Elements of the Fascist System

When it comes to the political economy of fascism or national socialism, it can be difficult to talk about since nazis and fascists themselves rarely talk about this topic. Adolf Hitler once himself said that “the basic feature of our economic theory is that we have no theory at all.” This kind of thing begs the question of “on what basis do they then develop economic policies?”. A sympathetic view would likely argue that this shows pragmatism and a lack of dogmatism. A skeptical view would point to this as an example that supports the claim that fascism lacks coherence and is especially ironic when you consider Hitler’s own view expressed in Mein Kampf about the need for people, but especially anyone wanting to be politically active, to have a weltanschauung (roughly translating to ‘deep and comprehensive worldview). Ideology might be considered a synonym to this.  Moreover, many thinkers that prefigured fascism in Italy, or in Germany itself with authors like Oswald Spengler yearned for a ‘non Marxist’ or ‘Prussian’ socialism. More confusion is added to the mix from some of Hitler’s other statements, such as ones about ‘socialising the people’ rather than ‘socialising the means of production’ (more on this shortly)  which has led to bad liberal-conservative arguments that Nazi Germany and the Soviet Union were somehow exactly the same because they both used the word ‘socialism’.  Yes,there are really people that seriously try to make this argument. Nevertheless in spite of all this fascism and national socialism taken together historically offer their own particular form of political economy that differ from typical liberal or Marxist forms, hence why fascists and national socialists tend to describe themselves as ‘third position’. In Hegelian terms, fascists aim to present themselves as the ‘synthesis’ in the dialectic between the ‘thesis’ of capitalism and the ‘antithesis’ of socialism, but you should be critical on whether or not this actually has substance. 

You have probably seen the word ‘totalitarianism’ thrown around. Fictional novels like Orwell’s 1984 provide one of the most famous but extreme examples from a left anticommunist perspective. But before this word had a strictly negative connotation, it was purely descriptive. The best summary of this concept is expressed by Mussolini himself in the famous slogan: “Nothing outside the state, nothing against the state, everything within the state.” Expanding further, Mussolini adds:

The Fascist conception of the State is all embracing; outside of it no human or spiritual values can exist, much less have value. Thus understood,Fascism, is totalitarian, and the Fascist State — a synthesis and a unit inclusive of all values —interprets, develops, and potentates the whole life of a people.”

The “Fascist conception of life stresses the importance of the State and accepts the individual only insofar as his interests coincide with those of the State..”

As we can see from the above quotes, and much more throughout the Doctrine of Fascism alone, everything is state centric. It is also necessary to note that these statements, derived from Hegelian philosophy, do not strictly mean that the state is there to literally micromanage every aspect of your life, but it is rather a refutation of a conventional liberal worldview in which individual flourishing or an individual’s character is the product of purely free choice independent of social context. For Mussolini, the fascist conception of state has “elbow room” for the individual and an independent conception of the good, even though the ultimate good in the fascist sense is the thirst for risk, adventure and having a ‘me ne frego’ ( I don’t give a damn) attitude toward danger. Under the auspices of fascism, this tends to express itself aesthetics of war as elaborated on by some Italian Futurists. So while serving the state in whichever form this takes,usually militarism is seen as the highest good, the idea of the individual isn’t liquidated entirely, it is subordinated to duty.

 When reading  fascist literature, excerpts from speeches and pronouncements, you will often find the theme of service to the state or race, where the fascist state is considered to be the highest,most concrete and enduring expression of a people and that the leader is the embodiment of the democratic will of the population (fuhrerprinzip).  Moreover, when you compare the Doctrine of Fascism to ‘proto fascist’ texts that inspired their Japanese counterparts, such as the Hagakure, you will notice some extremely obvious parallels, especially in regards to attitudes towards death, as well as about service to one’s lord (Hagakure) or the the state (Doctrine of Fascism). However, it is important to note that these ideas are not strictly exclusive to the fascist worldview or invented by fascist leaders and ideologues. It is also important to be critical of this conception of the state, and not solely from the position of liberal theory’s discomfort with the state, or government more generally, we must remember to think as mentioned earlier, on what basis is the ‘people’ or ‘nation’ defined. We should also think about it from a class perspective, or other social groups in society, since nations aren’t necessarily monoliths with people that all think the same, or lacking in minority and other interest groups. So when we look at fascism, national socialism and adjacent ideologies, or any ideology and political system in fact, it is important to pay attention to factors, such as economic policies, workplace relations, cultural policies, how the state is organized, in what ways the masses participate in politics. . In other words, what is the ‘social base’ of the state and party? Which elements of society most support the party, and if they’re in power, the institutions themselves. More importantly, whose interests does the state primarily serve in the society, the party itself notwithstanding? 

