Topic: Liberal Fascism
One of the great myths of the twentieth century was the alleged superiority of planned economies over market economies. Quite intelligent and worldly people of the sort who might be inclined to mock the doctrine of the Immaculate Conception believed this fairy tale. George Orwell once remarked that under conditions of humane socialism, global economics could be calculated on the back of an envelope.
The cult of economic planning received a tremendous boost from the totalitarianism that Orwell reviled on non-economic grounds: Stalin’s Soviet Union and Hitler’s Nazi Germany. It was widely believed in the 1930s and 40s that the planned economies of the totalitarian regimes were more rational, and hence more productive than messy market capitalism. To read such worshipful accounts of the Soviet state as Sidney and Beatrice Webbs’ Soviet Communism: A New Civilization is to marvel at the self-deceptive capacities of Western intellectuals.
In retrospect, of course, we can see that the totalitarian states were anything but efficient. In National Socialist Germany, the institutions that operated efficiently were those holdovers from the old days most reviled by the Nazis: the Army, the civil service, big business. The Nazi regime itself was a chaos of competing power centers in which mutual ambitions and antagonisms flourished—greatly to the detriment of the war effort. To take a single example, in 1942 it was proposed to ameliorate the Army’s increasingly serious manpower problem by transferring some 200,000 surplus Luftwaffe (Air Force) personnel to ground combat duty. Logically, these men ought to have been drafted into the Army and used to bring its existing units up to strength. But no: Reichsmarschall Hermann Göring, the head of the Luftwaffe, convinced Hitler that the conservative Army leadership would dampen the National Socialist spirit of his men. So instead the surplus personnel were formed into “Luftwaffe Field Divisions.” These units, poorly trained and commanded by Luftwaffe officers with scant ground combat experience, mostly fell apart when committed to action on the Russian front. Precious manpower and material desperately needed by the Army was thus squandered.
It was the same story in the Soviet Union, where such efficiency as existed was mostly the product of police terror. It’s true that the Party effectively mobilized the state’s economic resources to achieve victory in World War II. But after all, war was the environment most congenial to the Soviet regime; the Bolsheviks had always constituted a party at war with its own country. Even so, the USSR would undoubtedly have vanquished by Nazi Germany without the massive wartime aid it received from the US and Britain.
In the postwar period, economic planning was attempted in various Western countries, with indifferent results at best. It turns out that without the vital information provided by market signals, modern economies simply cannot function at peak efficiency. Thus every step in the direction of economic planning is a step away from prosperity. That’s something to think about as Barack Obama embarks upon his program of economic planning for America. His heart may be pure but his methods savor of totalitarianism.
