Lecture 1
This subject is commonly understood as the challenge of fascism and communism to democracy.
The aim of this lecture course will be to discover the true nature of that challenge. Incidentally, we will discover whether or not the above is an accurate description of the issues involved.
We are used to describing political philosophy as democratic. But is it justified to apply one and the same term to two as widely differing sets of ideals as are embodied in English and continental democracies, respectively?
It is generally assumed that English and continental democracy are but different variants of the same species. The parliament of Westminster is often referred to as the mother of parliaments. Continental parliaments are supposed to have been fashioned on the English model.
The differences between the English and the continental specimens are simply attributed to the inadequacy of the imitation. Accordingly, the crisis of democratic institutions on the continent is attributed not to their adherence to the philosophy of democracy but rather to their failure to adhere to it adequately. Is this appreciation correct?
English democracy centers upon the idea of liberty. It is a method of getting the affairs of a community done according to the greatest measure of common consent and with a minimum of coercion. The revealing figure of English democracy is the chairman. He has no parallel on the continent. The functions of a continental president are indeed almost the opposite of those of an English chairman. The task of the chairman is to ensure that discussions and deliberations are carried in such a manner as to allow articulate expression to all relevant trends of opinion (preferably with some indications of the volume of opinion that is supporting the various trends). The ascertaining of the “sense of the meeting” should involve unnecessary prejudging of the issue. No other but unavoidable coercion shall be used in the enforcement of these decisions. Especially, no greater degree of coercion against the minority shall be used than the overwhelming majority of the meeting deems on general grounds, that is, whether or not they themselves happen to belong to the majority or the minority with respect to the question at issue. It is by methods such as these that the greatest measure of liberty in the community is achieved.
If the meeting be that of a representative body periodically elected by a permanent constituency, a further safeguard against the abuse of the right of the majority to use coercion against the dissenting minority is found in the two-party system. The majority that would abuse its function of representing the greatest measure of common consent by coercing the minority beyond the limits of the unavoidable would almost automatically see itself put into a minority at the next elections.
The two-party system thus embodies the main features of English democracy. It gets things done, and gets them done by using a minimum of coercion. For without a stable majority parliament would be unable to provide a backing for an efficient government; and without an alternation of parties in powera the majority system would amount to a dictatorship over the minority.
At this juncture it may be appropriate to point to the inherent limitations of democracy as a form of government designed to ensure liberty. Obviously, it is impossible to translate any abstract principle, whatever it may be, into practice altogether. But what we are referring to are the inherent limitations of the principle itself. The need for getting things done is itself an essential part of liberty. It is not merely a practical aspect of life in the community, which bears no reference to the main problem of achieving liberty in the community, but, on the contrary, it is a matter of principle that things should get done. Imagine, for example, a community that would be unable to achieve its purpose for lack of an adequate machinery of government and you will realize at once that stable majorities are a condition of democracy as a form of government designed to achieve liberty. Yet the establishment of a stable majority implies the subordination of individuals and groups to the convictions and interests that dominate in the majority. The same holds true, of course, of stable minorities. Thus both individuals and permanent minorities represent an inherent limitation to the application of the democratic method. They must be dealt with, as the phrase goes, by common sense (which is only another way of saying that the principle upon which we were working has broken down).
It is an essential feature of democracy as a method that it will, eventually, attempt to overcome its own limitations, as far as possible in the spirit of liberty. The permanent minority of race, language, and nationality, of geographical reasons, of religious convictions, and of special economic or vocational interest will be to some degree protected by the self-denying ordinance according to which the powers of the democratic state must, in their very nature, be limited. It is this limitation that is expressed in the principle of local and vocational self-government, of tolerance, of cultural and religious autonomy, of noninterference into industrial and economic matters.
The method of liberty demands that its spirit should be applied even beyond the boundaries of the two-party system.
Democracy is centered around the principle of equality (the opposite of an aristocracy or an oligarchy). Democracy, accordingly, is an aim: it is the achievement of such a condition of affairs, in which common human equality is significantly expressed in actual social conditions. In practice this means that distinctions of birth and wealth are less stressed, while the difference in individual natural abilities has a wider scope. The state becomes the safeguard of equality; it is designed to prevent the domination of individuals by other individuals, of one by another group. The result is a strong state, but scant consideration accorded to dissenting minorities; a wide jurisdiction and a strong executive.
A great measure of social democracy is achieved. The overwhelming majority of the dignitaries of the Roman church, of the imperial army, and of the Austrian higher civil service is recruited from the sons of the lower middle class and peasants.