One of the essential components to the most well known historical  fascist states and views of political thinkers in that camp is the concept of the ‘corporate state’. The fascist idea of the corporate state is not to be confused with the idea that big multinational corporations like say, Disney or McDonalds literally control the state. To reinforce this point, Mussolini in The Doctrine and Origins of Fascism stated that within the fascist state, capitalism only exists to the extent the state allows it to exist or to the extent it is useful to the state. For Mussolini, a central component to fascism was that it unabashedly reasserts the role of the state (in the sense of government in general, rather than in strictly the Marxist sense) in distinction to liberal philosophy that tended towards a hypocritical phobia of it. On the basis of popular Marxist criticisms of fascism, however, fascism can be seen as reasserting the bourgeois state in the Marxist sense.

So what is the ‘corporate state’? The basic idea of the corporate state concept is to integrate trade unions into the state, thus reducing their independence and revolutionary potential, but still making concessions to workers, although strikes become outlawed. However, this is not merely a state approved trade union, since representatives of business are included. So imagine steel workers. They have representatives, much like a trade union, who sit in an organization which also includes representatives from all the relevant businesses and they work to determine industry standards regarding wages, benefits, labour conditions and so on but importantly, this is framed by fascists as co-operative rather than adversarial process, which under the auspices of an ideology of ‘national’ or ‘racial’ unity as something that is supposed to eliminate class differences and therefore make class struggle irrelevant and instead become class collaboration.  This system is supposed to, according to Mussolini, recognize, alleviate and manage the real material conditions and genuine grievances that gave rise to trade union and socialist movements. This organizational framework is then applied to most professions, and sometimes these ‘corporations’ are described in the literature as a form of cartel or trust. This is all overseen by a moderating state body, which in Germany during Hitler’s time was called the German Labour Front that was at least nominally neutral,  as ideologically, the fascist state claims to sit above class interests. So when Hitler claimed that he “socializes the people”, the concept  of class collaboration achieved through the corporate state style institutions is primarily what he meant by this. Politicians such as Oswald Mosley in Britain at the time also argued that a version of the corporate state should be the basis for how parliament works in Britain, rather than conserving the long standing bicameral system of House of Commons and House of Lords.  A skeptical look at this kind of system might argue that this system on paper is at best, reformist and merely sweeps class struggle under the rug, rather than actually resolving it.. In practice however the cooperative state system under Hitler has the illusion of any kind of supposed ‘worker control’ in the fascist framework shattered, as per the words of Labour Front head, Robert Ley:

“The building up of the corporate state will, as a first thing, restore to the natural leader of an enterprise, to the employer, the complete management and thereby also the responsibility. The factory council consists of workers, employees and employers. Nevertheless, it has only an advisory vote. The decision rests with the employer alone. Many employers have for years had to call for the ‘master in the house’. Now they are once again to be the ‘master in the house’.”

This is the complete opposite of socialism as is usually understood. However, we must also remember that the fascist economic system was still an effective path of development of industrial modernisation in ‘partially modernised’ states like Germany and Italy, and in Germany in particular, served the purposes of militarization very well. 

‘Blood and Soil’ is an element peculiar to the National Socialist form of political economy, which came about when agricultural theorist Walther Darre joined the party in the early 1930s, prior to the elections, since up to that time the party lacked a peasant policy.  The thinking behind Darre’s ‘Blood and Soil’ policy was that the peasant class, especially middle peasants, were the most racially pure, and strongest, component of German society due to their rural labour,their relative isolation from the ‘corrupting’ cosmopolitan influences of the city and  and that what remains of this group needs to be protected both from the threat of socialist collectivisation of agriculture, as well as further proletarianisation as a result of market forces, while keeping them tied to the land. This protected class of landowning peasants would at some point, according to Darre,  be the basis for the rejuvenation of the race and state, as well as the basis for constructing a new elite.  Some of the concrete components of the ‘Blood and Soil’ policy of hereditary farmers were:

  • Only landholders with around 7.5 acres of land were eligible. This meant propertyless farm workers, smaller plot landowners or larger land owners (usually agribusiness or aristocrats) were not eligible.
  • Land was not redistributed and ownership of land of those eligible was secured by making the hereditary farm unable to be bought and sold as a commodity, and ownership could only be transferred on a hereditary basis. This policy was eventually loosened due to eligible landowners having trouble transferring ownership to other family members or not actually wanting to be tied to the land, among other issues.
  • State set prices for produce, rather than market (supply and demand) or corporation determined prices in addition to high levels of protection against foreign produce in the relevant commodities
  • Heavy state involvement in deciding which crops are planted and agricultural methods  to be used on hereditary farms


