Chapter 3 – Fascism – a capitalist phenomenon

by Peter Cohen

“Whoever refuses to discuss capitalism should keep silent about Fascism.”
German sociologist Max Horkheimer, ”Die Juden und Europa”, in Zeitschrift für Sozialforschung, Vol. 8 (1939).

The indifference of the Western political establishment to the emergence of Fascist movements in the Baltics and Ukraine reflects the Forum for Living History’s indifference to the historical reality of Fascism. For the sake of simplicity the term Fascism is used here in a generic sense, i.e. it includes Nazism, which is justifiable since Hitler himself referred to Mussolini’s Fascist movement as a model to emulate.

Mainstream Western historians and journalists routinely distinguish between capitalism, Fascism and Communism. This distinction is absolutely false. Fascism cannot be separated from capitalism. The societies in which Fascism arose in the 1920s and -30s were distinctly capitalist, e.g. Italy, Germany, Spain and Greece. All Fascist movements were enthusiastically supported and financed by capitalists.

The Holocaust was obviously rooted in a Fascist society. It is therefore absurd to discuss the Holocaust without discussing Fascism in general. And a discussion of Fascism that omits the link with capitalism is not only absurd, but misleading in the extreme.

In line with a popular Western view, the Forum for Living History (FLH) gives the impression that Nazism was focused on anti-Semitism. But the core of Nazism and other Fascist movements was anti-Communism. That is why they were supported and financed by capitalists in Italy, Germany and other Western countries. The anti-Communist nature of German anti-Semitism is discussed in Chapter 5.

It is perhaps no coincidence that the FLH ignores an analysis of Fascist ideology by Herbert Tingsten, professor of Political Science at StockholmUniversityCollege 1935-1946, editor-in-chief of Dagens Nyheter, Sweden’s leading daily newspaper 1946-1959. Tingsten was and is highly regarded by the Swedish political establishment. He correctly described the emergence of Fascism in Nazismens och Fascismens idéer (The ideas of Nazism and Fascism),1992 (originally published in 1935):

“Fascism is a bourgeois phenomenon: it has come to power virtually without exception with the support of the bourgeoisie, the anti-socialist groups, it has basically preserved the bourgeois structure of production, private ownership of the means of production, free competition – at least in principle – and it rejects the idea of economic equality”. [Note the reference to competition that is “free in principle”. In reality the capitalist economy is dominated by privately owned monopolies or cartels.]

What is capitalism?

In a modern society, the means of production include land, buildings, equipment, tools and raw materials. The criteria that define a society as capitalist are:

  • The vast majority of the people who work to produce the goods and services required by society do not own or control the means of production. These are owned and controlled by a small minority of the population. In order to survive, the people who do the work have to sell their labor-power to the owners.
  • The owners control the means of production through private companies that are in competition with each other for e.g. market shares, raw materials, investment capital and investment opportunities.
  • The reality of competition forces the owners to accumulate as much capital as possible, i.e. to maximize profits.
  • The purpose of production is therefore to enable the owners to maximize profits.

In many capitalist countries, various types of companies are state-owned, such as those supplying basic inputs for an industrialized society in the form of electricity, gas, water or transportation. In most cases this has occurred because either the so-called free market could not supply these inputs efficiently or reliably, or the majority of the population was able to exert enough political pressure to compel nationalization.

The small minority that owns the bulk of the means of production in the private sector normally exerts a good deal of influence on the management of important state-owned firms, to the extent that they can be said to control them. And the government normally aims to ensure that such companies serve the needs of the minority.

Background to the rise of Fascism

Turbulent post-World War 1 Europe was dominated by two factors – the effects of the war and the public’s reaction to it, and the revolution in Russia in October 1917.

The First World War was a conflict between major imperial powers, mainly the UK and France on one side and Germany on the other. The large banks and industrial corporations in these countries were competing intensively and violently to maintain and expand empires that would ensure them of access to raw materials, markets and profitable investment opportunities. The defeat of Germany enabled the UK and France to secure substantial advantages in a number of regions, including the Middle East, Africa and the Pacific.

Approximately 9.7 million soldiers died in the war, 21.2 million were wounded, and 8.9 civilians died (Wikipedia). The majority of the soldiers who participated in the murderous battles came from the working class, and by the end of the war many of them had realized that they had been fighting to promote the interests of the ruling class, which included maximization of profits. In the run-up to the war Lenin and the great Irish socialist James Connolly warned the European working-class of the slaughter that awaited them. But the leaders of social democratic parties in the British, French and German parliaments had supported the war, and the killing machine was started.

After the war ended, discontent was widespread in the European working class, and many turned to Communist organizations that had maintained a consistent anti-war policy. This trend was strongly reinforced when the workers in Russia overthrew the Tsar and took power into their own hands. Many workers in Western Europe hoped that socialism could be established in their countries as well. The conflict between the working class and the capitalists intensified throughout Europe and was often violent, as in Austria, the Baltics, Finland, Germany and Hungary.

