Paved with Good Intentions
Utilitarianism + Socialism + Corporatism = Fascist Totalitarianism
A recurring theme runs through modern Western political history—it provides the paving stones that line the road to hell. The core of this theme is that the State is responsible for enabling the greatest good for the greatest number. From this basic tenant flows a wide range of unintended consequences that, in retrospect, can be recognized as fundamentally evil. This naive concept of the State as a guarantor of positive outcomes logically progresses to the conclusion that the State should interfere in and “manage” the economic forces and outcomes that citizens experience. In other words, the State should manage the economy. This logic underpins the oft-repeated assertion that the State should provide for and manage “healthcare.” That the State is responsible for caring for the elderly and providing pensions for those beyond a certain age (whether or not they are able to productively contribute to society). None of these roles and responsibilities are enumerated in the US Constitution and Bill of Rights.
The State should not be involved in managing the economy or healthcare, if for no other reason that the more the State meddles in these things, the worse off they become. The root cause of this is that the State is incompetent and incapable of accomplishing these tasks, and these roles and responsibilities are outside of the powers vested in the State by the founding documents.
The enumerated, or listed, powers are contained in Article I, Section 8. These include: to lay and collect taxes; pay debts and borrow money; regulate commerce; coin money; establish post offices; protect patents and copyrights; establish lower courts; declare war; and raise and support an Army and Navy. Those powers and responsibilities not enumerated in the US Constitution as federal government powers generally remain the authority of the separate States that agreed to associate and structure and legally bind themselves as a Republic. Fortunately or unfortunately, at the very end of this list contained one more power: to make all laws “necessary and proper” to carry out the enumerated powers. Also known as the Elastic Clause, this phrase allowed Congress to stretch its enumerated powers a bit to fit its needs. For instance, in McCulloch v. Maryland (1819), the Supreme Court ruled that under the Necessary and Proper Clause Congress had the power to establish a national bank to carry out its powers to collect taxes, pay debts, and borrow money. Broad interpretation of the Elastic Clause has allowed expanded Congressional and Executive Branch (ergo administrative state) power.
I assert that, under the US Constitution, the State (ergo the US Federal Government) has neither the right nor the responsibility to guarantee “the greatest good for the greatest number”. Therefore, those who reason that the State has a responsibility to guarantee outcomes, to manage the economy, to provide access to healthcare, to provide for the well-being of illegal immigrants, to care for elderly citizens, to “feed the world,” to manage and stabilize (or destabilize) other governments, or to insure world “peace” resort of appeals to a combination of utilitarianism and various ethical arguments which are completely outside of either the enumerated powers or the Elastic Clause. The US Federal State has neither authority nor power to create or enforce an imperial empire.
These are unconstitutional and unlawful roles for the US Federal Government. They are entirely outside the boundaries of the federal authority, and various forces and interests have unlawfully expanded State operations to encompass these missions.
Utilitarianism (as summarized by Brave AI)
The phrase “greatest good for the greatest number” originates from Jeremy Bentham’s utilitarian philosophy, which aims to maximize overall happiness or well-being. In essence, it suggests that moral actions are those that bring about the greatest positive impact on the world.
Key Principles:
Happiness as the metric: Bentham and later John Stuart Mill defined “good” as pleasure or happiness, which can be intellectual, emotional, or sensual.
Quantification: The concept implies a quantitative comparison of the good or happiness produced by different actions or policies.
Maximization: The goal is to maximize the overall happiness or good, rather than distributing it equally among individuals.
No inherent value: According to utilitarianism, there is no inherent value in any particular action, outcome, or individual; only the consequences matter.
Challenges and Critiques:
Justice and fairness: Critics argue that utilitarianism sacrifices individual rights and justice for the greater good, potentially leading to unfair outcomes.
Temporal considerations: The concept struggles to account for long-term consequences, as what may seem beneficial in the short term might have negative effects in the long run.
