December 3, 2022

Book Review: The Economic Foundations of Fascism by Paul Einzig

Even the most superficial readers of the popular Press know today that Communism means the public ownership of the means of production. The “Five Years’ Plan” has become a household word in England. Fascism, on the other hand, is still regarded principally as a political movement; the economic implications of the term are generally ignored. The meaning of the term ‘‘Corporate State” is unknown even to people whose general intelligence and special knowledge of foreign affairs and of economics is well above the average.

This is a quote from Paul Einzig’s 1933 book The Economic Foundations of Fascism, and as far as people’s knowledge of fascism goes, things haven’t changed much. Einzig attempts to explain why:

The explanation of this state of affairs is simple. While Soviet Russia is anxious to spread Communism all over the world and has spared no effort to make it known abroad, Fascist Italy has directed her propaganda inward, and has made no serious effort to gain converts abroad. 

Einzig’s book is an attempt to remedy this ignorance and convince England to pursue a similar system of government. In his research, Einzig was able to travel to Italy and talk to many important officials including several meetings with Mussolini himself. 

Written in the time of the Great Depression, or “the Crisis” as it is referred to in the book, The Economic Foundations of Fascism is both a condemnation of the laissez-faire system of governance, which Einzig believed to be incapable of solving the boom-bust economic cycle, and an exhortation of economic planning. At the time, England was trying to control its currency to stabilize the economy. However, Einzig considered it “a grave inconsistency to advocate a managed currency in an unmanaged economic system.” He saw fascist Italy as a glowing example of progress from its disorderly past:

A brief visit to Italy is sufficient to impress the keen observer with the outward evidence of stability and discipline. 

A key component of Fascism’s ability to plan and manage its economy is the peace between different factions achieved by the Corporatist system:

Fascism endeavours to conciliate the conflicting interests of the different classes. It does not aim at eliminating class distinctions; on the contrary, it seeks to maintain them with their special characteristics, and to obtain collaboration between them…In no matter what economic system, social peace is the preliminary condition to genuine prosperity. 

Einzig considered Fascism to be economically centrist:

Fascism is essentially an economic system—a compromise between pure individualistic Capitalism and complete State control. 

And although established through a dictatorship, he considered Corporatism as essentially democratic.

From a political point of view it is a new type of constitutional system in which the employers and employed, grouped into mixed national corporations, play a predominant part in the government of the country. It is a new kind of democracy as contrasted with the Parliamentary democratic system.

Einzig is a master of explaining complex ideas in simple terms making this book highly readable.

The Economic Foundations of Fascism is available in our bookstore.

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