May 19, 2022

Sustainable Economics: Lessons from Fascist Italy and the U.S.S.R.

This was a paper I wrote for a college class, originally just titled “Sustainable Economics Through Socialism and Nationalism.” There are citations at the end.

Introduction

One important question we must ask ourselves when judging the merits of the current economy is whether the economy works for the people, or if only the people work for the economy. Of course, the latter is necessary to achieve the former; people who do not work have no money to sustain their needs. Such needs include housing, healthcare, and education, all of which are necessary for maintaining a setting that is environmentally conducive to well-being. Our needs are not met, even for those who work or seek work. There are homeless people (US Interagency Council on Homelessness), unemployment permeates the country, and many cannot afford education or healthcare. What we have now needs to be set aside. An economic vision that is sustainable must contain elements of socialism and nationalism. History itself tells us that socialist and nationalist economics, when sustained by the people, sustains the well-being of the people in return.

Before examining historical evidence, we must first understand the foundation of our current model, its faults, as well as its socialist rivals in political theory, some of which offer worthy ideas compatible with American society.

Definitions and Clarifications

First, we must identify the economic framework that rules us currently: the neoclassical economic system. Oxford defines it succinctly as, “a branch of economics that studies the allocation of scarce resources between competing uses and users, based on principles of market equilibrium and profit maximization” (Oxford, 2017). This branch goes together with certain schools of thought, specifically capitalism and liberalism. Capitalism is an economic system where the “factors of production” are owned by individual (private) people (Oxford, 2017). Those who own capital may do with it whatever they want when under this system (Oxford, 2017). It is this reality, which permeates American economics, that has led to the supremacy of multi-billionaires who profit from private monopolies. They do not concern themselves with the well-being of the society, but with how much they can fit into their pockets. The current system, which encourages/rewards this “profit maximization”, creates no safety net for the middle-class when the capitalists allocate their resources to areas that, although are profitable, taint the environment we all share. In other words, the economy, under capitalism, does not sustain the needs of the people across the board; it sustains the needs of the capital owners, while the rest of us work to sustain the economy and get little in return. This is the consequence of economics modelling itself off the political ideology that is liberalism. Liberalism puts the individual at the center of his world; he maintains he has “rights against the government, including rights of due process under the law… freedom of expression and action, and freedom from religious and ideological constraints” (Oxford, 2008). Of course, the capitalist would want to be free from “ideological constraints” that would prevent him from his exploitative behavior! And with the right to “freedom of expression and action”, he can simply maintain that his business practices are permissible due to his freedom; thus, he may avoid accountability for his actions. The poison that is liberal capitalism must be eliminated and replaced with a model that considers the well-being of all the economic classes and abolishes the practice of exploitation at the expense of environmental health. This author proposes that actual sustainable economics (economy that sustains our needs, as much as our work sustains it) requires a new variant of socialism and nationalism, which are, as history shows, the inevitable solutions to economic and societal decay.

Before examining the legacy of socialist nationalism sustaining workable economies, there must be clarifications regarding political economic theory, as well as what constitutes appropriate socialism for the United States. Socialism exists when the “factors of production” are controlled by the state (Oxford, 2017). All variants of socialism to have ever existed adhere to this definition. A state, according to Oxford, is a “nation or territory considered as an organized political community under one government” (Oxford, 2017). We know that capitalism promotes the private control of “the means of production”; it happens to be the case that “private” means “individual”, because of its connection to the original Latin term “prīvus” (Oxford, 2005). Therefore, capitalism, is not just anti-state, it is anti-public; it is against publicly owned banks, corporations, and even treasuries, all of which produce the goods, and money, to keep society functioning. Anything that is private is not of a state; yet, it is private ownership that permeates production of goods in our country, despite being antithetical to the existence of a state.

Also, it is worth noting that “public” is derived from the Latin term “pūblicus”, which means “of the people” or “of the state” (Oxford, 2005). Therefore, all socialism is public ownership, which is state ownership.

Socialism has undergone different iterations with distinct ideological frameworks and perspectives. Two socialist ideologues come to mind: Karl Marx and Giovanni Gentile.

Marxist socialism champions that workers must control the means of production under a temporary state that would pave the way for communism: a stateless, classless, money-less society (Marx, 1848). Marx is explicit about this in Das Kapital, Volume 3: “Freedom, in this sphere, can consist only in this, that socialized man, the associated producers, govern the human metabolism with nature in a rational way, bringing it under their collective control instead of being dominated by it as a blind power…” (Marx, 1885).

Here, “socialized man” refers to the general public, and the “associated producers” are workers; together, they control the economy under Marxism-socialism.

