Hayek and Hitler: Did planning or chaos pave the way for fascism?

by John MacBeath Watkins

F.A. Hayek argues in The Road to Serfdom that the rise of fascism and Nazism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies. In the second chapter he asserts:
Everyone who has watched the growth of these movements in Italy or Germany has been struck by the number of leading men, from Mussolini downward (and not excluding Laval and Quisling) began as socialists and ended as fascists or Nazis.
Which he says is significant because the desire of socialists to plan the economy led them to restrict peoples' freedoms.

While it is true that Benito Mussolini and Pierre Laval were at one time socialists, Quisling was not, and the notion that Mussolini and Laval became Fascists because they wanted more effective economic planning seems pretty dubious. Laval's only real belief seems to have been that he should be rich and powerful.

Adolph Hitler was not a leftist. Like Mussolini and Quisling, he believed in the concept of the Leader Principle, Führerprinzip, the notion that some are born to lead, others are born to follow, and the will of the leader should overturn any written law. This was part of their belief in biological determinism, which also caused them to view "class war" as a crime against nature, as the people were already in the classes they were biologically suited to.

Hitler actually entered politics not as an idealistic socialist, but as a police spy sent to infiltrate the German Workers' Party, founded by Anton Drexler, a former member of the Fatherland Party, which during World War I had been financed by the German high command. Not surprisingly, the party was noted for its fervent support for the war.

Hitler liked the party, but had little interest in its social program (profit sharing, not actually socialism) and focused instead on Antisemitism, the Reichstag being out of touch with the people, the injustice of the Versailles treaty and the "stab in the back" legend of how WW I ended. The party changed its name to the National Socialist German Workers' Party in 1920, hoping to attract nationalists and socialists. It was, from the first, Nationalist and anti-Marxist. It was also strongly opposed to the Social Democratic Party of Germany, and any party that was not nationalistic. When they pushed through laws allowing Hitler to legislate without regard to the constitution, they soon after put the leaders of the SDP in jail.

Hayek says the Nazi party evolved from planning, yet he admits that "It is important to remember that, for some time 1933, Germany had reached a stage in which it had, in effect, had to be governed dictatorially."

Once the Depression destroyed the German economy, the parliamentary  system did not produce a consensus on what measures to take. As the center collapsed in German politics, the Communist and Fascist parties gained ground. Fear of socialism pushed the business class into an alliance with the Fascists.

Chancellor Heinrich Brüning, without a majority that could pass any measures in parliament, resorted to ruling by decree. Unfortunately, he chose a policy of fiscal austerity, exactly the wrong response to a depression.

It was in this environment that Hitler gained support from the military and industrialists. Hitler was not at that time a German citizen, but in 1932 a Nazi party member in the state of Brunswick granted him citizenship so that the could run for the presidency. Business interests financed his campaign, quaintly called "Hitler über Deutschland," just in case anyone had doubt about his dictatorial ambitions, and started a letter writing campaign to get Hindenburg to appoint Hitler Chancellor. The quarreling parties opposed to Hitler thought they were making him a figurehead, but when no party could form a majority, he got the Reichstag dissolved and called a new election. In the wake of a fire in the Reischtag building, the Nazis whipped up anti-communist hysteria, and although they did not win a majority, they were able to get enough support for enabling legislation for the cabinet to legislate that they essentially made the Reischtag irrelevant.

Now, does this sound like the story Hayek tells? Not to me.  It sounds more like an authoritarian leader promising order instead of chaos. One might almost think that the enemy is not planning, but the sort of chaos that makes people long for order, any sort of order.

Was the Italian experience evidence of Hayek's claims? Mussolini denounced the Socialist party he'd grown up in because he said it failed to recognize that national identity had come to trump class identity. But he was never one of those people of good will who thought planning the economy would lead to greater efficiency. He went from a Leninist view that a revolutionary vanguard would need to lead the people, to a Fascist view that a revolutionary vanguard would be needed to lead the people.

In his early days, Mussolini got a salary from Britain's MI5, so like Hitler, he entered politics not as a "person of good will" but as a spy. One wonders what MI5 thought it was getting for its money. In any case, his followers, the Black Shirts, fought street battles with the Communists. His 1922 march on Rome resulted in King Victor Emanuel III refusing to support the prime minister and giving his support to Mussolini's coup. Mussolini was supported by the military, the business class, and right wing liberals (I know that last won't make sense in the modern context, but as Hayek points out, liberalism is not necessarily left wing.)