A constitution based on the principle of popular sovereignty, together with that of feudal prerogative. Franchise restricted to a few hundred thousand voters. Popular education a new feature; actually elementary education obligatory since 1891, and secondary education since 1903.b In Austria, since 1867, public elementary schools are not only obligatory, but practically no other schools are allowed. The upper class [families] sending their children to public elementary schools. Incidentally, this being one of the reasons why schools reached such a high level. Secondary schools of two types: the lower type up to 14, the higher type up to the university – but only one kind of higher secondary schools in existence. Thus education a lever of national unity rather than an expression of class distinction.
Thus two sharply contrasting types of democracy must be distinguished: the English libertarian form of government, based on the democratic method, with limited powers of the state and hierarchic social stratification; as opposed to the continental egalitarian form of government, designed to ensure social equality, powerful central government, universal suffrage, and educational equality as its main institutional features.
Can it be that liberty and equality are mutually exclusive principles of social organization?
Far from being mutually exclusive, freedom and equality are actually correlatives, that is, they are corollaries of the Christian concept of personality.
Freedom is the essence of the spiritual nature of man. Indeed it is only another name for spirit. The Christian discovery of personality is the discovery of the truth that every human being has a soul to save, and in this decisive respect all human beings are equal.
But must anything follow from this assertion? There are some who would say that it applies only to an ideal society, such as the society of those who are in communion with the church. But those who assert this would be at a loss to explain why they continue to work for the perfection of society. But, however this may be, we usually think of both freedom and equality as principles that ought to be applied to actual institutional life in society.
It is at this point that our problem arises. For the institutional achievement of a principle is necessarily a partial achievement of the principle and, as such – or to that extent – a falsification of it. No wonder that it must clash with the equally partial realization of another principle. In fact equality is never achieved by law but at the cost of liberty, nor was liberty secured in an unequal society but at the price of maintaining inequality.
It is in the field of institutional achievement that we must look for the causes of the divergent development. To this purpose we must go back as far as the common origins of English and continental democracies require, namely for more than a thousand years.
When the Germanic village community and its tribal society came in touch with Roman civilization, the blood bond gave way to land as the new basis of economics and politics. The freeman's community was doomed. No organization of national sovereignty was possible on the basis of the blood bond. The manorial system emerged as the new local unit of economic and political life.
But there are only two ways in which national territorial sovereignty can be established on the basis of the manorial system:
Western European history – continental and English – roughly from 800 to 1800 is the history of the alternation of the two.
Both methods of setting up national sovereignty became a source of liberty:
The first type of liberty, usually called constitutional liberty, was often at the same time synonymous with the regainedc liberty of the barons to enslave his subjects; the second leads to social liberties.
In England the slave, the lower tenant, the villain, the journeyman were indebted for their liberty to the king. From William the Conqueror, who tried to stop slave trade, to Henry II and the Inquest of Sheriffsd to the Statute of Merton,e which limited enclosures, this holds true almost all the way. Politically the king was allied, as on the continent, with the nonfeudal classes against the barony (except at times of general economic emergency, like the Black Death period).
On the other hand, the barons were responsible for the increasing safeguards against the arbitrary power of the king.
Thus liberty was being nourished from two sides: the constitutional and the social.
The process on the continent was essentially similar. There, too, the king was trying to curb the barony, and the barons were asserting their constitutional rights. And here as there king and baron allied themselves with the other social classes to achieve their end. The difference lay in the classes they allied themselves with. And this, again, was dependent on the stage of economic development at which the struggle was decided.
Now, English development was ahead of development on the continent. The manorial system, which in Germany for instance continued up to the first quarter of the nineteenth century, declined in England by the end of the fourteenth century. This was the result of the wool trade. By the end of the fourteenth century services were mainly commuted in the manor and the villainage had disappeared. A new rural middle class made its appearance in the leaseholder, and – this is essential – the new wool industry remained an agricultural industry, without the use of machines. England became an industrial country centuries before the industrial revolution. No industrial proletariat accompanied this development. When the decisive stage of the constitutional battle was reached, the new middle class, which by this time had been mainly assimilated to the country gentry, fought its battles itself. No working class was present with which it needed to compromise in order to win it over to its side.
On the continent the decisive struggle came at the beginning of, or well into, the period of the Industrial Revolution. Both the king and the middle classes had to try to gain its support. In the French Revolution the working class was an effective ally of the middle classes in the battles in which feudalism was abolished. In 1830, and later on in 1848 all over Central Europe, a similar happening took place on a minor scale. Eventually, in 1917 and 1918, the same process spread to Eastern Europe, the Balkans, and Russia.
