A Tale of Two Ideologies – Response to Esoteric Entity

Our good old AnCap friend Esoteric Entity is back at it again! This time he has made a response video to DemocraticSocialist01’s response to AcedemicAgent’s video on whether or not socialism is a form of fascism or vise versa. Naturally I will try to remain respectful throughout this article, and apologize in advance if I at any point come off as rude or insensitive. Anyways, let’s get into the video!

To begin with, at 0:55 Esoteric Entity states that Hitler and Mussolini share most of their beliefs with the far left. Unfortunately, our author does not specify which specific ideals they hold other than showing a picture of Hitler with a few ideas listed that him and maybe some liberals share and the meme calls him “The Ultimate Progressive.” However, these are all just talking points; let’s actually go into the theoretical differences between fascism and socialism which I will end up coming back to. To get a good understanding of Hitler and his ideas, I recommend Cultured Thug’s video “Hitler’s Philosophy” for which I will be referencing all of my assertion of Hitler’s beliefs. Essentially, Hitler holds to a certain philosophy of idealism which is very similar to Mussolini. This is in contrast to the “far left’s” philosophy of materialism. As Mussolini explains in his work “The Doctrine of Fascism“:

Such a conception of life makes Fascism the resolute negation of the doctrine underlying so-called scientific and Marxian socialism, the doctrine of historic materialism which would explain the history of mankind in terms of the class struggle and by changes in the processes and instruments of production, to the exclusion of all else.

Mussolini then elaborates,

That the [alterations] of economic life – discoveries of raw materials, new technical processes, and scientific inventions – have their importance, no one denies; but that they suffice to explain human history to the exclusion of other factors is absurd. Fascism believes now and always in sanctity and heroism, that is to say in acts in which no economic motive – remote or immediate – is at work. Having denied historic materialism, which sees in men mere puppets on the surface of history, appearing and disappearing on the crest of the waves while in the depths the real directing forces move and work, Fascism also denies the immutable and irreparable character of the class struggle which is the natural outcome of this economic conception of history; above all it denies that the class struggle is the preponderating agent in social transformations. Having thus struck a blow at socialism in the two main points of its doctrine, all that remains of it is the sentimental aspiration, old as humanity itself-toward social relations in which the sufferings and sorrows of the humbler folk will be alleviated. But here again Fascism rejects the economic interpretation of felicity as something to be secured socialistically, almost automatically, at a given stage of economic evolution when all will be assured a maximum of material comfort. Fascism denies the materialistic conception of happiness as a possibility, and abandons it to the economists of the mid-eighteenth century. This means that Fascism denies the equation: well-being = happiness, which sees in men mere animals, content when they can feed and fatten, thus reducing them to a vegetative existence pure and simple.

Below is taken from what I’ve already written on this topic from my article “Why I’m Not a Fascist” and you can see further debate on Fascist and Marxist philosophy from my article “My Exchange With a Fascist: Cultured Thug

This is a pretty long block of text, so let’s break it down. Mussolini states that he does not deny the importance of economic processes, however Marxism over emphasizes its explanatory power and ignores all other factors. Nothing could be further from the truth, in that by using economic analysis we are able to deduce all of these “other factors” that Mussolini is so keen on insisting we simply ignore. For example, by using Marxian economics, we can see that the working class (as defined by its relation to the means of production) is indeed being exploited given they are producing more value than they receive in a wage (this must be the case for a capitalist to make a profit) and from this we can see an inherent contradiction in society, in that there is one class that benefits off of exploiting another, and therefore their interests will be different, and since the capitalists own the private property they are using for exploitation, they will be the ones with the power to control the state via monetary influence, and this is exactly what we see. From this, all we needed was a very basic economic concept and we are able to deduce so much about society as we know it, Mussolini fails to demonstrate how exactly materialist economic analysis falls short of Fascism’s explanatory power, especially because he states he rejects the notion of economic motives as a driving force of societal progression, even though I have just explained how economic motives do indeed influence and drive societies down certain paths.

Mussolini further dismisses other Marxian concepts without justification, so I shouldn’t need to go into too much detail in explaining why they’re wrong given he put in no effort to try and prove himself right. However I will intervene when he asserts that historical materialism “sees in men mere puppets on the surface of history, appearing and disappearing on the crest of the waves while in the depths the real directing forces move and work”, just because of how absurd the wording of his claim is. Essentially, historical materialism holds that there are different phases that historical development will undertake, given the current conditions of any given society. For Marx living under capitalism, he saw the inherent contradiction between the bourgeoisie and the proletariat, and saw that this contradiction is unstable and would cause the working class to rise up and overthrow their exploiters. Not because they’re mindless robots being driven by magical forces of history as Mussolini implies here, but rather because that is what their conditions call for. It is quite simple logic:

You (a worker) are exploited via wage labor -> You don’t want to be exploited -> The system that exploits you is unstable and ruthless and favors the ruling class -> You replace that system which suits your material interests.

