Expert Fascists: The Untold Story of the Spirit of Our Age

“History is a nightmare from which I am trying to escape,” someone said once. In the case of austerity, the nightmare has lasted for more than a century and the alarm isn’t about to jolt us into reality. “Outside, perhaps, of the less than three booming decades that followed World War II," Clara E Mattei notes soberingly in the introduction of her fine book The Capital Order, “austerity has been a mainstay of modern capitalism”.

Even the words are the same. In 1920, upholding the urgent need for countries to “pay their way” through spending cuts and individual abstinence, Lord Robert Chalmers, former permanent secretary at the Treasury, warned of the necessity of “painful” choices. In 2024, as an autumn budget featuring spending cuts of £1bn per department and tax rises looms, Sir Kier Starmer, PM of something called the ‘Labour’ party, has told us to steel ourselves for the “painful” decisions that must be made.

And just as in the 1920s, the promised sunlit uplands – the better times which this perpetual medicine is supposed to give way to – never appear. We must, says Starmer, “accept short-term pain for long-term good”. But we have been hearing that message for 14 years. Britain has been subject to austerity – of the fiscal kind – since 2010. And we (or the governing classes) are still making the same mistake. Maybe, as Mattei suggests, it’s not a mistake.

The Capital Order is about the origins of the creed of austerity. In the aftermath of the First World War, when the public wanted a “land fit for heroes” and the workers’ movement was on the march after decades of subservience, the wise, grey men in the shadows of power realised that something had to be done. The pressure of “excessive” demands on government had to be eased and workers, who were not only pressing for wage rises but questioning the immutability of the rule of capitalists over industry (‘the capital order’ of the book’s title), needed to know their place again.

Without drastic change and a remoulding of public opinion, the result would be ‘socialism’ or, in the worst nightmare of all, workers’ control and Bolshevism.

In Britain, the spirit of the age was trending in this catastrophic direction. Strikes were rampant and ‘reconstructionists’ from the elite, inspired by what had been possible during the war after laissez-faire had been discarded, were hatching plans for a free national health service and huge house-building programme (financed in part by local councils through non-profit making building guilds). It is fascinating to discover that the bulk of the reforming programme of the Attlee government after the Second World War was actually drafted in 1918-20 before being brutally scotched.

In Italy, as Mattei elucidates, things were even more serious. The workers’ movement was reaching the peak of its power – factories were seized and occupied during the long hot summer of 1920. The government stood by, helpless, and revolution seemed just a matter of time.

But at this point in both countries economists and bankers decisively entered the stage of history. On their advice, politicians implemented ruthless austerity. In Britain, savage spending cuts (the ‘Geddes Axe’) were forced through, and a policy of high interest rates, which caused a recession and mass unemployment, imposed in the face of protests. By 1922, wage levels were a third of what they had been in 1920, and 20% cuts in government spending were forced through. Confronted with the situation, workers went into survival mode and the strike wave evaporated.

The Italian ‘solution’ was even more extreme – Fascism. Mussolini marched on Rome and the supine Parliament granted full powers to his minister of finance, the liberal economist Alberto de Stefani, and his team of mainly non-Fascist advisors.  Free to follow their hearts’ desires, they implemented drastic reductions in welfare spending, abolished short-lived experiments in progressive taxation on the rich and corporations, and privatised state-run enterprises such as telecommunications. Coupled with Mussolini’s brutal physical destruction of the Left and workers’ organizations, the economy was pacified and profit-making made a safe endeavour again – though at the cost of wage levels, which sank like a stone, and political and economic freedom.

I must quibble here with the subtitle of the book – How Economists Invented Austerity and Paved the Way to Fascism. In Italy, they didn’t pave the way to Fascism; they were Fascism.

But regardless, what Mattei has done here is a wonderful example of historical revisionism (which is usually tainted by being associated with holocaust denial). It tells you things you very likely did not know and corrects the oversights of the historical ‘canon’ – a narrative which views the 1920s as a well-meaning period blind to the pain to come as a result of the Great Depression and the “low, dishonest decade” to follow. This book changes the way you view the past and thus the present.