Marx clarifies his disdain for nationalism in the Communist Manifesto: “The Communists are further reproached with desiring to abolish countries and nationality. The working men have no country. We cannot take from them what they have not got” (Marx, 1848). The goal of Marx’s socialism was internationalism; it is incompatible with the notion that America is a nation worth preserving with an economy to reflect that.

To Marx’s credit, he at least recognized the false idea of liberty in liberalism, specifically in its belief of individual freedoms superseding the freedom of the collective society.

The socialist Giovanni Gentile held the same negative view of liberalism: “The merit of Fascism was that it courageously and vigorously opposed itself to the prejudices of contemporary liberalism – to affirm that the liberty proposed by liberalism serves neither the people nor the individual” (Gentile, 1929).

The variant of socialism formulated by Giovanni Gentile was fascism. But he was not a Marxist. Marx believed that true economic freedom could be attained when the state was abolished, having outlived its usefulness. Gentile ascertained that freedom only exists with a state, which he states in the Origins and Doctrine of Fascism: “…the authority of the State and the liberty of citizens is an infrangible circle in which authority presupposes liberty and vice versa. Liberty is found only in the State and the State is authority” (Gentile, 1929).

Unlike Marx, Gentile was a nationalist: “Both Nationalism and Fascism place the State at the very foundation of every individual value and right… The nation… exists not because of spiritual activity, but as an empirical fact and a datum of nature. The constituent elements that make up the nation are territory or ethnicity – all of the same extrinsic nature, even when they are human in origin, like language, religion, or history” (Gentile, 1929).

In short, Gentile saw the nation as a fact of nature, and believed that true socialism could not pretend otherwise, and must adhere to the needs of the nation.

This theory proposed by Gentile, that economic freedom is only possible under socialism and nationalism, has replaced liberal capitalism with success, and has benefitted the citizenry of various nations to have adopted this model; of which include fascist Italy, and even alleged Communist countries which have abandoned Marx when it comes to governance and economic management, even though they do not acknowledge it.

To fully understand the economic vision this author proposes for America, it is necessary to examine certain countries, how their economies have functioned, the results of implementing anti-Marxian socialism, and what can be taken from each model that can fit the needs of America appropriately.

Mussolini and Socializing the People

Economic sustainability was achieved in Italy under the leadership of Benito Mussolini who adopted Gentile’s theory of fascist socialism. It is common for Marxists to claim that fascism in Italy was merely a servant of the upper class and a tool for capitalists to maintain a status quo connected to neoclassical economics. This is false. Social scientist Martin Goldberg makes the point that fascism emphasized the importance of the nation being an “embodiment of class struggle against other nation-states” (Goldberg, 2020), while believing that workers can only be respected if “their nation was also strong and respected” (Goldberg, 2020). Mussolini used state control of the economy to set “a policy of price and wage controls, along with industrial regulations that spanned various sectors of the economy” (Goldberg, 2020). Fascism also sought to holding corporations accountable for wrongdoing through an economic variant of socialism called corporatism (Goldberg, 2021). Paul Einzig, a British economist, explained in The Economic Foundations of Fascism that corporatism organized people into corporate groups with individual purposes, all of which were to serve the nation’s needs (Einzig, 1933). Such corporations included, “The Corporation of Stage” (theater), “The Corporation of Grains”, “The Corporation of Vegetable Oils”, paper and press, mines, “Professions and Arts”, et cetera (Goldberg, 2020).

Capital flowed through the economy because of the efficiency of the workers within these groups, and the government was made to step in whenever the bosses of corporations came close to exploiting workers for their own personal gain, and vice versa (Goldberg, 2020). In the fascist state, the government was to step in and act as a mediator between workers and bosses, to alleviate potential conflict between the middle and upper class (Goldberg, 2020).

What is particularly interesting is that Nicola Bombacci, a founder of Italy’s Communist Party, was impressed with Mussolini’s implementation of socialism, according to a letter he had written to the Duce in 1944: “I have spoken one hour and a half in a conquered and enthusiastic theatre…the audience, composed mostly by workers vibrated, shouting: yes, we want to fight for Italy, for the Republic, for Socialization. In the morning I have visited the Mondadori, already Socialized, I have spoken with the workers that form the Management Council which I have found full of enthusiasm and understanding for this mission of ours” (Goldberg, 2021).

According to Martin Goldberg, in Socialism of the Right: A Historical Study, Bombacci’s letter to Mussolini came right after Mussolini’s cabinet proposed an act that properly transitioned Italy’s economy “into a socialist model.” Article 1 of the act stated, “The company’s management, either state-owned or of private property, is hereby Socialized. In it labor assumes a direct role. The Socialized companies’ functioning is regulated by the present bill of law, by the statue or regulation of each company, by civil code norms and by the special laws insofar as they do not contradict present disposition” (Goldberg, 2021). We can see here that the end goal of corporatism was state socialism.