Defining “good”: The notion of happiness or good can be subjective and context-dependent, making it challenging to establish a clear standard.
Handling conflicting values: In situations where different values or principles conflict, utilitarianism may prioritize the greater good over individual rights or moral principles.
Real-World Applications:
Public policy: Utilitarianism has influenced policy decisions, such as resource allocation and social welfare programs, aimed at maximizing overall well-being.
Business ethics: Companies may prioritize the greatest good for the greatest number by balancing profits with social and environmental responsibilities.
International relations: Governments and organizations may consider the greatest good for the greatest number when making decisions about conflict resolution, trade, and development.
In conclusion, the concept of “greatest good for the greatest number” is a cornerstone of utilitarian philosophy, emphasizing the maximization of overall happiness or well-being. While it has practical applications, it also faces challenges and critiques regarding justice, fairness, and the definition of “good.”
The US Constitution does not implement a substantive ethical theory. By 'substantive ethical theory,' I refer to a theory that says, "An act is good if and only if. . "
The US Constitution embodies a social contract position since (at least some versions of) social contract theories say that a substantive ethical theory is unnecessary for the basis of legality or political authority. Not only do we not need substantive views about the nature of moral goodness, but encoding those in law will be positively harmful since this leads directly to certain kinds of discrimination, such as those that wracked Europe during the religion wars. When one “moral” outcome is favored over another, this directly results in theft enabled by the State on behalf of one social group at the expense of another. The Constitutionally reasonable thing to do is to let Citizens have whatever substantive moral theory they like but not let any of those theories become the basis of either law, legislation, or administrative fiat. To do otherwise is to functionally support one set of religious (ethical) beliefs over another. In other words, to violate the First Amendment.
The First Amendment to the United States Constitution prevents the government from making laws respecting an establishment of religion; prohibiting the free exercise of religion; or abridging the freedom of speech, the freedom of the press, the freedom of assembly, or the right to petition the government for redress of grievances.
So What is Fascism?
Often overlooked is that “mainstream media” is controlled by large corporations, and relies on organizations, cabals and aggregators (such as the “Trusted News Initiative” or Thompson/Reuters) to sustain and support its dominance and control of public information. Therefore, it should surprise no one that “mainstream media” actively supports and advocates for corporatist interests. Corporate or mainstream media has cooperated with political organizations (“parties”) from the left to distort, redefine and weaponize the 20th-century term “Fascism” to apply to politicians and political parties from the right side of the spectrum (assuming that “left” and “right” even have any meaning anymore.) Hence one observes repeated corporate media claims that populist center-right politicians such as Donald Trump (USA), Georgia Meloni (Italy), Marie Le Pen (France), Nigel Farage (UK), and of course, the Austrian School Economist Javier Milei (Argentina) as Fascists. But this is another example of the PsyWar method of gaslighting by redefining the meaning of words.
Sheldon Richman is the editor of The Freeman: Ideas on Liberty at the Foundation for Economic Education in Irvingtonon-Hudson, N.Y., and Mr. Richman has provided a practical definition of the true meaning of the political science and economic term “Fascism.” The following are selected quotes from his analysis.
As an economic system, fascism is socialism with a capitalist veneer. The word derives from fasces, the Roman symbol of collectivism and power: a tied bundle of rods with a protruding ax. In its day (the 1920s and 1930s), fascism was seen as the happy medium between boom-and-bust-prone liberal capitalism, with its alleged class conflict, wasteful competition, and profit-oriented egoism, and revolutionary Marxism, with its violent and socially divisive persecution of the bourgeoisie. Fascism substituted the particularity of nationalism and racialism—“blood and soil”—for the internationalism of both classical liberalism and Marxism.
Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it. Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.
Fascism is to be distinguished from interventionism, or the mixed economy. Interventionism seeks to guide the market process, not eliminate it, as fascism did. Minimum-wage and antitrust laws, though they regulate the free market, are a far cry from multiyear plans from the Ministry of Economics.
