Firstly, I have scanned and am posting this because I read a quote from a chapter via Thomas DiLorenzo’s “The Problem with Socialism.”
I chose to post the entire chapter because I found some great connection to our governing principles and the direction of them decade-after-decade. I do admonish the serious reader to read Gaetano Salvemini’s bio over at WIKI. Salvemini became a socialist and a political activist. Although he later abandoned the Italian Socialist Party for independent humanitarian socialism, he maintained a commitment to radical reform throughout his life (source). One person wrote of their own belief something similar to what Salvemini believed:
- As such I now refer to my beliefs as that of a humanitarian socialist because I have little care for the dogma of Marx, and yet I cannot abide with the current system. I do not believe we need a revolution to change things, any steps forward in a socialist direction through democratic means are perfectly acceptable to me no matter how small the changes. I use humanitarian because I want to see things get better for all, no matter their social status, even by the smallest of margins, all progress is a step forward no matter how small. Equality is the most pressing issue in society at the moment.
That is the typical Democrat line today that is emboldening government to legislate and get involved in persons lives at an extremely fast rate. Here is the quote from DiLorenzo’s book:
…Mussolini promised that centralized government planning would “introduce order in the economic field,” as opposed to the supposed “chaos” of capitalism. Consequently, the Mussolini regime established government regulatory agencies that dictated orders to every business, every industry, and every labor union, all in the name of governmental “coordination.” It achieved the basic aims of socialism—government control of the means of production—while leaving corporate managers in place. Government control, of course, means taxpayers foot the bill. As Italian writer Gaetano Salvemini explained in his book, Under the Axe of Fascism: “In December 1932 a fascist financial expert… estimated that more than 8.5 billion Lira had been paid out by the government from 1923 to 1932 in order to help depressed industries. From December 1932 to 1935 the outlay must have doubled.” Massive government regulation and taxpayer bailouts of failing favored industries meant that Italian fascism, like every other form of socialism, was an economic failure.
Thomas J. DiLorenzo, The Problem with Socialism (New Jersey, NJ: Regnery, 2016), 71.
I will highlight the quote from the text below. But if you read all of the below, please watch this respected Democrat legal scholar’s warning about the recent switch of power to the executive:
Here is the chapter entitled “The End of Laissez-Faire”
- Gaetano Salvemini, Under the Axe of Fascism (New York, NY: Viking Press, 1936), 377-382.
[p. 377>] Those who believe that Mussolini is leading Italy towards the left, cite the fact that the Fascist “corporative state” has done away with the doctrine and practices of laissez-faire. The Fascist corporative state not only cuts wages—although this fact is seldom mentioned—but it grants tariff protection to many industrial and agricultural products, gives subsidies to banks on the verge of failure and to industries about to collapse, obliges capitalistic concerns desirous of governmental aid to merge with other similar concerns, forbids the opening of new factories, etc. Mussolini and his followers in Italy, as well as his admirers abroad, never touch upon economic topics without proclaiming that the policy of laissez-faire is dead forever. And, since the abolition of economic laissez-faire has been associated in Italy with the abolition of personal rights, political liberties, and representative institutions, whoever rejects the doctrine and practices of laissez-faire is termed a Fascist, and state intervention in economic life is called Fascism. Therefore, President Roosevelt becomes a disciple of Mussolini—though not so big as his master.1
This is a gross misconception. The sun rises daily in both Italy and the United States. This does not make Italy and the United States one and the same country. Mussolini and Roosevelt both intervene in the economic life of their respective nations. This does not put Mussolini and. Roosevelt in the same category as statesmen. While they have in common the policy of economic intervention, they differ in this: that Mussolini has repudiated not only economic laissez-faire, but has also suppressed personal rights, political liberties, and representative institutions. Roosevelt leaves those rights, liberties, and institutions intact. Fascism is political dictatorship. Economic intervention is not Fascism.
The Colbertists and Mercantilists who opposed the Physiocrats in the eighteenth century, and the “utopian” Socialists, [p. 388>] “scientific” Socialists, State Socialists, Christian Socialists, Protectionists, and Nationalists who attacked laissez-faire in the nineteenth century, would have been much surprised to learn that in the twentieth century a Mussolini would be born who would claim to have discovered, for the first time, a way of killing the doctrine of laissez-faire.
As for the practice of laissez-faire, no government has ever confined itself to playing the policeman of private initiative, as the laissez-faire school recommended. Free trade, which is the application of laissez-faire to international commercial relations, was the exception and not the rule in the nineteenth century. The English government, while it practised free trade in the nineteenth century, gave at the same time the earliest examples of social legislation; i. e., it intervened in economic life to protect the workers against the abuse of private initiative. During the World War the economic life of all countries was controlled by their governments, although the “Homo corporativus” of the Fascist “thinkers” was as yet unborn.
Under the pre-Fascist regime in Italy, the Government intervened so often in the economic life of the country that, when it rained, the people amused themselves by throwing the blame upon the “robber government.” The government built the railroads, not as revenue-bearing investments, but as an instrument of political unification. Marsh reclamation at the expense of the government was half a century old in Italy when Mussolini discovered it in 1928. Education in all its grades was either directly imparted or supervised by the government. Italian tariff policy from 1878 onwards became ever more intensely protectionist. The shipping companies were always obtaining subsidies of all kinds from the government for building, equipping, and sending out their vessels. Interventions multiplied during the World War. They diminished during the period between the end of the war and 1926, i. e., during the last four years of the pre-Fascist regime and the first four years of the Fascist regime. They began to multiply again during the crisis provoked by the revaluation of the lira; and during the world depression have assumed proportions reminiscent of the state capitalism of the war years.
The policy of intervention in economic life is characteristic neither of free, nor of despotic, nor of oligarchical, nor of democratic governments. All governments in all periods have intervened, more or less thoroughly, in the economic life of their countries, if by no other fact [p. 379>] than that they have built roads, imposed taxes, and issued currency. Whether capitalists or proletarians, men are not favourable in an absolute sense either to laissez-faire or state intervention. They invoke such intervention when they expect to profit by it, and they repulse it when they foresee no advantage or fear a positive injury from its action. Signor De Stefani has judiciously remarked that the price of goods is always and everywhere the result of two factors: the private initiative of the producer and the environment which the politics of the government have created for production. Private initiative always is planned after taking into account pre-existing legislation. Private initiative independent of the government does not exist. And if “corporative” initiative is that which is developed by adapting oneself to rules imposed by law, it is clear that all private initiatives are “corporative,” and all states are “corporative” (Corriere della Sera, July 14, 1935). From these affirmations the conclusion can be deduced that Mussolini could have saved himself the trouble of inventing the corporative state.
The world nowadays teems with people who have fits of enthusiasm whenever they hear of state intervention, planned economy, five-year plans, and the end of laissez-faire. They do not care to ask who are the social groups in whose interests the state, i. e., bureaucracy and the party in power, is to intervene and plan. It is for them a matter of indifference whether the laissez-faire of big business is limited in order to protect the little fellow and the worker, or whether the laissez-faire of the little fellow and the worker is sacrificed to the interests of big business. What matters is that private initiative should be shackled by some one and in some way. Yet the first question which should be asked when invoking the end of laissez-faire is precisely this: in the interests of whom should such abolition take place?
If one wants to answer this question in connexion with the Italian Fascist regime, one must take into account the following facts:
1. Italy has never seen anything similar to the type of planning exhibited by the government of Soviet Russia.2 When an important branch of the banking system, or a large-scale industry which could [p. 380>] be confused with the “higher interests of the nation,” has threatened to collapse, the government has stepped into the breach and prevented the breakdown by emergency measures. If there is a field in which planning is necessary and can be done without notable obstacles, it is that of public works; but even a Fascist expert is obliged to recognize that “they are begun as required without a general plan in the region where the depression is most severe.”3 The policy of the Italian dictatorship during these years of world crisis has been no different in its aims, methods, and results from the policy of all the governments of the capitalistic countries. The Charter of Labour says that private enterprise is responsible to the state. In actual fact, it is the state, i. e., the taxpayer, who has become responsible to private enterprise. In Fascist Italy the state pays for the blunders of private enterprise. As long as business was good, profit remained to private initiative. When the depression came, the government added the loss to the taxpayer’s burden. Profit is private and individual. Loss is public and social. In December 1932 a Fascist financial expert, Signor Mazuchelli, estimated that more than 8.5 billion lire had been paid out by the government from 1923 to 1932 in order to help depressed industries (Rivista Bancaria, December 15, 1932, p. 1007). From December 1932 to 1935 the outlay must have doubled.
2. The intervention of the government has invariably favoured big business. As writes a correspondent of the Economist, July 27, 1935:
So far, the new Corporative State only amounts to the establishment of a new and costly bureaucracy from which those industrialists who can spend the necessary amount, can obtain almost anything they want, and put into practice the worst kind of monopolistic practices at the expense of the little fellow who is squeezed out in the process.
