The Fascist Origin and Essence of Privatization

Preface by Washington’s Blog: We documented in 2009 that fascism and our current crony capitalist economy are indistinguishable.

We noted in 2011 that America’s public resources are being raped and pillaged … just like those of small debt-saddled countries like Greece.

The following short – but important – piece by Eric Zuesse shows that looting and privatization of public resources was a hallmark of fascist Germany and Italy … and America today.

Washington’s Blog is non-partisan. We believe that the war between liberals and conservatives is a false divide-and-conquer dog-and-pony show created by the powers that be to keep the American people divided and distracted. See this, this, this, this, this, this, this, this, this and this.

We can argue it either way, because we are ideologically neutral: allowing the private sector to own and manage resources is good … or allowing the public sector to do so is healthy.

Here’s the key: If these resources had always been in the private sector, that would be fine … that would be free market capitalism.

But if they were purchased on the people’s dime with our blood, tears, sweat and taxpayer funds – and then sold to the big boys for pennies on the dollar – that’s not capitalism … that’s looting. Unfortunately, that’s exactly what the Nazis, Italian fascists, and modern American “leaders” are doing.

-By Eric Zuesse:

Conservatives support privatizing schools, prisons, hospitals, and other social services. The privatization-mania is also increasingly occurring in higher education, as conservatives in Congress push measures to raise the percentage of colleges that are owned by for-profit corporations, and to decrease the percentage that are either public or nonprofit.

The argument given for such privatization is that corporations are more efficient because they are “the free market” way of serving people’s needs. However, progressives argue to the contrary, that in these parts of the economy, where “profits” for the public are hard if not impossible to measure, government does a better and less-inefficient job than corporations do. And, now, even a conservative state’s governor seems to have switched to the latter conclusion.

On 3 January 2014, the AP reported an instance in which the Republican Governor of one of the three most-Republican states in the U.S., Idaho, is doing a 180-degree turn, and he announced that “the corrections department will take over operation of the largest privately-run prison in the state,” from Corrections Corporation of America. The AP’s Rebecca Boone, in Boise, reported, that, whereas “In 2008, he floated legislation to change state laws to allow private companies to build and operate prisons in Idaho,” he now is taking over operation of this CCA prison, because of “mismanagement and other problems at the facility.” Only a few months before, on September 16th, that same reporter had headlined “CCA in contempt for prison understaffing,” and she quoted the federal judge’s order, which said that, “For CCA staff to lie on so basic a point — whether an officer is actually at a post — leaves the Court with serious concerns about compliance in other respects, such as whether every violent incident is reported.” The judge found that CCA was lying because they wanted more of their income from the state to go toward boosting their bottom line for stockholders, and less of it to go toward feeding the prisoners and protecting them from each other. The judge’s order said, “If a prospective fine leads to $2.4 million in penalties, CCA has no one to blame but itself.” CCA had been caught by the judge in persistently lying to the state while shortchanging prisoners on the prison’s obligation to provide basic services to inmates. The tension between private profits versus public services was clear in this case. CCA had incentive to cheat inmates in order to raise profits, and now a federal judge was fining CCA for doing precisely that.

Similarly, countries such as France, Sweden, UK, and the OECD generally, where health care is entirely or largely provided by the government, have better health-care outcomes and far lower healthcare costs, on a per-person basis, than does the U.S., where the profit motive in medical care is far more encouraged.

However, many Americans prefer the privatization of government services, because they believe that such a movement toward “shrinking big government” is in the direction of greater freedom, and is the only ethical direction, a direction in favor of greater democracy, in accord with the U.S. Constitution. Though the U.S. Constitution is by no means a free-market document, and concerns political issues instead of economic ones, there is a strong belief, especially among conservatives, that it is primarily about economics. There is consequently a myth about privatization.

The Myth About Privatization: Privatization was introduced by two democracies, the USA and UK, in the 1980s, not by prior fascist regimes.

The Truth About Privatization: Privatization was, in fact, a big aim of the elite fascists, right from the very start of fascism.

Explanation of the Reality: Aristocrats control the private wealth. Privatization means that they get to control also what was previously public. Privatization moreover provides corrupt politicians (their politicians) an opportunity to pay off their contributors (themselves) by offering them an inside track on public-asset sales. So, it’s not surprising that privatization is the way of fascist countries.