Under fascism, the state, through official cartels, controlled all aspects of manufacturing, commerce, finance, and agriculture. Planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms. Licensing was ubiquitous; no economic activity could be undertaken without government permission. Levels of consumption were dictated by the state, and “excess” incomes had to be surrendered as taxes or “loans.” The consequent burdening of manufacturers gave advantages to foreign firms wishing to export. But since government policy aimed at autarky, or national self-sufficiency, protectionism was necessary: imports were barred or strictly controlled, leaving foreign conquest as the only avenue for access to resources unavailable domestically. Fascism was thus incompatible with peace and the international division of labor—hallmarks of liberalism.
Fascism embodied corporatism, in which political representation was based on trade and industry rather than on geography. In this, fascism revealed its roots in syndicalism, a form of socialism originating on the left. The government cartelized firms of the same industry, with representatives of labor and management serving on myriad local, regional, and national boards—subject always to the final authority of the dictator’s economic plan. Corporatism was intended to avert unsettling divisions within the nation, such as lockouts and union strikes. The price of such forced “harmony” was the loss of the ability to bargain and move about freely.
To maintain high employment and minimize popular discontent, fascist governments also undertook massive public-works projects financed by steep taxes, borrowing, and fiat money creation. While many of these projects were domestic—roads, buildings, stadiums—the largest project of all was militarism, with huge armies and arms production.
The fascist leaders’ antagonism to communism has been misinterpreted as an affinity for capitalism. In fact, fascists’ anticommunism was motivated by a belief that in the collectivist milieu of early-twentieth-century Europe, communism was its closest rival for people’s allegiance. As with communism, under fascism, every citizen was regarded as an employee and tenant of the totalitarian, party-dominated state. Consequently, it was the state’s prerogative to use force, or the threat of it, to suppress even peaceful opposition.
If a formal architect of fascism can be identified, it is Benito Mussolini, the onetime Marxist editor who, caught up in nationalist fervor, broke with the left as World War I approached and became Italy’s leader in 1922. Mussolini distinguished fascism from liberal capitalism in his 1928 autobiography:
“The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity. The Fascist State with its corporative conception puts men and their possibilities into productive work and interprets for them the duties they have to fulfill. (p. 280)”
Before his foray into imperialism in 1935, Mussolini was often praised by prominent Americans and Britons, including Winston Churchill, for his economic program.
Similarly, Adolf Hitler, whose National Socialist (Nazi) Party adapted fascism to Germany beginning in 1933, said:
“The state should retain supervision and each property owner should consider himself appointed by the state. It is his duty not to use his property against the interests of others among his own people. This is the crucial matter. The Third Reich will always retain its right to control the owners of property. (Barkai 1990, pp. 26–27)”
Both nations exhibited elaborate planning schemes for their economies in order to carry out the state’s objectives. Mussolini’s corporate state “consider[ed] private initiative in production the most effective instrument to protect national interests” (Basch 1937, p. 97). But the meaning of “initiative” differed significantly from its meaning in a market economy. Labor and management were organized into twenty-two industry and trade “corporations,” each with Fascist Party members as senior participants. The corporations were consolidated into a National Council of Corporations; however, the real decisions were made by state agencies such as the Instituto per la Ricosstruzione Industriale, which held shares in industrial, agricultural, and real estate enterprises, and the Instituto Mobiliare, which controlled the nation’s credit.
Hitler’s regime eliminated small corporations and made membership in cartels mandatory. The Reich Economic Chamber was at the top of a complicated bureaucracy comprising nearly two hundred organizations organized along industry, commercial, and craft lines, as well as several national councils. The Labor Front, an extension of the Nazi Party, directed all labor matters, including wages and assignment of workers to particular jobs. Labor conscription was inaugurated in 1938. Two years earlier, Hitler had imposed a four-year plan to shift the nation’s economy to a war footing. In Europe during this era, Spain, Portugal, and Greece also instituted fascist economies.
