In an unpublished article circa 1934 entitled “The Fascist Virus”[i] Karl Polanyi sketches a theory of fascism that remains relevant. This theory is further elaborated in an article entitled “The Essence of Fascism”[ii] and in The Great Transformation (1944). In light of current politico-economic trends, this theory is worth revisiting.
Polanyi identifies fascism as a virus that, during normal times, remains latent within capitalism. At times of systemic crisis, however, it becomes virulent. The association of fascism with capitalism arises because of the inherent tension between capitalism and democracy. Capitalism is the sphere of private property, accumulation and, if the project of free markets holds sway, vast economic and hence political inequality and social dislocation. Democracy, in contrast, is theoretically the sphere of political equality where popular sovereignty governs decision making. The counter-movement of societal protection inevitably looks to the sphere of electoral politics and government to protect its constituent elements from the destructiveness of unleashed market forces. At times of crisis, demands may escalate, threatening even the basic principle of private property. This clash between the economic and political spheres releases the virus of fascism into the body politic.
Fascism is a counter-revolution waged from above in countries where some degree of democratic politics obtains. For those determined to restore the “natural” order of private property, class privilege and profitability, the key question arises: how to achieve this goal in an ostensibly democratic system where the majority rules? The only way is to attack liberal values as corrupt and channel popular anger via evocative stereotypes and conspiracy theories that inflame nationalist, racist or religious cleavages. These tactics neutralize class struggle, which might otherwise overwhelm the coping mechanisms of the minority. If the top-down strategy succeeds, the outcome is an authoritarian, regulated capitalism with secure property rights that governs by stoking fear and hatred of outgroups.
The “virus” metaphor is an apt one. Fascism is like influenza. Usually, flu takes a relatively mild form (right-wing populism). But under certain conducive conditions, it assumes the virulent form of national socialism (Nazism), which threatens death and war. However,the mild forms can mutate into the more virulent one.
Today, we need to take the chance of a virulent outbreak seriously. Russia, Hungary, Poland and Turkey are close to neo-fascist regimes. Austria and the Netherlands escaped neo-fascist outcomes by narrow margins in recent elections. In France, Marine Le Pen is a strong contender in the run-off election for president. And Donald Trump continues to weaken democratic institutions and undermine an inclusive society in the United States. Centrist candidates in France, Austria, the Netherlands and elsewhere may prevail now, but what happens in the next elections if current socioeconomic trends continue?
The antidote to the fascist virus is clear. Fascism translates widespread economic and cultural insecurity into populist-authoritarian nativism. Neoliberalism has created these insecurities, but it seems to have no viable remedies. Austerity, a widely utilized response to economic imbalances, magnifies insecurity and thus increases the risk of a pandemic. What then to do? Outright racists, anti-Semites and Islamophobes will always be present, and few will be converted from their poisonous views. But they are a minority. The majority, we must believe, are open to a positive program that incorporates all those groups that feel left behind by the upheavals of neoliberal globalization and job-destroying technological change. A rejuvenated left must include the excluded through both policy and symbolism. Easy to say, but of course much harder to do. At a minimum, the program would include the rebuilding of a generous, universal and comprehensive welfare state. The increasing income deriving from higher productivity must be shared with those who bear the pain.
In the longer term, the inherent contradiction between capitalism and democracy can be positively resolved by extending democracy into the economic realm. This extension can involve various mechanisms, not all of which are revolutionary. Polanyi himself expressed an apocalyptic view of the future: either regression into the dark night of fascism or movement toward democratic socialism and the abolition of the market system. But Polanyi, I think, underestimated the protean nature of capitalism. “Socialism or barbarism” is not a correct prognosis (depending on what one means by socialism); indeed to hold rigidly to that bifurcated vision is a recipe for barbarism.
In the light of the political forces at play and the dangers of great leaps forward, we have to continue, patiently and reasonably, with radical reformism of the type I have identified as an “in-between” strategy. Extirpating the fascist virus may not mean the end of capitalism, but it certainly entails the demise of neoliberalism.
[i] Karl Polanyi Institute of Political Economy, Concordia University, file 18-08.
[ii] Polanyi included this article in his co-edited book of 1935 entitled Christianity and the Social Revolution, , which can be found online at the KPIPE.by