“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism — ownership of government by an individual, by a group, or by any other controlling private power.”
— Franklin D. Roosevelt, April 29, 1938. Message to congress
Today’s article takes a look at the growing mutually assured domination of government and big business which raises the question: at what point to we hear the words of Roosevelt, and acknowledge we are witnessing a resurgent Fascism?
To be clear, Fascism is not about soldiers in jackboots goose-stepping along Whitehall. This is a post WWII idea of Fascism which, it could be argued, provides a smokescreen for identifying original Fascism. Umberto Eco coined the term ‘Eternal Fascism’ for this brand I write of, the antecedent of the nationalist, racist Nazi-style Fascism considered as default today.
If one say’s of Britain ‘We live in a fascist regime’, the immediate response is most often an irritated, dismissive shake of the head followed by ‘Well why don’t you go live in Iran/North Korea/Russia?’ depending on the chosen pariah state of the moment. To be clear, I wouldn’t want to live in those states either. Equally, we have a responsibility as, purportedly, the sovereign power of this country (our sovereignty delegated to parliament through democratic universal suffrage) to ‘put our own house in order first’.
People presented with this premise will find themselves unable to take the ideological side step required to acknowledge our corporatist system as fascist, rather than free market run amok. It is the truth we dare not admit. I argue this is mainly because no one wants to think they live in a fascist state, no one wants the burden of being called into action to defend against a fascist state and most people sincerely want to (and in many cases do) believe that matters of ideology and politics are irrelevant in the context of their daily lives. All of this is human and understandable. But that is different from it being correct or responsible.
What’s Fascist about Blighty?
Using Roosevelt’s definition, no doubt examples are already coming to your mind. I am choosing deliberately to reference contemporary examples to underscore the proximity and urgency of our situation, and to avoid the debate becoming lost in the fog of chronological distance.
Taking a look at the various examples from the Bank Bailout, the Health & Social Care Bill, the Welfare Reform Bill, Workfare, the privatisation of the police force and Education System, it is easy to spot a common thread; the transfer of public services, to powerful private interests, funded by public money.
Now, in free market economics there are a couple of principles which purport to make the market free.
1) The Best ‘Man’ Wins: A business (a person or organisation providing a product or service to other persons/organisations in return for remuneration) prospers when its product or services beat those of its competitors at attracting customers. These customers have free choice over the suppliers in the market, and choose based solely on their idea of best value.
2) Moral Hazard: In the event that a business fails to achieve the above, to such a degree that it is no longer financially viable, it fails. The company is dissolved, made bankrupt or diversifies.
It is clear to see that collusion between big business and UK parliament in recent years has rendered these two rules obsolete. This is how.
Best ‘Man’ Wins? A Customer Compelled.
Libertarians would argue that all compulsory tax is theft. The idea that a government can compel an individual, through fear of sanction, to hand over money they have earned themselves has those of a Libertarian viewpoint ill at ease from the get go.
However, even if one agrees with a compulsory taxation system it is easy to see that in a fascist context, this principle one might look upon as beneficent, can become fraud in practise.
For example, let’s say I want to buy a vacuum (leaving out all the factors which complicate the analogy like comparative advantage, fair trade, etc. Let’s say we live in Adam Smith Land where the market is free). I want a vacuum cleaner. I can scour the market for the vacuum cleaner that most meets my requirements in terms of functionality, appearance, cost, quality and so on. Even after all that, I can buy any one I like, or none. All this is done entirely on my own free will.
Now, the Health and Social Care Bill, the academisation of schools and the privatisation of police stations are Bills which put private, profit making providers in charge of public services.
The services, although free at the point of use, are paid for through a tax I have no choice over paying, unless I accept legal or other sanction. In the past, this tax was agreed on the basis that it was a communal pool of funding for the service, delivered by public employees accountable to a parliamentary representative.
What these Bills do, is take that money given in good faith and divert it from that agreed course, to create new markets and revenues for private interests, with private employees who are not accountable to the state, and therefore, by extension, me.
This makes me, you, all of us, legally obliged customers of Virgin, G4S, Serco, Circle, and any other corporation the government flogs our services off to.