However, me invoking “material interests” here will allow me to critique one of Mussolini’s last points where he asserts that we Marxists hold, “well-being = happiness, which sees in men mere animals, content when they can feed and fatten, thus reducing them to a vegetative existence pure and simple.” However, this is a brutal misrepresentation of what we mean when we say the workers are to satisfy their material interests. Mussolini does not really define “well-being” other than implying it calls for being able to feed yourself, and therefore as a consequence of his idealism, this allows him to say that being able to feed yourself does not equate to happiness. An assertion that we Marxists actually agree with, because one of our prime arguments against capitalism is that bosses will just provide to workers what they can get away with, and this will (in most cases, especially in the third world) not satisfy their happiness. However, socialism allows for much more than man only being able to feed himself, in that it allows one greater control over their work, more access to basic needs such as food and housing, more control over their society, and much more. This would surely allow for one to reach self actualization especially when they don’t have to worry about basic necessities as they do under the capitalist mode of production.

As you can see from what I’ve demonstrated above, we do not agree with fascists in really any remote sense on any level. So our author’s assertion beginning at 1:19 of his video that the only reason we’re communists and not fascists is so we can claim moral high ground can therefore be shown to be false, given the vast philosophical disagreements we have with fascists, as well as economic which I will touch on later in this post, but let’s not get ahead of ourselves.

Next our author does something interesting, he tries to assert that Mises’ quote on fascism that DemocraticSocialist01 displayed in his video is a misquote, however even if you add the rest of the quote our author showed in his video, it still reads:

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error

Even with the addition of Mises saying it could not promise continued success, that does not take away from the fact that Mises said it saved European civilization. The only thing Mises disputed, as demonstrated in the quote, is that it would not promise long term success – he still is saying it was good while it happened. DemocraticSocialist01 wasn’t lying, he probably just googled Mises quotes on fascism and that came up. As I have shown, even with the addition you provided, it does not refute the initial point made of rightists being sympathetic towards the fascist movement.

Moving onto the point of Alberto De Stefani being in Mussolini’s government, this is once again a small point, but our author still does not give us the full context. It is true Stefani was only in office for three years (1922-1925) however it is not true that he was removed from the government for implementing liberal economic policies rather he was let go and replaced by Giuseppe Volpi in 1925 because his policies of privatization, balancing the budget, and reforming the tax system (which were all done with the assistance of Mussolini’s dictatorial power and his ability to override the parliament) lead to falling wages and crisis for which he was partly blamed. Essentially it’s not that Mussolini was ideologically opposed to liberal economics, it’s just that they didn’t work in Italy. This is further understood from Mussolini constantly changing economic policy in Italy whenever some crisis or event happened. Showing no clear ideological constraint on fascist economics. But this is a point I will expand on later.

Next, at around 4:20 we get into the good stuff. Our author is here claiming that the fascist conception of private ownership and the classical liberal/libertarian definition of private ownership are different, and therefore not the same thing. Our author, in a series of poorly edited quotes from what’s most likely a blog, defines the fascist economic system as a mode of production in which private ownership is allowed, yet it is really controlled by the government, and the government ultimately gets to decide which companies do the best based on which companies serve, what fascists refer to as, the national interest. He then declares, that this is socialism because the government is owning things and controlling things.

However, this is a very poor understanding of socialism. Socialism is not simply when the government owns things, or does things, or exists. The Italian economy was “centrally planned” only insofar as the rest of the world’s economies were during those times because they were preparing for/engaging in war. I’m not sure if our author knows what a war economy is, but even America during WWII had aspects of planning such as setting plan targets for military equipment, as well as everyday items such as food. Keep in mind, a world depression was also going on in the 1930s as well as 40s, which explains why the Italian economy started out in the 1920s as very market based and liberalized, but slowly progressed to having one of the highest rates of state ownership other than the USSR right before it collapsed.