Documentation of the Reality: In September 2009, the European University Institute issued their RSCAS_2009_46.pdf, titled “From Public to Private: Privatization in 1920’s Fascist Italy,” (subsequently retitled “The First Privatization: Selling SOEs” in the 2011 Cambridge Journal of Economics) by Germa Bel, who said in her summary: “Privatization was an important policy in Italy in 1922-1925. The Fascist government was alone in transferring State ownership and services to private firms in the 1920s; no other country in the world would engage in such a policy until Nazi Germany did so between 1934 and 1937.” Then, in the February 2010 Economic History Review, she headlined a study specifically about the German case, “Against the Mainstream: Nazi Privatization in 1930s Germany.” Here, she reported that, though “privatizations in [fascist] Chile [under Pinochet] and the UK, which began to be implemented in the 1970s and 1980s, are usually considered the first privatization policies in modern history, … none of the contemporary economic analyses of privatization takes into account an important, earlier case: the privatization policy implemented by the National Socialist (Nazi) Party in Germany. … Although modern economic literature usually fails to notice it, the Nazi government in 1930s Germany implemented a large-scale privatization policy.” Furthermore, “Germany was alone in developing a policy of privatization in the mid-1930s,” since Italy had finished its privatizations by then.

The purposes of these privatizations, in both cases, were chiefly “receipts from selling” the assets to finance rearmament, and also “the desire to increase support from” the major aristocrats (such as, in Germany, the armaments-making firms of the Thyssens, the Krupps, and the Flicks), who received sweet deals on these assets.

Much later, of course, Russia under Boris Yeltsin also privatized, while that nation switched from being communist, to becoming fascist. (Yeltsin was no fascist himself; he wasn’t intelligent enough to be anything, ideologically. He was just confused, mistaken.) China later did the same thing, when it, too, switched from being communist to being fascist.

Connection to Privatization in the U.S: To continue with prisons as the case: Huffington Post, on 22 October 2013, headlined a major investigative news report “Private Prison Empire Rises Despite Startling Record of Juvenile Abuse,” and reporter Chris Kirkham found rampant political paybacks in the privatizations of juvenile prisons. As a typical example of the consequences: Florida’s “sweeping privatization of its juvenile incarceration system has produced some of the worst re-offending rates in the nation. More than 40 percent of youth offenders sent to one of Florida’s juvenile prisons wind up arrested and convicted of another crime within a year of their release, according to state data. In New York state, where historically no youth offenders have been held in private institutions, 25 percent are convicted again within that timeframe.” Those children in Florida are experiencing the brunt of fascism. But so are taxpayers.

———-

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • jadan

    The notion of the “commons” is prior to any public/private debate.
    Before Europeans raped and pillaged the N. American continent, it was
    all commons. No tribe owned any of it. From the start the privatization
    of the commons was the raison d’etre of the US government. The USG
    handed out timber and mineral rights to insiders and vast acreage meant
    for individual farmers was appropriated by speculators. The rail roads created great private fortunes from thecommons That is how government acted then, and nothing has changed. The “welfare” provision in the preamble, the public utilities in the Constitution, like the Post
    Office, contrast with the behavior of a government that has from the
    start been the tool of oligarchs. Oligarchy is fascism.

    You can’t be ideologically neutral, GW. There really is no such thing as “free
    market capitalism”. It is an illusion created by the ideology of
    oligarchs to justify their own hegemony. You are either an ideological
    defender of the commons, or you are not. Privatization, which began
    about 1791 when Hamilton privatized the financial system, is the
    national policy of our oligarchy. The popular revulsion against
    government in the service of predators, began in earnest with the
    Populist revolt about 1870′s. When the privatizers completely wrecked
    the economy in 1929, the New Deal attempted to reestablish government by
    and for the people…..

    …and failed. We have no government to manage the commons and regulate markets to make them more fair and equitable. We have what we’ve always had: government by and for
    oligarchs. The fascist privatizers can be defeated by more direct
    popular government. We have no democracy. Our representative system does
    not represent the public interest. Unless the government can be
    reconnected to the people we won’t prevail against the illusion of
    fascist competence.

    We are losing the historical battle with the
    oligarchs. The reason is that we have no ideology of democracy. Strange
    but true. We are told freedom means less government, when in fact,
    freedom is not possible without a government-administered playing field.
    Is there an ideology out there proclaiming the virtue of democratic
    government to counter the anti-government sophistry of the fascist
    privatizers? No. We live in a national security state. Our electoral
    process & institutions are completely corrupt. Our true leaders are
    genuine fascists, invisible corporate/military droids in the Pentagon
    and intelligence agencies who do not believe in the Declaration in the slightest.

    • cettel

      Jadan, your comment is such a brilliant pithy statement; I wish I had written it. In the future, I might want to quote it. Both the “Oligarchy is fascism” thing and the “You can’t be ideologically neutral, GW,” thing, are brief phrases that are packed with profound truth, which I shall expand upon. I must quote them. Shall I attribute them to “Jadan,” or to whom? Signed, Eric Zuesse

      • jadan

        Thanks! “Jadan” will do in the anonymous spirit. “Oligarchy is latent fascism”. Warren Buffet is an oligarch, but not a fascist. With respect to GW, the neutral ideology position is trying to fight a war without weapons. We need a strong defense of government, but it’s difficult when the government actually is the problem! So it’s not government, but who controls it. We need an ideology of direct democracy.

