The Definition of Fascism

Cap-and-trade is it.

For decades, the loony left has loved accusing the right of being fascist.  After the defeat of the two fascist powers in WW2, that particular brand of politics has been held high as the standard for being the ultimate in evil, as, indeed, it should be. Fascism has the same problem as "racism."  It's been so overused as an insult that most everybody forgets what it actually means.

This week, in the halls of Congress, we are seeing a textbook definition of fascism in action from those very souls who so love to accuse others of it, yet none dare call what they're doing by its proper name.

There's been great debate over what fascism is, particularly in recent years as the definition has become muddied.  The fascist dictatorships of the 1930s had a good many attributes in common - racism, totalitarianism, demagoguery, suppression of dissent, and aggressive militarism, and nobody appreciates governments like that.  It was these characteristics that earned fascism the opprobrium which it so richly deserves.

In the area of economics, however, there's also a pattern in fascism that distinguishes it from other totalitarian systems such as communism: Fascism preserves private ownership of property, but subjects private property to stringent government control.

This aspect of fascism is not as well known because the German economic model operated more effectively during WW2 than the Soviet model operated during the Cold War.  The economic side of fascism doesn't cause as much obvious suffering as its other more visibly odious characteristics, but getting the economics wrong brings as much suffering over time as, say, racism and militarism.

Fascist Economics

In Nazi Germany, "privately-owned" factories made what the government commanded, hired whomever the government allowed, and so on.  Factories weren't called "The People's Tank Factory", as in the Soviet Union; they were still owned by Krupp, BASF, or whomever, and were still run, to an extent, as profit-making enterprises.  The rich were still rich; managers were promoted or demoted with some attention paid to merit; the stock market operated, and business deals took place.

Capitalism of a sort carried on, but with the caveat that at a moment's notice, all that you owned, up to and including your life, could be taken from you.  So, particularly for the wealthy, it was very much in everybody's best interests to go along with Nazi demands.

When Hitler first came to power, the wealthy and powerful thought they'd made a nice arrangement with him; "We've hired Hitler!" they celebrated.  Only too late did they discover that they'd forged their own chains - gilded chains, to be sure, but chains nonetheless.  Their whole nation, and the world, paid the price of empowering Hitler for many, many years.

Collectivism on the Cheap

Here in the United States, simply confiscating private property would cause a revolution.  The Constitution explicitly states that the government may take what it wants via what is known as eminent domain, but must pay for it fairly.  Even with that strict requirement, and even when the goal is for the public good like a highway or an airport, protesters line the streets and jam the project up in court for years or decades.

It's much simpler and cheaper for the government to have control, not by actually buying what they want - they'd have to pay for that - but through the use of regulations.  From small beginnings in zoning and fire-safety laws, these regulations have grown until almost nothing can be built or changed without the permission of government.

In this sorry tradition, we now have the greatest power-grab since the New Deal, all in the name of "saving the planet."

The global warming advocates consider carbon dioxide emissions to be causing permanent, detrimental changes to the environment.  Carbon dioxide is emitted by every animal, both when breathing and by other means, as well as by volcanoes and other natural processes; but the emphasis today is on industrial emissions caused by burning fossil fuels.  Other than power from hydro dams and nuclear plants, neither of which are being allowed to be built anymore, every economic activity requires carbon dioxide emissions.

The proposed Lieberman-Warner "Climate Security Act" throws a choke-hold around the entire economy, ensuring that nothing can take place without a government permit by giving the government control of that one common chemical compound.  Called "cap and trade", the idea is to come up with a total amount of carbon emissions that will be allowed for the country and then auction off that many permits.

If you want to do something that emits carbon - which is to say, darn near anything - you must buy enough permits to cover your carbon output.  Or you can't do it.

Remember that the global warming alarmists want to decrease carbon emissions as rapidly as possible.  Simply done: each year, sell fewer and fewer permits!  That's exactly what they plan to do.

Have we learned nothing from what's going on in the oil markets?  Demand is increasing as the teeming billions in China and India discover the joys of air-conditioning and car ownership.  The supply of oil is not increasing, so the cost is going through the roof.

This bill creates an artificial, new, government-created commodity - the emissions permit - which is every bit as essential for economic activity as oil; sets an artificial limit on it; and then, over time, lowers the amount available.

It doesn't take a degree in economics to know what's going to happen: the cost of carbon permits will go through the roof.  Since everything requires carbon permits, the cost of everything will go through the roof.

Now, it would be possible to make an argument that this is worthwhile, and some analysts do.  If, indeed, the earth is getting warmer due to human carbon emissions (which it's not, but that's a different discussion), then by far the best way to reduce those emissions is to tax them.

If you make something more expensive, you'll get less of it as we all know.  If it were really necessary to cut carbon emissions, you could start taxing carbon or selling permits and use the money to reduce taxes elsewhere and balance things out.

This bill does nothing of the sort.  It's been estimated that it will increase government revenues by $6.7 Trillion over the next ten years.