Moving onto whether or not the Italian system of corporatism was socialism, we must first define what exactly a socialist society is. Our author asserts at 5:00 that in order for a society to be considered socialist, it just needs to have a public option for any given commodity on the market, and the government needs to have full control over distribution and the means of production. Aside from the fact that the government cannot both provide a public alternative on the market for commodities and control distribution, because either there’s a market or there’s not our author can’t have it both ways, let’s actually define what the Marxist conception of socialism is, and how it has been put into practice in countries such as the USSR.

Marx makes it very clear throughout Capital Volume 1 that the key defining feature of capitalism is whether or not wage-labor is the primary way in which the producing population is exploited by the property owning class. So, from this, we can deduce that in order to demonstrate if a society is socialist or not you really only need to show two things:

  1. That there exists no exploiting class which appropriates the surplus value from the working population and uses it for their own interests exists
  2. That the predominant mode of extracting surplus is not through the exploitation of wage labor

Sadly for our author, fascist Italy meets none of these criteria. Fascist Italy was a non-democratic state, that crushed worker unions (especially the ones lead by socialists fighting more for workers’ rights) and attempted rebellions. Workers in Fascist Italy still had to work for a capitalist, whether state or private, and have their labor exploited and the surplus distributed among the capitalist (property owning) class. The USSR and other socialist states on the other hand did abolish capitalist property relations, and used the proletarian controlled state to direct the extraction and distribution of surplus to better the lives of the working class, not the capitalist class. I explain this at great length on the USSR Page of my website.

Moving on, at 6:30 in order to dispute DemocraticSocialist01 in citing the brilliant article “The Role of Private Property in the Nazi Economy: The Case of Industry” by CHRISTOPH BUCHHEIM and JONAS SCHERNER our author states that Buchheim and Scherner make the same “mistake” as DemocraticSocialist01 in confusing the fascist and liberal definitions of private property. However, our author makes no attempt to show where exactly in the article Buchheim and Scherner do this, so let’s look into what they actually said. It’s quite funny our author makes this claim while also pretending to have read the article, when the article addresses this directly! On page 393, Buchheim and Scherner introduced the argument given by Temin and Overy which was

Temin [and Overy] spoke of “nominal owners” implying that in the German economy of the Nazi period there was not much left of the right of disposal over one’s private firm. That is underlined in a later article of the same author where he pointed to the allegedly unequal long-term contracts between the Nazis and industry constituting an obligation of the latter to deliver its output at fixed prices. If firms refused, they could be nationalized. Characteristically, in his second paper Temin endeavored to prove that in the thirties the Nazi economic system was very similar to the Soviet one.

So right off the bat we can see the authors of this article were very much aware of the claim that under Fascism private owners were really just directed by the government. What the article then goes into depth at explaining, is why this is an incorrect view. Buchheim and Scherner end page 394 by laying out their arguments;

The notion that private firm property during the Third Reich had been preserved only in a nominal sense [this is referring to our author’s view that private firms were really directed by the state] and that in reality there was almost nothing left of the autonomy of enterprises as economic actors is severely flawed in at least three respects:

  1. Despite widespread rationing of inputs, firms normally still had ample scope to follow their own production plans.
  2. Investment decisions in industry were influenced by state regulation, but the initiative generally remained with the enterprises. There was no central planning of the level or the composition of investment, neither under the Four Year Plan nor during the war.
  3. Even with respect to its own war- and autarky-related investment projects, the state normally did not use power in order to secure the unconditional support of industry. Rather, freedom of contract was respected. However, the state tried to induce firms to act according to its aims by offering them a number of contract options to choose from.

To elaborate on all three of these arguments, I will be summarizing their findings as well as providing proper citations, but I would highly recommend simply reading the article yourself (like our author claimed he did) in order to get the full picture.

Note that some of what I am writing is directly copied from Buchheim and Scherner

To begin with, it is true that enterprises in Nazi Germany were given orders by the state (as in the case of most economies during the war) however, the Nazi system of planning was very different from how it was in socialist countries like the USSR given that rationing of inputs in the Third Reich was not accompanied by material balancing. What this means is that the exact allocation of inputs with regard to specific output needs was generally not planned beforehand. Of course, the production of an increasing selection of goods was quantitatively restricted or even forbidden, a tendency greatly intensified during the war. But on the other hand most enterprises could freely choose among a whole range of production possibilities, all of which had privileged access to rationed materials, including the making of almost every finished product for export, because exports commanded a very high priority. In addition there often was allotted a quota of rationed inputs for unspecified use.

