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-M. Stanton Evans, “Can Conservatives Change the Media?” Heritage Foundation Resource Bank lecture, August 7, 1990

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Fascism and the New Deal

“The word 'Fascism' has now no meaning except in so far as it signifies ‘something not desirable’," wrote George Orwell in 1946. He asked, “Since you don't know what Fascism is, how can you struggle against Fascism?”^[1]

Corporativist ideas had been popular with British socialists and Fabians, as well as American progressives such as Herbert Croly, Edward Bellamy and Colonel House since the late 19th century.

Mussolini was a Marxist who took over the Italian Socialist Party at the Congress of Reggio Emilia in 1912, expelling his opponents and espousing doctrinaire Marxism, prompting Lenin to write, “the party of the Italian socialist proletariat has taken the right path.”^[2]

In 1917, Lenin took over Russia, the following year imposing socialism (“War Communism”); it quickly and spectacularly failed, resulting in mass famine and economic collapse. In response to this failure, communists like Oskar Lange and Georges Sorel theorized about a “third way” between capitalism and socialism; Lange called his theory “market socialism”;^[3] Sorel meanwhile adopted “syndicalism,” a type of guild socialism.

While Lenin's “New Economic Policy” (1921-28) followed Lange, Mussolini's Fascism followed Sorel;^[4] National Socialism, emerging from the shattered remains of the Austro-Hungarian Empire, promised yet another a “third way” between capitalism and communism,^[5] uniting proletarian and bourgeois to fight for the state and race. It was in this atmosphere that the New Deal took shape.

"[T]he New Deal was often compared with Fascism," according to cultural historian Wolfgang Schivelbusch. "Italy had several years earlier begun the transition from a liberal free-market system to a state-run or corporatist one."^[6] “The slogan into which the Nazis condensed their economic philosophy, Gemeinnutz geht vor Eigennutz (i.e., the commonweal ranks above private profit) is likewise the idea underlying the American New Deal,” wrote Ludwig von Mises.^[7]

"There was hardly a commentator who failed to see elements of Italian corporatism in Roosevelt's managed economy under the National Recovery Administration, the institution formed in 1933 to maintain mandatory production and price 'codes' for American industry," wrote Schivelbusch. Even "intellectual observers of economics and social policies who were otherwise Roosevelt allies... saw a Fascist element at the core of the New Deal."^[8]

Roosevelt and his supporters saw the New Deal in revolutionary and dictatorial terms: First Lady Eleanor Roosevelt “lamented that the nation lacked a benevolent dictator] to force through reforms."^[9] Soviet intelligence source^[10] Walter Lippmann told Roosevelt, "The situation is critical, Franklin. You may have no alternative but to assume dictatorial powers";^[11] in his influential column, Lippmann added that the use of "'dictatorial powers,' if that is the name for it—is essential.'"^[12] The New York Herald Tribune approved the Inauguration with the headline "FOR DICTATORSHIP IF NECESSARY."^[13] In response to a hit Hollywood movie featuring as hero a President who “dissolves Congress, creates an army of the unemployed, and lines up his enemies before a firing squad,” FDR wrote that he thought the film “would help the country.”^[14]

The mood in Washington at FDR's inauguration was “strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan” reported The New York Times. “America today literally asks for orders.” The Roosevelt administration, reported the Times, “envisages a federation of industry, labor and government after the fashion of the corporative State as it exists in Italy.”^[15] George Soule, editor of the pro-Roosevelt New Republic magazine, wrote, "We are trying out the economics of Fascism without having suffered all its social or political ravages."^[16] In the North American Review, the progressive writer Roger Shaw described the New Deal as “Fascist means to gain liberal ends.”^[17] "We in America,” wrote liberal journalist Mauritz Hallgren, “are being forced rapidly and definitely into Fascism..."^[18]