This explains, incidentally, the kind of class consciousness that is characteristic of the continental working-class movement when compared with the Anglo-Saxon, whether English or American. The historical role that fell to it in the past became a constitutive element of the consciousness of the continental working class. Social equality and more or less socialist ideals thus became an inherent part of democracy on the continent.f
Lecture 2
In the course of our inquiry into the nature of the challenge offered to democracy in our time we have proceeded to distinguish between the English and the continental type of democracy. We found that the one was centered around liberty, the other around equality. The one may be called libertarian, the other egalitarian. We had to go far back in order to discover the source of the divergent development. We found that, in England, the democratic form of government was finally established at a time when the industrial working class had not yet come into existence – that is, a full century before the industrial revolution. In England the middle classes established the democratic form of government themselves; they based it on the idea of liberty. On the continent the democratic form of government was the result of a struggle in which the working class played a historic role alongside of the middle class, as in France, Prussia, and later on in the Austrian and the Russian Empires. Apart from these countries, democracy is of an egalitarian type only in these countries where, although established early, its establishment was the result of a national revolution against foreign feudalism – as in Switzerland in the thirteenth century, in the Low Countries in the sixteenth century, or in America in the eighteenth century.
Thus we are able to formulate our problem somewhat more precisely: the challenge to democracy is, primarily, a challenge to he continental type of democracy. However, only primarily; for the crisis of parliamentarism is embedded in a much broader crisis. The majority of the people belonging to our type of civilization have undergone in the last five or ten years (at the most) a change in their political or their economic system. The number of people engaged in this process can be put at 500–600 millions. If you add up Russia and America, Italy and Germany, you get some 400 millions; if you add up countries like Austria, Poland, Portugal, Greece, Yougoslavia, and half a dozen other small states – and perhaps Japan, where also a very radical change in the system is going on – you may reach a figure nearer 600 than 500 millions. In all these countries either the political system of constitutional government (as in Germany and Italy) or the economic system (as in Russia) has disappeared, or rather the relationship between the two has been radically altered.
This is the historical background of the conflicting philosophies in modern society, with which we are dealing here.
In order to discover the origin of this crisis we must go back to an earlier period in the history of modern society. We must investigate the relationship between economic liberalism and political democracy.
The characteristic feature of our civilization is the existence of a separate distinctive economic sphere within society. Both under the manorial system and later, under mercantilism, the political and the economic system were but different aspects of the social organization. It is generally characteristic of human society that its legal, moral, and economic organization is one – that it is artificial to insist upon these differences. Thus the present state of affairs is unique in that a distinct economic sphere has developed which is separate from the political. To introduce terms that are less open to misapprehension, we will call economic liberalism by the name laissez-faire and political democracy by the name popular government. This makes it clearer what type of economic liberalism and what type of political democracy we have in mind.
The principle on which our present economic system rests is that the production and distribution of goods in society goes on without conscious interference or planning. The economic sphere is autonomous, in other words it stands under laws of its own, which regulate its processes. The processes are automatic, that is, no outside intervention is needed to set them going and to keep them going; they are self-regulating. The economic sphere reacts unfavorably to the infringement of its autonomy, that is, to interference to its automatism. The sum total of material goods produced within a specified period of time tends to diminish as a result of interference.
In what manner is the system regulated? It stands under the command of prices. Useful articles have commodity prices; the use of capital is called interest; the use of land is called rent; the price of labor is called wages. These prices come into existence on different markets: capital, land, labor, and commodity markets.
It hardly needs to be stressed how much such a system tends to be artificial. It is enough to remind you of the commodity character of land and labor. Obviously, no society could exist in which land and labor were merely a commodity bought and sold, produced and reproduced according to laws of the market. Land, to begin with, cannot be strictly produced at all. Also, in more than one way, the quality of life in society depends on the use that society as such makes of land. Labor as a commodity has a human being attached to it as an appendage. This makes it almost a satanic joke to regard labor actually as a commodity. Except in economic theory, it has, of course, never been regarded so. The reaction to economic liberalism is as old as economic liberalism itself.
To put this in more general terms: economic liberalism, if it were to take hold of the whole of the material life of a society, would almost instantly destroy society. Society does only partly consist of material production and material goods. Life consists of many other values that would be destroyed in the process of producing the goods. Society would disintegrate.
This, in fact, was threatening during the earlier period of the Industrial Revolution. Long before laissez-faire could extend its sway over the whole of industrial life, the destruction of the essential values became too obvious to be overlooked. Under the conditions of the Industrial Revolution, the relation of man to nature, his craft, his family, his tradition was utterly destroyed.
The reaction to this process came from two sides: partly, from those who cherished the traditional values – the enlightened conservatives, led by Christian reformers of the type of Wilberforce; on the other hand, from radicals of the type of Bentham, who based their social criticism on the strength of human reason. It is in these two that we must see the ancestors of the later Christian socialists of the Kingsley–Maurice type, as well as the socialist criticism of the Morris type. The same grouping is present in other countries, for instance Bismarck’s “alliance” with Lassalle. Everywhere both the traditional feudalist classes and the new industrial classes reacted sharply to the extension of laissez aller.
