The austere roots of Nazism and fascism

Europe today is facing, on the one hand, the rise of  “apolitical” technocratism, and on the other, right-wing authoritarian government. The Continent needs a democratic alternative, or else we are heading towards a disaster that will bring enormous suffering to the popular classes in the name of the ruling financial and economic elites, says Vincent Navarro

One of the myths that have been peddled frequently in economic literature seeking to explain the economic depression in continental Europe in the early twentieth century has been that high inflation in Germany created such a mess in their economy that it led to the electoral victory of Hitler and Nazism. It is said and repeated constantly (and mistakenly) that the German population has a pathological fear of inflation, because they remember that it was this (ie, high inflation) that brought Hitler upon them. Even Ms. Merkel has cited this theory to justify the austerity policies being imposed today on the rest of the Eurozone.

Well, the (easily accessible) data does not support such a theory. What created the Great Depression in Germany and elsewhere in Europe were spending cuts and wage reductions that the Weimar Republic implemented to reduce the deficit and the public debt. These cuts generated a growth in unemployment, a serious problem of demand and a plummeting economy known as the Great Depression.

In an interesting article posted by Fabian Lindner comparing what is happening in Greece with what happened in Germany during the Great Depression (“Greece is like Germany’s Weimar Republic.” Social Europe Journal), the author notes how Germany, bogged down by the value of its currency (tied to the gold standard) and a huge US debt (result of from losing World War II and having to borrow capital for reconstruction), cut its spending, and thereby created the Great Depression, with a loss of 15% of GDP (Greece has lost 20% of its GDP).

This economic depression was the cause of the election victory of Hitler, who went on to pursue a textbook Keynesian policy to get out of depression. Public spending soared in preparation for World War II, which was also what US President Roosevelt did. This industrialization was financed by German banks Deutsche Bank, Commerzbank and Dresdner Bank, which were nationalized.

In Greece, however, the German government will not allow such an expansion of public spending, insisting on the austerity policies that led Germany to disaster. The rise of fascism in Greece is following almost identical dynamics. And not only in Greece. What we are seeing it in France, Germany, Great Britain, and also in Portugal, Italy and Spain, and many countries in Eastern Europe. Fascism is already ruling in Hungary and is increasing in power in Poland.

The great analyst of the rise of European fascism and German Nazism was Karl Polanyi in his book The Great Transformation, the most accurate analysis of the political context of the Great Depression. He writes that the weariness of the population towards representative institutions that were unable to solve the enormous suffering in the wake of public policies pursued by the State, led to hostility to such institutions and identifying all political parties as belonging to an oppressor class incapable of responding to popular needs. There was a logical and rational component in this rejection.

Now, where Nazism and Fascism appeared, it was deeply anti-democratic; the believe was that the solution was “apolitical”, authoritarian and technocratic in nature, with unpopular solutions imposed because they were deemed necessary to overcome the crisis.

The narrative of the Popular Party and the conservative and liberal voices in Spain has a bit of this apoliticalism. It is the government (presented as apolitical) that justifies its right to rule by its “sense of patriotism” (Prime Minister Rajoy says “I do what I must do”), the judge of the truth, without any hint of accountability to citizens and the electorate.

The democratic alternative isn’t the anti-politics expressed in the phrase that “all politicians are the same”. It is the politics that wants to democratize society, expanding the meaning of democracy, demanding participation by citizens in the governance of the country with a revolutionary change of democratic institutions.

Without this democratization, the two alternatives that are shaping Europe today are either “apolitical” technocratism, like Monti’s government in Italy, or a right-wing authoritarian government, whose highest expression is found in Hungary. The famous saying “Socialism or Barbarism” should be amended as “Democracy or Barbarism”. In the absence of a democratic alternative, we are now heading towards a disaster that will bring enormous suffering to the popular classes, in the name of the ruling financial and economic elites.

Nueva Tribuna 19.3.2013

Translation by Revolting Europe