Capitalists in the West were afraid that the Russian Revolution would spread to other European countries. In addition, Tsarist Russia had been a gold mine for foreign investors, who had extracted enormous profits, e.g. from the oil fields around Baku, where the Swedish Nobel family had major interests together with British and American capitalists. As much as 25% of French foreign investment was in Russia.

Returns on loans to the Tsarist government, including treasury bonds, were extremely satisfactory. But early in 1918 the new government in Moscow announced that it would not honor the Tsar’s obligations to the West. The Russian people would no longer labor to enrich foreign investors.

Capitalists in the West thus had a good deal to lose if the Russian working class were to succeed in maintaining power.

“Bolshevism must be strangled in its cradle”

When in 1918 Winston Churchill declared that ”Bolshevism must be strangled in its cradle” he expressed the views of virtually all Western capitalists on the situation in Russia after the October Revolution.

Churchill regarded Bolsheviks (Communists) as “swarms of typhus-bearing vermin” (Clive Ponting, Churchill, 1994). They were “a league of the failures, the criminals, the unfit, the mutinous, the morbid, the deranged and the distraught”. He described them as “troops of ferocious baboons amid the ruins of cities and the corpses of their victims”, but their “bloody and wholesale butcheries and murders were carried out to a large extent by Chinese executioners and armored cars”. They were also “cold Semitic internationalists”.

Churchill told Lord Curzon that the Soviet government was “a tyrannic government of these Jew commissars”. In public he referred to the “world wide communistic state under Jewish domination” as well as “the international Soviet of the Russian and Polish Jew”.

Robert Lansing, US Secretary of State under Woodrow Wilson, wrote of Communism that

Its appeal is to the unintelligent and brutish element of mankind to take from the intellectual and successful their rights and posses­sions and to reduce them to a state of slavery… Bolshevism is the most hideous and monstrous thing that the human mind has ever conceived… It is worse, far worse, than a Prussianized Germany, and would mean an ever greater menace to human liberty.

Capitalists in the West decided to follow Churchill’s advice, and launched a war against the new Soviet Russia. Like Churchill, they understood that unless they intervened there was no chance of the Soviet government being overthrown. Following agreements between Western governments, by the end of 1918 there were approximately 300,000 foreign troops in Russia. They came from France, the UK, the US, Italy, Germany, Poland, Finland, Czechoslovakia, Rumania, Turkey, Japan and the three newly independent Baltic countries.

By the end of 1919 the British had spent about 100 million pounds in the fight against Soviet Russia, approximately GBP 34 billion in today’s money, and the French about the same. The Americans acknowledged ”substantial outlays”.

The determination of the Russian workers and peasants to defend their revolution was so strong that the invading powers were forced to withdraw their troops in 1921-22 and to cut off supplies of war materiel to the remaining Russian counter-revolutionary forces. Without support from the West, these forces had no choice but to surrender, precisely as Churchill had previously warned.

Deaths more than double the Holocaust

Like many other wars including WW1, the Western War of Intervention generated death on a widespread scale from starvation and disease as well as with armed conflict. The death toll reached approximately 14 million, according to Colin McEvedy och Richard Jones, Atlas of World Population History, 1978. Wikipedia puts the total at 15 million. Both figures are more than double the number of deaths in the Holocaust.


Fascism in Italy

The Italian bourgeoisie consisted of class fractions with conflicting economic and political interests, e.g. industrialists, landowners and bankers. Like the small farmers and the owners of small manufacturing firms, they were terrified of Communism. But they were unable to form an effective political front against the working class and the Communist party.

Benito Mussolini realized that they all shared fear and hatred of Communism. His Fascist party provided a solution, uniting them in a common cause.

According to Richard Lamb in Mussolini and the British, 1997:

In 1920 Italy underwent such severe disruption that it became barely governable. The middle classes were frightened of the strikes and violence. Workers occupied the factories, there were mutinies among the armed forces, and a general strike. When, in June, Giolitti replaced Francesco Nitti as Prime Minister, he faced an almost impossible task in restoring law and order.

Mussolini’s opportunity came as, all over Italy, trains, barracks, banks and public buildings were attacked by mobs; local Soviets were proclaimed in worker-occupied factories, and control in some areas passed into the hands of Communists. Mussolini’s Fascists now put themselves forward as the saviours of the country, claiming to be the only force capable of checking the spread of Bolshevism. They declared that violence must be met with violence, and attacked the Communists and strikers ferociously. This attracted support from the middle classes and the industrialists, and produced near civil war. Mussolini’s recruitment of large squads of Fascists was helped by subscriptions from the wealthy, who saw Fascism as the only chance of stopping a Bolshevik-type revolution in Italy. Wearing black shirts and carrying the flag of the arditi [armed gangs of marauders like the Freikorps in Germany], Fascist squads were for the most part made up of unemployed ex-servicemen and out-of-work youths; many were inspired by fervent patriotism, but there was also a hideous element of criminal types who were more interested in the money.

After Mussolini became head of state in 1922, “De Martino, the Italian Ambassador in London, was able to cable to Mussolini on 2 November that only the Daily Herald had commented unfavorably on the change in Italian politics, that most circles were taking their lead from the favorable article in The Times of 1 November, and that the City of London and the bankers were pleased by the accession to power of the Fascists.

