"It cannot be denied that fascism and similar movements aimed at the establishment of dictatorships are full of the best intentions, and that their intervention has, for the moment, saved European civilization. The merit that fascism has thereby won for itself will live on eternally in history."
--------Ludwig von Mises, Neo-Liberalism, 1927
Von Mises, the founder and patron saint of neo-liberal economics, is here praising Austria's "sound economics" and attendant destruction of social democracy and unions. He continues to be a hero for followers of the "Austrian school" of capitalist economics, like former Congressman Ron Paul.
Source: GCAS Noam Chomsky Lecture with Lewis Gordon and Afar Hussain, You Tube, September 28, 2020
Below is a compilation of events on the early years of fascism in neighboring Italy, which von Mises lived through.
The Workers Take Over
Financial elites tremble as Paris flashes the news that Italy has “gone Bolshevik” with the red flag flying everywhere and the masses chanting “Viva Lenin” in the streets. Increasingly, the specter of Communist Europe gives way to the new reality: Russia and Hungary are already communist; there are red rumblings in the Balkans; Germany is a revolution waiting to happen.
After the 1918 Armistice, wartime assurances of prosperity turned to hollow mockery as the lira plummeted and the cost of living soared. War profiteers wallowed in blood money while hungry Italian workers went without promised pay hikes unless they could extract them with strikes. Now the metal workers association asks for inflation-adjusted wages and the employers turn them down flat: “We cannot admit the possibility of fixing salaries in relation to the rising cost of living.”
Public pressure forces a conference, but the owners torpedo all negotiations with another unilateral declaration: “All discussion is useless. We make no concessions.” The workers cagily respond by obeying all employer instructions to the letter, inevitably damaging goods and tools merely by refusing to adjust management demands to the actual requirements of production.
Alfa-Romeo locks out its workers and the manufacturers association agrees to follow suit. The trade unions opt for continuing production under a “creative strike” and half a million laborers occupy factories. Soon a million more join the burgeoning rebellion that has displaced managers and owners while armed patrols of workers shout for revolution in the streets.
Now even the Catholic party demands land reform, and workers seize landed estates from Apulia in the South to the northern frontier, posting requisition notices on the gates. In Reggio and Bologna workers and small farmers set the length of the working day, the type of farming, the rate of pay, and the proportion of manual labor to machines.
Benito Mussolini prepares his fascist movement to smash the workers’ unions and political organizations, paving the way for a long love affair with the House of Morgan.22
Sources: George Seldes, Sawdust Caesar, (Harper and Brothers, 1935) pps. 86-7; Mary Heaton Vorse, A Footnote To Folly - Reminiscences of Mary Heaton Vorse, (Farrar and Rinehart, 1935) pps. 200, 204-6; Walter Millis, Why Europe Fights, (Morrow, 1940) pps. 30-1
Portrait Of A Law-and-Order Movement
Two years ago Benito Mussolini formed the first detachment of his Blackshirts in the offices of the Popolo d’Italia, the Milan newspaper he founded seven years ago. Not much later his goon squads were roaming the country beating up leftist leaders and forcing them to swallow overdoses of castor oil. They broke up strikes, smashed and burned down Socialist and Communist headquarters, and zoomed around in military trucks enforcing the kind of order demanded by the bankers and industrialists who financed them. Even as they pushed Italy to the brink of civil war, they rarely suffered interference from the army or police.
By now a large group of Blackshirt deputies has become a fixture of the Parliament, while Mussolini’s private army and political party are practically departments of state. Street fighting and gunfire have become routine, with Fascists and the Left clashing in almost daily battles. In the May election campaign alone one hundred people were killed in combat between union members and Fascists.
The U.S. State Department praises the rapidly expanding fascist movement as “a league of all those who stand for law and order...”33
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) pps. 41-3; Gabriel Kolko, Century of War - Politics, Conflicts, and Society Since 1914, (New Press, 1994), p. 167; Walter Millis, Why Europe Fights, (Morrow, 1940) p. 29 and 32
A Likable Terrorist
Battered by inflation and unemployment, reeling from 600,000 Italian deaths in WWI, and resentful at the refusal of the Allies to hand over Dalmatian lands promised by wartime treaty, Italy’s fascist movement grows and strengthens.
With police and government officials standing aside, thousands of Blackshirt thugs attack labor union halls and socialist offices while huge fascist parades take over the streets. Bolstered by thunderous ovations, Benito Mussolini bellows that the time has come to save Italy from the spineless democratic politicians. “Either the government will be given to us or we shall seize it by marching on Rome!” A delirious throng thunders back: “To Rome! To Rome!”
The King wires him with an offer of the Premiership and Mussolini makes his way to the train station amidst a madly cheering crowd showering him with flowers.
Originally a socialist, Mussolini renounced the cause when bankers and industrialists promised him money, fame, and influence. Now as he prepares to take power there is no Bolshevik threat and no Fascist revolution, as will later be claimed. The military conspiracy between the generals, the government, and the northern industrialists hands him state authority without a drop of blood being shed.
