Column on Market Fascism

Markets Under Fascism

Tibor R. Machan

When a county is ruled by a fascist dictatorship, the exact nature of its
economic system will be indeterminate. Fascist dictatorships are
characterized by mainly charismatic and arbitrary leadership. They follow
no exact blueprint but depend on what the leadership decides.

To appreciate the situation in China, it helps to remember something the
late Susan Sontag said back in 1982. Her observations are worth
reproduction here:
...Fascist rule is possible within the framework of a Communist society,
whereas democratic government and worker self-rule are clearly intolerable
and will not be tolerated.
I would contend that what they illustrate is a truth that we should have
understood a very long time ago: that Communism is Fascism - successful
Fascism, if you will. What we have called Fascism is, rather, the form of
tyranny that can be overthrown - that has, largely, failed. 'Facism With a
Human Face'
I repeat: not only is Fascism (and overt military rule) the probable
destiny of all Communist societies - especially when their populations are
moved to revolt - but Communism is in itself a variant, the most
successful variant, of Fascism. Fascism with a human face....
Sontag?s observations fit the evolution of Chinese communism quite well
indeed. The recent leadership in that country has not followed the earlier
blueprints of socialist countries?preparing themselves to become the
Marxian communist haven the Left has fantasized about for a couple of
centuries and continues to dream of at most universities in the West.
Instead, Chinese leaders have engineered the country so as to take
advantage of elements of free market political economy. Following, it
appears, the ideas that were dubbed ?market socialism,? after the demise
of Soviet style socialism, the Chinese leadership is combining elements of
top down tyrannical rule with a kind of economic permissiveness that can,
if followed over time, unleash the forces of innovation, productivity,
investment and so forth.
We can think of this a bit on analogy of how some parents treat their
children when they wish for the latter to prepare for self-responsibility.
They retain full (legal) authority over them but start abandoning the kind
of hands-on discipline that they deploy when the kids are young and unable
to fend for themselves in virtually any area of their lives. Once,
however, the kids reach adolescence, these parents treat them with an eye
to fostering self-responsible conduct.
The analogy is misguided, of course, because those who govern the legal
system of a country aren?t the parents of the citizenry by a long shot.
Yet after centuries of hands on rule, the citizens may be a bit reluctant
to become self-governed. This doesn?t imply at all that they need to be
ruled as parents rule their children. Yet paternalistic leaders such as
those in China, who do see the population as requiring governance akin to
what happens in families, may take it as necessary to keep a strong hand
in guiding the country?s affairs.
Just as parents can retain authoritarian governance of children,
authoritarian paternalist governments can rule for a while without using a
heavy hand in all of their subjects? lives. Realizing that permitting a
wide range of personal discretion regarding economic matters can be a
useful approach to enriching China, the country?s leaders seem to be
acting just as such fascists as Chile former military dictator General
Augusto Pinochet did when he invited the Chicago boys and permitted the
country to adopt a free market style economy. Indeed, they are following
the advice of Adam Smith himself in his famous book, The Wealth of Nations
(1776).
Of course, in time such a permissive fascist system is quite likely to
become more and more liberal democratic. And that may very well be the
fate of contemporary China. And that would be a very desirable fate,
indeed, because it would mean that in time the permissiveness of the
Chinese leaders will be changed into a more principled free society. I
have no idea if that?s the thinking that prevails in Beijing but one can
hope, can one not?