Mussolini took over the government and began a violent campaign against labor unions and leaders of the working class, including Communists of course. Traditional democratic institutions were abolished. Like the bankers in London, the leaders of the West were pleased. Mussolini’s – and later Hitler’s – core strategy was to attack Communists and subdue the working class.

The main points of US policy toward Italy are summarized by David F. Schmitz in Thank God They’re on Our Side: The United States and Right-Wing Dictatorships 1921-1965 (1999):

First and foremost, Fascism in Italy was seen as a bulwark against the spread of Bolshevism, an authority guaranteeing the maintenance of social order, and an antidote for the illness of successive weak governments. Second, strong Fascist rule ensured that Italy would begin its postwar economic reconstruction free from the challenges of labor; reconstruction would provide economic opportunities for the United States [i.e. American capitalists]. Third, Mussolini was considered to be very popular and fully in control. This understanding… made it easier for American officials to ignore the domestic terror and the destruction of democratic institutions…

One of Mussolini’s warmest admirers outside Italy was Winston Churchill. In 1927 Churchill had called Mussolini “the greatest law-giver of the 20th century”. This was about a year after Mussolini had arrested and execut­ed a number of trade-union leaders, many of them Communists. Churchill said that “Mussolini has a firm grasp of the economic principles involved”, i.e. he understood that the working class must be subdued (Ponting). Mussolini’s government received comprehensive financial support from Washington, and investment by US corporations in Italy was greater than in any other country during the 1920s (David F. Schmitz, The United States and Fascist Italy, 1988).

Anti-Semitism did not play a significant role in the Italian Fascist movement. For example, Mussolini’s long-term mistress was Jewish, and wrote many of his speeches. The text below is from Arno Mayer’s Why Did the Heavens Not Darken?, Pantheon Books 1990.

To be sure, from 1917 to 1919 Mussolini repeatedly denounced the Jews for their involvement in the Bolshevik revolution in Russia. But he soon stopped singing the tocsin of “Judeobolshevism,” probably because he doubted its usefulness in Italy and out of regard for Jews in his entourage. While Jews of liberal and socialist persuasion were hostile to fascism, those with conservative convictions and economic interests supported Mussolini for his supernationalism and anti-Communism. Accordingly there were five or six Jews in the vanguard of Italian fascism, three of the early martyrs of Mussolini’s movement were Jewish, and there were some early Jewish paymasters as well. Over two hundred Jews are said to have participated in the March on Rome [when Mussolini is supposed to have seized power], and easily three times that number were registered party members soon thereafter.

“ldo Finzi, a Jew, became under-secretary of the interior in Mussolini’s first cabinet. In July 1932 Il Duce made Guido Jung, another Jew, his minister of finance, thereby raising him into the Grand Council. Although Jung lost his cabinet post in 1935, he served in the Chamber of Deputies until 1938, when he retired to his native Sicily. Gino Arias, a Jewish lawyer, wrote for Il Popolo d’Italia, the main [Fascist] party newspaper, and a number of military officers of Jewish origin served in important command positions, some of them in the Abyssinian campaign and the Spanish Civil War. It was not until 1938, when the government issued the Law for the Defense of the Race as well as a series of anti-Semitic decrees, that Jews began to be systematically barred and removed from high public office. But until the fall of 1943, when the Germans took over, none was put in prison, deported, or killed.

This explains why Italian Fascism is rarely if ever highlighted by mainstream Western historians, journalists, or the Forum for Living History. A close examination of the common elements of Fascism in Italy, Germany and Spain would clearly show that anti-Communism, not anti-Semitism, was always the main theme, and that Fascism was indeed a capitalist phenomenon, as Herbert Tingsten pointed out.

Fascism in Germany

As in Italy, conflicts of interest between various fractions of the German bourgeoisie prevented them from achieving political unity during the so-called WeimarRepublic that was established in1918. For example, the big landowners wanted tariffs on imported agricultural machinery removed, while German manufacturers of such machinery and their suppliers, including steel producers, wanted high tariffs as protection against foreign competitors.

Like Mussolini, Adolf Hitler realized that hatred and fear of Communism could unite the bourgeoisie, and he convinced their leaders that his party was the appropriate instrument for the struggle to destroy Communism, subdue the working class, and enable international expansion of German capitalism.

As early as 1923 the Nazi Party received the first contribution from a major German corporation, in the form of 100,000 Reichsmark in gold. More corporations fell in line, and the flow of money increased continuously. Details of financial support provided by German capitalists from 1923 onward are given in William L. Shirer, The Rise and Fall of the Third Reich, 1959. Without it the Nazis would never have come to power.

According to the Forum for Living History, at the end of the 1920s ”More and more Germans saw the Nazi Party as a solution for the political and economic misery”. The term ”political misery” is not explained. Like most mainstream Western historians and mass media, the Holocaust Book states that high unemployment was the cause of the Nazis’ rise to power. But it wasn’t the working class who voted for Hitler. The votes were cast by the upper class and the middle-class fractions of the bourgeoisie, who saw Hitler as the man who could save Germany from Communism, and who had promised to satisfy their varying economic needs.

