Tuesday, November 06, 2012

Quote of the Day: Participatory Fascism

For thirty years or so, I have used the term “participatory fascism,” which I borrowed from my old friend and former Ph.D. student Charlotte Twight. This is a descriptively precise term in that it recognizes the fascistic organization of resource ownership and control in our system, despite the preservation of nominal private ownership, and the variety of ways in which the state employs political ceremonies, proceedings, and engagements—most important, voting—in which the general public participates. Such participation engenders the sense that somehow the people control the government. Even though this sense of control is for the most part an illusion, rather than a perception well founded in reality, it is important because it causes people to accept government regulations, taxes, and other insults against which they might rebel if they believed that such impositions had simply been forced on them by dictators or other leaders wholly beyond their influence.

For the rulers, participatory fascism is the perfect solution toward which they have been groping for generations, and virtually all of the world’s politico-economic orders are now gravitating toward this system. Outright socialism is a recipe for widespread poverty and for the ultimate dissolution of the economy and the disavowal of its political leadership. Socialism is the wave of the past; everywhere it has been tried seriously, it has failed miserably. Participatory fascism, in contrast, has two decisive advantages over socialism.

The first is that it allows the nominal private owners of resources and firms enough room for maneuver that they can still innovate, prosper, and hence propel the system toward higher levels of living for the masses. If the government’s intervention is pushed too far, this progress slows, and it may eventually cease or even turn into economic regress. However, when such untoward conditions occur, the rulers tend to rein in their plunder and intervention enough to allow a revitalization of the economy. Of course, such fettered economies cannot grow as fast as completely free economies can grow, but the latter system would preclude the plunder and control that the political leaders now enjoy in the fettered system, and hence they greatly prefer the slower-growing, great-plunder system to the faster-growing, no-plunder one.

Meanwhile, most people are placated by the economic progress that does occur and by their participation in political and legal proceedings that give them the illusion of control and fair treatment. Although the political system is rigged in countless ways to favor incumbent rulers and their key supporters, it is far from dictatorial in the way that Stalin’s Russia or Hitler’s Germany was dictatorial. People therefore continue to believe that they are free, notwithstanding the death of their liberties by a thousand cuts that continues day by day.

Participatory fascism’s second great advantage over socialism is that when serious economic problems do arise, as they have during the past five years, the rulers and their key supporters in the “private” sector can blame residual elements of the market system, and especially the richest people who operate in that system, for the perceived ills. No matter how much the problems arise from government intervention, it is always possible to lay the blame on actors and institutions in the remaining “free enterprises,” especially the biggest bankers and other apparent top dogs. Thus, fascistic rulers have build-in protection against popular reaction that the rulers in a socialist system lack. (Rulers under socialism tend to designate foreign governments and capitalists and domestic “wreckers” as the scapegoats for their mismanagement and inability to conduct economic affairs productively and fairly.)
(bold emphasis mine)

This is from Austrian economist Robert Higgs at the Independent Institute

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