The history of the nineteenth century is dominated by the reaction of society as a whole to the new growth in its midst. The vast extension of government functions was its main consequence. In countries where, as in England, the powers of the state were limited other factors emerged – voluntary associations as trade unions, cooperatives, the churches – and restricted the principle of unchecked competition in various respects.
The actual condition of affairs was a mutual limitation and interpenetration of industry and government: a coexistence of laissez-faire and popular government.
Obviously the egalitarian type of democracy would have to contend with a special difficulty. The more popular government developed, the more parliaments would tend to become the instruments of the economic self-defense of the working classes, especially in case of a crisis.
It is here that the class structure of society reacted to the situation. The feudal class system was leveled out partly in the great revolutions; but the distinction between the owners of the apparatus of production and those who worked under direction took largely the place of the former classes of the manorial system. Under the industrial system it was essential that nobody but the owners should have (and in fact could have) an influence on the provision of employment and so on. But, if the system ceased to function or functioned badly, it was inevitable that the workers should make use of their political influence to protect themselves against the insufficient working of the industrial system. Incidentally, the gain in human values was bought at the price of increasing difficulties in the industrial sphere. The cruel automatism of the economic system would have perhaps shortened the trade cycle at the cost of the lives of some hundred thousand, who would have to be allowed to starve. But could our civilization accept the principle of human sacrifice as an integral part of its methods of producing material goods? Not if it wished to continue as a Christian society.
By this analysis it is becoming clear that, in case of a breakdown of the industrial system, laissez-faire and popular government would become mutually incompatible. The one or the other would have to go.
But that major crisis was in itself inevitable. For the delicate balance between laissez-faire and government intervention described above made the price system more and more rigid and less adaptable. Taxation, social insurance, municipal activities, tariffs, wage regulations, and the like tended to fix items of costs and thus to make the system as a whole less elastic.
The need for elasticity was especially great in the international sphere. The gold standard, free trade, capital exports could function only if the price system within the country would adapt itself to the international situation. In other words these great features of the international economic system were conditioned by an elastic adaptation within the national system. But it was precisely the capacity for adaptation that was diminishing. The closely knit national units of our time were preformed in the prewar period.
All over the world, after the war, major adaptations needed. Vast efforts at adaptation broke down. The haphazard interventionism of the prewar period had to make place to a full-blown national unity of the industrial and economic system. This is the background of the present crisis.
The sources of the conflict are thus in the sphere of industrial and political organization respectively – but with very important modifications as to their philosophy. The nature of the critical situation out of which fascism springs offers a key to the transformation.
A point is reached where neither the political nor the economic system functions satisfactorily. A feeling of general insecurity takes hold of society as a whole. There is fascist short cut to safeguard production at the price of sacrificing democracy. Democracy can continue only with a change in the property system. Therefore the destruction of democratic institutions is a safeguard for the continuation of the industrial system.
Democratic philosophy tends to be socialist. Laissez-faire philosophy tends to be antidemocratic.
Lecture 3
In the first lecture a distinction was drawn between English and continental ideals of democracy. Libertarian and egalitarian types were contrasted, and it was found that mainly the latter were involved in the “crisis of democracy.”
In the second lecture the philosophy of laissez-faire and that of popular government were regarded in their mutual interaction. It was found that liberal economics and popular government reached a delicate balance in the nineteenth century, at the expense of the elasticity of the economic system. The interpenetration of state and industry resulting in more closely knit national units emerged. These comparatively rigid systems were put to the test when, under postwar conditions, sudden major adjustments in all countries became imperative. It is in the course of these efforts of the various countries to adjust themselves to the new conditions that the two main features of the present epoch emerged:
It is with this latter development that we are concerned tonight. The development toward autarky was no less startling than the rise of the dictatorships.
The decisive factor in the development of self-sufficiency was the pressing need for sudden major adjustments in an increasingly rigid economic system. Let us first consider the effects of diminishing elasticity.
The international gold standard is rightly regarded as the axis of the international economic system in prewar times. Long-term loans are dependent upon the gold standard; and so is that freedom of the flow of trade that is needed to keep the balance of payment even (tariffs do not necessarily impede this flow).
But the gold standard implies the unimpeded rise and fall of the price level within a country. This, under our present system, may mean a difference between boom or depression and unemployment. When prices are falling, production is carried on at a loss and is therefore discouraged, if not altogether brought to a standstill. Anyhow, the determination to uphold the gold standard implies the will to suffer the consequences, if necessary. As long as the consequences are not disastrous, the proposition is reasonable.