Washington looks kindly on his Blackshirt movement, which the New York Times describes as “political terrorism.” In a letter to Secretary of State Charles Evans Hughes, U.S. Ambassador Richard Child explains that Italians “hunger for strong leadership and enjoy...being dramatically governed.”36
Sources: George Seldes, Sawdust Caesar, (Harper and Brothers, 1935) pps. 113-27, John P. Diggins, Mussolini and Fascism - The View From America, (Princeton, 1972) pps. 29-30; Walter Millis, Why Europe Fights, (Morrow, 1940), pps. 33-4; Michael Parenti, Blackshirts and Reds - Rational Fascism and the Overthrow of Communism, (City Lights, 1997) p. 2; Ronald Steel, Walter Lippmann and the American Century, (Little Brown and Company, 1980) p. 180; Gabriel Kolko, Century of War - Politics, Conflicts, and Society Since 1914, (New Press, 1994) p. 167; David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) p. 52
An Improved Investment Climate
Secretary of State Charles Evans Hughes wires Mussolini that he is “glad to cooperate” with his expressed desire for “friendly economic and spiritual collaboration” with the U.S., offering him “best wishes for the happiness and progress” of Italy. Impressed by the organization and discipline of the fascists, Washington finds their repression doing wonders for American investor confidence.
Mussolini declares he will privatize utilities and railways, offering Americans a crack at the spoils. He tells the press that his government intends to “give the greatest security to capital, and to insure it of...better...more stable conditions” than it has enjoyed before. Judge Gary of U.S. Steel adds his enthusiastic thumbs-up from Rome: “I feel like turning to my American friends and asking them whether they do not think that we too need a man like Mussolini.”
In a letter to his father, U.S. Ambassador Richard Child cheerfully relays news of Mussolini’s destruction of liberal, constitutional government: “We are having a fine young revolution here. No danger. Plenty of enthusiasm and color. We all enjoy it.”37
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) p. 36, 52. 54. 56, 57; George Seldes, World Panorama - 1918-1933, (Little, Brown and Company, 1933) p. 142
Washington, Wall Street, Praise Italian Dictatorship
On the first anniversary of his accession to state power, the U.S. Embassy reports to the State Department that Mussolini has never “been more popular or held a stronger position.” In particular, he “has been eminently successful in bringing about social peace and the cessation of class warfare. In the beginning the means employed were physical, but very soon a tendency to apply more peaceful methods was manifest. The results have been excellent, and during the last twelve months there has not been a single strike in the whole of Italy.”
Business leaders are equally pleased. Lewis E. Pierson, president of the Merchants’ Association of New York, tells leading businessmen that Mussolini is “truly a great man” who has defeated communism and is committed to “the inviolable rights of property and contract.” Willis Booth, president of the International Chamber of Commerce, praises him for bringing Italy “out of the slough of despair into the bright realm of progress.” The New York Evening Post reports that the Mussolini spell “has settled down hardest over the minds of sober American businessmen,” whose admiration for Italy’s dictator “at times comes perilously near to assuming that Mussolini not only created order and discipline in Italy, but before that created the Apennines and the blue Italian skies.”
U.S. Steel’s Judge Elbert Gary, on hand to witness the Mussolini miracle in person, cannot contain his admiration: “We have here a wonderful renaissance of youthful energy and activity. A master hand has, indeed, strongly grasped the helm of the Italian state.”43
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) pps. 70-1
Where The Trains Run On Time
With all of Italy hanging on his every word, Giacomo Matteotti, speaker of the five Opposition parties in the Chamber of Deputies, rises to read off a list of recent Blackshirt bludgeonings at polling stations. The Fascist benches erupt in protest: “Liar!” “Falsifier!” “Prove it!”
Mussolini squirms and glares while Matteotti produces sworn statements, Fascist newspaper reports, Fascist orders of violence, and court findings confirming the violence,.
A week later Mussolini shakes his fist at Matteotti and tells him that were they in Russia the communists would know what to do, “and you would have a bullet through your spine.” Soon a Mussolini editorial appears on the front page of the Popolo d’Italia, demanding revenge for Matteoti’s sullying of Fascism’s good name. Days later Cesare Rossi, co-director of the Cheka, tells journalist Carlo Silvestri: “With people like Matteotti, the only thing to do is let the revolver speak.”
An American—Amerigo Dumini—is selected for the task, along with four accomplices. Trained as a gangster in American slums, Dumini is Rossi’s colleague in the Cheka and the “household friend” of Mussolini.
One fine day Matteotti is kidnapped and beaten, then stabbed, mutilated, and burned. Parts of his body are buried, dug up, abandoned to the foxes and pariah dogs, then buried again.
Mussolini tenderly consoles Matteotti’s sobbing widow when she arrives in parliament seeking news of her husband’s whereabouts. “Signora, I should like to restore your husband alive to you. You may be assured that the government will do its utmost duty. We know nothing for certain, but there is some hope.”
U.S. Ambassador Henry Fletcher informs the State Department that many prominent Fascists are implicated in Matteotti’s murder, but their man Mussolini is in the clear.
Documents proving Mussolini’s involvement in the murder, including the confessions of his men, go on sale at Rome newsstands.
