by Karl Polanyi
Since the Great War two changes have taken place which affect the position of socialism. First, the market system proved unreliable to the point of almost total collapse, a deficiency that had not been expected even by its critics; second, a socialist economy was established in Russia, representing an altogether new departure. Though the conditions under which this venture took place made it inapplicable to Western countries, the very existence of Soviet Russia proved an incisive influence. True, she had turned to socialism in the absence of developed industries, general literacy, and democratic traditions—all three of which according to Western ideas, were preconditions of socialism. This made her special methods and solutions inapplicable elsewhere, but did not prevent socialism from becoming an inspiration. On the Continent workers’ parties had always been socialist in outlook and any reform they wished to achieve was, as a matter of course, suspect of serving socialist aims. In quiet times such a suspicion would have been unjustified; socialist working-class parties were, on the whole, committed to the reform of capitalism, not to its revolutionary overthrow. But the position was different in an emergency. If normal methods were insufficient, abnormal ones would then be tried, and with a workers’ party such methods might involve a disregard of property rights. Under the stress of imminent danger workers’ parties might strike out for measures which were socialistic or at least appeared as such to the militant adherents of private enterprise. And the very hint would suffice to throw markets into confusion and start a universal panic.
Under conditions such as these the routine conflict of interest between employers and employees took on an ominous character. While a divergence of economic interests would normally end in compromise, the separation of the economic and the political spheres in society tended to invest such clashes with grave consequences to the community. The employers were the owners of the factories and mines and thus directly responsible for carrying on production in society (quite apart from their personal interest in profits). In principle, they would have the backing of all in their endeavor to keep industry going. On the other hand the employees represented a large section of society; their interests also were to an important degree coincident with those of the community as a whole. They were the only available class for the protection of the interests of the consumers, of the citizens, of human beings as such, and, under universal suffrage, their numbers would give them a preponderance in the political sphere. However, the legislature, like industry, had its formal functions to perform in society. Its members were entrusted with the forming of the communal will, the direction of public policy, the enactment of long-term programs at home and abroad. No complex society could do without functioning legislative and executive bodies of a political kind. A clash of group interests that resulted in paralysing the organs of industry or state—either of them, or both—formed an immediate peril to society.
Yet precisely this was the case in the 1920s. Labor entrenched itself in parliament where its numbers gave it weight, capitalists built industry into a fortress from which to lord the country. Popular bodies answered by ruthlessly intervening in business, disregarding the needs of the given form of industry. The captains of industry were subverting the population from allegiance to their own freely elected rulers, while democratic bodies carried on warfare against the industrial system on which everybody’s livelihood depended. Eventually, the moment would come when both the economic and the political systems were threatened by complete paralysis. Fear would grip the people, and leadership would be thrust upon those who offered an easy way out at whatever ultimate price. The time was ripe for the fascist solution.
* Hadley, A. T., Economics: An Account of the Relations between Private Property and Public Welfare, 1896.
† Bentham, J., Manual of Political Economy, p. 44, on inflation as “forced frugality”; p. 45 (footnote) as “indirect taxation.” Cf. also Principles of Civil Code, Ch. 15.
* Polanyi, K., “Der Mechanismus der Weltwirtschaftskrise,” Der Österreichische Volkswirt, 1933 (Supplement).
C H A P T E R T W E N T Y
History in the Gear of Social Change
If ever there was a political movement that responded to the needs of an objective situation and was not a result of fortuitous causes, it was fascism. At the same time, the degenerative character of the fascist solution was evident. It offered an escape from an institutional deadlock which was essentially alike in a large number of countries, and yet, if the remedy were tried, it would everywhere produce sickness unto death. That is the manner in which civilizations perish.
The fascist solution of the impasse reached by liberal capitalism can be described as a reform of market economy achieved at the price of the extirpation of all democratic institutions, both in the industrial and in the political realm. The economic system which was in peril of disruption would thus be revitalized, while the people themselves were subjected to a reeducation designed to denaturalize the individual and make him unable to function as the responsible unit of the body politic.* This reeducation, comprising the tenets of a political religion that denied the idea of the brotherhood of man in all its forms, was achieved through an act of mass conversion enforced against recalcitrants by scientific methods of torture.
The appearance of such a movement in the industrial countries of the globe, and even in a number of only slightly industrialized ones, should never have been ascribed to local causes, national mentalities, or historical backgrounds as was so consistently done by contemporaries. Fascism had as little to do with the Great War as with the Versailles Treaty, with Junker militarism as with the Italian temperament. The movement appeared in defeated countries like Bulgaria and in victorious ones like Jugoslavia, in countries of Northern temperament like Finland and Norway and of Southern temperament like Italy and Spain, in countries of Aryan race like England, Ireland, or Belgium and non-Aryan race like Japan, Hungary, or Palestine, in countries of Catholic traditions like Portugal and in Protestant ones like Holland, in soldierly communities like Prussia and civilian ones like Austria, in old cultures like France and new ones like the United States and the Latin-American countries. In fact, there was no type of background—of religious, cultural, or national tradition—that made a country immune to fascism, once the conditions for its emergence were given.