Worse than that, these companies have failed to attract most of us out of the state model. Most of us use the NHS rather than private healthcare, most of us use the state education system rather than private education, most of us wouldn’t consider using private security over calling the police. Unhappy with their market share, these corporations have succeeded, through the collaboration with a parliamentary system inseparable from the corporate world, in cheating the rule of the market. They don’t need us to choose them, the choice has been made for us and we are compelled to hand over our cash.
There is no party present which does not espouse these ‘neo-liberal’ policies, therefore utilising the vote to arrest this process is not possible. This egregious domination of our democracy by self serving corporatism is Fascist.
Moral Hazard? Not a Chance
To recap on the cause of our current economic woes, there was collusion again between government and the financial services industry, to avoid proper regulation of financial services in general, and the derivatives market in particular. There was intense lobbying in the US and the UK to maintain this position, with senior government figures on both sides of the Atlantic stepping in directly to prevent the Commodity Futures Trading Commission (in the US) and the Financial Services Authority in the UK, from ever coming close to putting the appropriate safeguards in place around these products.
This left banks, brokers and insurance companies free to mount the biggest assault on fiscal logic known to man. They started to rapidly expand their theoretical balance sheets by leveraging debt to almost infinite ratios. High Street Banks and Mortgage Providers, credit card companies and other debt merchants chased the custom of individuals with little or no regard for their ability to pay back the loans. Why? Because they were not going to keep ownership of the debt.
The banks and other groups could then sell on this hastily won debt to a big Bank/Broker such as Goldman Sachs, CitiGroup et al who collected batches of these debts together, turned them into a financial INVESTMENT product called a Collateral Debt Obligation. So, a bunch of risky debts becomes an investment product overnight. This product was then, with the support of the Cartel’s gatekeeper, the Credit Ratings Agencies, declared Triple A for its credit worthiness. That’s right, in effect saying that the likelihood of return on some unemployed, indebted guy in Minnesota’s credit card bill is as likely as return on a government bond from the UK/US government.
The banks then took these investment products and sold them to unknowing pension companies who bought them on the basis that they were now deemed perfectly safe.
The same banks then insured for the very product they sold the pension firm going toxic. That’s right, the equivalent of an estate agent selling you a house having set a fire under the floorboards, then going and putting an insurance policy in place for a payout on your death or the destruction of your house. These are called Credit Default Swaps (CDS). There was no limit on who could set up these CDS’s either. So, not only could your estate agent insure that house, but every estate agent in your city....or country.
Now, bear in mind that at every point of these exchanges, significant fees are being handed over, generating paper profits, making balance sheets look amazingly positive, with no actual product or service underpinning them.
Finally, in 2007 all those little over leveraged consumers around the world started to find it impossible to repay their loans. The CDO investments turned toxic and all those who had invested in them, those pension companies we discussed, lost their money. Whilst employees were informed the pension they’d been funding all their working lives had vanished overnight, leaving them with no safety net in old age, the Goldman Sachs’s of this world started filing their insurance claims with the likes of AIG and Lehman Brothers and others.
The insurers couldn’t cope with the financial hit and started to fold, the brokers balance sheets couldn’t handle the hit and started to fold, and the high street banks, unable to claim from broker, bank or insurer started to fold. The whole system was about to come crashing down. Capitalism itself, as expressed today, had failed the Moral Hazard test, as had each of the businesses involved in this ponzi scheme of a financial derivatives market.
However, instead of these corporations collapsing, this extraordinary mountain of toxic private debt was transferred into public debt by the Bank Bailout. The taxpayer was not asked, but told, that they had to bailout the banks with their tax revenues.
Not one banker went to court or jail. Not one new regulation has been placed on the financial derivatives market. These same products are being packaged and sold across the financial services industry right now. The Banks were left free to carry on business as usual, on our dime.
Instead of this prompting criticism of big business, despite the ‘banker bashing’ which we often hear condemned in the media, it’s our state system which has been lambasted and ripped apart. The economic crisis went from being a Fascist failure, to a statist failure. A failure of a tax and spend government who ‘failed to fix the roof while the sun was shining’. The solution?
Greater deregulation of markets, especially the financial services industry which has been recast as our greatest wealth creator not our greatest debtor. A violent contraction of the welfare state, and a blanket condemnation of those unfortunate enough to find themselves without work due to ill physical or mental health, disability or sheer lack of jobs. Finally, private enterprise must take a leading role in the provision of public services....because they are more efficient than the current public providers of, apparently, any service. Our schools, hospitals, police forces, welfare system, all of it opened to private providers paid for by the public purse.