        • cettel

          That’s what I’m working on. I have a draft paper on it, now being considered by an academic journal, and I seek feedback on it from individuals such as you. If you are interested enough in the subject to be willing to plod through a rewrite of existing microeconomic theory, and to tell me your thoughts about it while you are reading through it, contact me at the.eric.zuesse @ gmail.com, (without the blanks, of course) and I’ll be happy it to send you, for that purpose.

          • Rocky Racoon

            Democracy Against Capitalism by E.M Wood may help. In Defence of History Wood (eds) and Trotsky as Alternative by Mandel which gives a very coherent explanation of fascism ( actually the best I have ever come across), the rise of the Soviet Bureaucracy.
            Any of these sources could be used for graduate school level academia.
            RR

        • cettel

          (error)

        • Rocky Racoon

          Socialist Democracy even if you drop the socialist DEMOCRACY AGAINST CAPITALISM is a good place to start in western society especially America. It is the name of a book I read a decade ago by E.M. Woods. An American Marxist and Academic. Very good read.
          RR

  • http://blogdredd.blogspot.com/ Dredd Blog

    “The following short – but important – piece by Eric Zuesse shows that
    looting and privatization of public resources was a hallmark of fascist
    Germany and Italy … and America today.”

    Well said and documented.

    Privatization of things that should not be privatized was a characteristic of feudal society as well.

    • BT

      This story is disingenuous, as International banks that fleece the nation are not permitted under fascism.
      NOTHING INTERNATIONAL is permitted in fascism.
      The Fundamental difference between fascism and Judeo marxism is that one is nationalist and the other is INTERNATIONALIST.

      Fascism supports religion and recognizes God, Marxism is atheistic and de facto worships the state/ J E Ws.
      Further, fascism also doesn’t guarantee equal results from unequal labor Marxism like the USSR… I might mention that just the murder rates of the nation’s citizens is another good indicator. (66 million Christians killed by Bolshevik J EWs in USSR from 1917-1949)

      Fascism is about A nation and A people; and it is not communistic or internationalist. Fascism is geared to serve the host people and their traditional culture.
      USA is copying the march towards Marxism and not fascism. We are clearly being extorted for international banker goals and Marxist initiatives and dreams of a global totalitarian atheistic agenda of Marxist multiculturalism.

      • Rocky Racoon

        Fascism is the inevitable result of capitalism in crisis. World War among competing capitalists in crisis is the inevitable result. This profitability crisis brought about through the replacement of living labour with dead labour ( machines) which cannot create new value leads to the fraud, theft and ultimately war and the destruction of existing values. Marxism does not worship the state but believes that the state will inevitably wither and die as the production process is rationally planned and democraftifally administered by the direct producers. It takes a generation or two for the socialized production to raise the cultural level of society for this to be possible. Communalism and cooperation are innate traits of human beings as is sociability. Fascism is the destruction of organized labour and the atomization of the working class. The fall of the Soviet Union was the greatest set back for humanity in the 20th century. The capitalist counter revolution which was undertaken by the entire industrialized West took 80 some years to occur thanks largely to Stalin’s socialism in one country and peaceful coexistence. Yet it was socialised production that saw the USSR to go toe to toe with the entire WESTERN WORLD beating them in the space race and raising the standard of living from a peasant society to a modern industrial Goliath in a few generations. Capitalism has brought us two world wars heading for the third and thermonuclear extinction and now our third great depression. America ranks last among OECD countries in education which explains why you do not understand either Fascism or Marxism.

        • Bill Von Besser

          I am afraid it is you who does not understand fascism or marxism.

          • Rocky Racoon

            rather weak response no argument what so ever, other than y our opinion. I defined both in my response did you miss it? Again-Fascsim: the destruction of collective labour. Marxism: a rationally planed economy democratically administered by the direct producers.

          • Rocky Racoon

            FASCISM

  • http://www.blog2.tshirt-doctor.com/ Pissed Off

    Exactly! I’ve been calling it not “privatization” but “corportization”.

  • MorningStar

    Whatever entity, foreign or domestic, controls the prisons will probably control the FEMA Camps

  • A no-name is

    Old Money always rules over no money. Right to the point sires.

  • Ojr

    I noticed that like with communism that also took everything away from everybody while the elite commies lived high on the hog this is in reverse and everything is taken away from everyone and the elites get it all

    • Rocky Racoon

      How does going from a backward peasant society to a modern industrial giant that put the first satellite in space take everything from everybody???

 

 

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