Now, if you wanted to find a common thread in the rise of these fascist leaders, would it be that they were in some sense Social Democrats? No, Mussolini specifically said that socialism had failed, and although he spoke of national socialism, his policies favored business. It did not, however, favor individualism. Giovanni Gentile, the self-described philosopher of fascism, embraced the term "totalitarian," invented by a critic of fascism, and proclaimed that the distinction between public and private was false as understood by capitalism and communism. Fascism sought to politicize everything spiritual and human, so that, as Mussolini put it, the goal was "Everything within the state, nothing outside the state, nothing against the state."

Does this sound like a stealthy evolution from city planning to concentration camps? I think not. A totalitarian state was the goal, not an accidental outcome of an evolutionary process.

The other examples we have of totalitarian states are Communist regimes. Did Russia and China start with planning, and then become progressively more authoritarian? No, they pretty much went from chaos to dictatorship. They did not succeed in seducing liberal democracies, they instead offered order instead of chaos. Neither country had a history of liberal democracy, and although Germany had the Wiemar Republic, it functioned in such difficult circumstances that never became fully rooted in the culture of Germany.

Yet Hayek tells us that:
...the first of modern planners, Saint-Simon, even predicted that those who did not obey his proposed planning boards would be "treated as cattle."
Henri de Saint-Simon was a utopian socialist who never worked a day in his life as a planner. He had almost no influence during his lifetime, but advocated a society divided into the workers, the owners and the wise, the last of these being those who would direct society. Was he the source of the original sin of planning? Surely France experienced some degree of planning under Cardinal Richelieu, whose motive was to centralize power under himself. Indeed, Saint-Simon called on Louis XVIII to begin building the new order, I suspect because he saw his ideas as more akin to the Ancien Régime than to a liberal state.

But Saint-Simon did focus on administrative efficiency and industrialization. Not that he was an administrator or industrialist (he made his money speculating on land,) but he imagined that he could tell people who actually did these things how to do them better.

I'm inclined to doubt that the problem with Saint-Simon was that he wanted society to run more efficiently. The problem, and the influence on Marx and others that did such harm, was that he imagined that society should be ruled by the wise, that is, people like him. Not only that, but he wanted to educate people so that they would be changed into something better than they were, through a system of education that would teach them not to be greedy.

Hitler, Mussolini, Lenin, and Saint-Simon all believed that a group that knew better than the people should tell the people how to run their lives. Now, I can certainly imagine a city planner feeling that way, and anyone who's tried to build in a city probably has a brief against planners, but the dictators Hayek gives as examples did not evolve from planner to dictator. Planners tended to remain bureaucrats, willing to work for whatever administration was in power. A Hitler or a Mao does not thrive in bureaucracy. Such men thrive as politicians, as forceful men in time of chaos. Such men will seize whatever instruments of power are available to them, and invent such tools as don't already exist. To rise to such power, the allies required are those with resources, the military and merchant classes, unless the chaos is as complete as it was in Russia or China when the Communists took power. Such men might seize the reigns of the Mongol horde, or the Huns, in time past.

Saint-Simon, by the way, was not such a man. He was so ineffectual that when he attempted suicide, he shot himself in the head six times without achieving the desired result. What was seductive to the young men of the École Polytechnique during his lifetime was, I suspect, the notion that people like them should rule.

Hayek's book is important because of the effect it has had. Unfortunately, I'm not impressed with the history or the reasoning thus far. But then, Hayek wrote in England during wartime, when rationing and central planning were at their peak. In wartime, even democracies can resort to such central planning, because while markets are excellent for determining what is of value during peacetime, the goal of survival provides a certain and central goal for a society in wartime. He did not foresee the long, strange peace punctuated by proxy wars that was the Cold War, or the fact that a free enterprise system's greater ability to generate wealth (and enough food) would prove decisive.

Perhaps the thing Germany and Italy had in common was that they were young countries. Italy was united in 1861, and immediately found itself fighting against armed resistance to the unified government. Germany was unified in the wake of the Franco-Prussian War in 1871. Both countries were assembled from a number of small states. Germany was proving ungovernable under democracy because no majority could form, and Italy can still give the impression of being ungovernable.

Hitler came to power, as Hayek admits, because the democratic government broke down. So should we take from this the lesson that planning is a bad thing, or that we must not allow the democratic process to break down to the point where the country becomes ungovernable?

The Right in this country takes the former view, and thinks that the unprecedented frequency of their use of the filibuster in the 2009-2010 congress was in defense of liberty, because efforts to change the way the health insurance market worked (in ways they had previously supported) threatened the sort of central planning Hayek had warned about. Of course, Hayek was not immune to the argument that the government needed to regulate markets to make liberalism work, as I've written about previously.

But I would say that we have seen what happens when a country becomes ungovernable by democratic means. People give up on democracy. Perhaps those who value freedom should take a closer look at that.

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