Mussolini was convinced that the New Deal was copying Fascist economic policies.^[19] "Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices," wrote Mussolini in a review of FDR's book Looking Forward. "Without question, the mood accompanying this sea-change is reminiscent of Fascism." Mussolini wrote that the book New Frontiers, by FDR's Secretary of Agriculture Henry A. Wallace was "just as 'corporativistic' as the individual solutions put forth in it... The book leaves no doubt that it is on the road to corporatism..."^[20]

Nazi Minister of Economics Hjalmar Schacht declared that Roosevelt had the same economic idea as Hitler and Mussolini;^[21] the official Nazi Party organ, Völkischer Beobachter, applauded “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies,” commenting, "Many passages in [Roosevelt's] book Looking Forward could have been written by a National Socialist."^[22]

Hitler himself admired FDR’s approach, saying, “I have sympathy with President Roosevelt because he marches straight toward his objective over Congress, over lobbies, over stubborn bureaucracies.”^[23] Hitler likewise expressed "admiration" for Roosevelt's economic policies, and said he was in accord with" Roosevelt's "moral demand," which he identified as the "quintessence of German philosophy of the State," as he wrote to U.S. Ambassador to Germany William Dodd.^[24]

"Roosevelt once spoke in the presence of journalists of Mussolini and Stalin as his 'blood brothers,'" and "had nothing but 'sympathy and confidence' in Mussolini up until the mid-1930s".^[25] The President privately found Mussolini "admirable," writing to his personal friend John Lawrence, "I don't mind telling you in confidence, that I am keeping in fairly close touch with that admirable Italian gentleman."^[26] FDR also wrote to U.S. Ambassador to Italy Breckinridge Long about Mussolini, "I am much interested and deeply impressed by what he has accomplished and by his evidenced honest purpose of restoring Italy and seeking to prevent general European trouble."^[27]

Long, in turn, reported to Roosevelt’s economic adviser Rexford Tugwell about economic organization under the Fascists: “Your mind runs along these lines … It may have some bearing on the code work under N.R.A.”^[28] Tugwell, the “most prominent of the Brain Trusters and the man often considered the chief ideologist of the 'first New Deal' (roughly, 1933–34),”^[29] said, “I find Italy doing many of the things which seem to me necessary…. Mussolini certainly has the same people opposed to him as FDR has. But he has the press controlled so that they cannot scream lies at him daily.”^[30] Tugwell, "the most left-wing member of Roosevelt's brain trust" was "open in his respect for Mussolini's economic policies."^[31] Of the Fascist system he wrote, "It's the cleanest, neatnest [sic], most efficiently operating piece of social machinery I've ever seen. It makes me envious."^[32] FDR's Secretary of the Interior Harold Ickes conceded that “what we were doing in this country were some of the things that were being done in Russia and even some of the things that were being done under Hitler in Germany. But we were doing them in an orderly way.”^[33] Eleanor Roosevelt's close friend Lorena Hickok, a journalist who covered the New Deal, wrote, "If I were 20 years younger and weighed 75 pounds less, I think I'd start out to be the Joan of Arc of the Fascist Movement of the United States."^[34]

The centerpiece of the New Deal was the National Industrial Recovery Act (NIRA) of 1933, which was “similar to experiments being carried out by the fascist dictator Benito Mussolini in Italy and by the Nazis in Adolf Hitler's Germany,” according to John A. Garraty,^[35] president of the Society of American Historians.^[36] NIRA established the National Recovery Administration (NRA), “the New Deal’s attempt to bring to America the substance of Mussolini’s corporativism.”^[37] As one NRA study concluded, “The Fascist principles are very similar to those which have been evolving in America and so are of particular interest at this time.”^[38]

The Italian Fascist Party journal of political theory Gerarchia (Leadership) characterized the NRA as "bearing a Fascist signature" and as "corporatism without the corporations." Progressive journalist Robert Shaw agreed, "The NRA... was plainly an American adaptation of the Italian corporate state." When Roosevelt referred to the industrial cartels established by the NRA as "modern guilds," writes Schivelbusch, he was making "reference to the corporatist system associated with Fascism."^[39] FDR's own economics instructor at Harvard^[40] concurred, identifying the NRA as "essentially fascistic."^[41]