With large landowners and industrialists in open conflict with peasants and workers, a shaken Italy moves toward civil war.45
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) pps. 72-3; George Seldes, Sawdust Caesar, (Harper and Brothers, 1935) pps. 147-53; George Seldes, World Panorama - 1918-1933, (Little Brown and Company, 1933) pps. 234-5; George Seldes, Witness To A Century (Ballantine, 1987), p. 218; Stuart H. Hughes, The United States and Italy, (Harvard, 1979), p. 99
Under the banner of “Hierarchy, Order, Discipline” a Corporate State rises on the graveyard of common rights inherited from democracy and monarchy.
Mussolini promises peace “by force if necessary,” ordering his gangs to attack all enemies and destroy the last opposition newspapers. In three months sixteen men in public life are killed, 36 seriously injured and 172 assaulted as Fascists invade and destroy 46 homes and political clubs. Mussolini proudly announces peace through total control: “For the first time in the history of the world, a constructive revolution like ours realizes peacefully, in the field of production and work, incorporation of all the economic and intellectual forces of the nation.”
The constructive revolution bans strikes and lockouts, abolishes industrial competition, places capital, business, and industry under state control, assigns each citizen a category of production, forces labor to cooperate with capital, appoints a new Parliament, bans political opposition, and arrests thousands for heresy.
U.S. bankers come running with loans.60
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988), pps. 75, 96-8; George Seldes, World Panorama - 1918-1933, (Little Brown and Company, 1933), pps. 236, 239
“The chief business of the American people is business,”
says President Coolidge to the American Society of Newspaper Editors. He adds that “there are many other things that we want very much more,” like peace, honor, and charity.
In a burst of charity the Congressional Debt Commission proceeds to cancel over 75% of Italy’s World War I debts. Opponents of the sweetheart deal uncharitably attack the president for supporting Mussolini. House Speaker Henry Rainey denounces the Fascists as “murderers” and the Italian dictatorship as “the most dangerous, the most pronounced despotism that we have in... all the world.”
The White House and business leaders counter that Italians are not ready for Western-style democracy and need fascist order, discipline, and efficiency to mature as a nation. Morgan partner Thomas Lamont explains that Anglo-Saxons must understand that “the old forms of parliamentary government in Italy [have] proved futile and [have] led to inefficient government and chaos.” The House of Morgan floats Italy a $100 million loan.
U.S. leaders hail Italy’s Corporate State as the only remedy for Russian Utopianism abolishing profit, spreading word that Mussolini has saved his nation and possibly all of Europe from Communist slavery. They prudently omit mention of Mussolini’s having announced the death of Bolshevism in Italy well before he came to power.61
Sources: David F. Schmitz, The United States and Fascist Italy, 1922-1940, pps. 76, 96-9; Clifton Daniel, ed. Chronicle of America, (DK Publishing, 1997) p. 627; George Seldes, World Panorama - 1918-1933, (Little Brown and Company, 1933) p. 239; George Seldes, Sawdust Caesar, (Harper and Brothers, 1935) p. 276; Cyndy Bittinger, "The Business of America Is Business?" www.calvincoolidge.org/pages/history/research/ccmf/bitt02.html
A Letter To the House of Morgan
“I wonder if you all in New York know just what you are doing in backing Fascistism in Italy. We had a taste of it last night here. A party of Fascists motored up from Rome armed with revolvers, rapiers and loaded whips, arrived at nine and proceeded to beat up with fierce brutality the peasants who could not produce a Fascisti card.... If any peasant objects he is shot. This is happening all over the place. It seems funny for American money to be perpetuating it.”68
Sources: Ron Chernow, The House of Morgan - An American Banking Dynasty and the Rise of Modern Finance, (Atlantic Monthly, 1990), p. 283
1926: New York/Washington
U.S. Leaders On Italian Fascism
“In formulating judgment on Fascismo two things should be kept in mind. First, it so happens that Italy is inhabited by Italians and not by Americans or Englishmen, and that what applies or appeals to us need not necessarily apply or appeal to them. Secondly, in the case of every people, more essential even than liberty, and therefore taking precedence over it, is order and national self preservation.”
—New York Banker Otto Kahn
“The methods of the Duce are not by any means American methods,” [but a democratic approach] “would certainly NOT appeal to a people so differently constituted as are the Italians.”
—William Castle, chief of the State Department’s Western European Division
“Mussolini has crushed all opposition to Fascism in Italy. He is organizing the new Corporate State, regimenting labor and capital and all lines of intellectual and economic activity. Italy is to become a great well-coordinated machine fired by Fascism and controlled by him.”
—U.S. Ambassador to Rome Henry Fletcher
“[Mussolini] would not hesitate to cut off a man’s head instantly if he failed to deliver what was expected of him.”
—Benjamin Strong, Bankers Trust72
Sources: Ron Chernow, The House of Morgan - An American Banking Dynasty and the Rise of Modern Finance, (Atlantic Monthly, 1990) p. 277; David F. Schmitz, The United States and Fascist Italy, 1922-1940, (University of North Carolina, 1988) pps. 69, 78, 104-5