In effect, a microcosm of the German agricultural sector ran under a form of pseudo central planning, which did not cohere well with the rest of the ‘mixed’ but mostly market-based economy. The blood and soil ideology also sharpens the rural urban divide, but only in ideological terms rather than material ones. The rural-urban divide is something intrinsic to any country, especially industrially modern or modernizing country as a result of material processes and uneven industrial development,or specific policy choices like the NEP in the Soviet Union in the 1920s going into the collectivization of the early 1930s.. Cultural values also often differ between cities and rural spaces, a snapshot of which can be seen in electoral maps. However, an ideological policy and principle like ‘blood and soil’ alters what is primarily an economic issue and a matter of how a state prioritizes things like infrastructure development into an ideological-moral one that not only idealizes rural life, but also moralizes it which could sharpen a sense of class conflict on the basis of urban versus rural, which of course is potentially counterproductive for an ideology that nominally seeks to emphasize national and racial unity and avoid this kind of issue. While not necessarily knowledgeable about what specific agricultural policies Darre’s blood and soil doctrine entailed, many self described fascists or national socialists will often accept the basic premise of this volkisch view.  There are also many who while not being fascists or national socialists and not necessarily accepting the ‘blood’ part of ‘blood and soil’, do idealize and moralize the rural-urban divide in favour of rural dwellers and reminiscent of the Narodniks, like to propose rural living as in of itself a  form of political activism and catch-all solution to serious political issues. 

While earlier we have seen that Mussolini framed capitalism under fascism as something that is tolerated to the extent it doesn’t interfere with state priorities (whatever they may be at the time) or used instrumentally as the ‘best’ (of course, without explaining how) economic system. In Nazi rhetoric, they claimed to be anti-capitalist, which has continued to lead to the kind of confusion mentioned earlier in the module. And of course, the Nazi party proudly lacked a clearly defined economic theory, but to the extent that it had the semblance of one, this was largely based on the work of Gottfried Feder, who was an influential member of the party during the 1920s. The essential grievances of Feder towards ‘capitalism’ bore no meaningful similarities to Marxist theories, as he even celebrated the role of the industrialist factory owner, wanted to reaffirm their hierarchical role over the workers, but also that they have somehow they same fundamental interests against finance capital,  and interest slavery (usury) which is a kind of predatory loan-making often involving  ,  which, as you may guess is necessarily personified by the Jew, according to Feder.

While it is correct to identify this finance capitalism (stock markets, usury, dominance by big banks, etc.) as a serious issue for its lack of productivity, wealth hoarding and exploitation and reasonable to suggest it is worse than industrialists, since the enterprises of the industrialists actually produce things, these things would still be bad even if not a single jew was involved in this at any level. Moreover, much ire is also directed towards the worker movement, accusing them of being too “self interested” and a party of “money interests” for pursuing better wages instead of putting this aside for a ‘higher’ national unity. This is part of the ‘philosophical’ basis for ‘class collaboration’ as described earlier. Esoteric right wing Italian philosopher, Julius Evola, held a similar point of view that capitalism and communism were both two sides of the same coin that ignored higher spiritual values. Feder argues that there is no important difference between ‘capitalism’ (in his meaning) and communism since both are effectively ‘jewish’ tools that set the German people against each other and to pressure the German from ‘above’ (finance) and ‘below’ (workers movement).

The nazi understanding of what capitalism is, according to Blick, “highly selective” and hinges primarily on what is considered to be necessarily Jewish or Jewish-dominated without presenting evidence for these claims. Feder’s thinking, often repeated by Hitler, creates a more mystical and racially tinged version of political economy. On top of this, the supposed ‘socialism’ of the party, beyond ‘socialising the people’ (corporative system) is both socialisation in the mundane sense and the class collaboration idea described above.  The other reason to question the ‘anti capitalist’ credentials of national socialism or fascism, aside from the rigid commitment to defend ‘private property’, is the tendency of fascist states to defend the interests of big business (whilst nominally being in favour of defending small and medium sized enterprise).  For example, Nazi election campaigns were bankrolled by large industrialists in the early 1930s, such as from the Krupp family. Moreover, the Nazi rearmament drive greatly benefitted these industrialists the most as the state spending on these contracts increased and with the addition of dual purpose infrastructure spending, drove the lion’s share of the state spending and economic recovery. The word ‘privatization’ was also first coined by academics in the 1940s as part of their studies on the economic policies of National Socialism in practice.