Moreover, there was a striking lack of relationship between its material and numerical strength and its political effectiveness. The very term “movement” was misleading since it implied some kind of enrolment or personal participation of large numbers. If anything was characteristic of fascism, it was its independence of such popular manifestations. Though usually aiming at a mass following, its potential strength was reckoned not by the numbers of its adherents but by the influence of the persons in high position whose good will the fascist leaders possessed, and whose influence in the community could be counted upon to shelter them from the consequences of an abortive revolt, thus taking the risks out of revolution.
A country approaching the fascist phase showed symptoms among which the existence of a fascist movement proper was not necessarily one. At least as important signs were the spread of irrationalistic philosophies, racialist aesthetics, anticapitalistic demagogy, heterodox currency views, criticism of the party system, widespread disparagement of the “regime,” or whatever was the name given to the existing democratic setup. In Austria the so-called universalist philosophy of Othmar Spann, in Germany the poetry of Stephen George and the cosmogonic romanticism of Ludwig Klages, in England D. H. Lawrence’s erotic vitalism, in France Georges Sorel’s cult of the political myth were among its extremely diverse forerunners. Hitler was eventually put in power by the feudalist clique around President Hindenburg, just as Mussolini and Primo de Rivera were ushered into office by their respective sovereigns. Yet Hitler had a vast movement to support him; Mussolini had a small one; Primo de Rivera had none. In no case was an actual revolution against constituted authority launched; fascist tactics were invariably those of a sham rebellion arr
anged with the tacit approval of the authorities who pretended to have been overwhelmed by force. These are the bare outlines of a complex picture in which room would have to be made for figures as diverse as the Catholic freelance demagogue in industrial Detroit, the “Kingfish” in backward Louisiana, Japanese Army conspirators, and Ukrainian anti-Soviet saboteurs. Fascism was an ever-given political possibility, an almost instantaneous emotional reaction in every industrial community since the 1930s. One may call it a “move” in preference to a “movement,” to indicate the impersonal nature of the crisis the symptoms of which were frequently vague and ambiguous. People often did not feel sure whether a political speech or a play, a sermon or a public parade, a metaphysics or an artistic fashion, a poem or a party program was fascist or not. There were no accepted criteria of fascism, nor did it possess conventional tenets. Yet one significant feature of all its organized forms was the abruptness with which they appeared and faded out again, only to burst forth with violence after an indefinite period of latency. All this fits into the picture of a social force that waxed and waned according to the objective situation.
What we termed, for short, “fascist situation” was no other than the typical occasion of easy and complete fascist victories. All at once, the tremendous industrial and political organizations of labor and of other devoted upholders of constitutional freedom would melt away, and minute fascist forces would brush aside what seemed until then the overwhelming strength of democratic governments, parties, trade unions. If a “revolutionary situation” is characterized by the psychological and moral disintegration of all forces of resistance to the point where a handful of scantily armed rebels were enabled to storm the supposedly impregnable strongholds of reaction, then the “fascist situation” was its complete parallel except for the fact that here the bulwarks of democracy and constitutional liberties were stormed and their defenses found wanting in the same spectacular fashion. In Prussia, in July 1932, the legal government of the Social Democrats, entrenched in the seat of legitimate power, capitulated to the mere threat of unconstitutional violence on the part of Herr von Papen. Some six months later Hitler possessed himself peacefully of the highest positions of power, whence he at once launched a revolutionary attack of wholesale destruction against the institutions of the Weimar Republic and the constitutional parties. To imagine that it was the strength of the movement which created situations such as these, and not to see that it was the situation that gave birth in this case to the movement, is to miss the outstanding lesson of the past decades.
Fascism, like socialism, was rooted in a market society that refused to function. Hence, it was worldwide, catholic in scope, universal in application; the issues transcended the economic sphere and begot a general transformation of a distinctively social kind. It radiated into almost every field of human activity whether political or economic, cultural, philosophic, artistic, or religious. And up to a point it coalesced with local and topical tendencies. No understanding of the history of the period is possible unless we distinguish between the underlying fascist move and the ephemeral tendencies with which that move fused in different countries.
In the Europe of the 1920s two such tendencies—counterrevolution and nationalist revisionism—figured prominently and overlay the more comprehensive but fainter pattern of fascism. Their starting point was, of course, the Peace Treaties and postwar revolutions, respectively. Though both counterrevolution and revisionism were obviously limited to their specific objectives, they were easily confounded with fascism.
