Critics of libertarianism often regard it as a species of fascism. Libertarianism seems both “extreme” and “rightwing,” and what is fascism if not “right‐​wing extremism”? Even conservatives have repeated the charge: In his review of Ayn Rand’s novel, Whittaker Chambers wrote that, “from almost any page of Atlas Shrugged, a voice can be heard, from painful necessity, commanding: ‘To a gas chamber—go!’ ”

Libertarians justifiably object that fascism advocates unrestrained government power, not laissez‐​faire. However, this response often raises more questions than it is taken to answer. Inasmuch as libertarianism is anathema to the left, how can it simultaneously be diametrically opposed to the fascism of the extreme right? The study of comparative politics is able to shed a great deal of light with respect to this question. To regard libertarianism as akin to fascism presupposes that all political ideologies occupy some point on a political spectrum, the poles of which are communism on the left and fascism on the right. Political moderates are understandably sympathetic to this view. More surprising was the Communist International, which officially defined fascism as the “overt, terrorist dictatorship of the most reactionary, chauvinist and imperialist elements of finance capital” and pioneered the strategy of calling all of its opponents “fascists.”

The problem with this totalitarian model is that fascism and communism are in many respects quite similar. Most tellingly, both advocated and imposed a significantly larger role for government in the economy. This fact is frankly admitted by thoughtful socialists like Carl Landauer:

In a history of socialism, fascism deserves a place not only as the opponent which, for a time, threatened to obliterate the socialist movement. Fascism is connected with socialism by many crosscurrents, and the two movements have some roots in common, especially the dissatisfaction with the capitalist economy of the pre‐​1918 type.… [F]ascism was ready to use forms of economic organization first suggested by socialists—and very likely that use of socialistic forms would have increased if fascism had not all but destroyed itself in causing the Second World War.

Observations of this sort underscore the totalitarian nature of both ideologies: The greater the power of the state, the more totalitarian it is. Richard Pipes has characterized both communism and fascism as comprising “an official, all‐​embracing ideology; a single party of the elect headed by a ‘leader’ and dominating the state; police terror; the ruling party’s command of the means of communication and the armed forces; central command of the economy.” Stalin’s Russia and Nazism were near the totalitarian pole, and Italian Fascism was quickly approaching it.

Although political scientists who use the totalitarian model rarely draw attention to the fact, libertarianism—with its severe strictures on government power—plainly occupies the opposite end of the spectrum from all brands of totalitarianism. If the United States is less totalitarian than the Soviet Union because it has more personal and economic freedom, it is more totalitarian than a “capitalist economy of the pre‐​1918 type.”

Although we regard fascism as a term of opprobrium, to understand it as a political ideology, we must study its theory and practice during the interwar period when millions proudly accepted the label. No one denies that fascism arose in opposition to orthodox Marxism. What is difficult for many to grasp is the source of the mutual hostility between these two political movements. The issues in dispute did not center on economics. Mussolini, Hitler, and the other fascist leaders were prepared to embrace the statism of their socialist rivals. The issue on which they fundamentally differed was nationalism. According to orthodox Marxism, the fate of the nation (defined as the political entity holding monopoly power over a specific geographic area) was of no interest to workers. The fascists, in contrast, strongly disagreed: Just as members of the same economic class had interests in common, they argued, so did inhabitants of the same country. Fascists accordingly replaced veneration of “the workers” with equally fanatical devotion to “the nation.”

Mussolini’s transition from orthodox Marxism to fascism is well known. In April 1914, he was, “in the judgment of sympathizers and opponents alike, the dictator of the Socialist Party.” Yet after Mussolini switched his allegiances on the issue of war with the Central Powers, the Socialist Party expelled him. It was at this point that he began publishing his newspaper, the People of Italy, to promote his synthesis of nationalism and socialism:

Mussolini insisted that the only socialism that would be viable in the twentieth century would be a socialism prepared to identify itself with the nation.… Mussolini’s argument effectively identified traditional socialism as both antinational and antisocialist.

Unlike Mussolini, Hitler had never been a Marxist. Yet he eagerly accepted the socialist label despite suspicion that “we [Nazis] were nothing but a species of Marxism.… For to this very day these scatterbrains have not understood the difference between socialism and Marxism.” What Hitler condemned most in Marxism was its internationalism. Hitler hated the Marxists not for their economics, but because they “stabbed Germany in the back” during World War I with their revolutionary activities. Indeed, he repeatedly claimed that Marxism was procapitalist and that it sought “only to break the people’s national and patriotic backbone and make them ripe for the slave’s yoke of international capital and its masters, the Jews.”