Just as Mussolini “organized each trade or industrial group or professional group into a state supervised trade association” that “operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc.,”^[42] the NRA “forced virtually all American industry, manufacturing, and retail business into cartels possessing the power to set prices and wages, and to dictate the levels of production.”^[43]

As head of the NRA and thus “FDR’s leading bureaucrat,”^[44] the President appointed^[45] General Hugh Johnson, who was granted “almost unlimited powers over industry.”^[46] According to economist Thayer Watkins (who teaches economic history at California’s San José State University,^[47] Johnson was “an admirer of Mussolini’s National Corporatist system in Italy and he drew upon the Italian experience in formulating the New Deal.”^[48] Walker F. Todd, research fellow at the American Institute for Economic Research, agrees that Johnson “did admire greatly what Mussolini appeared to have done,” identifying the NRA as a “thoroughly corporativist” idea.^[49]

Johnson was said to carry around with him a copy of Raffaello Viglione’s pro-Mussolini book,^[50] The Corporate State, even presenting a copy to Secretary of Labor Frances Perkins.^[51] In his retirement speech, Johnson invoked what he called the “shining name” of Mussolini.^[52] According to Jonah Goldberg, Johnson displayed a portrait of Il Duce in his NRA office and actually “distributed a memo at the Democratic Convention proposing that FDR become a Mussolini-like dictator.”^[53]

Roosevelt appointed Johnson’s former business partner George Peek to head the AAA. Both men had “worked with the War Industries Board, the agency that regulated American production during World War I, and they believed their experience of managing an economy almost totally sealed off from the world market would suit the country now.”^[54] They had long advocated a policy of expanding tariffs to keep foreign agricultural products out of the United States,^[55] a policy that would have again rendered the U.S. economy “almost totally sealed off from the world market”^[56]—a fair approximation of “autarky,” an economic policy particularly but not exclusively “associated with Nazi economic organization.”^[57]

"The German Labor Service (Reichsarbeitsdienst—RAD) arose from a party organization set up in 1931 and known as the NS-Arbeitsdienst for the purpose of easing unemployment,"^[58] "like its New Deal equivalent, the Civilian Conservation Corps,"^[59] which would be established in 1933.^[60] According to Garraty, both

Even some New Dealers have come to see the essential similarities between their ideology and fascism. Bertram Gross, for example, was a leading architect of liberal social policy under presidents Roosevelt, Truman and Carter.^[62]

"I sought solutions for America's ills ... through more power in the hands of central government," wrote Gross, a leftwing political scientist and urban studies professor. "In this I was not alone. Almost all my fellow planners, reformers, social scientists, and urbanists presumed the benevolence of more concentrated government power." "Big Business-Big Government partnerships ...," he wrote, "were the central facts behind the power structures of old fascism in the days of Mussolini, Hitler and the Japanese empire builders. ... I see Big Business and Big Government as a joint danger." "Anyone looking for black shirts, mass parties or men on horseback will miss the telltale clues of this creeping fascism..." wrote Gross in his 1980 book Friendly Fascism. "In America, it would be supermodern and multiethnic -- as American as Madison Avenue, executive luncheons, credit cards and apple pie. It would be fascism with a smile."

While writing his book, Gross dreamed that he was searching through a huge, empty house for "friendly fascists."