Counterrevolutions were the usual backswing of the political pendulum toward a state of affairs that had been violently disturbed. Such moves have been typical in Europe at least since the English Commonwealth, and had but limited connection with the social processes of their time. In the 1920s numerous situations of this kind developed, since the upheavals that destroyed more than a dozen thrones in Central and Eastern Europe were partly caused by the backwash of defeat, not the forward move of democracy. The job of counterrevolution was mainly political and fell as a matter of course to the dispossessed classes and groups such as dynasties, aristocracies, churches, heavy industries, and the parties affiliated with them. The alliances and clashes of conservatives and fascists during this period concerned mainly the share that should go to the fascists in the counterrevolutionary undertaking. Now, fascism was a revolutionary tendency directed as much against conservatism as against the competing revolutionary force of socialism. That did not preclude the fascists from seeking power in the political field by offering their services to the counterrevolution. On the contrary, they claimed ascendency chiefly by virtue of the alleged impotence of conservatism to accomplish that job, which was unavoidable if socialism was to be barred. The conservatives, naturally, tried to monopolize the honors of the counterrevolution and actually, as in Germany, accomplished it alone. They deprived the working-class parties of influence and power, without giving in to the Nazi. Similarly, in Austria, the Christian Socialists—a conservative party—largely disarmed the workers (1927) without making any concession to the “revolution from the right.” Even where fascist participation in the counterrevolution was unavoidable, “strong” governments were established which relegated fascism to the limbo. This happened in Estonia in 1929, in Finland in 1932, in Latvia in 1934. Pseudo-liberal regimes broke the power of fascism for the time, in Hungary in 1922, and in Bulgaria in 1926. In Italy alone were the conservatives unable to restore work-discipline in industry without providing the fascists with a chance of gaining power.
In the militarily defeated countries, but also in the “psychologically” defeated Italy, the national problem loomed large. Here a task was set the stringency of which could not be denied. Deeper than all other issues cut the permanent disarmament of the defeated countries; in a world in which the only existing organization of international law, international order, and international peace rested on the balance of power, a number of countries had been made powerless without any intimation of the kind of system that would replace the old. The League of Nations represented, at the best, an improved system of balance of power, but was actually not even on the level of the late Concert of Europe, since the prerequisite of a general diffusion of power was now lacking. The nascent fascist movement put itself almost everywhere into the service of the national issue; it could hardly have survived without this “pickup” job.
Yet it used this issue only as a stepping-stone; at other times it struck the pacifist and isolationist note. In England and the United States it was allied with appeasement; in Austria the Heimwehr cooperated with sundry Catholic pacifists; and Catholic fascism was anti-nationalist, on principle. Huey Long needed no border conflict with Mississippi or Texas to launch his fascist movement from Baton Rouge. Similar movements in Holland and Norway were non-nationalist to the point of treason—Quisling may have been a name for a good fascist, but was certainly not one for a good patriot.
In its struggle for political power fascism is entirely free to disregard or to use local issues, at will. Its aim transcends the political and economic framework: it is social. It puts a political religion into the service of a degenerative process. In its rise it excludes only a very few emotions from its orchestra; yet once victorious it bars from the band wagon all but a very small group of motivations, though again extremely characteristic ones. Unless we distinguish closely between this pseudo-intolerance on the road to power and the genuine intolerance in power, we can hardly hope to understand the subtle but decisive difference between the sham-nationalism of some fascist movements during the revolution, and the specifically imperialistic non-nationalism which they developed after the revolution.*
While conservatives were as a rule successful in carrying the domestic counterrevolutions alone, they were but rarely able to bring the national-international problem of their countries to an issue. Brüning maintained in 1940 that German reparations and disarmament had been solved by him before the “clique around Hindenburg” decided
to put him out of office and to hand over power to the Nazis, the reason for their action being that they did not want the honors to go to him.† Whether, in a very limited sense, this was so or not seems immaterial, since the question of Germany’s equality of status was not restricted to technical disarmament, as Brüning implied, but included the equally vital question of demilitarization; also, it was not really possible to disregard the strength which German diplomacy drew from the existence of Nazi masses sworn to radical nationalist policies. Events proved conclusively that Germany’s equality of status could not have been attained without a revolutionary departure, and it is in this light that the awful responsibility of Nazism, which committed a free and equal Germany to a career of crime, becomes apparent. Both in Germany and in Italy fascism could seize power only because it was able to use as its lever unsolved national issues, while in France as in Great Britain fascism was decisively weakened by its antipatriotism. Only in small and naturally dependent countries could the spirit of subservience to a foreign power prove an asset to fascism.