic. . . . It drags skeletons from
closets and insists that they be explained. No wonder the older
generation fears and distrusts the younger. Youth is the avenging
Nemesis on its trail. . . .

Our elders
are always optimistic in their views of the present, pessimistic
in their views of the future; youth is pessimistic toward the
present and gloriously hopeful for the future. And it is this
hope which is the lever of progress – one might say, the
only lever of progress. . . .

The secret
of life is then that this fine youthful spirit shall never be
lost. Out of the turbulence of youth should come this fine precipitate
– a sane, strong, aggressive spirit of daring and doing.
It must be a flexible, growing spirit, with a hospitality to new
ideas and a keen insight into experience. To keep one's reactions
warm and true is to have found the secret of perpetual youth,
and perpetual youth is salvation.

[20]

 

References:

[1]

Gertrude Himmelfarb, Lord
Acton
(Chicago: University of Chicago Press, 1962),
pp. 204–05.

[2]

Ibid., p. 209.

[3]

Carl Becker, The
Declaration of Independence
(New York: Vintage Books,
1958), chap. 6.

[4]

The information about Comte and Dunoyer, as well, indeed,
as the entire analysis of the ideological spectrum, I owe to
Mr. Leonard P. Liggio. For an emphasis on the positive and dynamic
aspect of the Utopian drive, much traduced in our time, see
Alan Milchman, u201CThe Social and Political Philosophy of Jean-Jacques
Rousseau: Utopia and Ideology,u201D The November Review (November,
1964): 3–10. Also cf. Jurgen Ruhle, u201CThe Philosopher of Hope:
Ernst Bloch,u201D in Leopold Labedz, ed., Revisionism
(New York: Praeger, 1962), pp. 166–78.

[5]

Joseph A. Schumpeter, Imperialism and Social Classes
(New York: Meridian Books, 1955), p. 175. Schumpeter, incidentally,
realized that, far from being an inherent stage of capitalism,
modern imperialism was a throwback to the precapitalist imperialism
of earlier ages, but with a minority of privileged capitalists
now joined to the feudal and military castes in promoting imperialist
aggression.

[6]

Bernard Semmel, Imperialism
and Social Reform: English Social-Imperial Thought, 1895–1914

(Cambridge, Mass.: Harvard University Press, 1960).

[7]

Leopold S. Amery, My Political Life (1953). Quoted
in Semmel, Imperialism and Social Reform, pp. 74–75.

[8]

The point, of course, is not that these men were products
of some u201CFabian conspiracy,u201D but, on the contrary, that Fabianism,
by the turn of the century, was socialism so conservatized as
to be closely aligned with the other dominant neo-Conservative
trends in British political life.

[9]

Thus, see Horace O. Davis, u201CNations, Colonies, and Social
Classes: The Position of Marx and Engels,u201D Science and Society
(Winter, 1965): 26–43.

[10]

See the penetrating article by Alexander J. Groth, u201CThe
u2018Isms' in Totalitarianism,u201D American Political Science Review
(December, 1964): 888–901. Groth writes:

The
Communists . . . have generally undertaken measures directly
and indirectly uprooting existing socioeconomic elites: the
landed nobility, business, large sections of the middle class
and the peasantry, as well as the bureaucratic elites, the
military, the civil service, the judiciary, and the diplomatic
corps. . . . Second, in every instance of Communist seizure
of power there has been a significant ideological–propagandistic
commitment toward a proletarian or workers' state . . . [which]
has been accompanied by opportunities for upward social mobility
for the economically lowest classes, in terms of education
and employment, which invariably have considerably exceeded
the opportunities available under previous regimes. Finally,
in every case, the Communists have attempted to change basically
the character of the economic systems which fell under their
say, typically from an agrarian to an industrial economy.
. . .

Fascism
(both in the German and Italian versions) . . . was socioeconomically
a counter-revolutionary movement. . . . It certainly did not
dispossess or annihilate existent socioeconomic elites. .
. . Quite the contrary, Fascism did not arrest the trend toward
monopolistic private concentrations in business but instead
augmented this tendency. . . .

Undoubtedly,
the Fascist economic system was not a free-market economy,
and hence not u201Ccapitalistu201D if one wishes to restrict the use
of this term to a laissez-faire system. But did it not operate
. . . to preserve in being and maintain the material rewards
of, the existing socioeconomic elites?

[11]

For examples of the attractions of fascist and right-wing
collectivist ideas and plans for American big businessmen in
this era, see Murray N. Rothbard, America's
Great Depression
(Auburn, Ala.: Mises Institute, 2000).
Also cf. Gaetano Salvemini and George LaPiana, What to Do
With Italy (New York: Duell, Sloan, and Pearce, 1943), pp.
65ff.

Of the
fascist economy, Salvemini perceptively wrote: "In actual
fact, it is the State, that is, the taxpayer who has become
responsible to private enterprise. In Fascist Italy the State
pays for the blunders of private enterprise. . . . Profit is
private and individual. Loss is public and social." Gaetano
Salvemini, Under
the Axe of Fascism
(London: Victor Gollancz, 1936),
p. 416.

[12]

Thus, see Rothbard, passim.

[13]

R. Palme Dutt, Fascism and Social Revolution (New
York: International Publishers, 1934), pp. 247–51.

[14]

See Gabriel Kolko, The
Triumph of Conservativm: A Reinterpretation of American History,
1900–1916
(Glencoe, Ill.: The Free Press, 1963), pp.
173 and passim. For an example of the way in which Kolko has
already begun to influence American historiography, see David
T. Gilchrist and W. David Lewis, eds., Economic Change in
the Civil War Era (Greenville, Del.: Eleutherian Mills–Hagley
Foundation, 1965), p. 115. Kolko's complementary and confirmatory
work on railroads, Railroads
and Regulation, 1877–1916
(Princeton, N.J.: Princeton
University Press, 1965) comes too late to be considered here.
A brief treatment of the monopolizing role of the ICC for the
railroad industry may be found in Christopher D. Stone, u201CICC:
Some Reminiscences on the Future of American Transportation,u201D
New
Individualist Review
(Spring, 1963): pp. 3–15.

[15]

Kolko, The Triumph of Conservatism, p. 274.

[16]

Arthur Jerome Eddy, The
New Competition: An Examination of the Conditions Underlying
the Radical Change that is Taking Place in the Commercial and
Industrial World – The Change from a Competitive to a Cooperative
Basis
(7th ed., Chicago: A.C. McClurg, 1920).

[17]

Kolko, The Triumph of Conservatism,p. 214.

[18]

Ibid., pp. 286–87.

[19]

One happy exception is William D. Grampp, u201CNew Directions
in the Communist Economics,u201D Business Horizons (Fall,
1963): pp. 29–36. Grampp writes:

Hayek
said that centralized planning will lead to serfdom. It follows
that a decrease in the economic authority of the State should
lead away from serfdom. The Communist countries may show that
to be true. It would be a withering away of the state the Marxists
have not counted on nor has it been anticipated by those who
agree with Hayek. (p. 35)

The novel
in question is Henry Hazlitt, The Great Idea (New York:
Appleton-Century-Crofts, 1951).

[20]

Randolph Bourne, u201CYouth,u201D The Atlantic Monthly (April,
1912); reprinted in Lillian Schlissel, ed., The World of
Randolph Bourne (New York: E.P. Dutton, 1965), pp. 9–11,
15.

Murray
N. Rothbard
(1926–1995) was dean of the Austrian School,
founder of modern libertarianism, and chief academic officer of
the Mises Institute. He was
also editor — with Lew Rockwell — of The
Rothbard-Rockwell Report
, and appointed Lew as his literary
executor. See
his books.

The
Best of Murray Rothbard

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