The war and the treaties upset the traditional economic balance between the different countries. The adjustments that would have been needed to maintain it without a break would have meant a complete stoppage of industrial activity and, in many cases, actual starvation for the masses.
All the more impressive were the efforts made in the various countries to restore the gold standard by the traditional methods. It is in this first half of the postwar period that the seeds of the ulterior developments were sown.
Let us distinguish between three groups of countries:
Currencies were restored first in group (a) – Russia, Germany, Austria, Hungary, and half a dozen other small countries – between 1922 and 1925; secondly in the victorious countries, as in France, Belgium, England (1925 and 1926).
Thirdly, the USA since 1927 was helping Great Britain to keep on the gold standard, and in order to do so it kept interest rates low, thereby causing a secret – or rather latent – inflation within the country that, in 1929, led to the most terrific business crisis in its history.
On the whole, what happened was this. Group (b), which had persuaded the governments of group (a) to return to the gold standard (prematurely, as we now know), shouldered the inevitable costs of this process through a continuous stream of long-term loans, which they granted to group (a) in order to help them cover the deficit of their balance of payments. The United States of America from 1927 onwards was behaving in a similar fashion toward group (b). Ultimately she was burdened with the accumulated deficits of both group (a) and group (b). For all her wealth, she hardly managed to cover it by inflation.
The reason for this apparently purely humanitarian action lay in the reluctance of the people of the United States to accept the fact that the world as a whole, including themselves, was not the richer but the poorer for the war. They attempted to keep European impoverishment from their shores by putting an embargo both on the import of men and on that of goods originating from this impoverished territory. Had they not done so, the masses of poor immigrants or, alternatively, the cheap goods produced by them would have necessarily depressed the excessive American wage and income level, thereby leveling out the American and European standards. Only in this way could a free movement of men and goods have been restored after the war. But America preferred to keep European immigrants and European goods from its shores, even though this meant a continuous flowg of American long-term loans to European countries.
During this whole period of attempted adjustments by traditional methods, practically from the Armistice to the end of December 1929, when the storm broke in Wall Street, a heavy strain was put on national economies. In Europe, a drastic balancing of budgets that cut social services and benefits to the bone, increasing exports by pressing on wages, was inevitable. The sufferings of the Central and Eastern European peoples in this period were appalling.
In England trade depression continued and unemployment was rampant. The balance of payments was becoming more and more passive.
In the first major depression the precarious balance broke down again.
America dropped its unofficial monetary agreement with the Bank of England, and ultimately, in 1933, went off gold herself, without the slightest consideration for the needs of England – which, by that time, was keen on stabilization.
England went off gold to the amazement of the whole world, put an embargo on foreign loans, and left Central and Eastern Europe to its fate.
Central and Eastern European countries were back in the melting pot.
But the countries concerned, although they were forced off gold, did not throw up the sponge. New vast efforts were made to restore the gold standard. But this time serious restrictions on trade (quotas, embargos, preferential tariffs, clearing systems, restrictions of currency) had to be introduced in order to protest the national currencies. However, this happened, as we see, not in order to achieve self-sufficiency but, on the contrary, to overcome the isolation forced upon the countries concerned by the battle for the stability of the currency. The tragedy is that this isolation was never overcome.
In spite of their efforts, all countries ultimately failed. The unelastic system refused to be further pressed and deformed. In order to stabilize their currencies, the various countries, mainly unconsciously, proceeded to the establishment of semi-controlled, semi-autarkic economies. They intended these measures to be provisional. Actually this meant the end of the gold standard – of an international capital market and an international commodity market. Incidentally, it was in the effort to adapt their now isolated economy to the disappearance of the traditional economic international systems that the dictatorships emerged. This explains why the tendency toward autarky is worldwide. All countries in the world today have managed currencies, control foreign lending, and restrict in various ways the inflow of foreign goods.
We can now proceed to clear the question on the have and have-nots. The legend will have it that autarky is forced upon some nations by the lack of raw materials and colonies. Obviously, this is putting the cart before the horse. As long as an international economic system of interchangeable currencies, capital movements, and unrestricted flow of commodities lasts, the lack of raw materials and colonies means no drawback to national economy. Confer Belgium, or Switzerland, or in fact the brilliant industrial success of Germany herself. It is under conditional autarky that national sovereignty gains special economic importance. For the advantages of using one's internal currency for the purchase of raw materials may be an asset under a managed currency.
The true importance of the haves and have-nots business is this: under the conditions of self-sufficiency our economic system cannot last without general impoverishment. On the other hand, no changeover in colonial possessions could remedy the evil. The haves have not all they need. The have-nots could never have all they need. An internal international division of labor must again be achieved.
