Tuesday, May 05, 2009

Fascism revisited


Fascism revisited (Wizbang)
The best example of a fascist economy is the regime of Italian dictator Benito Mussolini. Holding that liberalism (by which he meant freedom and free markets) had "reached the end of its historical function," Mussolini wrote: "To Fascism the world is not this material world, as it appears on the surface, where Man is an individual separated from all others and left to himself.... Fascism affirms the State as the true reality of the individual."

This collectivism is captured in the word fascism, which comes from the Latin fasces, meaning a bundle of rods with an axe in it. In economics, fascism was seen as a third way between laissez-faire capitalism and communism. Fascist thought acknowledged the roles of private property and the profit motive as legitimate incentives for productivity--provided that they did not conflict with the interests of the state.


From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign. After Mussolini consolidated his dictatorship in 1925, Italy entered a new phase. Mussolini, like many leaders at this time, believed that economies did not operate constructively without supervision by the government. Foreshadowing events in Nazi Germany, and to some extent in New Deal America, Mussolini began a program of massive deficit spending, public works, and eventually, militarism.

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