Apr '03 [Home]


The Winners and Losers of Fascism:  Class Warfare in Its Most Concentrated Form

by Pete Dolack

. . .

It is not uncommon these days to hear the term "fascist" used to describe the political conditions in the United States under the Bush administration. Indeed, the continuing mass roundups of Muslim and Middle Eastern men, harsh new laws circumscribing civil liberties, draconian new spying systems, the rush to launch wars and a mass media tightly controlled by a small circle of corporate interests are plenty scary, with more undoubtedly on the way.


But we must not mistake form for substance. We are living in a sham democracy with some components of a police state, but this is far from fascism. Conditions in the United States could be far worse than they are now, and those who glibly describe present-day American society as "fascist" are obscuring the truly frightening reality of what genuine fascism would be. This goes well beyond uniformed thugs running rampant in the streets. If fascism were to happen in the United States, it wouldn't be with Nazi stormtroopers. While that is the method traditionally thought of as helping to institute the most extreme right-wing dictatorships, fascism in the United States, were it to come, would be instituted by different methods. It likely would be wrapped in American-style populism and pegged to a national emergency. A declaration of martial law seems the most likely mechanism.

At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of Big Business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interests of that social base. Here are its quintessential elements:

     - militarism,
     - extreme nationalism,
     - the creation of enemies and scapegoats, and (perhaps the most critical component)
     - a fanatical propaganda that intentionally raises panic and hate, while disguising its
        true nature and intentions under the cover of a phony populism.

Despite national peculiarities that result in major differences in the appearance of fascism in various countries, the class nature of fascism is consistent. Big Business is invariably the supporter of fascism, no matter what a fascist movement's rhetoric contains, and is invariably the beneficiary. It is no easy decision for even its bankrollers to implement it, since even the economic elite who will benefit from it lose some of their own personal freedom. But the results of the terror unleashed under fascist governments are obvious.

The Bankrollers of Hitler's Rise to Power

In recent years, as the corporate use of slave labor and trafficking in plundered assets, among other "benefits" of Nazi Germany, have become acknowledged in recent legal settlements in Germany, demands that the German and Swiss companies that profited pay restitution have become louder. But these same companies, and their apologists, claim that they, too, were "victims" of the Nazi regime and were somehow "forced" to do what they did. This is nonsense. From the 1920's, big-business leaders supplied the financial support for the Nazis. Not only German industrialists, but industrialists in other European nations and in the United States contributed support.

Fritz Thyssen is the best known supporter of Hitler among German industrialists, but he was far from alone. Thyssen, whose companies controlled most of the steel and iron markets of Germany, began providing financial support for the Nazis from late 1923, amounting to millions of marks. He also helped recruit other industrialists who were initially hesitant. When he invited Hitler to speak before a group of industry leaders in January 1932, the one-time artist painted such a picture that several present began making contributions and providing other support, and previous supporters increased their contributions.

Other Nazi financiers included coal baron Emil Kirdorf, arms manufacturer Gustav Krupp, steel magnate Albert Voegler, I.G. Farben executives, printer Hugo Bruckmann, piano maker Carl Bechstein, banker Hjalmar Schacht and arms maker Friedrich Flick. At a single meeting in February 1933, German industrialists contributed three million marks for the Nazis.

Kirdorf began supporting Hitler in 1927, but was worried about the left-sounding rhetoric of some Nazi leaders, such as Gregor Strasser and Ernst Roehm. Hitler assured Kirdorf that the Nazis' pro-labor and anti-capitalist rhetoric was merely an attempt to gain popular support and would not be implemented. Kirdorf suggested Hitler write a pamphlet for private distribution among industrialists that would explain this. Hitler did so, and Kirdorf distributed the pamphlet. In it, Hitler declared democracy "weakness and stupidity." The readers of the pamphlet approved of Hitler's plans to suppress trade unions, and Hitler's support increased.

Many American Big Businessmen were eager supporters of Nazi Germany. Although some were more interested in profits and were indifferent to the crimes of Hitler's regime, many were driven by ideology and saw fascism as a model to be implemented in the United States. This is not to deny that anti-Semitism played a role. Hitler was an admirer of Henry Ford and had copies of Ford's anti-Semitic book, The International Jew, distributed. In 1923, after hearing Ford was considering a run for president, he told a Chicago Tribune interviewer, "I wish I could send some of my shock troops to Chicago and other big American cities to help."