Several myths have formed around both the New Deal and fascism. Among these are the myth that the New Deal ended the Great Depression, that fascism was a plot by big business rather than a mass movement, and that "corporativism" was the rule by corporations of the state, rather than the rule of the state over corporations.Regarding the New Deal's effectiveness in combating the Great Depression, Schivelbusch writes, "the consensus among historians today" is "that the United States completely emerged from the Depression only with its entry into World War II."^[64]

Regarding the myth that Naziism was a capitalist plot, David Schoenbaum notes that the Nazi Party census found the single largest category of Party members was “Workers” (30.3%), the second-largest category was “White collar,” (19.4%), of which 59.1% were in sales; the third-largest category, “Independent”/“Self-Employed” made up 19%, the largest group of whom were in “handicraft” (43.7%) Schoenbaum adds that of the two exhibits most often trotted out in defense of the Naziism-as-capitalist-plot thesis—Fritz Thyssen and the Krupps—that Thyssen eventually had to flee Nazi Germany for Switzerland, while even the Krupps “did not finance Hitler before 1933,” when his victory had become a fait accompli.^[65] Moreover, some business people likewise supported FDR's policies (e.g., "Although I'm a capitalist, I happen to believe in [Roosevelt's] program").^[66] Even Ronald Reagan was a New Dealer, back when he was a liberal Democrat and a Roosevelt man (although he later saw the light, saying, "Fascism was really the basis of the New Deal").^[67]

In fact, much of Nazism was borrowed^[68] from American progressives and Democrats^[69]—eugenics and "racial hygiene,"^[70] for example. As Robert Nisbet observed:

Regarding the myth that “corporativism” represented rule by corporations: “The programme of the Fascists, as drafted in 1919, was vehemently anti-capitalistic,” wrote Ludwig von Mises. “The most radical New Dealers and even communists could agree with it.”^[72] It demanded “Suppression of incorporated joint-stock companies, industrial or financial. Suppression of all speculation by banks and stock exchanges,” and “Control and taxation of private wealth. Confiscation of unproductive income.”^[73] The Fascists called this economic system corporativismo (corporativism). As UCLA international relations and political science professor Herbert Steiner observed in 1938, “So substantial are the limitations under which private property and capital are exercised in Italy, that the conception of ‘capitalism’ is avowedly destroyed and replaced by corporativismo.”^[74]

Likewise, along with its well-known anti-Semitic and expansionist planks, the Nazi Party program included a number of less-remembered demands that were (and are still) considered “progressive.” For example: “the State shall above all undertake to ensure that every citizen shall have the possibility of living decently and earning a livelihood”, “a generous increase in old-age pensions”, “specially talented children of poor parents, whatever their station or occupation, be educated at the expense of the State”, “help raise the standard of national health” by “providing maternity welfare centers, banning child labor, increasing physical fitness through the introduction of compulsory games and gymnastics, and by the greatest possible encouragement of associations concerned with the physical education of the young,” etc.

The Nazi platform attacked the concept of economic freedom, asserting that the “first duty of every citizen must be to work mentally or physically”, that “all unearned income, and all income that does not arise from work, be abolished... breaking of the tyranny of interest”, that “that “usurers, profiteers, etc., are to be punished with death, regardless of creed or race”, “total confiscation of all war profits”, “nationalization of all trusts that have gone public [i.e., publicly-traded companies]”, “profit-sharing in large industries”, “ immediate communalization of large stores”, “enactment of a law to expropriate the owners without compensation of any land needed for the common purpose... abolition of ground rents, and the prohibition of all speculation in land”, etc.

As against individualism and the free market, the Nazis demanded “creation of a strong central authority in the State”, “COMMON GOOD BEFORE INDIVIDUAL GOOD” [Capitalization in original], that “No individual shall do any work that offends against the interest of the community to the benefit of all”, that “ ruthless war be waged against those who work to the injury of the common welfare”, etc.

Finally, the Nazis wiped out free speech and religious freedom, demanding “a legal campaign against those who propagate deliberate political lies and disseminate them through the press”, that “Newspapers transgressing against the common welfare shall be suppressed”, disingenuously promising freedom for all religious faiths “in the state, insofar as they do not endanger its existence” or “offend the moral and ethical sense” of the Germanic race.^[75] The Party statutes of May 22, 1926, state of these points: "This program is unalterable."^[76]

Notes