Based on the experience of the last decade or so in Britain and Europe, most people tend to view austerity in terms of budget cuts and (regressive) tax rises. But, as Mattei points out, this is just one prong of the “austerity trinity”.

Fiscal austerity (1) is often accompanied by (2) monetary austerity which entails large rises in interest rates – the cost of holding debt – ostensibly to combat inflation but at the cost of driving the economy into recession. In the 1920s, this was known as the “dear money” policy – “the queen of all austerity policies in Britain” according to Mattei.  Dear Money was inaugurated in 1921 (when interest rates were raised to 7%) and lasted for more than a decade. It was still the official response to the Wall Street Crash of 1929 and predictably only made things worse. But the most brutal example of monetary austerity in the West took place at the beginning of the 1980s on both sides of the Atlantic, when interest rates were hiked to above 17%. The result was recession, mass unemployment (reaching 4 million for a decade in Britain), and the taming of organized labour. Again these results were not an unfortunate mistake. And the lady wasn’t for turning.

The last leg of austerity is (3) industrial austerity, which involves privatisation and crushing organized labour and the right to strike. Both, as Mattei details, were an integral part of Fascist austerity in 1920s’ Italy which literally destroyed (physically) the workers’ movement, enshrining a period of ‘industrial peace’. Industrial austerity was zealously resuscitated by Margaret Thatcher in the 1980s leading to a world-wide revolution in economic ‘common sense’, shaping the economic landscape we now take for granted. Nowadays in Europe, if you displease the economic overlords of the European Central Bank, you will be compelled to swallow the medicine of both fiscal and industrial austerity – budget cuts, privatisation, and laws against striking.

But if the economic history of the 20^th and 21^st century has, in the main, been one of austerity, the three horsemen of the austerity trinity have not always been paraded at the same time. Depending on the circumstances, different aspects have been stressed while others have been ignored – or in fact seriously transgressed.  This discordant record, dependent on the needs of the time as defined by technocrats shielded from democratic accountability, reveals – as we will see in part two – a lot about our current economic predicament.

The Billionaires' World

 Putin’s invasion of Ukraine has, almost inevitably, dredged up the only historical analogy most people are capable of making – that of the appeasement of Adolf Hitler before World War Two. Sun columnist Piers Morgan – who according to the adverts ‘says out loud what most people are thinking’ – has dutifully obliged with the Neville Chamberlain vibe. But according to many American politicians it’s just like 1938 all over again …. again.

Actually, and more worryingly, the most apt historical echo is not the Second World War but the First, when a group of states who had, ideologically much in common, slogged it out for four long years over a cause few could remember, resulting the deaths of around 20 million people.

On the eve of the 21^st century, the Italian historian Domenico Losurdo recalled the 1910 funeral of Edward VII of England. It was, he wrote, “the occasion for a splendid procession which saw kings, hereditary princes and dukes, united by ties of kinship and common mourning, parade on horseback. Time seemed not to have made the least dent in the power and prestige of the European aristocracy. Nine monarchs, all descendants of William the Silent, occupied the stage …”

Yet a little over four years later, these same countries were dragged by a series of alliances into, at the time, the most destructive war in world history. These were resolutely capitalist nations – often officially led by people related to each other – that had, over the previous 30 years, taken possession of over 8.6 million square miles of Africa and Asia in the name of progress and trade. They were, on the surface, united by racial, economic, political and familial ties. Nonetheless these countries were plunged into insane nationalistic fervour and a seemingly endless fight to the death.

Of course certain ideological differences were stressed. Britain, France and, latterly, America – the Entente – were presented as bastions of liberalism in contrast to the militarism of the other side (Germany, Austro-Hungary and the Ottoman Empire). But the Entente was also allied with Tsarist Russia, an absolute monarchy, police state and profoundly anti-Semitic regime.