In the election in the summer of 1932 the Nazi Party received 37.3% of the votes. In November the figure dropped to 33%. The Nazi leaders and the upper class were panic-stricken. On 30 January President Hindenburg appointed Hitler as prime minister in a virtual coup d’etat, and 81 elected Communist members of parliament were arrested. This event is not mentioned by the Forum for Living History, nor by most mainstream Western historians.

The attack on the working class in general and Communists in particular began immediately. All assets of labor unions were confiscated, and their leaders were arrested. On 21 March 1933 The Manchester Guardian reported that the first concentration camp would soon open near the Bavarian town of Dachau, and according to the police in Munich it was intended to house about 5,000 Communists and other representatives of the working class. The police made no mention of Jews. Rule by terror had been started, and was to last until May 1945. The text of the Guardian article is available at

For German capitalists, Hitler had created a paradise. Real wages for the working class declined by 25% during the 1930s, and large German corporations made record profits (Ernest Mandel, Late Capitalism, 1978).

In the mid-1930s it was decided that a massive re-armament plan would be implemented to enable an attack on the Soviet Union. The plan was prepared by the directors of IG Farben, a giant German chemicals company and one of the world’s largest corporations. Farben later established large production plants directly connected to the Auschwitz concentration camp and also manufactured Zyklon gas, which was used for mass extermination of Jews, Roma and Soviet prisoners of war.

The re-armament program was financed by Western banks within and outside Germany. Like their German counterparts, capitalists throughout the West saw the coming German attack on the Soviet Union as a continuation of the war against Communism that had begun in 1918. A continuation which they hoped would be successful.

Fascism in Spain

The government of the SpanishRepublic that was elected in 1936 was a coalition of several parties that showed alarming socialist tendencies according to the rulers of the West. The government’s program included distributing land to poor peasants and reinforcing the rights of labor unions. 

In July 1936 General Francisco Franco launched a revolt intended to protect and promote the rights of Spanish capitalists and large landowners. The German air force supplied transport planes to ferry Franco’s troops from the Spanish colony of Morocco to the mainland. Spanish workers and farmers showed unexpected resistance and made it clear that they had no intention of allowing their government to be overthrown. Franco called for help, and both Germany and Italy sent troops to support his forces. The US sent military materiel.

The Western powers regarded Republican Spain as a Communist state in the making and had no objections to the German and Italian legions. They participated in the strangulation of the legally elected government by inventing a policy of ”non-intervention”, which in fact involved intervening in the war by establishing an embargo that prevented the Republic from purchasing military supplies on the international market.

The non-intervention policy “appeared impartial, but in practice it amounted to a kind of ‘malevolent neutrality’ that tipped the balance decisively against republican Spain”. (Douglas Little, Malevolent Neutrality, 1985.)

As in so many other contexts, Winston Churchill expressed the capitalists’ view of Spain in unambiguous terms. In August 1936 he wrote that the Republican government was “falling into the grip of dark, violent forces coming ever more plainly into the open, and operating by murder, pillage and industrial disturbances”. The government and its supporters were “a poverty stricken and backward proletariat demanding the overthrow of Church, State and property and the inauguration of a Communist regime”. They were opposed by the “patriotic, religious and bourgeois forces, under the leadership of the army, and sustained by the countryside in many provinces… marching to re-establish order by setting up a military dictatorship”.

He referred to alleged massacres of civilians and prisoners by government forces as “butcheries”. But Franco’s executions of prisoners were not the same as the “atrocities” committed by the Republicans. In 1937 Churchill told his fellow MPs that Britain should officially recognize Franco’s forces as the legitimate government of Spain.

In his memoir The Gathering Storm (1948), Churchill wrote of the Spanish Civil War “in that conflict I was neutral”, which was a bare-faced lie (Ponting).

The Soviet Union was the only European country that came to the aid of the Republic. The government of Mexico sent war materiel. The government was also helped by more than 30,000 men who volunteered to fight in defense of the Republic against the Fascists. They came from over 50 countries.

The Fascists finally prevailed after three years of bloody struggle. As in Italy and Germany, the working class and the poor peasants were quickly subjected to bloody repression that lasted for many years. An estimated 200 000 (Paul Preston, The Spanish Holocaust, 2012) to 400 000 (Michael Richards, A Time of Silence: Civil War and the Culture of Repression in Franco’s Spain, 1998) people were murdered during the civil war and by the subsequent Franco government.

In 1945 the Franco government was the only Fascist regime left in Europe. During World War 2, Franco had sent soldiers to the Eastern Front to fight alongside the Nazi forces against the Soviet Union, which was then an ally of the UK and the US. The Western powers could have removed Franco from office in a few weeks in the summer of 1945. Instead, the US signed an agreement with his government for establishment of American airbases in Spain.

The bases were intended for use in a future attack on the Soviet Union. The US also contributed financial support to the government in Spain, and together with other Western powers maintained good relations during Franco’s lifetime.

