From liberalism to fascism – Paul Mattick


Publicado em: Living Marxism: International Council Correspondence, Vol. V (1940-1941), No 4 (Spring 1941)


Rapid social changes affected the various layers of society in different ways, manifold opportunities opened up with the formation of capital. A belief in progress dominated the ideology of the prospering capitalist class so that even the most ruthless of the capitalist entrepreneurs were somehow convinced that the never-ending accumulation of capital would finally benefit the whole of humanity. The undeniable miseries that paralleled the increasing wealth were seen as regrettable imperfections, partly inherited from the past, which would be smoothed out to the satisfaction of all in the course of further development. Ever since Auguste Comte, burgeois thinkers interested in social questions have been thoroughly convinced that with the ascendancy of the capitalist system of production and its liberal political structure a society has finally been established in which all existing and possible problems can be peaceably solved through the “moralization of capital”.

The development of capitalism has been accompanied by the growth and decline of a number of anti-capitalistic ideas and movements. But as the ideologies dominating a historical period are those of the ruling classes, so the optimism prevalent in the early labor movement was a reflection of the “positivism” of the liberal bourgeoisie. The opponents of capitalism, too, took it for granted that the capitalistic expansion process would industrialize great parts of the world, develop international trade, and simplify class relationships through the increase of the proletariat. The moderate as well as the radical wings of the labor movement, adhering to various philosophical and organizational principles, were deeply convinced that with the success of capitalism the success of the laboring class was also assured. Class-consciousness and labor organizations were bound to grow with the increasing importante of large-scale industry, with the accompanying capital concentration, and with all the related structural changes in the direction of the two-class society.

The idea that progress would serve both the capitalists and their opponents, and the latter even better than the first, was a reflection of the practical unity between labor and capital, of the continuous interplay of class forces that excluded the development of a “pure” class-consciousness and a truly consistent revolutionary practice, and was, in addition, deeply rooted in the past. Because history cannot be turned backwards, there has been no alternative for the proletarian layers of society to their support of the bourgeois revolution. Though the workers simply had to fight on the side of the rising bourgeoisie, they were made to think and were fond of believing that in fighting for the cause of capitalism they were also preparing their own emancipation.

To find capitalistic and even pre-capitalistic elements in all anti-capitalistic theories, utopias, and movements is nothing to be wondered at. Not only can they be found at the initial stages of these movements, but they have been destined to gain importance in the course of time. Modern socialism, not wishing to arrest a development considered historically necessary, tried to help it forward by remaining progressive when the bourgeoisie itself had already become conservative. Recognizing the continuity of the historical processes, which it interpreted as a series of class struggles, the proletariat was to carry on where the capitalists left off. While the bourgeoisie was satisfied with a dialectical movement that retired with the creation of the bourgeois state, Marx continued to look at the society dialectically, that is, the worked in the direction and in expectation of a proletarian revolution.

The reaction fostered by the successful bourgeoisie could not be fought for long, however, with reminiscences of a revolutionary past. The farther the labor movement was removed from capitalism’s Sturm und Drang period the less it felt inclined to re-enact the historic drama of the bourgeois revolution in proletarian make-up. Marx himself became noticeably more scientific the older he grew, and “General” Engels was forced to reject as outmoded the once beloved strategy of the barricade. The growing possibility of apparently increasing profits and wages integrated the labor movement more securely into the capitalist structure. Politically, too, the laboring class became a seemingly important factor within bourgeois democracy, at least in Western Europe. “Onward and Upward” was the slogan of all classes, and neither revolutionary science nor propaganda could counteract the new spirit. The labor movement as a whole adopted the ideologies of those very bourgeois reformers whom Marx had thought unworthy of a serious critical appraisal. Finally, the Fabian Society and Bernstein’s “Revisionism” added dreary statistics to the already stale class collaboration ideology of John Stuart Mill – and called it a day.

Though it is true that the “original” Marxism contained bourgeois elements in its theory and practice, it more importantly embodied ideas and social forces quite incompatible with capitalist society. In the economic sphere capitalistic “progress”, that is, the accumulation of capital, Marxism saw as the accumulation of misery. The competitive, private-property economy was bound to meet ever-growing difficulties which it would finally not be able to overcome. The capitalist system was mortal. Its inner contradictions and outer limitations assured a rising labor movement that its hour of triumph was the nearer the more capitalism progressed. The revolutionary elements in Marxism were soon, however, either ignored or interpreted in a way that fitted them into the increasingly non-revolutionary practice of a labor movement thoroughly satisfied with capitalistic progress but in need of an ideology that camouflaged this fact. The revolutionary content of Marxism became a sort of spiritual exercise for holidays. It was brought out as compensation for the meagerness of the concessions wrested or bargained from the bourgeoisie. It served as a reminder to the ruling class not to relax in its duty towards its slaves.