Likewise today, Patriarch Kirill,  the head of the Russian Orthodox Church, has backed Putin’s invasion on the grounds that it is a “metaphysical” struggle against immoral Western values (such as LGBT rights and same-sex marriage). At the same time, however, Boris Johnson has scuttled off to Saudi Arabia to beg for more oil from that erstwhile British ally, which happens to be an absolute monarchy and beheaded 81 people prior to his arrival. And which, in addition to visiting hell upon neighbouring Yemen, is also probably the most anti-Semitic regime on earth. Such does history rhyme.

In the current world the ties that don’t bind are not based on monarchy, aristocracy or Empire. Rather the common denominator across liberal, conservative and authoritarian countries is the dominance and ubiquitous presence of the ultra-rich. In 2021, there were 2,755 billionaires in the world, 660 more than the previous year. During 2020, a new billionaire was created every 17 hours. Billionaires are, collectively, worth $13.1 trillion, up from $8 trillion just 12 months previously and less than $3 trillion in 2006. To give a sense of perspective, a billion is a thousand million.

Their mere presence inevitably dominates and skews the societies they inhabit – be it the U.S, Britain or Russia. It is widely known, for example, that Russian billionaires – the infamous oligarchs – were created after the collapse of communism through the process of “voucher privatisation” which enabled a small group of people to acquire former state assets and amass stupendous wealth. But the number of Russian billionaires has, in common with the rest of world, dramatically increased in the 21^st century; from several to over 100. They are taxed at just 2 per cent more than the rest of the population (and this increase was introduced in 2020!), while the rest of the country is subjected to austerity.

Venerated Ukrainian war leader, Volodymyr Zelenskiy, posed as an anti-oligarch in order to be elected president in 2019. But his campaign was launched on the TV channel of billionaire Igor Kolomoyskyi. And his putative hostility to oligarchs hasn’t stopped him, together with the partners in his TV company, owning a network of offshore companies registered in the British Virgin Islands, Cyprus and Belize. Repressing the Left and gutting labour rights, which Zelenskiy has done in the middle of a war, is strangely in tune with the interests of the mega rich.

Controlling the state, and using it to amass and protect great wealth, has become almost customary in the 21^st century. Ba’athism emerged in the 1940s and 50s as a pan-Arab, quasi-socialist ideology, though one which was brutally repressive of leftists. But under Assad in Syria, Ba’athism has simply become the means through which a small elite have enriched themselves through privatisation and neoliberal ‘reforms’ – a process which has notably intensified since the turn of the millennium. In China, the official communist ideology and an interventionist state has proved no impediment to the leadership and company managers accruing huge fortunes. The Panama Papers, for example, named the families of eight current or former members of China’s politburo. Levels of inequality are similar to those of South Africa, peasants are regularly stripped of their land and turned into proletarians and super exploitation of workers occurs.

The liberal heartlands of America and Britain – despite their ostensibly democratic institutions – exhibit the identical thumbprints of billionaire domination, manifested in the gravy train of privatisation, quantitative easing, political funding and control of the media. Oligarchs in Britain, George Monbiot said in 2020, “use their economic power and translate it into political power, which is what oligarchs do the world over”. And given that billionaires (oligarchs) have hugely increased in number in the first two decades of this century, the process will only get more explicit.

It may be objected, plausibly, that the interests of billionaires lie in a strong state that protects them and ensures the conditions for their continued accumulation of capital, but that they definitely don’t lie in the division of the world into warring blocs that impose sanctions on each other and confiscate wealth. This is undoubtedly true. But it was also the case that the so-called liberal ‘golden age’ of capitalism (1870-1913) degenerated into the internecine carnage of World War One despite it being in no-one’s interest that it do so. The pre-WW1 era and our own are remarkably similar in many ways. The resemblances include a commitment to a globalised economy, few cross border restrictions on the movement of goods, capital and people, and a belief in balanced government budgets. But the liberal age of capitalism can to an abrupt and brutal end in 1914. Ours can too.

Those old enough to remember the 1990s will recall the air of triumphalism around the collapse of Communism and the fervent belief that, now the world was entering an era of globalisation, free trade and liberal capitalism, countries would regard war as irrational and anachronistic. No two countries with a McDonalds’ franchise have ever gone to war with each other, it was said. Well Russia has – or had – McDonalds.

