Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning

of measures, large and small, to accommodate customers and employees with various handicaps. Offices had to be retrofitted to be wheelchair compliant. Various public signs had to be written in Braille. Devices to aid the hearing impaired had to be made available. And so on.

Now imagine you are the CEO of Coca-Cola. Your chief objection to this law is that it will cost you a lot of money, right? Well, not really. If you know that the CEO of Pepsi is going to have to make the same adjustments, there's really no problem for you. All you have to do is add a penny — or really a fraction of a penny — to the cost of a can of Coke. Your customers will carry the freight, just as Pepsi's customers will. The increase won't cost you market share, because your price compared with your competitor's has stayed pretty much the same. Your customers probably won't even notice the price hike.

Now imagine that you own a small, regional soft drink company. You've worked tirelessly toward your dream of one day going eyeball-to-eyeball with Coke or Pepsi. Proportionally speaking, making your factories and offices handicapped-friendly will cost you vastly more money, not just in terms of infrastructure, but in terms of the bureaucratic legal compliance costs (Coke and Pepsi have enormous legal departments; you don't). Plans to expand or innovate will have to be delayed because there's no way you can pass on the costs to your customers. Or imagine you're the owner of an even smaller firm hoping to make a play at your regional competitors. But you have 499 employees, and for the sake of argument, the ADA fully kicks in at 500 employees. If you hire just one more, you will fall under the ADA. In other words, hiring just one thirty-thousand-dollar-a-year employee will cost you millions.

The ADA surely has admirable intent and legitimate merits. But the very nature of such do-gooding legislation empowers large firms, entwines them with political elites, and serves as a barrier to entry for smaller firms. Indeed, the penalties and bureaucracy involved in even trying to fire someone can amount to guaranteed lifetime employment. Smaller firms can't take the risk of being forced to provide a salary in perpetuity, while big companies understand that they've in effect become 'too big to fail' because they are de facto arms of the state itself.

Perhaps the best modern example of the fascist bargain at work is the collusion of government and the tobacco companies. Let us recall that in the 1990s the tobacco companies were demonized for selling 'the only product which, if used properly, will kill you.' Bill Clinton and Al Gore staked vast amounts of political capital in their war against 'Big Tobacco.' The entire narrative of 'right-wing' corporations versus progressive reformers played itself out almost daily on the front pages of newspapers and on the nightly news. The attorney general of Texas proclaimed that 'history will record the modern-day tobacco industry alongside the worst of civilization's evil empires.' Christopher Lehmann-Haupt suggested in the New York Times Book Review that 'only slavery exceeds tobacco as a curse on American history.' Tobacco executives were 'the most criminal, disgusting, sadistic, degenerate group of people on the face of the earth,' according to one widely quoted antitobacco activist.³⁷

Out of this environment sprang forth the — unconstitutional — tobacco settlement whereby 'Big Tobacco' agreed to pay $246 billion to state governments. Why would the tobacco companies agree to a settlement that cost them so much money and that forced them to take out ads disparaging their own product and pay for educational efforts to dissuade children from ever becoming their customers? The reason, quite simply, is that it was in their interests. The tobacco companies not only had their lawsuits settled; they bought government approval of a new illegal cartel. 'Big Tobacco' raised prices above the costs imposed by the settlement, guaranteeing a tidy profit. Smaller companies who did not agree to the settlement are still forced to make large escrow payments. When these firms started to thrive, cutting into the market share of the big tobacco companies, state governments jumped in and ordered them to make even larger payments. 'All states have an interest in reducing...sales [by non-settlement companies] in every state,' Vermont's attorney general warned fellow state attorneys general. The government in effect enforces a system by which small businesses are crushed in order to maintain the high profits of 'Big Tobacco.' Now, you might think this is all fine. But how — exactly — is this a free- market approach? How — exactly — is this unlike the corporatism of Fascist Italy, Nazi Germany, and Hugh Johnson's NRA?³⁸