To add insult to injury, we are saddled with a media so overwhelmingly inadequate in providing critical analysis of this demonstrably illogical and fraudulent approach that the BBC may very well have been rebranded as Bought By Cameron.
So, to return to Umberto Eco for a moment, he defines a list of societal attributes which provide the framework for a Fascist state (Eternal Fascist).
• “The Cult of Tradition" - the rejection of the Spirit of 1789 (and of
1776, of course). The Enlightenment, the Age of Reason, is seen as the beginning of
• "The Cult of Action for Action's Sake", which dictates that action is of value in itself, and should be taken without intellectual reflection. This, says Eco, is connected with anti-intellectualism and irrationalism, and often manifests in attacks on modern culture and science.
• "Disagreement Is Treason" - fascism devalues intellectual discourse and critical reasoning as barriers to action.
• "Fear of Difference", which fascism seeks to exploit and exacerbate, often in the form of racism or an appeal against foreigners and immigrants.
• "Appeal to a Frustrated Middle Class", fearing economic pressure from the demands and aspirations of lower social groups.
• "Obsession with a Plot" and the hyping-up of an enemy threat. This often involves an appeal to xenophobia or the identification of an internal security threat. He cites Pat Robertson's book The New World Order as a prominent example of a plot obsession.
• "Pacifism Is Trafficking with the Enemy" because "Life is Permanent Warfare" - there must always be an enemy to fight.
• "Contempt for the Weak" - although a fascist society is elitist, everybody in the society is educated to become a hero.
• "Selective Populism" - the People have a common will, which is not delegated but interpreted by a leader. This may involve doubt being cast upon a democratic institution, because "it no longer represents the Voice of the People".
• "Newspeak" - fascism employs and promotes an impoverished vocabulary in order to limit critical reasoning.
Now, take a look through this list, and reflect upon the attacks on the so called ‘liberal intellectual elite’ or ‘job snobs’ who rallied against workfare, arguing for a day’s pay for a day’s work. The knee jerk attacks on Afghanistan, Iraq and Libya – and the ‘something must be done’ culture. The fact that ideas on economics, social structure, environmental management which challenge the existing paradigm are absent from mainstream media, sidelined under the heading ‘alternative theories’ in academia and ignored or mocked by the political establishment – making disagreement treasonous and unpopular. The accusatory language aimed at blaming the woes of Britain on immigration or ‘failed multiculturalism’ and the constant characterisation of terrorists as brown men with beards holding Korans. The parliamentary narrative, to the ‘squeezed middle’ or ‘hard working families’, that parliament is working for you guys, it is on your side but it’s efforts are being hampered by those welfare cheats, immigrants, idle youth and old people who just won’t die and are therefore a drain on our resources. The branding of the most vulnerable members of our society in fact, the old, the disabled, the sick, the mentally ill, the jobless, all these groups are now treated with suspicion and contempt. A news media so narrow in its focus and its use of language, parroting the distinctions and terms of debate set out by the government, that full debate becomes impossible.
And finally, in Greece and Italy, the democratically elected governments that wouldn’t do the bidding of the banks, were replaced by unelected bankers. The reason given? That they were unable to serve the interests of the people, which was apparently redefined by our leaders as the actions which are most conducive to their profit making ventures.
Did the so called free press of the western world condemn this toppling of democratic government by unelected technocrats?
Of course not, they reliably provided us with pundits from all over the world assuring us that this was all for the best and completely in our interests, they were saving us.
What do you do when you Realise you Live in a Fascist State?
The good news is your head doesn’t explode and the floor doesn’t slide out from under your feet. But you can stop banging your head against a brick wall. Why vote for your Fascist representative? Why expect them to act in your interests? Why be confused by the inconsistent and irrational policy selection?
You are able to abandon false hope, and instead think with a clear head about what action you can take, personally and with others, to start the clamber out of Fascism. You can stop supporting the worst offending corporations. You can stop supporting events such as the Olympics which take your money and hand it to those corporations. You can join campaigns of particular interest to you, meet other people who share your ideas and take direct action to make a change. Over time, by joining the dots and our collective effort and will, we can topple fascism.
The dawning realisation is but the first critical step in this process...