In the United States, beginning in 1933, the constellation of government interventions known as the New Deal had features suggestive of the corporate state. The National Industrial Recovery Act created code authorities and codes of practice that governed all aspects of manufacturing and commerce. The National Labor Relations Act made the federal government the final arbiter in labor issues. The Agricultural Adjustment Act introduced central planning to farming. The object was to reduce competition and output in order to keep prices and incomes of particular groups from falling during the Great Depression.
It is a matter of controversy whether President Franklin Roosevelt’s New Deal was directly influenced by fascist economic policies. Mussolini praised the New Deal as “boldly . . . interventionist in the field of economics,” and Roosevelt complimented Mussolini for his “honest purpose of restoring Italy” and acknowledged that he kept “in fairly close touch with that admirable Italian gentleman.” Also, Hugh Johnson, head of the National Recovery Administration, was known to carry a copy of Raffaello Viglione’s pro-Mussolini book, The Corporate State, with him, presented a copy to Labor Secretary Frances Perkins, and, on retirement, paid tribute to the Italian dictator.
What is Socialism?
from Socialist author Robert Heilbroner.
It has been Friedman, Hayek, von Mises, and the like who have maintained that capitalism would flourish and that socialism would develop incurable ailments. Mises called socialism “impossible” because it has no means of establishing a rational pricing system; Hayek added additional reasons of a sociological kind (“the worst rise on top”). All three have regarded capitalism as the “natural” system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. By reviewing the history of Socialism, we can clearly see echoes of this failed logic in the centralized planning and “stakeholder capitalism” economic models which are so actively promoted by the World Economic Forum and its United Nations allies.
Socialism—defined as a centrally planned economy in which the government controls all means of production—was the tragic failure of the twentieth century. Born of a commitment to remedy the economic and moral defects of capitalism, it has far surpassed capitalism in both economic malfunction and moral cruelty. Yet the idea and the ideal of socialism linger on. Whether socialism in some form will eventually return as a major organizing force in human affairs is unknown, but no one can accurately appraise its prospects who has not taken into account the dramatic story of its rise and fall.
The Birth of Socialist Planning
It is often thought that the idea of socialism derives from the work of Karl Marx. In fact, Marx wrote only a few pages about socialism, as either a moral or a practical blueprint for society. The true architect of a socialist order was Lenin, who first faced the practical difficulties of organizing an economic system without the driving incentives of profit seeking or the self-generating constraints of competition. Lenin began from the long-standing delusion that economic organization would become less complex once the profit drive and the market mechanism had been dispensed with—“as self-evident,” he wrote, as “the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic.”
In fact, economic life pursued under these first four rules rapidly became so disorganized that within four years of the 1917 revolution, Soviet production had fallen to 14 percent of its prerevolutionary level. By 1921 Lenin was forced to institute the New Economic Policy (NEP), a partial return to the market incentives of capitalism. This brief mixture of socialism and capitalism came to an end in 1927 after Stalin instituted the process of forced collectivization that was to mobilize Russian resources for its leap into industrial power.
The system that evolved under Stalin and his successors took the form of a pyramid of command. At its apex was Gosplan, the highest state planning agency, which established such general directives for the economy as the target rate of growth and the allocation of effort between military and civilian outputs, between heavy and light industry, and among various regions. Gosplan transmitted the general directives to successive ministries of industrial and regional planning, whose technical advisers broke down the overall national plan into directives assigned to particular factories, industrial power centers, collective farms, and so on. These thousands of individual subplans were finally scrutinized by the factory managers and engineers who would eventually have to implement them. Thereafter, the blueprint for production reascended the pyramid, together with the suggestions, emendations, and pleas of those who had seen it. Ultimately, a completed plan would be reached by negotiation, voted on by the Supreme Soviet, and passed into law.