Among the major American contributors to the rise of the Nazis were top executives of DuPont and General Motors; Averill Harriman, whose family made a fortune in railroads in the late 19th century; Prescott Bush, George W. Bush's grandfather, and George Herbert Walker, Prescott's father-in-law; brothers Allen and John Foster Dulles; and the Dulles brothers' Sullivan & Cromwell Wall Street law firm. All these men had extensive dealings with Thyssen. [*] In 1924, Harriman and Walker set up the Union Banking Corp., which existed to conduct business with Thyssen. Walker later installed Prescott Bush as an executive in his companies, including in Union Banking, which became "an out-and-out Nazi money-laundering machine." [**]

The Dulles brothers represented many firms on Wall Street and elsewhere interested in dealings with the Nazis from the 1920's. As early as 1934, Congressional investigators found that Walker and Bush's companies widely subsidized Nazi propaganda in the United States and Germany, and made deals with the Nazi intelligence apparatus.

A sufficient flow of subsidies was sent to the Nazis so that Hitler had 100,000 storm troopers at his disposal by the end of 1930 and during Germany's July 1932 elections, he had sufficient funds to fly to 50 cities in two weeks.

Profits and Death Camps in Nazi Germany

What was the result of big-business support for Hitler? Profits more than doubled in five years. The composite profits of German industrial and commercial enterprises increased from 6.6 billion marks in 1933 to 15 billion marks in 1938. Military contractors did the best, with the profits of the German Weapons and Munitions Works increasing 10-fold — no surprise since national expenditure on the military increased from 23 percent in 1933 to 74 percent in 1938. Between 1938 and 1942, the total capital possessed by German corporations increased by 55 percent.

Much of these profits came on the backs of their workforces. Contrary to the "laws" of capitalism, wages actually fell, despite the disappearance of mass unemployment. According to one survey of seventeen industrial branches, wages in October 1942 were 15 percent below 1929 wage levels. A separate survey showed that from Hitler's ascension to power on January 30, 1933 to the summer of 1935, wages fell 25 to 40 percent. This was achieved through the destruction of all unions and workers' organizations and maintained by laws which prohibited workers from changing jobs and forced transfers to lower-paying jobs or to agricultural estates where the pay was a fraction of starvation-level unemployment benefits.    (Image:  Post-war sculpture, Auschwitz)

Much of this economic imbalance occurred before slave labor became widespread in Nazi Germany. Concentration camps, 138 of them, became a source of slave labor for Krupp, including Auschwitz where the company operated a fuse factory. An estimated 70,000 of Krupp's 100,000 slave laborers died at the hands of camp guards. All Daimler-Benz plants were staffed by prisoner labor by the end of 1941. I.G. Farben, the chemical giant, even built its own concentration camps to eliminate the "waste" of time it took prisoners to march to work! I.G. Farben, which after the war was split into BASF, Bayer and Hoechst, made huge profits supplying the lethal gas Zyklon B to the death camps. Much of the financing of the Auschwitz death camp was provided by Deutsche Bank.

Trading with the Enemy

The list of American companies that did business with Nazi Germany during the 1930's and during World War II, include:  Aluminum Corporation of America (Alcoa), DuPont, Ford, General Motors, William Randolph Hearst's media empire, IBM, International Telephone & Telegraph (ITT), and Standard Oil of New Jersey (later known as Exxon). These are all in addition to the sprawling, multi-company business empire run by George Herbert Walker, Prescott Bush and Averill Harriman, and also the Dulles brothers, who facilitated investments in Germany for countless companies.

Sullivan principal John Foster Dulles sat on the board of I.G. Farben. Allen Dulles, who would become the head of the Central Intelligence Agency at its birth, created the Paperclip Project, which brought 1000 Nazi scientists to the U.S., including doctors who killed their victims through high-altitude testing, freezing, injections of salt water, drug injections, nerve gas, mustard gas, and the insertion of gangrene cultures, glass or sawdust into wounds.

To the Rescue:  The Creation of Fascism in Italy

The familiar pattern was laid down in early 1920s Italy — the charismatic leader, widespread violence and instability, increasingly extreme nationalism, opportunistic left-sounding demagoguery designed to fool the lower and middle classes, the tacit support of the legal authorities and, above all, the financial support of the richest industrialists whom the movement will benefit.

Benito Mussolini started as a Socialist, but moved to the right during World War I once his new newspaper began attracting heavy advertising from arms manufacturers and other business interests. He carefully allowed a variety of propaganda to be put forth and even denied having a program, instead allowing fascism to appear to be whatever one wished it to be.

The fascists' support from industrialists, bankers and rural landlords continued as the street squads broke strikes, burned union offices, killed opponents and fomented terror across the country. A group of bankers subsidized Mussolini's March on Rome with 20 million lire (roughly 13.7 million in today's U.S. Dollars).