The fact that attitudes, principles and activities, considered progressive at the stage of bourgeois enlightenment, entered the proletarian theory and practice is revealed also in the various concepts of what would constitute a new society. The new social structure advocated by revolutionary organizations, or the transformation of the existing order into the new one hoped for by the reformists, were very vague mental constructions. But even in their ambiguity these blue-prints of the future were as old as they searched rather for the lost paradise than for a new society, as for instance qhen Friedrich Engels, on the strength of a questionable theory of anthropology, conceived of the new society as regaining – albeit on a higher level – a long lost primitive communism. Marx himself asked the question whether or not the precapitalistic Russian village-communes could be of use and could play a part in a socialistic reconstruction of society. Ideologies bound up with early and even pre-capitalistic conditions also found a belated revival in the theories of anarchism. The slightly altered ideas of the petty bourgeoisie reappeared in programs designed to end all monopolistic rule by ending that of the state. Decentralization, social credits, labor exchanges, syndicates and other proposals were – so to speark – not only results of an intuitive recognition that the trend of capitalist development pointed toward the totalitarian state, but were connected also with the theories and practice of the remote past. After all, Hobbes wrote his Leviathan in the middle of the seventeenth century and the Jacobin terror had demonstrated quite early the possible absolutistic powers of a democratic-capitalistic regime.

The vague concepts of socialism were as misleading as they were useful. As Professor Pigou once remarked, if “we are setting a nude figure, with all its blemishes parent to the eye, against a figure that is veiled, we are tilting the balance against the nude”, that is, against capitalism. However, it is understandable that what the nude reveals will strongly influence any guess as to what the veil might conceal.

Capitalism developed from laissez faire to monopoly. Laissez faire itself presupposes the monopoly of the means of production in the hands of the capitalistic classe. But there was competition between individual entrepreneurs. This competition, however, was from the very beginning an imperfect one because it involved different aggregates of capital, shifts of production, variations in locality, in short, a whole series of economic, social, historical and geographical facts which had different meanings for different capitalists, and which turned all competitive “laws” into “laws” of monopolization. Capital formation was thus capital concentration, which, in turn, meant centralization of political control. Logically this whole development would end in a division of society into two groups: the owners of the means of production – which by virtue of their position ruled over all spheres of social life – and the rest of mankind. It was acknowledged, however, that this development did not need to reach its “logical conclusion”; that long before, due to the pressure of the contradictory processes involved, stagnation, social upheavals and revolutionary changes might occur. Nevertheless, the trend was towards the “General Cartel” – towards state capitalism, that is, a situation in which the state is completely taken over by capital. Accepting this whole process as inevitable, it was only consistent that the socialists should center their attention first of all on the state apparatus; the reformists by trying to gain control legally, the revolutionists by wanting to destroy the old in favor of a new state. But both were to realize fully what would have to take place anyway: the final merger of all economic and political power in the hands of a single authority. The reformists, should they control the state, would purchase the means of production from their capitalist owners; the revolutionists would expropriate them. In the Anti-Dühring Engels proclaimed that “the first act in which the state really comes forward as the representative of society as a whole – the seizure of the means of production in the name of society – is at the same time its last independent act as a state”. After that the state will “wither away” to make room for an “administration of things”. State power is thus sought to eliminate the power of the state and thereby that of capital. The concept of the workers state was not derived from a hypothesis of social control that reached into the future, but was the recognition of an inescapable necessity which was determined by the previous development of capitalism.

Necessity was turned into a virtue. Shortly before the “first workers’ state” came into being, its main proponent, Lenin, began to describe socialism as “nothing but the next step forward from state capitalist monopoly, as nothing but state capitalist monopoly made to benefit the whole people”. State monopoly, especially in its most obvious form obtaining during war conditions, became for Lenin “the fullest material preparation for socialism”, provided the ruling personnel was changed. The whole content of the proletarian revolution was now seen as the replacement of a selfish ruling class by a beneficent state apparatus. “If Russia was ruled by 130,000 landowners”, Lenin once said, there is no sense in telling us that Russia will not be able to be governed by 240,000 members of the Bolshevik Party”. And long before this opportunity arose, he had insisted that “the social democrat’s ideal should not be a trade-union secretary, but a tribune of the people”.