Is this money going to be used to save Social Security?  No.  For tax relief?  No.  To shore up Medicare?  Not in the least!

Instead, that money is parceled back out to favored groups.  Indian tribes, "renewable" energy research, the State of California - every possible interest group gets a bite, except the taxpayer.  You can see the effects clearly laid out on this flowchart provided by the U.S. Chamber of Commerce.


The fascism involved isn't caused by the high taxes.  Taxes can be set at any level without being fascistic as long as they are allocated in a fair, transparent, even-handed manner.

But this Act is anything but fair, transparent, or even-handed.  It does not simply require the permits, set the level, and establish the exchange mechanism, oh no; though that's what they tell you about.  Instead, the bill is loaded with exceptions, grants, set-asides, and other tweaks that make the system highly unfair and require a large bureaucracy to administer the permits.

Industries and states who have lobbied most effectively are exempted, have their permits provided free, or get their permits a reduced price.  Those who have not made the investment in wining and dining K Street are left out in the cold.  They may be better businesses - in fact, they probably are, since they're spending their resources on the actual business instead of on schmoozing in Washington - but they will fail in the marketplace because of the artificially higher costs laid on them by the government.

Instead of emphasizing business acumen, this arrangement places a premium on political pull just like a banana republic.  The laws even make it possible to make a fortune without doing anything useful at all, by cornering a permit set-aside and then selling permits off to someone who actually needs them.  What's capitalistic about that?  Nothing.

What's the bottom line?  The Climate Security Act would create a fascist state by placing the government in complete control over who is allowed to do anything using their "private" property.

Didn't bid high enough for your carbon emissions permit?  Then your factory must shut down.  Didn't lobby effectively?  Then you'll have to pay more than your competitor whose congressman, while enjoying his new yacht, took care to slide a little gift for his patron into a bill rider.

It's easy to say that this is targeted only at big business.  It's even true - it was done that way on purpose.  Do you think that Congress would dare take $6.7 Trillion by increasing taxes on, say, gasoline?  They'd be howled out of office.

Yet this will have exactly the same effect.  Businesses don't pay taxes; people do.  Sure, the corporation writes the check, but they aren't allowed to print money, they have to get the money from somewhere.  They either pass the bill along to you the consumer or they go out of business.

Time is running out for this Congress; the plan is unlikely to pass this year.  But both Obama and McCain are in full support of global warming alarmism in general and cap-and-trade specifically, so it's almost certain to return and succeed in 2009.

Is it not bad enough that gas prices have doubled in the last year, and quadrupled in the last several?  Apparently not: Congress wants to double the price again, and again, and again.  In the Disney version of Robin Hood, Prince John fulminated, "Double the taxes!  Triple the taxes!  I'll make them pay!"  There will be no Robin Hood to rescue us this time; Little John (McCain) is on the other side.

Kermit Frosch is a guest writer for  Read other articles by Kermit Frosch or other articles on Economics.
Reader Comments
People do not realize what an economic disaster Fascism is because the Fascist powers were defeated before they got to try their economic policies in peace time.

The only reason that the German and Italian economies worked as well as they did during the war was that the Allies bombed out everything else. When they bombed the cities, for example, everybody that had worked in, say a movie theater, had no job because the theater was gone. So that person was available to work in a munitions plant. Bombing the cities actually INCREASED war production.

In peace time, of course, the Germans MIGHT have been able to plan a bit better than the Russians were able to do because their country was smaller, BUT central planning by government doesn't work anywhere, not even in China.

That is the direction we're heading as our government grabs more and more control over our economy through, as Frosch says, regulation, permits, and other back-door assaults on our liberty. We the people will end up as poverty-stricken peasants. The elites in their gated communities will be OK, and they'll feel good about impoverishing us because they can tell themselves they saved the planet FROM US!
June 6, 2008 1:32 PM
Probably the best qualified presidential candidate will be the one who can control the gasoline riots that are certainly coming. The American public is NOT going to walk quietly into the fascist night you so perfectly describe.
June 6, 2008 1:50 PM
I'm not sure there will be any gasoline riots from people left of the aisle. They WANT high gasoline prices. They WANT shortages. It fuels (sorry) their agenda. So the only rioters would be righties, who aren't generally known for their rioting.
June 6, 2008 1:57 PM
I watch what is happening and where our country is going, and I deeply hope that Atlas is preparing to shrug.
June 6, 2008 3:51 PM
Oh, for goodness sake, not someone else talking about that damn book! Sheesh... It's becoming the new Bible. Regardless of what kind of ending Ayn Rand puts in her literature, the truth is that there is a legitimate place for compassion in our society. I'm not advocating social safety nets or welfare, but I'm tired of the whole A.S. movement. NEWS FLASH: The ideals for that were around a lot longer than 50 years ago. Ayn Rand just fictionalized what she heard Locke and Nietzsche and others say.
June 6, 2008 4:24 PM
Funny that you should make that comparison, L. Sanders. I've read that Atlas Shrugged is the second-most-influential book (the Bible being first, of course.) However, you've got a point - I really don't find the ending at all realistic, or likely.
June 6, 2008 4:52 PM
Why so much anger about a book that you appear to be so dismissive of?