The Italian Social Republic, in Goldberg’s view, proved itself to be successful at “advancing socialist causes” (Goldberg, 2021). Italy’s citizenry even maintained support for Mussolini, “with large crowds greeting him to support the new republic” (Goldberg, 2021). The support is not surprising when acknowledging that the implementation of corporatism and socialist economics allowed for the creation of an overall healthier environment for the Italian people.

One criticism of American economic policy today is that corporations are allowed to profit off business practices that directly harm the environment we occupy, whether it be by poisoning nature itself, or poisoning the minds of the people through extensive advertisements that appeal to their base desires: appetite and sexual desires. This environment that we have now, with fast food chains around every block, with pornography made to be available on demand, did not exist under the socialist nationalist model that existed in Italy under Mussolini. Not only were base desires not exploited for the profit of capital, but the well-being of the people was the focus of the economy. In short, when they worked for the economy, the economy worked for them, and not against them. When considering a socialist economic model to sustain the needs of Americans, it is appropriate to believe we ought to consider borrowing Italy’s idea of economic corporatism and socialism so that we may properly establish an environment that is environmentally friendly and healthy and promotes the well-being of one’s own health. That, precisely, is a lesson we must learn from Italy when constructing this new sustainable economic plan for America.

Stalinism Versus Traditional Marxism

The Communist Party of Russia would, in time, partially abandon the socialism of Marx, which we know to be internationalist, and replace it with a socialist nationalism. It is well-known that Joseph Stalin is responsible for the Holodomor famine, and various other murders that were deliberate; such things are rightfully condemned. Despite this, it is undeniable that when Stalin governed the citizenry that he deemed not traitorous, he did a decent job sustaining an economy, especially under the difficult circumstances of the Cold War, threats of American or pro-liberal espionage, and being cut off from trade with the “free world.” His governance set Russia on a path of “socialism in one country” (Michigan State University, 2015), countering the international socialism of Trotsky and the “left opposition” (Michigan State University, 2015), and he brought the Russian people to a state of economic sustainability and cultural stability (Mandell, 1946). Author Dr. Kerry Bolton asserts that “the USA has long been the center of ‘world revolution’, and continues to be so, while Stalin pursued the most un-Marxist policy of nationalism and imperialism… Stalinism therefore constitutes a major force for tradition and conservatism in the world, against globalization, while the USA maintains its mission as a center of contagion that spreads throughout the world” (Bolton, 2017).

Dr. Bolton, in his book Stalin: The Enduring Legacy, points out that in the early days of Stalin’s reign of power, many from the German right-wing thought that the Soviet Union would “transcend Marxism and become a nationalist state”, paving the road for a potential alliance with National Socialist Germany (Bolton, 2017). Even after World War II, when America lost its alliance with Russia and “sought German assistance against the USSR in the Cold War”, right-wing German veterans who had just fought against Soviets “refused to do so again under American direction” (Bolton, 2017). The new Socialist Reich Party, which was compromised of surviving members of Hitler’s NSDAP, considered America to be more dangerous for influencing world politics more so than Stalin’s party (Bolton, 2017). Even a large section of the American right-wing believed that the USSR was “[transcending] Marxism in favor of cultural and political health, recognizing that their own country was the real center of international subversion and revolution” (Bolton, 2017).

How can it be the case that Stalin’s Russia was economically anti-Marxist? And how could they have possibly benefitted from this? Stalin maintained that the direction of Russia would be that of “Marxism-Leninism” (Stalin, 1952), which is a breakaway from what one might call “orthodox” Marxism (Lenin, 1917). This ideology is explained properly in Vladimir Lenin’s “State and Revolution”, which asserts that the maintaining of a state is necessary in bringing about a dictatorship of the “proletariat” or working class (Lenin, 1917). This idea of dictatorship may just be the single thing about Stalin’s political platform that was Marxist.

While not admitting that fascist-like policies would pave the way for a sustainable economy in the USSR, Stalin did enact such policies, which can easily be found on record. Professor W. Mandell’s A Guide to the Soviet Union contains statements from Stalin’s amendments to the Russian constitution; Article 4 reads, “The socialist system of economy and the socialist ownership of the means and instruments of production, firmly established [because of] the abolition of the capitalist system of economy, the abrogation of private ownership of the means and instruments of production and the abolition of the exploitation of man by man, constitute the economic foundation of the USSR” (Mandell, 1946). Article 5 states, “Socialist property in the USSR exists either in the form of state property (the possession of the whole people) or in the form of cooperative and collective-farm property (property of a collective farm or property of a cooperative association)” (Mandell, 1946).

Article 5 mentioning the importance of state property being “possession of the whole people” is directly compatible with Gentile’s socialism. And the “form of cooperative and collective-farm property” or “property of a cooperative association” is yet another link to fascism when considering the association of cooperative groups in Mussolini’s Italy under the corporatist economic plan.