To square his political “realism” with his Marxian “orthodoxy”, indispensable in the struggle against the capitalist and reformist opponents of bolshevism, Lenin transformed Marx’s casual statement that the socialist society as it emerges out of capitalism would look different from one with a long history of its own into the useful formula “from socialism to communism”. “Socialism” was the basis for communism, just as capitalist state monopoly had been the basis for “socialism”. Thus every communist must support “socialism” and favor state monopoly; he can raise no objection to the demand that until communism arrives the strictest state control over production and distribution is required.

When Engels proclaimed that the proletariat siezes the power of the state and changes the ownership of the means of production into state ownership, it is clear that he assumed that there had not been a change of ownership into state-ownership before. Otherwise he could only have said that the capitalist state monopoly must be replaced by a socialist state monopoly. Thus Lenin proceeded quite “marxistically” to capture the state, nationalize all productive property, and regulate the economy according to a plan. To fulfill the Marxian program completely there remained only for the state to “wither away”. What must be noticed, however, is that where Marx and Engels dealt with the socialistic reconstruction of society in an extremely vague manner, mainly outlining a few general principles such as can be found in the Critique of the Gotha Programme, Lenin had a specific and concrete concept of the structure and character of the socialism that the bolsheviks were to institute. His model – so to speark – was to be found in the German postal service, his “socialism” was almost identical with the “socialism” of the German war-economy. To take over capitalism when it reached its highest concentration and centralization meant to Lenin to complete the socialization process that capitalism itself initiated and fostered through its own peculiar laws of development. In advanced monopolistic nations the political overthrow of the state would today suffice to turn into socialism what only yesterday operated under the false name of capitalism. In Russia it was more complicated, because there the proletariat had to both make and unmake the bourgeois revolution, since the bourgeoisie proper was no longer capable of fulfilling its historical mission, that is, preparing the ground for the socialist society.

Marx and Engels were scientists not prophets. They analized the capitalist system as they knew it and drew some conclusions as to its developmental tendencies, but they did not predict the future in all its details. They did not foresee the present totalitarian regimes. For them the state was essentially an instrument to secure the rule of the capitalist class. If, with the concentration of capital, the ruling body became smaller, the state would serve fewer interests and oppose larger masses. But Marx and Engels never followed their own lines of thought to the end, for they were convinced that capitalism would not be able to reach a point of development that allowed for the complete merger of state and capital, and for some kind of planned economy. Both knew that trustification and protecionism were attempts to bring some sort of regulation into the national and international markets, but they felt sure, as Engels pointed out in a footnote to the third volume of Capital, that such “experiments are practicable only so long as the economic weather is relatively favorable… although production assuredly needs regulation, it is centainly not the capitalist class which is fitted for that task; the trusts have no other mission but to see to it that the little fish are swallowed by the big fish still more rapidly than before.” For Marx the process of capitalist expropriation would not end in a gigantic super-trust merged with the state. Trusting in the growing powers of the working class, his concept of the capitalist accumulation ended, as he once wrote to Engels, “in the class struggle as a finale in which is found the solution of the whole smear.”

For a long time to come, however, the actual class struggles merely served as incentives for a more rapid capital accumulation. Capitalism proved itself very adaptable to changing circumstances. The periodically recurring crises strengthened rather than weakened it. The class struggle became quite unimportant. The dominant issue was the changing character of capitalism itself. Trustification, cartellization, monopolization, often over-reaching national boundaries, pointed in the direction of market regulations, planned production and crisis control. A new era had seemingly begun. Capitalism, at least that capitalism of which Marx had written, neared its end. The socialist theoretician Hilferding pointed out that each capitalist must not only make profit, but must accumulate in order to remain a capitalist. But accumulation is the concentration of capital in fewer hands. Thus in pursuing his capitalistic end, each capitalist progressively destroyed the opportunities for pursuing capitalistic ends. With the concentration of all capital in “one hand”, capitalism would have reached its “goal”. There would then no longer be a capitalist end that could be pursued. Capital accumulation in the previous sense of the term would no longer be possible, because where all is concentrated concentration stops. Kautsky a little more timidly applied the same reasoning to problems of international relations in his theory of “Ultra-Imperialism”.