The results were spectacular or awful, depending on one's point of view. From 1926 to 1934, industrial wages in Italy were reduced by 40 to 50 percent, while agricultural wages were reduced by 50 to 70 percent. At the same time, taxes on Italian workers were increased. As a further whip to keep wages down, children were regularly used in agricultural and factory work.

There was plenty of money to be given to big businessmen, however. A fascist financial expert estimated that more than 8.5 billion lire were paid in industrial subsidies from 1923 to 1932 and an estimated 17 billion lire were given to Italian industry from December 1932 to 1935, according to Gaetano Salvemini's exhaustively researched 1936 book, Under the Axe of Fascism.

Fascism in Pinochet's Chile

Pre-Pinochet Chile was a stable democracy; it had the second-longest democratic tradition in the Western Hemisphere. This ended swiftly after the free election of a Socialist, Salvador Allende, to the Chilean presidency. Allende's Popular Unity government, a multi-party coalition, was bitterly resented by Chilean industrialists, bankers and large landowners. These were joined by the few American corporations that had substantial business interests in Chile, who in turn had influence over the Nixon administration, which could and did employ the Central Intelligence Agency.

After efforts to prevent Allende's inauguration failed, right-wing death squads were set up, fascistic gangs began roaming the streets of Santiago, the Big Business-controlled media maintained a shrill anti-Allende propaganda and pressure was brought to bear on the Chilean military to oust the government. Money from American corporations with Chilean interests had intervened in the country's affairs since the 1950's. Chase Manhattan Bank Chairman David Rockefeller had set up the Business Group of Latin America, which included the heads of Anaconda, ITT (which owned the Chilean telephone system), and PepsiCo. This group, and the CIA, operated through one of Chile's biggest businessmen, Agustin Edwards, who orchestrated opposition through his El Mercurio newspaper chain, Chile's largest.

The head of PepsiCo, Donald Kendall, had close ties to President Richard Nixon. After Kendall made two calls to Nixon following Allende's 1970 election victory, the CIA got orders to stop Allende's inauguration (according to investigative journalist Greg Palast in a Nov. 8, 1998, article in the London Observer). American companies spent $1.5 million in an attempt to prevent Allende from assuming office, then poured in more money to destabilize his government. The CIA, in documents available on the web site of the director of central intelligence, admitted that it had made an effort "to encourage Chilean businesses to carry out a program of economic disruption."

As Allende's presidency went on, Chilean business interests created more instability, with the result that, as shortages mounted, the middle class (shopkeepers, professionals, and others) turned against the government. By July 1973, a truckers' strike was begun concurrent with increased right-wing terror against human and infrastructure targets. It was easy for the truckers to remain on strike because the CIA was paying the truckers more to strike than they earned driving.

What was the reality of the 1973 coup? The majority of Chilean workers earned less in 1989 than in 1973 (after adjusting for inflation). From 1972 to 1987, per capita gross national product declined 6.4 percent. Labor's share of the national income declined from 52 percent in 1970 to 31 percent in 1989. By then, Chile's poverty rate had reached 41 percent, and 40 percent of Chileans did not have adequate housing, up from 27 percent in 1972. One-third of Chileans were unemployed by 1983.

Huge compensation packages were paid to companies that had been nationalized under Allende, a policy supported even by the Christian Democratic opposition. Four — ITT, Anaconda, Cerro, and Kennecott — raked in $449 million. Some of these companies had already been grossly overpaid for shares during the Frei administration that preceded Allende's. Public spending, meanwhile, was slashed 25 percent in 1975, a year in which the Chilean economy shrank 17 percent. In 1969, a Chilean earning the minimum wage could buy a list of basic foodstuffs ("basket") with half of his income; by 1975, a minimum-wage worker needed all of his earnings to buy just 80 percent of the same basket.

So much for the "economic miracle" proclaimed by Pinochet's apologists.

[*] These activities are well documented. See, among others, the books Facts and Fascism, George Seldes, 1943; Power Inc., Morton Mintz and Jerry S. Cohen, Viking Press, 1976; Trading With the Enemy, Charles Higham, Delecorte Press, 1983; and The Secret War Against the Jews, John Loftus and Mark Aarons, St. Martin's Press, 1994. Much of this came to light in Congressional hearings during the 1930's and 1940's. [body]

[**] The Secret War Against the Jews, John Loftus and Mark Aarons, St. Martin's Press, 1994. [body]

[This article is excerpted from an essay in which the topics here are discussed in far greater detail, along with discussions of fascism in Spain and Argentina, and an analysis of the possibilities of fascism in the United States. This last topic is scheduled to be excerpted in the July newsstand issue of the magazine.—Eds.]