The question which now inserts itself is whether nationalism, racism, authoritarianism and war are the inevitable shadows of liberal capitalism and market fundamentalism. That despite many in the global elite not wanting a world of war and division, the world is inevitably predisposed to such a disaster because of the inequality and suppressed conflict inherent in a  global economy designed exclusively around the needs of the rich.

If you ignore the noise about Hitler and appeasement, you can hear those chimes of history ringing now.

 

 

 

 

 

 

 

 

 

 

The History of Mr Crank

The slur ‘crank’ is enjoying something of a renaissance in these red-baiting times. The ‘crank left’ is a general term of abuse directed at those who don’t accept the increasingly shaky presuppositions of mainstream debate, with the advantage of course of not having to deal with their objections. Such weird people typically read ‘crank’ news websites, such as The Canary or Skwawkbox. Then there are ‘crankademics’, a wonderfully witty neologism trained at academics who insist on pointing out the painful lack of evidence justifying the purge of Labour party members in the name of anti-antisemitism.

There is something quintessentially English about the barb ‘crank’. It means an eccentric who is obsessed with the minutiae of a specific subject, a fixation ‘normal’, well-balanced people don’t share. In the U.S., such people might be called oddballs or weirdos but not cranks. In America ‘cranky’ is used to designate bad-tempered people but that is something different. Cranks aren’t necessarily cranky.

And ‘crank’ is unusually employed against the Left, in particular the anti-imperialist Left. To be sure there are ‘crank scientific theories’, such as that Covid-19 is caused by 5G phone masts, which originate with the Right. The vectors of strange Trumpian obsessions might be labelled cranks. But generally the Right is not assumed to be outside the pale of civilised, ‘normal’ debate in the way the ‘crank Left’ is.

As far I can tell, crank was first deployed to any great effect during the First World War. Conscientious Objectors were contemptuously derided as cranks and female pacifists shared the same fate. “I can’t stand cranks,” barks Captain Mainwaring in Dad’s Army when a member of his platoon confesses to have been a Conscientious Objector during the last war. “Imagine not wanting to fight … it isn’t normal.”

But the person who really forged an indelible link between cranks and the Left was George Orwell, ironically an unashamed radical socialist himself. “[T]here is the horrible – the really disquieting – prevalence of cranks wherever Socialists are gathered together,” wrote Orwell in The Road to Wigan Pier. “One sometimes gets the impression that the mere words ‘Socialism’ and ‘Communism’ draw towards them with magnetic force every fruit juice drinker, nudist, sandal wearer, sex-maniac, Quaker, ‘Nature Cure’ quack, pacifist and feminist in England.”

Leaving aside the fact that undercover nudists and sex maniacs are not, as far as is known, overrepresented at Labour party meetings (nor, soon, will socialists it seems), there is the disquieting fact that some 1930s cranks – for example feminists – were clearly ahead of their time. Orwell also had a particular bugbear about vegetarians, and vegetarian options on menus. Yet anyone now branding feminists and vegetarians as cranks would themselves be open to the very same insult. Crankdom, as was noted long ago, is not a static concept.

A loyal Orwellian might retort that a being ahead of your time is scant consolation for being unelectable, or unpopular, during it. But it is also true if you accept the entire common sense corpus of your age, you end up not wanting to change anything for fear of stepping out of line. It’s also worth noting that a socialist Labour party, doubtless still replete with its fair share of cranks, won the 1945 election by a landslide.

Nonetheless, Orwell certainly started a trend and, since his time, left-wingers who strayed too far from the conventional wisdom of their epoch soon heard the epithet ‘crank’ ringing in their ears. The Campaign for Nuclear Disarmament in Britain could never shake the crank label. Gandhi was accused of “sheer crankiness” by right-wing historian Paul Johnson. More recently, in 2014, famed Conservative ‘moderate’ Kenneth Clarke urged Greeks not to elect the “cranky extremists” of Syriza. They didn’t listen, although presumably when the putatively left-wing Syriza utterly caved and implemented an even more ruthless austerity programme than the original, Tspiras and co. became normal adults.