Praise for Fascists from the leaders of the democratic West

Sumner Welles, Undersecretary of State under Franklin D. Roosevelt: “Governments and the wealthier classes saw the specter of Bolshevism in every sign of unrest, political or social”. Commenting on the Fascist seizure of power in Italy, Welles wrote:

At first, however, the major powers, and in particular Great Britain, breathed a sigh of relief. From their standpoint, Italy had become quiet and orderly. It was in hands that would ruthlessly root out all signs of Communism.

Business interests in every one of the democracies of Western Europe and of the New World welcomed Hitlerism as a barrier to the expansion of Com­munism. They saw in it an assurance that order and authority in Germany would safeguard big business interests there. Among the more reactionary elements of the Church, there was a paean of praise.

In the case of Hitler, as in the case of Mussolini, the greedy, the Tories and the shortsighted heralded his rise to power with enthusiasm. I can remember one American Ambassador who publicly applauded Mussolini as the harbin­ger of a new era of glory, not only for the Italian people but for the rest of the civilized world as well.

Major characteristics of Fascism between the World Wars

1. Annulment of bourgeois democracy. The people no longer had even a formal legal right to influence management of the affairs of State. And they had no insight into the decision-making process within the government.

2. Intensified and widespread integration of the State with large corporations and banks, often in the form of joint committees that made vital decisions and formulated strategy.

3. Intensified expansion of monopoly capital, continued concentration of power and wealth in the hands of a small minority of the population.

4. Degradation and intensified exploitation of the working class, through outright terror and violent attacks – legal and physical – on trade unions. One of the main functions of the Fascist regimes was to strip workers of rights and benefits that they had won through unions and political movements.

The text below was written in 1936 by a well-known American journalist. The reference to the “Fascist revolution” reflects the then current mytholo­gy that Mussolini and Hitler aimed at some sort of social revolution.

Workers have lost their right to bargain; their trade unions have been dis­solved…their wages may be (and have been) mercilessly deflated by decree; above all, they have lost the right to strike. The capitalist, on the other hand, even if he has suffered inconvenience [limited cosmetic restrictions on the mobility of capital], maintains his funda­mental privilege, that of earning private profits. Fascism as Mussolini intro­duced it was not, probably (sic!), a deliberate artifice for propping up the capitalist structure, but it had that effect. The restriction on the mobility of capital was in effect a premium which the capitalists were willing to pay in order to get full security against the demands of labor. The whole color and tempo of the Fascist revolution, in contrast to that in Russia, is backward. (John Gunther, Inside Europe, 1936.)

Franz Neumann in Behemoth: The Structure and Practice of National Socialism (1942/1944) one of the best books ever written about Nazism:

It is in the control of the labor market that National Socialism (Nazism) is most sharply distinguished from democratic society. The worker has no rights. The potential and actual power of the state over the labor market is as comprehensive as it can possibly be. The state has already reached the utmost limit of labor market control.

The purpose of this control was to serve the interests of large corporations in Germany, which included maximizing profits, reducing labor costs, and driving small and medium-size competitors out of business.

Eliminating the rights of workers was accompanied by privatization of any and all profitable or potentially profitable operations in the public sector.

The following was not written by Margaret Thatcher. It was proclaimed by Benito Mussolini in an electoral campaign in 1921:

The State must be limited to its purely political and juridical functions. Let the State give us police to protect decent people from villains, a well-organized system of justice, an army ready for any eventuality, and a foreign policy to serve the national interest. All the rest, and I do not exclude the secondary schools, must return to individual private initiative. If you want to save the State, you must abandon the collectivistState handed down to us by the force of events and by the war, and go back to the ManchesterState. (Cited in Nicos Poulantzas, Fascism and Dictatorship, 1979.)

The ManchesterState described by the 19th-century English economists Cobden and Bright was intended to ensure that a society’s economic life was ordered and controlled by market forces, with no outside interference. This is of course one of the basic principles of modern neo-liberal economics, in which the ideal State is described as a “night-watchman”, to use a term that has been adopted by the Swedish conservative party (Moderata samlingspartiet). The night-watchman is often quite generous when it comes to spinning off publicly owned assets or rescuing private investors from the perils of bankruptcy.

Residents of the EU and the US are well-acquainted with the modern version of the Nazi economic policies described by Michael Parenti in Contrary Notions, 2007:

In both Italy and Germany, perfectly solvent publicly owned enterprises, such as power plants, steel mills, banks, railways, insurance firms, steamship companies, and shipyards, were handed over to private ownership. Corporate taxes were reduced by half in both Italy and Germany. Taxes on luxury items for the rich were cut. Inheritance taxes were either drastically lowered or abolished. In Germany between 1934 and 1940 the average net income of corporate businessmen rose by 46 percent. Enterprises that were floundering were refloated with state bonds, recapitalized out of the state treasury. Once made solvent, they were returned to private owners. With numerous enterprises, the state guaranteed a return on the capital invested and assumed all the risks. The rich investor did not have to worry about any losses; if a business did poorly, the investor would be recompensed from the state treasury.