At first glance all this seems quite in step with Marxism, for Marx himself was convinced that, nationally as well as internationally, “everything the bougeoisie centralizes favors the working class”. Yet this would not spare the working class the trouble of the revolution. For Marx the development from laissez faire to trustification was not a straight line. This development was a contradictory process of prosperity and depression, creation and destruction, centralization and decentralization, progress and reaction. The contradiction inherent in the relations of production could never be overcome by way of centralization, that is, by a mere organizing principle. It would be reproduced on an elarged scale as production itself was enlarged and the scope of capitalist activity widened. The end of laissez faire was not the end of competition; it only led to the more forceful competition of monopolies. National centralization indicated a trend not towards pacification but towards imperialistic wars. There were no doubt quantitative changes; a qualitative change, however, involves class action. As long as there were owners or controllers of the means of production on the one hand and an empty-handed laboring class on the other, all reproduction involved the reproduction of the exploitative relationship. Only that class which owned nothing could be interested in ending this relationship, and could thus stop a continuous reproduction process that involved the reproduction of all conditions connected with and determined by the existing class relations. Short of the abolition of the class relations all transformation would only be new expressions of the same old capitalist society.

The socialist reformists did not deny that the competitive struggle reproduced the inner contradictions of capitalism on a larger scale, but they thought that this process was coming to an end because of a lack of competitors. Assuming that this end would be reached, Hilferding wrote in his Finanzkapital, “the whole of capitalist production would be consciously regulated by one authority… it would still be a society in antagonistic form. But this antagonism would be one of distribution. The distribution itself would be consciously regulated.” At this stage of development all previous capitalistic categories would lose their meaning. The single authority would arrange what should be produced and under what conditions; it would control the products, and would distribute them as it saw fit. Under such conditions, the only reason for displacing with socialists a capitalist authority, that is, the personnel brought into controlling position by the previous development, would be the conviction that the socialists knew how to serve society better. From then on the historical process would be determined by the actions of the persons comprising the single authority. It would make no difference whether these persons stemmed from the capitalist class, the middle class, or the working class; the quality of leadership would be all that mattered.

Though Lenin was a great admirer of the Marxian “orthodoxy” of Kautsky and Hilferding, he soon disagreed with them on practical issues. Independent of the question as to whether or not their theories would work in Western Europe, it was certain that they did not fit the Russian conditions. To wait for capital-concentration among the Russian peasantry simply meant asking too much. A revolution was in the making; one had to participate and adapt oneself to its specific conditions. Though Lenin did not possess the patience of the reformist who waited for the “ripening” of socialism, he enthusiastically accepted their notion that history could be made by a directorate as soon as capital was concentrated in “one hand”. “State capitalism”, he said at a Congress of the Bolshevik Party, “is that form of capitalism which we shall be in a position to restrict. This capitalism is bound up with the state, and the state – that is, the workers, the most advanced part of the workers, the vanguard, is ourselves, and it is we on whom the nature of this state capitalism will depend”. In view of the hierarchical arrangements within the party, all that was left to say was what Louis XIV said shortly before the bourgeois revolution, “L’etat, c’est moi”, and that is now, at the “end” of capitalism, on the lips of a hundred million Germans, “Hitler ist Deutschland!

The application of these principles in Russia was intended to do and do better what the capitalist had not succeeded in doing. It was an enormous job. There can be no doubt that Lenin and Trotsky applied the terms “traitor” and “hypocrite” to the Hilferdings and Kautsky not for competitive purposes only, but because they were really convinced that these people betrayed their own principles. After all, the essential differences between reformists and revolutionists were to be found in their struggle-for-power policies, not in their methods for building socialism. True, Russia was not “ripe”, but could it not be helped along by doing consciously what in the capitalistic nations went on behind the backs of the people? The socialists had no answer. To find anti-bolshevik arguments at all they had to borrow from the white counter-revolution.

In his book “Terrorism and Communism” Trotsky wrote that “without militarization of labor and state compulsion… socialism will remain an empty sound… There is no way to socialism except by the authoritative regulation of the economic forces and resources… …and the centralized distribution of labor in harmony with the general state plan.” This was in full accord with the ideas nourished by all socialists of the time, yet the majority of the social-democrats refused to accept the bolshevik regime as a socialistic one. Under this regime socialists and their followers went to Siberia just as they went under the Czar. But the socialists could not claim that they were opposing a capitalist regime, nor could they admit that they were out to crush socialism. What then did they oppose?