In the light of these facts, it is important to realize:
Managed currencies, equalization funds, control of foreign land lending, and foreign trade have come to stay. They are the embryo of the new organs of the semi-controlled or fully controlled society in its economic relationships. Both as an instrument of economic warfare and as one of economic cooperation, they are infinitely more effective than the methods of bygone times. The real alternative is presented by the two ways in which they can be made use of.
It is here that the real significance of the haves and have-nots business can be gauged. The so-called have-nots are the powerful states that appear to nourish the idea that the empire is the adequate solution of the new international organization. In order to achieve it, they are prepared to make use in the most drastic fashion of the fighting value of the new organs of self-sufficiency. The so-called haves are that group of states that are inclined to make the rule of law in world affairs the basis of the new international economic order. The political phrase that expresses this line of thought most adequately is collective security. Whether a country wishes to fit in with this pattern of life or not can most readily be judged by the manner in which it interprets the need for self-sufficiency. Some think of it not only as an instrument of economic warfare, but as the precondition of launching the most deadly forms of modern mass warfare upon their neighbors. Others see in it a warning of the pressing need for the re-establishment of an international community; and, over and above that, also the instrument by which this aim can be achieved. This difference in the various national philosophies of self-sufficiency represents what is probably the truest dividing line among nations today.
Lecture 4
In our enquiry into the nature of the challenge that is offered to democracy in our time we have now reached the stage at which a discussion of the actual institutional developments in Europe today – notably in Soviet Russia, in fascist Italy, and in national socialist Germany – becomes possible.
In our first lecture a distinction was drawn between the English and the continental ideals of democracy. The difference between the two was traced to their historical origins, that is, to the period at which institutional democracy was established. In England this occurred well before the Industrial Revolution, while on the continent this event took place after the inception of the Industrial Revolution. Accordingly, the role of the working classes was different here and there. English democracy was established mainly by the rural and urban middle class. On the continent the industrial working class acted as an ally to the middle class. It was to its influence that the egalitarian features of continental democracy were due.
Turning to socialist Russia, we must keep in mind that:
(1) The Russian was the most recent of the revolutions that followed in the wake of the French Revolution and spread its ideas eastwards across Europe. These revolutions resulted in the abolition of semi-feudal absolutism based on an aristocratic society and feudal forms of land tenure. Moreover, the rise of national consciousness that began with the French Revolution continued. First in Germany and Italy, then in the Balkans, later still in the Danubian basin and in the middle of Eastern Europe, lastly among of the numerous nations of western Russia and the peoples inhabiting central, eastern, and Siberian Russia, freedom for the national language and culture was won. The fall of czarism, the abolishment of semi-feudal land tenure, and the liberation of more than a hundred smaller nations within the Russian Empire are to be regarded as the last stage of the process that had its origins in the French Revolution of 1789.
(2) The later the downfall of feudalism happens in the course of industrial development, the greater the influence of the working class and the more democracy tends to be egalitarian. In Russia, where feudalism lasted longest, the egalitarian idea appears in its socialist form. No other development could be expected.
For the working class naturally played a leading role in the abolition of absolutism and semi-feudal land tenure in Russia. Accordingly, the institutional system that replaces czarism and semi-feudalism tended to be a socialist democracy.
But in what sense is Russia socialist? And how far was Russian development determined by democratic ideals? These two questions can be fairly said to sum up the important conflict of philosophy that is being waged around Soviet Russia today.
The leaders of the Russian Revolution were inspired in their political action by their (Marxian) philosophy.
Three points bear a special reference to our subject:
In the light of these principles – Leninist principles – it was asserted by Leninist groups:
Accordingly, the main outlines of their policy can be summed up as follows:
The term “socialist” is used here as a synonymous with “communist.” A difference between these two terms must, of course, be made in two different respects.
It is in the light of those Marxist principles of Lenin and his followers that the main course of the revolution can be best understood.
The industrial and commercial middle class of Russia, which had backed the Kerensky Revolution of February 1917, was comparatively small in numbers and lacking in cohesion and discipline. The industrial working class with which it was allied was comparatively numerous and had reached a very high degree of cohesion and discipline.
Russian industries were mostly centralized, in modern establishments employing a comparatively great number of workers.
If France, in 1789, had a class of artisans and industrial workers of a comparatively primitive type, if Central Europe in 1848 had a somewhat more advanced type of industrial proletariat, Russia in 1917 possessed a far greater percentage of modern factory workers among its industrial proletariat than probably any other country in the world. The weakness of the middle classes and the comparative strength of the factory workers determined the course of the Russian revolution.