5. Terror and military aggression as integral components of domestic and foreign policies.

6. Mysticism as a substitute for class struggle. The ideological flim-flam generated by Fascist movements in Italy, Spain and Germany contains many irrational elements that are above all ahistorical. For example, large corporations and banks in Germany were eager to expand by controlling foreign markets. This goal was expressed publicly by Hitler as the need for a greater space (Lebensraum) for the German people, which would be achieved largely at the expense of those unfortunate enough to be living in Poland and Soviet Russia.

The elements of mysticism often pointed to a mythological idyllic past, when Communism (Bolshevism) did not exist, large monopoly companies did not dominate the economy, society was stable and not exposed to threats from the Reds, and everyone – especially the lower middle classes – lived happily, enjoying the power over the working class that was their natural heritage.

In public pronouncements Fascist leaders continuously contradicted themselves, promising different rewards to different audiences in order to secure their support.

The upper class, i.e. the owners of society, did not have to be fed on mysticism. They were well aware of the value of Fascism as a means of consolidating their rule, crushing the Communist movement, reducing the working class to subservience, and boosting their profits.

A note on the mass psychology of Fascism

The Fascists attracted the lower-middle, middle and upper classes by claiming to serve their material interests. But there was also a psychological aspect of Fascist ideology that helped to gain middle-class supporters, such as the famous Swedish film director Ingmar Bergman.

Bergman writes in his memoirs, Laterna Magica (1987, my translation): “I loved him [Adolf Hitler] also. I was on Hitler’s side for many years, rejoicing at his triumphs and grieving over his defeats”.

Bergman does not specify how many years he spent on Hitler’s side. But he presumably rejoiced when the Germans invaded Poland and started killing Jews, grieved when the Soviets stopped the Fascist armies in the Battle of Moscow, and wept inconsolably after the defeats of Nazi armies at Stalingrad and Kursk, which decided the outcome of WW 2.

Although Bergman has a reputation for introspection and deep psychological insight, he does not tell us much about why he loved Adolf Hitler.

For many decades Bergman has been praised for his profound, virtually unique cinematic explorations of the human psyche. On the evening of the day he died a eulogist on Swedish public-service television (SVT 2) said that he explored “the human being’s internal landscape”. On the same program, the director Ang Li said that Bergman “dealt with the inner self”.

But in Laterna Magica the master of psychological insight seems to be completely uninterested in understanding his own “internal landscape” in relation to his sustained love for the Fascist dictator, even in retrospect at the age of 69.

However, he does provide a clue, although he obviously intends it as an excuse:

My brother was one of the founders and organizers of the Swedish National Socialist party, my father voted for the National Socialists in several elections. Our history teacher was passionate about ’the old Germany’, our gym teacher travelled to Bavaria every summer for an officers’ meeting, several of the parish priests were crypto-Nazis, and close family friends expressed strong sympathy for ’the new Germany’.

Bergman himself spent time in Germany during the 1930s and describes his experience:

…unvaccinated and unprepared I tumbled into a reality that glittered with idealism and hero-worship. I was also helplessly exposed to an aggression which to a great degree corresponded to my own… (Emphasis added)

This is the key to understanding why Bergman loved Hitler. Where did the aggression come from?


A release for repressed rage and energy

For generation after generation, over several thousand years, the hierarchical class structure of Western society has reflected the subordination of the majority of the population to the ruling class in a market economy.

The traditional Western family has played an essential role in reproducing the authoritarian structure of class society. The repressive hierarchy of class is translated into a repressive hierarchy of subordination within the so-called nuclear family – man/woman/child.

Adolf Hitler saw the family as “the smallest but most valuable unit in the complete structure of the state” (Mein Programm, 1932).

In Western societies a young child normally does not have an alternative to living within the family that it was born into. It is not easy for a healthy young organism to accept subordination and the repression required to achieve it. Particularly because the two people who should be sources of love, warmth and security often turn out to be authoritarian guardians whose main goal is to make the child “behave correctly and do the right thing”. This is sometimes called “adapting to society”.

One of the most common strategies adopted by children in response to domination within the family is called internal repression (Freud). The child pretends, consciously or unconsciously, that the orders re­ceived from its parents are not really orders, but instead are actually the child’s own wishes and decisions.

This means that a great deal of energy is directed inward in a process that simultaneously represses the child’s natural desires and maintains the fantasy that it is making its own decisions. This process generates internal tensions that are often unbearable. The inability to resolve these tensions is mirrored by aggression against the outside world – the type of aggression that Bergman refers to. Normally this aggression must also be restrained, because to release it would invoke sanctions from higher authority.

Unconsciously the child and later the adult longs for release of inner tension. The appeal of Fascism to people like Bergman is that it offers an opportunity for release that is also approved by higher authority, in Bergman’s case Adolf Hitler. The authority that enables the release from unbearable inner tension easily becomes the object of love and idolatry.


Basic structure of Fascist society

The basic structure of Fascist society in Germany was described by Franz Neumann in Behemoth (emphasis added):

The ruling class is composed of those who command the means of violence (physical and moral) and the means of production, and those who possess the administrative skill. There are thus four groups: the Nazi leadership, which controls the police and propaganda; the army leadership; the industrial hierarchy; and the high civil service.