Actually the problem solves itself very easily; “theoretically” it is a little more difficult. The socialists had constructed a beautiful theory of social development; capital itself was the great “socializer”. One had only to wait. Waiting was quite bearable since it schooled the masses, developed discipline, created group-solidarity, a worker’s culture. In short, instead of money, as Marx had said, capitalism was sweating socialism out of all its pores. To be sure, money did not disappear altogether. Trade-union and secretarial salaries increased with the growth of the cultural requirements of the emancipated proletarians. Naturally, the emancipation could be achieved only gradually – one secretariat after another. The dimes and nickels of the millions created fortunes as well as the hundreds of thousands of any baker’s dozen of capitalists. The socialists did not need to wait for Woolworth to demonstrate this fact. Every Balkan peasant knows that small animals also give manure. Lucrative jobs were waiting in governmental and labor institutions; money was made and cleverly invested. The emancipated proletarians learned to appreciate what Disraeli described as “the sweet simplicity of the three per cent”. No, there was no need to search deep into the soul of man to understand why the socialists could not accept bolshevism.

Theoretically the socialist opponents could not admit the capitalistic character of the Russian social system because it applied their own theory of socialization. Unable as socialists to fight a socialist state, they were forced to invent new definitions which fitted neither capitalistic nor socialistic ideals. At first Russia was denounced as a new variety of an eternal Asiatic barbarism. The fascization of Western Europe led to a refinement in description. Only recently Hilferding wrote in the Sotsialistichesky Viestinik that the Russian economy is neither capitalistic nor socialistic, but a “totalitarian state economy”, a “personal dictatorship”, Stalin’s state, in which “economy no longer has its own laws, but is directed from above.” In short, the centralization of all capital in “one hand” has been literally accomplished. For the present-day Hilferding this goes too far. Earlier he was quite willing to accept an economy consciously regulated by a civilized, well-meaning and, if possible, social-democratic central authority. But a personal dictatorship, especially of a Stalin, he rejects. Thus he is now convinced that the dreamed of “managing of things” may become an “unlimited domination over man”, and he says that “we must change our over-simplified and schematic ideas about the inter-relationships between economy and the state.”

Not only Hilferding, but most politically-minded people are now reconsidering their former conceptions of capitalism, socialism, the state, and their interrelationships. It was not the Russian Revolution that stirred them up, however, but the rise of fascism, and especially the successes of the German Nazi-state. The Russian Revolution had rather reestablished the belief in “progress” somewhat dimmed by three years of warfare. All went according to schedule: accumulation, crisis, war, revolution, socialism. But in Western Europe the new hope led to no more than the applaudng of the heroic deeds of the Russian workers. A few million dead soldiers had not been able to destroy the theory of “gradualism” that dominated the pre-war ideologies. Only the so-called fascist revolutions ended the reformists’ dreams by killing off the dreamers. But instead of the situation becoming clearer, now that the “dream was lost”, it only became more bewildering. Less than ever do people understand the meaning of their own activities and the happenings in their world.


The fascist state, and even more so the bolshevik state, are both old and new, just as all anti-capitalistic ideas have been both old and new. Thus some observers are able to see in the rise of bolshevism and fascism the beginning of a world-wide social revolution, and others can speark gloomily of a return of the Dark Ages. Indeed, it seems that ideas of the mercantilistic stage of early capitalism re-appear in national-socialistic concepts, that money-economy returns to earlier barter-schemes, that the internationality of capitalist trade yields to autarchy, that wage-workers find themselves once more in servitude. And yet, the Blitzkrieg changes the map of the world even faster than the imperialism of liberalism; production for whatever purpose exceeds all previous records; capital is spreard to all corners of the world; populations are shifted on a scale that makes the mass emigrations of the past appear like jaunty week-end excursions. Munitions plants in the jungles of the Dutch Indies, airplane assemblies in the woods of deepest China, death-bearing “Liberators” crossing the Atlantic in 7 1/2 hours, engineering feats of bomb-proof dogouts for 46 divisions awaiting Der Tag of the invasion, enthusiastic shock-troops in field, factory and enemy territory – certainly this cannot mean that the clock has been turned back.