Of course the most perfect crank of our age is undoubtedly Jeremy Corbyn. He had all the requisite qualities, personal and political. He was a resolute anti-imperialist and thought – erroneously actually – to be a pacifist. He also made jam, had a hobby of taking photos of manhole covers and possibly wore sandals on occasion.

Yet although he should have been an easy target, the British establishment had to strain every sinew to finally defeat him. He was subject to the most vicious and dishonest character assassination in British political history, relentlessly accused of being a spy, terrorist sympathiser and anti-Semite. Unbelievably, the campaign is still going on even after he was comprehensively defeated at the polls.

The enormous effort that needed to be expended, including within the Labour party, reveals, I think, two important things. One is that throughout the first two decades of the 21^st century, the cranks have been proven right on most important issues and the ‘sensibles’ wrong. The Iraq War was a terrible mistake, Iraq didn’t have – or claim to have – WMD and over two million Iraqis have subsequently died. The economic boom of the first years of the century was revealed to be built on sand, the bursting of which caused immense repercussions we have still living with. Austerity, supported at the time by all major political parties in Britain, but not the crank Left, was not only economically wrong-headed but imposed needless suffering on millions. Quantitative Easing – the main method of dealing with the old economic downturn and the new one – has merely increased inequality and augmented the wealth of the already wealthy. A strategy of confronting Covid-19 based on hoping it would quickly go away has prolonged the economic pain and resulted in innumerable excess deaths.

The role of ‘moderates’, of the sensible mainstream, in the 21^st century has mainly involved trying to plug holes in a dam that is springing leaks in so many places it is impossible to catch up.

The second revelation is that despite cranks residing on the farther reaches of acceptable debate, there is something inherently repellent about their main adversary, the professional politician. Politics is now a career, prepared for by a stint in student politics, followed by a sinecure in PR or the media and the obligatory role as a Spad (special advisor to a minister). It is its own world, sealed off from common experiences. As a result, most politicians, devoid of any ideas of their own, try to toady to what they perceive as public feeling without really understanding it. There is a desperate attempt to appear ordinary or normal, someone you’d want to go for a drink with. The most accomplished at this act – Boris Johnson for instance (who, it will be recalled, originally couldn’t decide whether to be pro or anti-Brexit) – are the most successful politicians.

By the contrast, conviction politicians – Thatcher or Corbyn – might appear obsessive, and thus strange. But because they see politics as fulfilling an ulterior purpose, rather than being something to be immersed in for its own sake, they come across as more human.

Yet, it has to be said there is some truth to Orwell’s accusation that the average socialist adherent is rather “out of touch with common humanity”. Partly this is due to the fact that socialists are intensely interested in politics and changing the world, passions which most people don’t share. But this trait is exacerbated by the fact that both the Corbyn movement in Britain and the Sanders equivalent in the U.S. were overwhelmingly political campaigns. They involved people signing up to organisations dedicated to changing the political sphere. Something they were incredibly successful in doing – in January 2018 the Labour party had 552,000 members.

However, they lacked an analogue in the economic sphere. They weren’t accompanied by a palpable rise in industrial unrest or trade union recruitment, features that invariably occurred in the past – for instance during the Great Depression – when left-wing movements started to take hold.

And, revealingly, the crank insult is rarely, if ever, applied to strikers or organised labour. This is not for reasons of timidity or acquiescence. Workers prepared to fight for their rights have been called ‘the enemy within’, work-shy, harbingers of mob rule or the naïve puppets of far left agitators. They are clearly seen as dangerous. But calling them ‘cranks’ just wouldn’t be taken seriously. And this, in a back-handed way, highlights the fatal flaw in Corbynism. It never overcame the Labour party’s fundamental weakness among private sector workers. And this, remember, was a party specifically founded to advance their interests. The 2019 electoral collapse had other, proximate causes – notably Brexit – but the exclusively ‘political’ character of the Corbyn surge was a major reason it was so ephermeral.

An alliance between the crank Left and a movement of alienated private sector workers would be some people’s worst nightmare.