Among these, the power of the high civil service has steadily declined and can be completely ruled out of the picture…

The practitioners of violence tend to become businessmen, and the businessmen become practitioners of violence. Many leading industrialists become high SS leaders…Many terrorists have assumed powerful industrial positions…This coalescence is not accidental, but inherent in the structure of Nazi Germany. Nazism is interested in maximum production. There are two ways to achieve this. It could strengthen the bureaucratic controls and then compel more production. But this the Nazis could not do even if they wanted to. They lack trained personnel and will lack still more, as more manpower is absorbed by the armed forces. But the only feasible way for them was, therefore, to entrust the operation of the economy to the most powerful monopolists [capitalists] to strengthen their powers, and to incorporate the whole industrial life into monopolistic and authoritarian organizations…

But this very development creates new grave social problems. Small and middle business must suffer more. Workers must be still more terrorized to achieve higher performance…German society is thus composed of:

A small group of powerful industrial, financial and agrarian monopolists (large estates) tending to coalesce with a group of party hierarchs into one single bloc disposing of the means of production and the means of violence.

 A large mass of workers and salaried employees without any kind of organization and without any means of articulating their views and sentiments.


Large profits to be made

We have seen that capitalists throughout the West praised the Fascist movements for their commitment to destroying Communists and Communism. But the attractions of Fascism were not limited to its political commitments. There was also a great deal of money to be made in Italy and Germany, and corporate shareholders have never been known for their concern about the methods used to ensure higher profits.

As noted above, large German corporations reported record profits in the 1930s. Many foreign corporations were also anxious to get in on the action, as soon as the Nazis had shown that they had the labor market under control. Capitalists are always enthusiastic about business environments in which labor power is available on favorable terms. More recent manifestations of controlled labor markets will be discussed in Chapter 15.

Major US corporations invested heavily in Nazi-Germany and made highly satisfactory profits. Many of these companies played key roles in Hitler’s’ rearmament program and during World War 2 as well, as shown in the next chapter.

The Circle of Friends and the SS

The intimate links between corporate Germany and the SS are reflected in the “Circle of Friends (Freundeskreis), which was formed on the initiative of a number of large companies and banks. Their representatives met with Heinrich Himmler once a month for “informal talks”, and provided the SS with one million Reichsmarks annually to cover the cost of “special tasks”.

The corporations in the Circle included IG Farben, Robert Bosch, Portland-Zement, German-American Petroleum, the Hamburg-America Line and major banks such as Deutsche Bank, Dresdner Bank, and Commerz und Privatbank.

At the Nuremberg Trials, former SS General Karl Wolff testified that

The relations between Himmler and the members of the Circle of Friends… were so good that Himmler frequently took the gentlemen along to familiarize them with the work and the problems of the SS, and to show them what their donations were used for. I believe that it was in 1937 that Himmler took the members of the Circle of Friends to view his Allach porcelain factory and the Dachau concentration camp.

In a letter to the SS, IG Farben director Otto Ambros wrote that “the friendship with the SS is a blessing”, and confirmed that the needs of the corporations were being fulfilled.

The rewards of friendship

The companies in the Circle of Friends benefited from Nazi policies in many ways, as their operations achieved record profits in the 1930s and during the war. They also took advantage of the policy of “Aryanization” which involved expropriating property owned by Jews and transferring it at little or no cost to “Aryan” owners.

Many small shops and businesses were transferred, but larger enterprises were reserved for the big companies and banks, most of them members of the Circle of Friends.

In general, the economic policies of the Nazi regime favored large companies and associations of such companies, at the expense of small and medium-size firms. Neumann reproduces a remarkable letter published in Deutsche Allgemeine Zeitung on 16 November 1942, written by one of a group of

…six industrialists – owners of small and medium-size plants – (who) were sitting together in a Russian foxhole north of Smolensk… talking about what would become of them, or at least of the plants they owned and managed, after the war…

In the first place it should be stated that no private and responsible industrialist… would ever demand measures for his protection against big enterprises and combines. This would contradict his basic conception of the equal justification and equal value of all economic activities, which is an essential assumption. On the other hand, he emphatically demands equal treatment for all, meaning that there should be no one-sided sponsoring and furtherance of big industry as it actually exists, if not de jure, certainly de facto…

We, who are soldiers at present but follow with open eyes the recent economic developments, recognize very clearly the inevitable consequences of the decrees and measures of recent years, and we understand them better now that we are sufficiently distant. Whether we deal with the closing down of plants, or the appointment of leaders of the industrial rings, or the extension of the functions and powers of certain economic groups, …again and again we find that we deal with measures which in the last analysis run counter to the interest of small and medium-size enterprises. Has anyone ever heard that when an unprofitable enterprise has been closed down its machines, workforce and orders have been assigned to a medium or a small plant? Or that the leader of an industrial ring [a sort of supervisory committee that allotted orders to companies within a specific sector] has allotted interesting and profitable work to small and medium-size plants and less profitable work to large-scale enterprises?