Can this be capitalism? Has not capitalism long been decaying? Has it not suffered under the permanent crisis, unused resources, stoppage of capital export, millions of unemployed and, worst of all, the decline of profits? And then what was the meaning of the bolshevik coup d’etat, the March on Rome, the Reichstag fire? What explains the variety of procedures of Mussolini’s syndicated corporate state, in the Russia which abolished all individual property rights, in the state-controlled German economy? What do these differences mean in regard to the interests of capitalists, workers, farmers, and the middle class? What should be accepted, what rejected? And so on – endlessly.

Let us recall for a moment Hilferding’s remark that in Stalin’s Russia “economy no longer has its own laws”. We already know that, according to Hilferding, economic laws concentrate capital into fewer hands – finally, into “one hand”. Connected with these laws were other “laws” referring to the capitalist mechanism as it operates at any time during the general developmental process. With the social capital united in “one hand”, these captialistic categories would lose their force and meaning. Until then the development of capital would be determined by the “law of value”, the automatic regulator of capitalist production and distribution.

The “law of value” was discovered by Marx’s forerunners, the exponents of political economy. It served to show that the capitalistic market mechanism benefitted the whole of society; an “invisible hand” guided all dispersed individual activity towards the common goal – an economic equilibrium in which each one receives his proper share either in the form of profits, interests, or wages. For Marx the definition of value in terms of labor meant something other than what it meant for classical economy. “In the haphazard and continually fluctuating relations of exchange between the various products of labor”, he said, “the labor time socially necessary for their production forcibly asserts itself as a regulating natural law just as the law of gravity does when the house collapses over our heads.” It is only in its conceptional form that Marx’s “law of value” is connected with that of the classicists. It is distinguished from the latter through its close connection with the social conditions underlying the capitalist economy. In 1868 in a letter to Dr. Kugelmann, Marx wrote, “Even if there were no chapter on ‘value’ on my book, the analysis of the real relationships which I give would contain the proof and demonstration of the real value relations… Every child knows that a country which ceases to work, I will not say for a year, but for a few weeks, would die. Every child knows, too, that the mass of products corresponding to the different needs require different and quantitatively determined masses of the total labor of society. That this necessity of distributing social labor in definite proportions cannot be done away with by the particular form of social production, but can only change the form it assumes, is self-evident. No natural laws can be done away with. What can change, in changing historical circumstances, is the form in which these laws operate.”

In other words, the social division of labor entails some form of coordination of all individual operations to satisfy human needs. But private-property capitalism has no co-ordinating agency. That function is supposedly fulfilled by the exchange process. Human necessities must first be translated into value relations before they can be realized. The value relations appear as “economic laws” only by virtue of the fact that capitalists pursue individual ends in a society based on social labor. But the atomized activity of capitalist producers is only a historical fact, not an economic necessity. Capitalism emerged as a new class society out of another class society. It thus developed further the social labor process without being able to make it really social, that is, without being able to co-ordinate all partial functions in such a manner that the whole of society could participate in the progress connected with an increassing productivity.

Marx argued within the conceptional framework of classical economy in order to fight the bourgeois economists on their own ground, to show that their ideas failed to convince even in their peculiar fetishistic setting. But in doing so, he only translated into bourgeois-economic terms existing social relationships, that is, the actual fight between human beings and between classes to gain their separate ends without regard to any economic law or social necessity. He showed that no mysterious “invisible hand” was guiding society, but that it was “regulated” by the defeats and successes of groups and individuals in the relentless permanent social war. This war appears as the ordinary economic activity in which people engage; it is a war, nevertheless. The “economic laws” were exposed as relations between persons and classes in the productive process, and in social life generally.

The “economic laws” of capitalism, which have now supposedly culminated in the “directed economy”, were of a fetishistic nature. Their end can only lay bare the real relationship they covered up. In other words, the end of these “economic laws” does not prove the existence of a new type of society, but only robs the capitalist society of its disguises. Behind all capitalistic categories there finally stands nothing but the exploitation of the many by the few. Because for historical reasons capitalist society started out as an aggregate of numerous large or small units, the accumulation of capital resulted from the quasi-independent activity of individual capitalists, profits and wages appeared to be regulated by market laws. For historical reasons, too, the state began as an executive organ for all capitalist interests and was thus the property of none.