Lecture 5
In my second lecture I have endeavored to show in what manner the “fascist situation” arises as a result of the incompatibility of laissez-faire economics and popular government of an egalitarian type.
The Italian so-called corporative state is the best example of the fascist solution, which mainly consists in suppressing the institutions of representative democracy, in which the working class could express itself either in the political or in the economic field. Parliaments and trade unions are abolished. What remains is the capitalistic structure of society. This, organized according to branches of industry, is the corporative state in practice.
In theory, the corporative state professes to be much more: the whole of economic life being subjected to the discipline of the state. Here at once a major problem arises. We have described the difficulty experienced by the popular government when interfering with the industry. Interference with the price system and the markets leads to a paralysis of the liberal competitive system. Has the fascist state succeeded in solving this problem of how to interfere with privately owned enterprises without shouldering the losses incurred? (No capitalist enterprise can permanently incur losses. This is axiomatic. If the state incurs the loss, there must be some permanent separate fund whence to finance it. This is economically impossible.) Has the Italian corporative state found the solution?
The syndical phase of Italian fascist revolution lasted from 1922 to 1926.
The syndicates are unions of the employers and the employed, organized according to branches and geographic regions, so as to constitute a parallel organization. The two together are the syndical organization of industry. The jurisdiction of the syndicate concerns labor questions: wages, hours, and general labor conditions. In cases of non-agreement, labor courts decide. (This organization amounts to no more than a compulsory organization of employers and employed in national federations and confederations of syndicates.)
The fascist syndicate has no formal monopoly but has factual–legal monopoly, as only the fascist unions (a) can represent the branch in question; (b) can sign legally binding agreements; (c) can collect dues from all those belonging to the branch.
The Charter of Labor is not a legally binding document but a declaration of principles.
The corporative period starts in 1926.
A corporation is a syndicate bracketed together by a steel-ribbed framework of state, party, and expert representatives.
In this form the syndicates are supposed to be state organs in actual control of industry – that is, these organs are supposed to be able to allow state administration of the industry. How far has this organization proceeded?
| 1928 | corporative ministry |
| 1930 | corporative chamber – nomination out of 800 |
| 1932 | National Council of Corporations |
| 1934 | corporations (by the end of the year) |
| 1936 | emergency principle accepted (the war industry principle). |
Lecture 6
We very nearly reached the end of our course and it is time to sum up the results. Today's talk on Germany should be restricted to the question of how far German developments tend to confirm our propositions. In our course on Europe today we have been approaching our subject mainly from the angle of conflicting philosophies. This conflict is commonly summed up through the formula of the challenge of fascism and communism to democracy. We proposed to inquire into the validity of this formula by trying to discover the fundamental nature of the challenge to democracy in our times.
Our main results are the following:
The term “democracy,” as a designation of traditional forms of government in Western European countries, is not unambiguous. It designates a different set of institutions when the reference is the libertarian or the egalitarian type of democracy. Historically, this depends on the stage of industrial development at which these institutions were established, and accordingly on what social classes were most immediately concerned with the abolition of monarchic despotism. In England the middle classes themselves fought their battle against the royal prerogative (monarchic absolutism), and in the course of the struggle they fused with the landed gentry into one social upper class. In consequence no element of social equality entered the conception of democracy. The modern industrial working class was not yet born when English democracy was established; it could therefore have no part in it. On the continent, the working class participated in the struggle against despotism and set its imprint on the democracy that emerged. It became egalitarian democracy. The more modern the working class was, the more its democracy tended to be socialist, in other words to press for such a change in the property system as would allow the conscious and responsible participation of the people in an industrial society. Thus the Russian Revolution appears as the last in a complex series of upheavals that started with the French Revolution. It must be regarded as the outcome of a democratic philosophy under conditions in which (a) political democracy cannot maintain itself in the face of counter-revolution unless it takes on socialist forms; (b) socialist forms would lead to specific developments on account of the unique conditions under which socialism was established (lack of literacy, lack of industries and of democratic traditions).
Thus we are unable to eliminate two false alternatives to democracy that commonly obscure the issue: (a) the role of dictatorship; and (b) self-sufficiency (autarky). Neither is specific to fascism.
Dictatorship is a common feature of emergency periods and, in the wider sense of a strong executive, it is a universal feature of our time. There is no essential difference in this respect between the Russian government and the German, the Japanese and the Italian, the New Deal powers or the national government of 1931 in England with its practical 9/10 parliamentary majority. The great difference lies in the democratic intent or otherwise that inspires these governments.