And have you even read it?

Yes, there is a place for compassion in our society. Compassion FREELY CHOSEN by those being compassionate, not "compassion" ENFORCED by government. You seem to be missing that distinction.

Patience - thing is, I think you're probably right about the ending. We're heading toward collectivism, whether it be Socialist or Fascist, and there is no John Galt to save us. Even if there were, I have less faith in people than Rand did - his premise wouldn't be accepted. People don't want to be responsible for themselves.
June 6, 2008 5:14 PM
Yes, I read it (the meat of it anyway) before there was any of the current celebrity chic stuff behind it like there is now. In other words, I read it before Oprah added it to her book list.

On the subject of "missing"... Go back and read what I said about not wanting government encforcement and regulation. You sound like a real Rand convert: declare a defintion and then paint the future that way.


Don't you find it ironic that so many people are so swept up in a movement that promotes *invidualism"?

I don't mind the subject matter. Sure, I find objectivism to be seriously lacking in our society, and I hope it takes off in real, practical way. But I started noticing long ago that many people who say "I'm reading Atlas Shrugged right now" don't seem to be able to discuss it at all. They're reading it in the same way that "Patriot football fans" can't name anyone else on the team besides Tom Brady.

(PS. Ayn Rand was a *female*. I think you meant "her" premise.)
June 6, 2008 5:21 PM
Re: Rand / "his" - my bad on the grammar - I meant GALT's premise, as outlined in his extremely long speech. I am quite aware of who Ayn Rand was, and what she believed.

I read the book some time ago, and had held the beliefs for some time before that. If oprah has added it to her reading list, I'm rather saddened by that. It cheapens the book.

I HOPE to see the end that Rand painted in Atlas Shrugged. I expect I won't. "Don't you find it ironic that so many people are so swept up in a movement that promotes *invidualism"?" - Ironic, maybe not. But it paints a perfect picture of why I have so little faith in people: They're sheep, and they don't want to think for themselves. Objectivism requires thinking for yourself and taking responsibility for yourself. People en masse just will not do that.

So, although I HOPE to see a certain ending, I expect I won't.
June 6, 2008 5:29 PM
Oh, I misunderstood. My mistake.

I also have no faith in people, and the (usual) people who are reading the book nowadays further enforces that lack of faith.

Get this... A friend of mine at work was recently droning on and on about the greatness of Barack Obama and Obama's vision for health care and other problems that governemnt "just had" to fix "once and for all". Get this - in the same paragraph my friend talks about reading Atlas Shrugged and how it was "so great".

What does one even say to that...? Where does one begin? Makes me think our school system is too shot to even bother with.
June 6, 2008 5:41 PM
"Oh, I misunderstood. My mistake."
No, it really was my mistake. In proper grammer, a pronoun refers to the most recently used noun, which, in my sentence, was "Rand", not "Galt". I'm a writer - I should know better :)

As for the rest, it sounds like we're actually more in agreement than I thought at first. Your friend is a perfect example.

The Public Indoctrination System has done a very good job. It has made the masses completely incapable of independent rational thought.
June 6, 2008 5:45 PM
Fascism Today will not have the EXACT face of Fascism Yesterday.

Exactly who and what is "the loony left" is it the people who want Oversight, Transparency, and Accountability? is it those of us who want our Children Educated and Healthy, learning Art, and playing sports instead of joining gangs and selling drugs?

I am the loony left and I want my Community to be healthy, educated, safe! I want my Country to be Smart, Healthy, Strong and Safe!

I am the loony left and I want corporations to bring JOBS BACK TO AMERICA!

I am the loony left and I am your neighbor, your family and your friend.

I am the loony left and I am a patriot, I love my country, I believe in the Constitution of the United States of America!

I am the loony left and I am sick and tired of the FEARMONGERING, WARMONGERING, and HATEMONGERING and I say SHAME ON YOU for your DIVISIVENESS that makes us weak, SHAME ON YOU for your HATE of your fellow Americans, SHAME ON YOU for spreading FEAR that breads suspicion and anxiety in a time when we need to stand together with courage, confidence and clarity to see our true enemies!

America has faced far greater enemies and threats, Nations like the USSR with hundreds or thousands of nuclear weapons, Technology, skill and manpower to match or own and yet NOW we have let a hand full of petulant petty tyrants bring us to each others throats and Cripple us with fear. This small group can give us a bloody nose but it is our OWN SHAME if we BETRAY our constitution, our principals and our honor out of fear and ignorance or let some shameless politician exploit these fears and exacerbate our Terror for political power!

My question to YOU is, will you stand with your brethern to give us strength and wisedom, to help protect our Principles, our Values, our Beliefs and DEFEND our Constitution or will you be the virus that infects the body politic weakening America and our ability to stand against all enemies forign and domestic!

Do you want to be the sinew that makes the body strong or do you want to be the virus that cripples?

The choice is yours!
June 10, 2009 4:47 PM
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