Another strictly anti-Marxist and pro-fascist stance exists in Article 10: “The right of citizens to personal ownership of their incomes from work and of their savings, of their dwelling houses and subsidiary household economy, their household furniture and utensils and articles of personal use and convenience, as well as the right of inheritance of personal property of citizens, is protected by law” (Mandell, 1946).

Here, Stalinism protected the right to private property, whereas actual Marxists do not believe in private property, they would rather everything be owned collectively by the society.

Article 12 provides another example of anti-Marxist socialism: “In the USSR work is a duty and a matter of honor for every able-bodied citizen, in accordance with the principle: ‘he who does not work, neither shall he eat’” (Mandell, 1946). This contradicts Marx’s mentality of people being entitled to the benefits of socialism due to their existence; here, Stalinist socialism is not a right, but a privilege – it is socialism based on merit. This merit-based socialism is similar to that of the socialism under Mussolini (Goldberg, 2020), and the German socialism of Hitler’s conservative opposition led by Oswald Spengler, as per his book, Prussian Socialism (Spengler, 1919).

Even more shocking, these anti-Marxist economic policies inspired Konstantin Rodzaevsky, the leader of the Russian Fascist Party, to write a letter to Stalin in 1945: “Not all at once, but step by step we came to this conclusion. We decided that: Stalinism is exactly what we mistakenly called ‘Russian Fascism’. It is our Russian Fascism cleansed of extremes, illusions, and errors” (Bolton, 2017). There are those that have, having examined the legacy of Stalin, referred him as a “red fascist” (red being the traditional color of communism). This is an appropriate, if only partially wrong, label for Stalin.

The only aspect of Stalinism that maintained a semblance of Marxism was Stalin’s refusal to achieve socialism through class-cooperation, but through the Marxian class-warfare, which brings the upper class, and lower class, into the middle, thus establishing a single class for the whole nation (Stalin, 1952). Although the Soviets would benefit from the socialist nationalism of Stalin, which had been pragmatic in its implementation of sustainable economics through its merit-based system of “give to the state, receive from the state” (Mandell, 1946), they suffered from not embracing their class distinctions, thus not allowing the overall capital (money) to properly sustain a totally healthy environment.  Stalin’s USSR, despite technically eliminating a poverty class, did establish poverty-like environments for the citizens (Mandell, 1946), as well as setting the standard of living to be sub-par for the average citizen. In other words, even though Stalin properly established sustainable economics, his embrace of Marxist class-elimination prevented a healthier environment from coming to fruition.

From this, we can learn what to do and what not to do. We know two things: Stalin’s implementation of socialist nationalism set a proper foundation for sustainable economics in the sense that when the people sustained the economy, the economy then sustained their needs as well. We also know that their needs were just barely met due to the elimination of class; we should therefore consider a vision of economy that does the former, but not the latter. Put simply, socialism only works when Marx is removed from the equation.

We know that socialism combined with nationalism, under a strong state, is the formula for success for achieving sustainable economics – when sustained by the people, such an economy sustains them in return. This very notion is what it means to have sustainable economics, which is what we do not have. Even though we do everything that we can to sustain the neoclassical economic system, it does not sustain the needs of all Americans across the board; it rewards a small portion of the upper class (those who own mass amounts of capital and run private monopolies), while the rest of us scrape by to afford housing, healthcare, higher education, and so forth.

Conclusion / Socialist Nationalism in an American Context

The answer to our problems is only as good as those who are willing to struggle and work for it. It would be a lie to suggest that the Italians under Mussolini, or the Russians under Stalin, had an easy time bringing about the nationalization of such utilities. Even so, under what we have now, it is just as hard, if not even harder, to achieve wealth beyond our wildest dreams, starting off as middle-class, or lower-class individuals. Why not struggle not just for yourself, but for your community?

Socialist nationalism, in theory, sets in stone an economic plan designed to cater to the needs of the group, as opposed to a single individual who seems to be the focus of liberal capitalism. The problems that exist now effect everybody living in this country, so it is only natural that we find a solution for everybody. It would be wise to bring this theory into practice and see if we can be as successful as the Italians before the second World War and outlast the Soviets.

Should we fail to do this, we leave the United States to remain as is: to continue leading the “free world”, and influence it greatly, with neoclassical economics and the problems that we have become so familiar with.

References

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Goldberg, Martin. (2020). The Truth About Mussolini and Fascism. Independent publishing.

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Socialism in One Country versus Permanent Revolution. (2015, September 24). Retrieved from http://soviethistory.msu.edu/1924-2/industrialization-debate/industrialization-debate-texts/socialism-in-one-country-versus-permanent-revolution/
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