The example Buchheim and Scherner provide for us is that of the textile industry which was the fourth largest industrial employer behind metal processing, food, and clothing and was far bigger than chemicals. From 1934 and onwards, the textile industry was regulated by the Nazi regime whereby quotas would have to be met, and a minimum number of fibers would have to be mixed and so on. However, the individual firms still remained free to produce those varieties of textiles they considered most profitable to them, even though the regular input quotas were decreasing in the course of time.

The Nazis also established a system of incentives consisting of extra rations of scarce raw materials allotted to firms that undertook to manufacture textiles for high priority requirements. All export orders were privileged in this way, which opened up to entrepreneurs much additional scope for autonomous decision making and production. In a similar way military orders as well as those of other state agencies commanded extra quotas of input materials, which enterprises could compete for. Thus, the German textiles industry of the Nazi period certainly did not work in an institutional setting of liberal markets. But neither was it one of complete state direction and central planning. Private ownership of firms still had economic significance, because entrepreneurs preserved a good deal of their autonomy with regard to the profile of their production.

Furthermore, regulation of raw material consumption in industry not unexpectedly had an effect on investment. It is true that state plans did direct some industries insofar as output capacity was concerned, but state intervention was limited to licences, and some resource allocation nearing the start of the war. But overall, firms remained in charge of their own investments and were able to decide which investment routes to take based on which was most profitable for them. Profitability was also boosted for firms by the fact that not only did the Nazi government allow the competitive behavior of profit driven capitalists, but they also encouraged it by changing policies and contracts to match up with whatever capitalists saw more profitable. Overall, it is true that capitalists occasionally had to bend to the will of the state, usually at little financial loss to them, but when they had to do this is was on terms that were most profitable for them and even at this still a part of the economy was directed by the market, and that which wasn’t was still directed in the interests of the profitability of capital which, as I will explain soon, is based on the exploitation of labor – and that’s what makes any society capitalist.

Now that we have clearly demonstrated the roll of private property and capitalism in the Nazi economy, let us address the claim at 6:22 where our author claims that Buchheim and Scherner used Marx’s “strawman” definition of capitalism as opposed to the “actual dictionary definition of capitalism.” However, simply doing Ctrl+F and searching “Marx” reveals that the word only appears twice in the article, in the first instance they are talking about how Orthodox Marxists reject the notion of “full fascism” preferred by Western Historians when writing about fascist economics and instead use the term monopoly capitalism. This mention was not conceding the Marxist view but rather just showing that it exists, and this is further revealed when we look at the second instance in which Marxist is used which is in footnote 8 which refers the reader to Eichholtz’s “Geschichte der deutschen Kriegswirtschaf” for a better understanding of the Orthodox Marxist position on fascism and monopoly capitalism. Nowhere do the authors adopt the Marxist definition of capitalism as being a mode of production which is driven by the exploitation of wage labor.

The next statement given by our author is at 6:28 where he reads the dictionary definition of capitalism which is:

an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Our author then uses this definition to imply that capitalism cannot have a state. He furthers this view beginning at 7:00 where he goes onto explain that the United States and Great Britain are not capitalist states because all property is not private. However, capitalism is not simply when all property is owned privately. You can have many modes of production if all that exists is private ownership of property. What makes capitalism capitalism is the implications of private ownership on a market which manufactures commodities to be exchanged. Now, before I am accused of using the “dogmatic Marxist strawman fallacy” definition of capitalism, let me explain why we Marxists come to this conclusion on capitalism.

When defining capitalism, we must look at the historical development of different modes of production. I am going to be oversimplifying here, but stay with me. When our author tries to define capitalism as “exchange on the market between private individuals not using force” he is making a common mistake even among leftists, in that he is ignoring that market exchange between private individuals has existed for thousands of years. Remember the silk road? The entire premise of it was private owners would trade on a semi-global scale. (Referring mostly to the beginning of it during its pre-capitalist stages.) This is why Engels referred to it as simple commodity production whereby individual producers produced commodities to be exchanged between each other. This is what you’re talking about when you claim that all capitalism is is people producing things and exchanging them on a market. In other words: your definition of capitalism, is describing the system that came before capitalist production came into being.