Thus, the final plan resembled an immense order book, specifying the nuts and bolts, steel girders, grain outputs, tractors, cotton, cardboard, and coal that, in their entirety, constituted the national output. In theory such an order book should enable planners to reconstitute a working economy each year—provided, of course, that the nuts fitted the bolts; the girders were of the right dimensions; the grain output was properly stored; the tractors were operable; and the cotton, cardboard, and coal were of the kinds needed for their manifold uses. But there was a vast and widening gap between theory and practice.
Problems Emerge
The gap did not appear immediately. In retrospect, we can see that the task facing Lenin and Stalin in the early years was not so much economic as quasi military—mobilizing a peasantry into a workforce to build roads and rail lines, dams and electric grids, steel complexes and tractor factories. This was a formidable assignment, but far less formidable than what would confront socialism fifty years later, when the task was not so much to create enormous undertakings as to create relatively self-contained ones, and to fit all the outputs into a dovetailing whole.
Through the 1960s the Soviet economy continued to report strong overall growth—roughly twice that of the United States—but observers began to spot signs of impending trouble. One was the difficulty of specifying outputs in terms that would maximize the well-being of everyone in the economy, not merely the bonuses earned by individual factory managers for “overfulfilling” their assigned objectives. The problem was that the plan specified outputs in physical terms. One consequence was that managers maximized yardages or tonnages of output, not its quality. A famous cartoon in the satirical magazine Krokodil showed a factory manager proudly displaying his record output, a single gigantic nail suspended from a crane.
As the economic flow became increasingly clogged and clotted, production took the form of “stormings” at the end of each quarter or year, when every resource was pressed into use to meet preassigned targets. The same rigid system soon produced expediters, or tolkachi, to arrange shipments to harassed managers who needed unplanned—and therefore unobtainable—inputs to achieve their production goals. Worse, lacking the right to buy their own supplies or to hire or fire their own workers, factories set up fabricating shops, then commissaries, and finally their own worker housing to maintain control over their own small bailiwicks.
It is not surprising that this increasingly Byzantine system began to create serious dysfunctions beneath the overall statistics of growth. During the 1960s the Soviet Union became the first industrial country in history to suffer a prolonged peacetime fall in average life expectancy, a symptom of its disastrous misallocation of resources. Military research facilities could get whatever they needed, but hospitals were low on the priority list. By the 1970s the figures clearly indicated a slowing of overall production. By the 1980s the Soviet Union officially acknowledged a near end to growth that was, in reality, an unofficial decline. In 1987 the first official law embodying perestroika—restructuring—was put into effect. President Mikhail Gorbachev announced his intention to revamp the economy from top to bottom by introducing the market, reestablishing private ownership, and opening the system to free economic interchange with the West. Seventy years of socialist rise had come to an end.
Socialist Planning in Western Eyes
Understanding of the difficulties of central planning was slow to emerge. In the mid-1930s, while the Russian industrialization drive was at full tilt, few raised their voices about its problems. Among those few were Ludwig von Mises, an articulate and exceedingly argumentative free-market economist, and Friedrich Hayek, of much more contemplative temperament, later to be awarded a Nobel Prize for his work in monetary theory. Together, Mises and Hayek launched an attack on the feasibility of socialism that seemed at the time unconvincing in its argument as to the functional problems of a planned economy. Mises in particular contended that a socialist system was impossible because there was no way for the planners to acquire the information (see Information and Prices)—“produce this, not that”—needed for a coherent economy. This information, Hayek emphasized, emerged spontaneously in a market system from the rise and fall of prices. A planning system was bound to fail precisely because it lacked such a signaling mechanism.