From a libertarian perspective, the dispute between these rival brands of collectivism is, in many respects, cosmetic. Indeed, fascist economic policies, like those advocated by socialists, involved extensive government regulation, expansive public works, and generous social programs. Such policies had precedents in socialist legislation, but the fascists gave them a nationalist rationale: to heal internal class divisions, move toward economic autarchy, and prepare for war. As Hitler put it:

[T]he task of the state toward capital was comparatively simple and clear: it only had to make certain that capital remain the handmaiden of the state and not fancy itself the mistress of the nation. This point of view could then be defined between two restrictive limits: preservation of a solvent, national, and independent economy on the one hand, assurance of the social rights of workers on the other.

The Italian fascists were consistently less radical than were the German Nazis, and the influence of national socialist doctrine on Italian economic policy was initially mild. However, government intervention in the economy accelerated in the mid‐​1930s. Public works, state‐​enforced cartels, and welfare spending expanded significantly. The state bought the assets of failing banks and corporations, eventually owning most of the banking sector and controlling “a greater portion of the national economy than in any other nation‐​state west of the Soviet Union.”

Once having taken power, the Nazis were quicker to expand the role of government and cut ties with the world economy than the Italians had been. In their first 4 years, the annual increase in real private consumption in Germany was 2.4%, versus an astronomical 19.7% for public consumption. Rearmament had priority, but real nonmilitary government spending grew at an annual rate of 5.3%. Nazi trade policy reduced imports to below their Depression levels, particularly in agriculture, and regulation rapidly expanded throughout the economy. David Schoenbaum notes of the German economy under the Nazis,

Wages, prices, working conditions, allocation of materials: none of these was left to managerial decision, let alone to the market.… Investment was controlled, occupational freedom was dead, prices were fixed.… [B]usiness, particularly big business, declined or flourished in direct proportion to its willingness to collaborate.

World War II brought more radical economic changes in Germany. The Nazis instituted state slavery, forcing millions of foreigners into involuntary—and often lethal—servitude. As the war progressed, Germany moved close to full socialism, ultimately conscripting women, the elderly, and even children for economic and military service.

Admittedly, the fascists avoided the radical socialist policies of economy‐​wide nationalization of industry and collectivization of agriculture. But this deviation from orthodox Marxism was hardly unique to fascism: Given these policies’ devastating effects in the Soviet Union, every socialist with a modicum of common sense wanted to avoid them. During World War II, Ludwig von Mises wrote,

The Marxians are not prepared to admit that the Nazis are socialists too. In their eyes Nazism is the worst of all evils of capitalism. On the other hand, the Nazis describe the Russian system as the meanest of all types of capitalist exploitation and as a devilish machination of World Jewry for the domination of the gentiles. Yet it is clear that both systems, the German and the Russian, must be considered from an economic point of view as socialist.

Since the collapse of communism, many political scientists and historians have belatedly embraced Mises’s perspective. Although they received little recognition for their contribution, libertarians like Mises and Hayek were pioneers of pointing to the similarities between these two brands of totalitarianism. It is unlikely that they will receive the credit they deserve, but, as their model takes root, comparisons between libertarianism and fascism look increasingly spurious.

Further Readings

Barkai, Avraham. Nazi Economics: Ideology, Theory, and Policy. New Haven, CT: Yale University Press, 1990.

Branden, Barbara. The Passion of Ayn Rand. New York: Doubleday, 1986.

Gregor, A. James. The Faces of Janus: Marxism and Fascism in the Twentieth Century. New Haven, CT: Yale University Press, 2000.

———. Young Mussolini and the Intellectual Origins of Fascism. Berkeley: University of California Press, 1979.

Hitler, Adolf. Mein Kampf. New York: Houghton Mifflin, 1971.

Landauer, Carl. European Socialism: A History of Ideas and Movements. Berkeley: University of California Press, 1959.

Mises, Ludwig von. Omnipotent Government: The Rise of the Total State and Total War. Spring Mills, PA: Libertarian Press, 1985.

Payne, Stanley. A History of Fascism, 1914–1945. Madison: University of Wisconsin Press, 1995.

Pipes, Richard. Russia under the Bolshevik Regime. New York: Vintage Books, 1994.

Schoenbaum, David. Hitler’s Social Revolution: Class and Status in Nazi Germany 1933–1939. New York: W. W. Norton, 1980.

Bryan Caplan
Originally published