The self-sufficiency tendency is also a feature of our time. It is the inevitable result of the breakdown of the international organization of economic life, which obtained under liberal capitalism. The difference lies in the cooperative or antagonistic way the new organs of self-sufficiency are being made to work by the various national units. The organs themselves are common to them all; managed currencies (with or without exchange equalization funds), control of capital exports, bilateral regulation of foreign trade. Democratic and nondemocratic states differ merely in the manner in which these institutions should be used to restore international economic organization on a new basis. While fascist countries propose to do this on the basis of empire, that is, by political unification under one control (their own), democratic countries wish to perform this by peaceful cooperation between the nations. Whether this will prove possible without a more definite move in the direction of so-called socialist transformation of their own national economies is yet to be seen.
But what, in our view, is the nature of this emergency – of which both strong governments or dictatorships and autarkic tendencies are but incidental concomitants?
The principles underlying our industrial and our political organization respectively have become mutually incompatible – this is the heart of the trouble. Laissez-faire economics and popular government cannot continue to exist side by side. The delicate balance achieved between the two in the prewar period could not be lasting, for it did not provide for the necessary adjustments, primarily in the international sphere. The existing international organization of economic life rested on the automatic readjustment of national industry and trade to changing world conditions, an adjustment that became more and more difficult to make as the national economy became more and more rigid as a result of the increasing interpenetration of state and industry, and also of the more massive changes needed. When, as an effect of the world war and treaties, suddenly big readjustments became inevitable, almost all nations were faced with an emergency. A worldwide effort to deal with this emergency on the old liberal lines of automatic adaptation was made during the twenties but failed entirely in 1930, when the Great Depression broke out, partly in consequence of that effort. The international organization of economic life, which seemed to have been restored, collapsed and the nations were involved in a life-and-death struggle, trying to save at least the internal stability of their various currencies. In this period self-sufficiency and strong government became practically universal. And it was at this stage that the fascist tendencies suddenly emerged into the limelight. In the countries in which the egalitarian type of democracy prevailed they were victorious.
What was the reason for these (fascist) tendencies?
In the course of this emergency, popular governments were forced to interfere with the industrial system on a large scale. It soon became apparent that our economic system will not broker interference from the outside. Unsatisfactory as its working in many respects is, if interfered with, it becomes even more unsatisfactory in the long run. For, under the system of private ownership of the means of production, state interference in industry leads often to the opposite of the intended results. Measures intended to release unemployment may lead to the increase of unemployment. The continuation of liberal economics is, on the other hand, patently impossible on account of the emergency (see above). In such a situation the leaders of industry become hostile to popular government and try to undermine the authority of the democratic party system; as an alternative, big business offers its own government, the direct administration of social affairs by the captains of industry – that is, the owners of capital and their appointed managers. Democratic parliaments begin to be restive and tend toward socialist measures in order to enforce the emergency legislation. Neither the political nor the industrial machinery can function under these conditions. Society as a whole is threatened with a deadlock. Fear of a sudden collapse of both the political and the industrial system takes hold of the population. If (as happened in America) the leaders of finance and big business stand discredited, the movement is toward the dictatorship of the political powers (called New Deal); if popular government is under a shadow, the move is toward the dictatorship of the owners of the capital enterprise and industrial undertakings. Fascism emerges.
Democracy is challenged by fascism. The content of this challenge lies in the necessity of interfering with an economic system when democracy is proving unable to do so effectively. Fascism becomes inevitable.
The characteristic of fascism is therefore the change to which it actually leads. Not the fascist movements, but fascist institutions are the key to the study of the fascism. They offer the picture of a modern society in which democratic institutions have been abolished or put out of action, in the sense that the working people have no possibility of exerting an influence either in the political or in the industrial field, both labor parties and trade union organizations having been abolished. In the industrial field there is no essential change. The system of ownership continues. Private ownership of the means of production is maintained. The essential claim of fascism is that under these conditions it is able to deal with the three main complaints that are commonly brought against capitalism – namely trade depressions and lack of planning, lack of security of tenure for the employee, and unjustified differences of income at both ends of the scale.
Fascism implies, as it were, the promise of a reform of capitalism on these accounts, at the price of the permanent elimination of freedom, equality, and peace. Once the influence of the working classes is eliminated, it does not seem impossible, on the face of it, that capitalist industry and state should be mutually compatible. Liberal capitalism would then be replaced by so-called corporative capitalism and popular democracy by the fascist state. This is meant by the corporative state.
In Italy, as we have shown, the corporative system has not yet been put to the test. Whether the fascist state is able to interfere with industry as an independent force is doubtful. War industry is the actual situation – that is, a new emergence, not a system or final solution.
And Germany?
In 1933 the movement toward the Ständestaat stopped. Policy ‡…‡h the time of war industries.
Organizational principles are vaguely competitive, without a clear consciousness of the problem involved.
Thus the challenge of fascism is threefold: