Why Conservatives Love War and the State

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This
article originally appeared in Left
and Right
, Spring 1965, pp. 4-22, as “Left and Right: The
Prospects for Liberty.”

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, and 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 paper 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 18th 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 “nasty, brutish, and short”; here
was Maine’s “society of status” and Spencer’s “military society.”
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 18th 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 19th 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 superfeudal overlord
re-imposing 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 non-existent: the Italian cities, the
Hanseatic League, the confederation of 17th 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 (e.g., 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 17th century, the American
Revolution, and the French Revolution, all of which were necessary
to 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 “society of contract”; the
military society gave way partially to the “industrial society.”
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 sink of stagnation
and despair. 

Soon
there developed in Western Europe two great political ideologies,
centered around this new revolutionary phenomenon: the 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 “Left,”
and Conservatism on the extreme “Right,” 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 “Liberalism wishes for what ought to be, irrespective of what
is.” In working out this view, incidentally, it was Acton, not Trotsky,
who first arrived at the concept of the “permanent revolution.”
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 “what ought to be” over “what is,” was, he admitted, virtually
to install a “revolution in permanence.” 

The
“revolution in permanence,” 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… “Liberalism is essentially revolutionary,”
Acton observed. “Facts must yield to ideas. Peaceably and patiently
if possible. Violently if not.” [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, the
abandonment of natural rights and “higher law” 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 focussing 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 “rightward” in strategy
soon became a shift rightward in theory as well; so that Spencer
abandoned pure liberty even in theory e.g., in repudiating his famous
chapter in Social
Statics
, “The Right to Ignore the State.” 

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 “Left” 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 “left” 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 focussing. Socialism, like Liberalism and against Conservatism,
accepted the industrial system and the liberal goals of freedom,
reason, mobility, progress, higher living standards 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 “withering away of the State” and the “end of the
exploitation of man by man.” Interestingly enough, the very Marxian
phrase, the “replacement of the government of men by the administration
of things,” 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 “class struggle”;
except that for Dunoyer and Comte the inherently antithetical
classes were not businessmen vs. 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 “exploiters.”
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 “withering” for Marx), then
how is the “collective” 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 “Left,” 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 neo-mercantilism, 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 “social
imperialism,” which Joseph Schumpeter trenchantly defined as “an
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…” [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-1890’s, 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 “laisser faire and anti-imperialist” while hailing
the latter as “collectivists and imperialists.” 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 “still cling to the fixed
frontier ideals of individualist republicanism (and) non-interference.”
In contrast, “a Great Power …must govern (a world empire) in the
interests of civilization as a whole.” 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 any one 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 a “Brains Trust or General Staff” for the movement,
were: the Liberal-Imperialist Richard B. Haldane; the geo-politician
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 the First World War. [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
“own” national government in the war (with the honorable exception
of Eugene Victor Debs’ 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 re-establish 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 “purifying” 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 “conservative” 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 “social imperialist” camp. [9] Lenin’s camp turned more “left” 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 “leftist” 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 conceives 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. In recent years, the splits in the Leninist world have brought
to the fore a still more left-wing tendency: that of the Chinese.
In their almost exclusive stress on revolution in the undeveloped
countries, the Chinese have, in addition to scorning Right-wing
Marxist compromises with the State, unerringly centered their
hostility on feudal and quasi-feudal landholdings, on monopoly
concessions which have enmeshed capital with quasi-feudal land,
and on Western imperialism. In this virtual abandonment of the
classical Marxist emphasis on the working class, the Maoists have
concentrated Leninist efforts more closely on the overthrow of
the major bulwarks of the Old Order in the modern world. [10] 

Fascism
and Nazism were the logical 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 socio-economic content. For Communism
was a genuine revolutionary movement that ruthlessly displaced
and overthrew the old ruling lites; while Fascism, on the contrary,
cemented into power the old ruling classes. Hence, Fascism was
a counter-revolutionary movement that froze a set of monopoly
privileges upon society; in short, Fascism was the apotheosis
of modern State monopoly capitalism. [11] 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 1920’s and
early 1930’s. [12] 

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 “Fabian” and Communist “conspirators,”
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 “extreme right-winger”; slightly
to the left of him, then, lies 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 “right-wing libertarian” 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 16th 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 the First World
War. 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. [13] 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
1930’s – that is, until the mid-thirties, when the exigencies
of Soviet foreign relations caused a sharp shift of the world
Communist line to “Popular Front” 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 “social fascism”
– 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 “move to a form of dictatorship
of a war-type”; 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 “social-reformist ‘progressive’ camouflage,”
“the reality of the new Fascist type of system of concentrated
state capitalism and industrial servitude remains, ” including
an implicit “advance to war.” 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.” [14] 

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 “political
capitalism,” in the U.S. is found in the brilliant work of Dr. Gabriel
Kolko. In his Triumph
of Conservatism
, Kolko traces the origins of political
capitalism in the “reforms” 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 “monopolistic”;
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 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 business turned, increasingly after the 1900’s, 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 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 anti-business. 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,
e.g., insurance, banking, meat, exports, and business generally,
regulations that present-day Rightists think of as “socialistic”
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 “Gary Dinners” sponsored by that
Morgan company could dampen, Carnegie declared in 1908 that “it
always comes back to me that Government control, and that alone,
will properly solve the problem.” There is nothing alarming about
government regulation per se, announced Carnegie, “capital is
perfectly safe in the gas company, although it is under court
control. So will all capital be, although under Government control…” [15] 

The
Progressive Party, Kolko shows, was basically a Morgan-created party
to re-elect Roosevelt and punish President Taft, who had been over-zealous
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 “to do for general business” 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. [16] As would happen more dramatically in European Fascism,
each economic interest group was being cartellized and monopolized
and fitted into its privileged niche in a hierarchically-ordered
socio-economic 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 “cooperation,” Eddy trumpeted that “Competition is War,
and ‘War is Hell.'” [17] 

What
of the intellectuals of the Progressive period, damned by the
present-day Right as “socialistic”? Socialistic in a sense they
were, but what kind of “socialism”? 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 1880’s and 1890’s…[18]

The
ideal of the leading ultra-conservative German professors, moreover,
who were also called “socialists of the chair,” was consciously
to form themselves into the “intellectual bodyguard of the House
of Hohenzollern” – 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 1920’s 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 1920’s, but became
a part of the basic fabric of American society. [19]

Thus
the New Deal. After a bit of leftish wavering in the middle and
late ‘thirties, the Roosevelt Administration re-cemented its alliance
with big business in the national defense and war contract economy
that began in 1940. This was 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 neo-mercantilism,
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
moulded 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 moulding took place
amidst the adoption by business of the collectivist views of “enlightened”
sociologists and other social engineers. It is also clear that this
harmony of views is not simply the result of naivet by big businessmen
– not when such “naivet” coincides with the requirements of
compressing the worker and manager into the mould of willing servitor
in the great bureaucracy of the military-industrial machine. And,
under the guise of “democracy,” 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. “Me-tooism” – 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 1920’s, 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 attentions 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
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 FDR 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 new-found allies, soon began
to accept them and even don cheerfully the formerly despised label
of “conservative.” 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 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 “isolationist” forces were all identified, by
their enemies and subsequently by themselves, as men of the “Right.”
By the end of World War II, it was second nature for libertarians
to consider themselves at an “extreme right-wing” 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 “left-wing” tradition
which had included libertarians; and hence when the historical
aberration of the New Deal period corrected itself and the “Right-wing”
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 “allies.” 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 socialist and Communist, 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 18th 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 one’s 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 (i.e., 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. Secondly, 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 1930’s 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 1950’s. 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 de-socialization 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 desocialized so fast and so far that its economy is now
hardly more socialistic than that of France. The fact that people
calling themselves “Communists” 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 economy with any success. Indeed,
one follower of Mises in effect predicted this process of de-socialization
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. [20] 

Communist
countries, therefore, are increasingly and ineradicably forced
to de-socialize, 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 “objective conditions” 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 “subjective conditions”
for victory, i.e., 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 peopled 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 17th and 18th centuries faced odds much
more overwhelming than faces 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 18th 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 naive and simplistic view of strategy: that
liberty will win merely by educating more intellectuals, who in
turn will educate opinion-moulders, 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 about 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: 

youth
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. [21]

Notes

[1] Gertrude
Himmelfarb, Lord
Acton
(Chicago: University of Chicago Press, 1962), pp.
204-205. 

[2] Ibid.,
p. 209. 

[3] Cf.
Carl Becker, The
Declaration of Independence
(New York: Vintage Books ed.,
1958), Chapter VI. 

[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, “The Social
and Political Philosophy of Jean-Jacques Rousseau: Utopia and Ideology,”
The November Review (November, 1964), pp. 3-10. Also cf.,
Jurgen Ruhle, “The Philosopher of Hope: Ernst Bloch,” in Leopold
Labedz, ed., Revisionism
(New York: Praeger, 1962), pp. 166-178. 

[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 pre-capitalist 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: Harvard University press, 1960). 

[7] Leopold
S. Amery, My
Political Life
(London, 1953), quoted in Semmel, op. cit.,
pp. 74-75. 

[8] The
point, of course, is not that these men were products of some
“Fabian conspiracy”; 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 B. Davis. “Nations, Colonies, and Social Classes: The
Position of Marx and Engels,” Science and Society (Winter,
1965), pp. 26-43. 

[10] The
schismatic wing of the Trotskyist movement embodied in the International
Committee for the Fourth International is now the only sect within
Marxism-Leninism that continues to stress exclusively the industrial
working-class. 

[11] See
the penetrating article by Alexander J. Groth, “The ‘Isms’ in
Totalitarianism,” American Political Science Review (December,
1964), pp. 888-901. Groth writes: “The Communists… have generally
undertaken measures directly and indirectly uprooting existing
socio-economic lites: the landed nobility, business, large sections
of the middle class and the peasantry, as well as the bureaucratic
lites, 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 sway, typically from an agrarian
to an industrial economy… Fascism (both in the German and Italian
versions)…was socio-economically a counter-revolutionary movement…
It certainly did not dispossess or annihilate existent socio-economic
lites…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 ‘capitalist’ 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 socio-economic
lites?” Ibid., pp. 890-891. 

[12] 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
(Princeton: Van Nostrand, 1963). 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, i.e., 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. 

[13] Thus,
see Rothbard, passim. 

[14] R.
Palme Dutt, Fascism
and Social Revolution
(New York: International publishers,
1934), pp. 247-251. 

[15] See
Gabriel Kolko, The
Triumph of Conservatism: A Re-interpretation 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. 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, “ICC: Some Reminiscences on the
Future of American Transportation,” New Individualist Review
(Spring, 1963), pp. 3-15. 

[16] Kolko,
Triumph of Conservatism, p. 274. 

[17] 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 and Co., 1920). 

[18] Kolko,
Triumph of Conservatism, p. 214. 

[19] Ibid.,
pp. 286-287. 

[20] One
happy exception is William D. Grampp, “New Directions in the Communist
Economies,” 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.” Ibid., p. 35. The novel in question
is Henry Hazlitt, The Great Idea (New York: Appleton-Century-Crofts,
1951.) 

[21]
Randolph Bourne, “Youth,” The Atlantic Monthly (April,
1912); reprinted in Lillian Schlissel, ed., The
World of Randolph Bourne
(New York: E. P. Dutton and Co.,
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 executor. See
Murray’s books.

Copyright
2013 by the Ludwig von Mises Institute.
Permission to reprint in whole or in part is hereby granted, provided
full credit is given.

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