The small and medium-sized firms have been left to take care of themselves and have had to sink or swim without external assistance. On March 26, 1934, Mussolini stated that “three-quarters of the Italian economic system, both industrial and agricultural,” had been in need and had been helped by the government. This was an exaggeration. He should have said three-quarters of the big firms engaged in banking, industry, shipping, etc.4
[p. 281>] 3. In order to avert the bankruptcy of the big concerns that were on the verge of ruin, the government created certain public institutes to take over the shares of the rescued companies and to supervise the companies in question until they were again in a healthy condition. Mussolini described these institutes as “convalescent homes, where organs which have more or less deteriorated come under observation and receive appropriate treatment” (January 13, 1934). These institutes have been hailed as instruments of a managed economy. As a matter of fact, in none of the firms for whose rescue the government has imposed heavy sacrifices upon the taxpayers has the government introduced direct management. The governmental institutes merely keep in their coffers the shares of the firms which they have saved, and await the day when the market shows signs of recovery; when this occurs, the shares will again become private capital. To the big business men the government is what the Moor is in Schiller’s tragedy, Fiesco: when the Moor has committed the assassination, he has to disappear. After rendering the services asked by big business, the government must retire into the background and leave a free field to private initiative. The Charter of Labour says that state intervention in economic life, when private initiative proves insufficient, may assume the form of encouragement, supervision, or direct management. But it also says clearly that private initiative is the most useful and efficient instrument for furthering the interest of the nation. Private initiative must be respected. Therefore, direct management remains embalmed in the Charter of Labour together with the principle that labour is a social duty.5
The act of May 15, 1933, which empowered the Central Corporative Committee to forbid the creation of new factories or the development of existing plants, may be regarded as the ne plus ultra of government [p. 382>] intervention in business. Official communiqués announce from time to time that a certain number of permits have been granted or refused. But they never explain which kind of factories has been allowed or forbidden to be created or developed. Neither do they give the reasons why permits have been granted or refused. The great industrial magnates can be assured that a permit will never be granted to a company which wishes to build a new type of motor-car, to new sugar, hydro-electrical, or rayon concerns, or to new chemical plants, unless they give their consent. As a well-informed contributor remarked in the Economist, January 5, 1935, each time that the corporative system has functioned, “it has turned out to be nothing more than the most ordinary protectionism.”
But if one takes seriously Signor Bottai’s statements, in Corporate State and N.R.A., p. 623, one is led to believe that in the United States the result of the labour codes “seems to be the triumph of the interest of the individual industrial group rather than the triumph of the interest of the community,” whereas in Italy the corporations “are in a much better position than is any one isolated industrial group to regulate not only particular group interest but also the interests of the community as a whole.” In the United States “a corporate regulation of production in the Italian sense could only be achieved if, in the present codes substantial changes were made by permitting a much broader participation of labour.”
1. Mussolini, interviewed in the New York Times of Sept. 16, 1934, said: “America appropriated one of the Fascist principles when the new regime delegated more power to the executive head of the government.”
2. Resto del Carlino, Nov. 7, 1933: “If Fascism does not believe in economic liberty, it has always favoured and assisted the most powerful spring, the most creative force, of human activity: individual initiative. It is evident, therefore, that Fascist economic policy will not allow the corporations of category to become organs of a planned economy.”
3. Marcelletti, Aspects of Planned Economy, p. 334.
4. Signor Pirelli, in his address of Oct. 15, 1934, said: “Beyond the frontiers there has been a misunderstanding of the meaning of one of Mussolini’s phrases to the effect that three-quarters of the Italian economic system, both industrial and agricultural, is under the supervision of the state. Almost all the medium-sized and little firms and the great majority of slightly larger firms, with the exception of a few categories, are completely outside the sphere of the state’s healing activity.”
5. Excellent surveys of the economic policies of the Fascist dictatorship since 1926 have been made by Perroud, in the Revue d’Economie Politique, Sept.-Oct. 1933, and by Rosenstock-Franck, L’Economie Corporative, pp. 331 ff. This phase of Fascist action has developed completely outside the so-called syndical institutions created by the dictatorship, and also outside the National Council of Corporations and the corporations themselves. The history of the relations between capital and labour under the Fascist dictatorship is only one chapter in the history of the intervention of the dictatorship in the economic life of the country; it is not the whole history. It has been our purpose to write that one chapter alone.