The Mises-Hayek argument met its most formidable counterargument in two brilliant articles by Oskar Lange, a young economist who would become Poland’s first ambassador to the United States after World War II. Lange set out to show that the planners would, in fact, have precisely the same information as that which guided a market economy. The information would be revealed as inventories of goods rose and fell, signaling either that supply was greater than demand or demand was greater than supply. Thus, as planners watched inventory levels, they were also learning which of their administered (i.e., state-dictated) prices were too high and which too low. It only remained, therefore, to adjust prices so that supply and demand balanced, exactly as in the marketplace.
Lange’s answer was so simple and clear that many believed the Mises-Hayek argument had been demolished. In fact, we now know that their argument was all too prescient. Ironically, though, Mises and Hayek were right for a reason they did not foresee as clearly as Lange himself. “The real danger of socialism,” Lange wrote, in italics, “is that of a bureaucratization of economic life.” But he took away the force of the remark by adding, without italics, “Unfortunately, we do not see how the same or even greater danger can be averted under monopolistic capitalism” (Lange and Taylor 1938, pp. 109–110).
The effects of the “bureaucratization of economic life” are dramatically related in The Turning Point, a scathing attack on the realities of socialist economic planning by two Soviet economists, Nikolai Smelev and Vladimir Popov, that gives examples of the planning process in actual operation. In 1982, to stimulate the production of gloves from moleskins, the Soviet government raised the price it was willing to pay for moleskins from twenty to fifty kopecks per pelt. Smelev and Popov noted:
“State purchases increased, and now all the distribution centers are filled with these pelts. Industry is unable to use them all, and they often rot in warehouses before they can be processed. The Ministry of Light Industry has already requested Goskomtsen [the State Committee on Prices] twice to lower prices, but “the question has not been decided” yet. This is not surprising. Its members are too busy to decide. They have no time: besides setting prices on these pelts, they have to keep track of another 24 million prices. And how can they possibly know how much to lower the price today, so they won’t have to raise it tomorrow?”
This story speaks volumes about the problem of a centrally planned system. The crucial missing element is not so much “information,” as Mises and Hayek argued, as it is the motivation to act on information. After all, the inventories of moleskins did tell the planners that their production was at first too low and then too high. What was missing was the willingness—better yet, the necessity—to respond to the signals of changing inventories. A capitalist firm responds to changing prices because failure to do so will cause it to lose money. A socialist ministry ignores changing inventories because bureaucrats learn that doing something is more likely to get them in trouble than doing nothing, unless doing nothing results in absolute disaster.
In the late 1980s, absolute economic disaster arrived in the Soviet Union and its Eastern former satellites, and those countries are still trying to construct some form of economic structure that will no longer display the deadly inertia and indifference that have come to be the hallmarks of socialism. It is too early to predict whether these efforts will succeed. The main obstacle to real perestroika is the impossibility of creating a working market system without a firm basis of private ownership, and it is clear that the creation of such a basis encounters the opposition of the former state bureaucracy and the hostility of ordinary people who have long been trained to be suspicious of the pursuit of wealth. In the face of such uncertainties, all predictions are foolhardy save one: no quick or easy transition from socialism to some form of nonsocialism is possible. Transformations of such magnitude are historic convulsions, not mere changes in policy. Their completion must be measured in decades or generations, not years.
The fact of the matter is that a careful review of historical detail reveals that the current US Federal Administrative State and its primary political supporter, the Democrat party, is in fact, Fascist/Corporatist/Socialist. And the center-right populist movements and leaders are not Fascists as the media so often shouts. Still, rather it is the corporatist “mainstream media” allies that so gleefully parrot State-promoted narratives that are Fascist/Corporatist.
The road to our current hell has been abundantly paved with naive good intentions. If you seek to “feed the world” you will get more humans that are dependent on handouts. The best laid plans often go awry, despite the fact that the Secretary General of the United Nations calmly assures all that will listen that the UN Agenda 2030 and their “Pact for the Future” has “the best plans.”
It is long past time to force the US Federal State back into the limited box that was originally designed for it. I do not know how this can be accomplished, but I do know that we have to try.