To the capitalist mind for which its own society was the final product of all social development and class relations were natural necessities – the capitalist relationships in production and exchange appeared as real economic laws which determined and limited the behavior of men. To improve society it was only necessary to understand these laws better. However, all “scientific” economic theory remained mere ideology; though as an ideology it was forceful and well served the capitalist ends. As an ideology it entered even anti-capitalistic theories and mystified all social questions the simpler they became. The rise of the totalitarian state cannot be understood, nor its character grasper, by people unable to free themselves from this ideology which speaks of “economic laws” when it describes no more than the exploitation of men by men within a particular historical setting and at a certain developmental stage of social production and technique. However, fascism’s “ending” of the assumed “economic laws” – which are now exposed as no more than a special form in which, within the atomized capitalist society, certain natural necessities assert themselves despite class and profits needs does not prove that there are no economic laws at all; it only shows that such laws can have nothing in common with those relationships the bourgeois economists describe as economics laws. The claim that fascism has brought to an end the “economic laws” which “regulated” capitalist society cannot be taken seriously, for one cannot end something that does not exist.

What the fascists are doing is to react differently to the inescapable need for distributing the social labor in such proportions that society can exist at all. That is, they have within given territories developed methods of doing consciously what hitherto was left to chance. The results of the struggle of all against all and of class against class, fought out in the sphere of exchange, disguised these real struggles as peaceful automatic exchange relations. What the fascists have done is to bring into daylight what had been hidden behind economic terms. They could not help unmasking the exchange relations as the relation between classes – one controlling, the other controlled – because they themselves rose to power by political struggles, not by grace of an economic law.

The law of value in the Marxian sense asserts itself by way of crisis and revolution. Under conditions of production and exchange in charge of a large number of relatively small enterprisers, and the existence of a variety of class interests and group interests within the classes, that is, in the so called laissez-faire period of capitalism, each class, each group, each capitalist had only a limited power to violate the interests of others. In bourgeois-economic terms this situation was seen, or could be expressed, as prices tending towards their value. The unequal development of the powers possessed by capitalists and classes, because of unequal beginnings and opportunities, and the inequality of social position meant that development took place as concentration of capital and centralization of political power. The strong could violate the weak in increasing measure. The distribution of social labor in definite proportions became ever more a distribution according to the needs of the determining capitalistic groups. If the contradictions between capital and social needs became too great, a crisis occurred. The crisis enforced re-organizations in the capital structure so that the capitalists could continue to serve exclusively their own needs without inviting punishment. The day of reckoning was postponed, and has been postponed until now. In this very process, however, the face of capitalistic society has changed continuously.

All this can be expressed in economic terms, that is, can be described as the “law of accumulation”, the “changing organic composition of capital”, the “tendency of the rates of profit to decline”, and in many other ways, as it is actually done in various crisis theories. But all these formulations only say in different words that on the basis of the existing divisions of labor, modern technique, and the prevailing class structure, more and more power is given to the successful groups to enforce their will upon society. This led to the conclusion that if one single group should usurp complete control over all capital, it would depend on the character of this group whether it would use its powers to distribute the social labor with a view of pleasing everybody, or use it to satisfy its own desires at whatever cost to society. It was not to be expected, however, that the cartellized monopolists would on their own part use their power to harmonize the social needs with the social division of labor. They either would have to be forced to do so, by more socially-inclined groups, or to be replaced by a socialistic regime. Thus not the working class, but separate organizations, parties as they had developed within the liberal structure, were thought of as the realizers of socialism.

Each political party, servind not the limited interests of one or another group within the accepted framework of capitalism, but aspiring to control society completely in order to realize one or another social theory, had thus to develop as a dictatorially-inclined party. Whatever parties claimed to favor democracy, that is, the democracy that existed, were destined to disappear, because the concentration process in society deprived, them of their basis of existence. But the question which of a number of such organizations will finally gain power depends on a great complex of circumstances. There is no general formula for gaining power except that which says you have to take it. The composition of the group which becomes the single authority and its road to power may be quite different in every case. It is nonsense to address a particular group as one which, because of its special position or function in society, is scheduled to rule. No generalization can here approach realities. To explain the rise of Bolshevism in Russia a separate study is needed, to explain the rise of German fascism another is necessary. But to understand why the capitalist development tends to wind up in the dictatorship of one group over the whole of society it is only necessary to recognize the class character of society and to understand how this class nature determines the peculiar character of the developing economic and political structure of capitalism as one which concentrates, in the hands of a few, all that is created and belongs to the labor of all.