This is the hidden history of big business from the railroads of the nineteenth century, to the meatpacking industry under Teddy Roosevelt, to the outrageous cartel of 'Big Tobacco' today: supposedly right-wing corporations work hand in glove with progressive politicians and bureaucrats in both parties to exclude small businesses, limit competition, ensure market share and prices, and generally work as government by proxy. Many of JFK's 'action- intellectuals' were businessmen who believed that government should be run by post-partisan experts who could bring the efficiencies of business to government by blurring the lines between business and government. Big business rallied behind LBJ, not the objectively free-enterprise Barry Goldwater. Free marketeers often decry Richard Nixon's wage and price controls, but what is usually forgotten is that big business cheered them. The day after Nixon announced his corporatist scheme, the president of the National Association of Manufacturers declared, 'The bold move taken by the President to strengthen the American economy deserves the support and cooperation of all groups.'³⁹ Jimmy Carter's supposedly prescient efforts to tackle the energy crisis led to the creation of the Energy Department, which became — and remains — a piggy bank for corporate interests. Archer Daniels Midland has managed to reap billions from the environmental dream of 'green' alternative fuels like ethanol.

Indeed, we are all Crolyites now. It was Croly's insight that if you aren't going to expropriate private businesses, but instead want to use business to implement your social agenda, then you should want businesses themselves to be as big as possible. What's easier, strapping five thousand cats to a wagon or a couple of giant oxen? Al Gore's rhetoric about the need to 'tame Big Oil' and the like is apposite. He doesn't want to nationalize 'Big Oil' he wants to yoke it to his own agenda. Likewise, Hillary Clinton's proposed health-care reforms, as well as most of the proposals put forward by leading Democrats (and a great many Republicans), involve the fusion of big government and big business. The economic ideas in Hillary Clinton's It Takes a Village are breathlessly corporatist. 'A number of our most powerful telecommunications and computer companies have joined forces with the government in a project to connect every classroom in America to the Internet,' she gushes. 'Socially minded corporate philosophies are the avenue to future prosperity and social stability.'⁴⁰ It doesn't take a Rosetta stone to decipher what liberals mean by 'socially minded corporate philosophies.'

The granddaddy of all such 'philosophies' is of course industrial policy, the ghost of corporatism made flesh in modern liberalism. In 1960 President Kennedy called for a 'new partnership' with corporate America. In the 1970s Jimmy Carter called for 'reindustrialization' under a new 'social contract' to deal with the 'crisis of competitiveness.' A young aide in the Carter administration named Robert Reich launched his career as a buzz-phrase generator, spewing out such impressive-sounding nuggets as 'target stimulants' and 'indicative planning.' Later, the 'Atari Democrats' once again claimed that the 'future' lay in 'strategic partnerships' between the public and the private sectors.

In the 1980s envy for corporatist 'Japan Inc.' reached delirious proportions. The intellectual descendants of those who worshipped Bismarck's Prussia and Mussolini's Ministry of Corporations now fell under the spell of Japan's Ministry of International Trade and Industry, which soon became the lodestar of enlightened economic policy. James Fallows led an all-star cast of liberal intellectuals — including Clyde Prestowitz, Pat Choate, Robert Kuttner, Ira Magaziner, Robert Reich, and Lester Thurow — in a quest for the holy grail of government-business 'collaboration.'

Reich was one of the pioneers of the Third Way movement. Indeed, Mickey Kaus writes that Third Way rhetoric is Reich's 'most annoying habit' and his 'characteristic mode of argument.'⁴¹ In 1983 Reich wrote The Next American Frontier, in which he championed 'an extreme form of corporatism' (Kaus's words) where in exchange for 'restructuring assistance' from the government, businesses would 'agree to maintain their old work forces intact.' Workers would become de facto citizens of their companies, in a relationship eerily similar to Krupp's General Regulations. And in an even more eerie echo of Italian Fascist corporatist thought, corporations would 'largely replace geographic jurisdictions as conduits of government support for economic and human development.' Social services — health care, day care, education, and so forth — would all be provided via your employer. This was all not only good but inevitable because 'business enterprises,' according to Reich, 'are rapidly becoming the central mediating structures in American society, replacing geographic communities as the locus of social services and, indeed, social life.'⁴²

Yet somehow it's the economic right that wants corporations to have more control over our lives.

In 1984 the former Republican strategist Kevin Phillips wrote Staying on Top: The Business Case