One of the first types of capitalism to emerge, according to economic historians, was merchant capitalism in the 9th century for the Islamic World, and 12th century for the European world (see here for detail.) The reason for this was the introduction of the labor market. Before, individual producers would mostly produce for themselves, this is why it was simple production and not capitalist production. Once workers began to sell their labor as a commodity, the people who were buying labor as a commodity were able to rapidly accumulate capital by hiring out more and more workers, and by doing less of the work themselves. This capital, being understood as expanding value (or the exponential increase in wealth), is where the term “capitalism” comes from in the first place. Without the introduction of labor as a commodity, capital would not be systematically accumulated as it is now, and the word capitalism would not exist. This is why we Marxists define capitalism on the basis of exploiting labor (e.g. workers are not paid in accordance with how much value they produce for a capitalist) because if labor was not exploited, then capitalists would not be able to make money and modern capitalist markets would crash because capital would cease to be profitable.

The state has always existed alongside this process of capitalist development from the very beginning. Because the capitalist class was hoarding large amounts of wealth, the state made sure that the workers never tried to seize the means of production. Clear examples of this become apparent by diving further into capitalism’s development and looking at industrial capitalism, and specifically the 19th and 20th century where the state (U.S. specifically) constantly clamped down on radical labor movements to protect the capitalists from having their property taken. This is even apparent today when research has concluded time and time again that the majority of policy decisions made by the U.S. government favor a small economic elite (a.k.a the ones who have the ability to buy labor and exponentially grow their wealth a.k.a capitalists.) The entirety of private property rests on the given state’s ability to protect it. This is why communist revolutions have predominantly happened in countries where the states have been too weak to protect the given system of property relations whether they be capitalist or feudal or both.

Moving on, starting at around 9:50, Esoteric Entity tries to be a condescending dick towards DemocraticSocialist01 by suggesting he destroyed his own argument. However Esoteric Entity still doesn’t seem to understand what capitalism is or the argument either DemocraticSocialist01 or AcademicAgent were making. Our author implies that because DemocraticSocialist01 showed that the western powers and fascist powers both adopted war economies, this somehow refutes DemocraticSocialist01’s point and proves AcademicAgent’s. However our author seems to have forgotten the arguments being made. AcademicAgent’s point was that because fascist economies engaged in a war economy (mostly planned with heavy price controls) during a war, fascism is therefore a form of socialism because socialist countries like the USSR also had a mostly planned economy. However, what DemocraticSocialist01 shows in his response, is that the adoption of economic planning in fascist countries was not because fascists ascribe to socialist economic planning, but because there was a war going on and DemocraticSocialist01 offers evidence of other, capitalist, countries engaging in these same practices as both fascist and socialist states did; why? Because there was a war going on. The overall point DemocraticSocialist01 was getting at is that if you’re going to call fascism a form of socialism because fascist countries had economic planning, then you also have to call the western powers socialist because they too had economic planning during these times. And, as I’ve explained previously, America and the western powers are indeed capitalist because the dominant form of exploitation is the buying of wage labor, and this leads to capital accumulation, and forces the state to maintain the dictatorship of the bourgeoisie.

Finally, at around 10:27 our author, in response to DemocraticSocialist01 referencing Joseph Goebbels’ statement that total war policies would be temporary, claims that this implication would mean the complete construction of socialism in Nazi Germany. However, our author conveniently cuts out what Goebbels actually says,

…methods on to create out of the stolid toughness of the Russian people a grave danger for the civilized nations of Europe. A whole nation in the East was driven to battle. Men, women, and even children are employed not only in armaments factories, but in the war itself. 200 million live under the terror of the GPU, partially captives of a devilish viewpoint, partially of absolute stupidity. The masses of tanks we have faced on the Eastern Front are the result of 25 years of social misfortune and misery of the Bolshevist people. We have to respond with similar measures if we do not want to give up the game as lost. 

My firm conviction is that we cannot overcome the Bolshevist danger unless we use equivalent, though not identical, methods. The German people face the gravest demand of the war, namely of finding the determination to use all our resources to protect everything we have and everything we will need in the future.

This specific quote is touching on the negative effects the war is having on the German people, however if you read the rest, Goebbels is making it quite clear that they need to end the system of total war. And guess what? That actually means the opposite of what our author implies, because it means the state won’t have to direct production as much as it does during war (even though capitalists were given much autonomy as I described earlier) and more would be left to the market. I have no idea where this idea that “Germany was a left wing government” before WWII comes from given all the leftists were expelled from the government with Hitler’s rise to power, and especially since I demonstrated earlier, based on that article our author obviously didn’t read, that capitalism thrived in Nazi Germany.

In conclusion, our friend Esoteric Entity is still the uneducated, lying, condescending prick I’ve shown him to be in the past, and all of his arguments are either misguided or just plain wrong. Thanks for reading!


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