The successful party controls both the state and capital. But a state can under certain circumstances transform itself into a “party” and combine political and economic power in its dictatorship. Many roads lead to Rome. The old idea that monopoly capital would control for its purposes the state apparatus has proved an illusion. This much only is clear. The old idea was the result of the generally accepted belief in capitalistic progress as determined by its “economic laws” of motion. There were no such economic laws; hence “progress” could take another course. But the stubborn insistence that old theories are truer than new facts, and insistence connected both with material group interests and the psychological difficulty of admitting defeat, still allows for wide-spread discussions as to what constitues the difference between, say, Russia, Germany, and the United States. Those subjected to the fetishistic laws of capital have certainly lost a world with the establishment of the totalitarian states. Those adhering to the frozen ideology of bolshevism indeed see differences between fascism and bolshevism as great as between day and night. And every child can see that neither Russia nor Germany can be compared with the United States. Differences between these nations cannot be denied, but only a blind fanaticism could insist that Hitler serves a group of independent monopolists, that Stalin plans or fosters the resurrection of private property in the old laissez-faire sense, that Roosevelt’s policies have as their basis the desires of the dominating groups of capitalists. It is also senseless to find a decisive difference between two systems in the fact that in Russia a party came to power illegally, and in Germany legally, or to distinguish between them, because in the one capital was expropriated at once and in the other only gradually. Neither is there any sense in distinguishing between a rising and an existing fascist regime, that is, between the latter and the “democracies”, unless one has the power to turn events away from their present direction. To call one economic system capitalistic, another socialistic, and the third nothing for lack of terms, does not solve any question. Instead of arguing about names, one should describe in concrete terms the actual relations between men and men in the productive process, and their position in relation to the extra-economic sources of power. When one does that, all discernable differences become quite unimportant. In essentials all these systems are alike. In each a separate group controls all power sources and hence controls the rest of society.

The rule of party as state, or of a state as party, and their control over the society, results from previous happenings. Advancing capitalization displaced individual capitalists with autonomous capitalist groups, individual workers with trade and political organizations. There arose – as it were – within the state a number of smaller “states” which interfered with the successful functioning of the state just as much as the monopolies interefered with the competitive rule of the market. Economic crisis conditions were accompanied by the crisis of democracy. To “solve” the first, the second had to be taken care of. But just as the bourgeoisie was unable to overcome the economic crisis, so it was unable to solve the political one. If a party could take state-power, or a state abolish all parties, it could “end” the political crisis. It could thus, unhampered, attempt to reorganize the economic structure. In fully developed capitalist nations a party may not need a real revolution to accomplish this task, nor does a state have to wait for such a party. Only in backward nations are revolutions necessary for this purpose.

Although the growing influence of the state in capitalist society has been directly identified with its increasing monopolization, the apparent parallelism discernible here has to be understood not as a process in which one hand washes the other – that is, as if the monopolistic units themselves were fostering the power of the state, and the latter exercised this power in the exclusive interest of the monopolists, – but must be seen in connection with and within the setting of the general national and international competitive process. The state, essentially a monopolistic enterprise like any other, developed its own vested interests and had a better opportunity to defend them within the permanent international crisis conditions. It could with the help of social movements become the most important monopoly and within the framework of imperialistic rivalries combine all power in society in one hand, and thus begin to “plan” the nation.

From this point of view state rule over the economy and therewith totalitarianism is but another step int he concentration process which accompanied the whole development of capital. It is a new phase in the history of the capitalistic social and international division of labor based on the divorce of the producers from the means of production. Like any previous re-organization of the capitalist structure in the wake of a crisis, this new reorganization, expressed in a limited “planning”, succeeded at first in overcoming an existing stagnation. These initial successes, however, only obsure the real character of its “planning”, just as previously a new propserity based on re-organization processes that took place during the crisis had given rise to hopes that noew at last the philosopher’s stone had been found. In reality, as the spreading of the war shows only too clearly, the anarchy of the market has been replaced by the anarchy of “planning”. By gearing the whole economy to the needs of war all crisis symptoms disappear as they disappeared under war conditions in the liberalistic age. But the very existence of this war indicates that the separate interests of the diverse state-apparatuses – each of which comprises a group of privilege people – clash with the real needs of the social world just as violently, if not more so, as did the private-property interests of times past. All capitalistic categories today are reproduced not in their fetishistic form but in their actual character; they are reproduced on a still greater scale, violating more than ever the needs of manking.

All transcriptions were done by Felipe Andrade. Did you find any mistakes? Suggestions? Send e-mail to:
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