Toward the end of the letter the writer refers to the “reconstruction of the East”, i.e. the takeover of the Soviet Union by German businesses. He hopes that “the responsible authorities” will give owners of small and medium-size plants a chance to share in the spoils.

The vital importance of German capitalists for the Nazis

The text below illustrates the vital importance of German capitalists for Hitler and the Nazi party, as well as the enormous profits that could be generated for corporations that supported and promoted Fascism. The text is taken from a document submitted at the Nuremberg Trial on 12 November 1945 by Robert H. Jackson, Chief of Counsel for the United States of America (emphasis added).

Four generations of the Krupp family have owned and operated the great armament and munitions plants which have been the chief source of Germany’s war supplies. For over 130 years this family has been the focus, the symbol, and the beneficiary of the most sinister forces engaged in menacing the peace of Europe. During the period between the two World Wars, the management of these enterprises was chiefly in Defendant Krupp von Bohlen’s hands…

After the First World War, the Krupp family and their associates failed to comply with Germany’s disarmament agreements but all secretly and knowingly conspired to evade them.

In the 1 March 1940 issue of the Krupp Magazine, the Defendant Krupp stated:

‘I wanted and had to maintain Krupp (after World War 1) in spite of all opposition, as an armament plant for the later future, even if in camouflaged form. I could only speak in the smallest, most intimate circles, about the real reasons which made me undertake the changeover of the plants for certain lines of production… Even the Allied snoop commissioners were duped… After the accession to power of Adolf Hitler, I had the satisfaction of reporting to the Fuehrer that Krupp stood ready, after a short warming-up period, to begin rearmament of the German people without any gaps of experience…’

Gustav Krupp von Bohlen und Halbach (and Alfried as well) lent his name, prestige and financial support to bring the Nazi Party, with an avowed program of renewing the war, into power over the GermanState. On 25 April 1931 Krupp von Bohlen acted as chairman of the Association of German Industry to bring it into line with Nazi policies. On 30 May 1933 he wrote to Schacht that:


‘It is proposed to initiate a collection in the most far-reaching circles of German Industry, including agriculture and the banking world, which is to be put at the disposal of the Fuehrer of the NSDAP in the name of ‘The Hitler Fund’ …. I have accepted the chairmanship of the management council.’

Krupp contributed from the treasury of the main Krupp company 4,738,446 marks to the Nazi Party fund. In June 1935 he contributed 100,000 marks to the Nazi Party out of his personal account.

The Nazi Party did not succeed in obtaining control of Germany until it obtained support of the industrial interests, largely through the influence of Krupp. Alfried Krupp first became a Nazi Party member and later Gustav did also. The Krupp influence was powerful in promoting the Nazi plan to incite aggressive warfare in Europe.

Gustav Krupp von Bohlen strongly advocated and supported Germany’s withdrawal from the Disarmament Conference and from the League of Nations. He personally made repeated public speeches approving and inciting Hitler’s program of aggression: On 6 and 7 April 1938 two speeches approved annexation of Austria; on 13 October 1938 approving Nazi occupation of the Sudetenland; on 4 September 1939 approving the invasion of Poland; on 6 May 1941 commemorating success of Nazi arms in the West.

Alfried Krupp also made speeches to the same general effect. Krupps were thus one of the most persistent and influential forces that made this war.

Krupps also were the chief factor in getting ready for the war. In January 1944, in a speech at the University of Berlin, Gustav Krupp boasted, Through years of secret work, scientific and basic groundwork was laid in order to be ready again to work for the German Armed Forces at the appointed hour without loss of time or experience. In 1937, before Germany went to war, Krupps booked orders to equip satellite governments on approval of the German High Command. Krupp contributed 20,000 marks to the Defendant Rosenberg for the purpose of spreading Nazi propaganda abroad. In a memorandum of 12 October 1939 a Krupp official wrote offering to mail propaganda pamphlets abroad at Krupp expense.

Once the war was on, the Krupps, both Gustav and Alfried being directly responsible therefore, led German industry in violating treaties and international law by employing enslaved laborers, impressed and imported from nearly every country occupied by Germany, and by compelling prisoners of war to make arms and munitions for use against their own countries. There is ample evidence that in Krupp’s custody and service they were underfed and overworked, misused, and inhumanly treated. Captured records show that in September 1944 Krupp concerns were working 54,990 foreign workers and 18,902 prisoners of war.

Moreover, the Krupp companies profited greatly from destroying the peace of the world through support of the Nazi program. The rearmament of Germany gave Krupp huge orders and corresponding profits. Before this Nazi menace to the peace began, the Krupps were operating at a substantial loss. But the net profits after taxes, gifts, and reserves steadily rose with rise of Nazi rearmament, being as follows:

For year ending 30 September 1935: 57,216,392 marks

For year ending 30 September 1938: 97,071,632 marks

For year ending 30 September 1941: 111,555,216 marks


The book value of the Krupp concerns mounted from 75,962,000 marks on 1 October 1933, to 237,316,093 marks on l October 1943. Even this included many going concerns in occupied countries at a book value of only 1 mark each. These figures are subject to the adjustments and controversies usual with financial statements of each vast enterprise but approximately reflect the facts about property and operations.