MASSACHSETTS AND THE MUSSOLIZATION OF AMERICA by Llewellyn H. Rockwell Jr.
5 min readSep 15, 2019
Massachusetts and the
Mussolinization of America
Llewellyn H. Rockwell, Jr.
O fficial socialism has probably never been a threat in
America, but the corporate state has. And is.
It all began in 1919 when ex-Marxist Benito Mussolini
wrote the Fascist Party platform, calling for central planning
through a “partnership” of government, business, and labor.
By 1925 he was in total power.
Not all of Mussolini’s admirers were in Italy. The cover
story of the New York Times Magazine for October 24, 1926,
gushed:
The most approachable as well as the most interesting
statesman in Europe. He is a voracious learner who never
makes the same mistake twice. . . . The whole country is
keyed up by his energy. . . .
The whole economic structure of the nation has been
charted out in a graph that shows it as a huge corporation
with the Government as the directorate. He explains it
clearly and patiently, reminding you that he started his ca-
reer as a teacher.
An earlier New York Times editorial (October 31, 1922)
had explained:
In Italy as everywhere the great complaint against de-
mocracy today is its inefficiency. . . . Neither the failures
nor the successes of (Russia’s) Bolshevist Government offer
much of an example to the Western world. Dr. Mussolini’s
experiment will perhaps tell us something more about the
possibilities of oligarchic administration.
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Although Herbert Hoover in many ways prefigured him,
it was Franklin D. Roosevelt who first tried to create an ex-
plicit corporate state in America with his National Recovery
Administration (NRA). With its fascist-style Blue Eagle
emblem, the NRA coordinated big business and labor in a
central plan, and outlawed competition. The NRA even em-
ployed vigilante groups to spy on smaller businesses and
report if they violated the plan.
Just as in Mussolini’s Italy, the beneficiaries of the U.S.
corporate state were — in addition to the government itself —
established economic interest groups. NRA cheerleaders in-
cluded the National Association of Manufacturers, the U.S.
Chamber of Commerce, the American Bar Association, the
United Mine Workers, the Amalgamated Clothing Workers,
and — above all— Gerard Swope of General Electric, who
helped draft the NRA act.
Only the courage of the Supreme Court, which ruled that
the NRA was unconstitutional, prevented the establishment
of a fascist economy in our country. FDR denounced the
“nine old men” and tried to pack the court with NRA pro-
ponents. But the American people, including most of his sup-
porters, opposed the power grab, and he lost. That did not
end the battle, however.
Today, there are many elements of a corporate state in
Washington. But in Massachusetts, Michael Dukakis has
come closest to actually establishing one. Wrote the Washing -
ton Post recently:
Corporate Massachusetts is in a de facto alliance with
the state and a host of potentially conflicting interests, in-
cluding . . . organized labor . . . , all of whom serve on
agency boards and are also recipients of agency grants. . . .
Not only has Dukakis drawn these business leaders into
what amounts to limited partnerships with state govern-
ment, with the governor as the dominant general partner,
but also these quasi-public agencies have formed a web of
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financial arrangements with at least 3,000 corporations
across the state. The state government effectively has been
entrenched in almost every nook and cranny of the private
sector.
The tools Dukakis used to create this alliance for central
planning included a larger bureaucracy; subsidized loans,
bailouts, and outright grants for big businesses; and guaran-
teed high wages for unions.
Those on the Massachusetts gravy line include the insur-
ance industry, especially John Hancock Mutual Life; high-
tech corporations like our old friend GE, Digital Equipment
Corp., and Raytheon; and banks like the Bank of Boston.
Each is represented on the boards of the Massachusetts
Capital Resources Corp., the Massachusetts Industrial
Finance Agency, and similar corporate-statist entities. And
all march in profitable lock-step with the state. The only los-
ers are taxpayers, consumers, and businesses without politi-
cal connections.
The Post notes that Dukakis’s policies “diverge sharply
from the more traditional type of partisan politics emphasiz-
ing ideological splits between business and labor.”
With guaranteed profits, corporations are partially liberated
from consumer control. In return, they agree to pay the above-
market wages that labor unions demand, and otherwise co-
operate with the state. But what will be the economic result?
In 1920, Ludwig von Mises showed in “Economic Calcula-
tion in the Socialist Commonwealth” that there can be no
rational central planning.
In a free market, consumers’ spending decisions tell pro-
ducers what and how much to produce. If consumers prefer
Fords to Chevrolets, they tell Ford Motor Company to make
more cars by buying more of them, thereby driving up the
price of Fords relative to Chevrolets and attracting more in-
vestment to Ford. Because of the free market in capital
goods, Ford is able to devote more resources to production
than Chevrolet.
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253
This process enables firms to rationally calculate the “struc-
ture of production” from the beginning to the end, to use scarce
resources to satisfy the most highly valued goals of consumers.
Mises showed that under socialism, economic calculation
is impossible. Since capital goods are owned collectively, they
cannot be bought or sold and therefore can have no money
prices. Therefore, the desires of consumers cannot be served,
no matter what the intentions of the producers. This is why the
Soviet shoe factory is incapable of making the styles, colors,
or numbers of shoes that consumers want, no matter how
hard the managers try.
But Mises’s argument must also apply to the corporate
state. To the extent that some corporations enjoy state-
privileged positions, they are partially protected from compe-
tition. Their capital goods have money prices, unlike under
socialism, but they are not freely set prices. Thanks to state
favoritism, competitors have less opportunity to bid those re-
sources away, so consumers’ desires cannot be fully served.
We saw an example of this with the Chrysler bailout.
Consumers sought to divert resources from the Chrysler
Corp. to other car manufacturers, which produced better
products at better prices. So in response to the pressure
group composed of Chrysler executives, union workers, large
shareholders, and big bank creditors, politicians gave the
company massive federal financing. Consumers wanted ra-
tional economic calculation, but the government prevented
it, thereby making the rest of us poorer.
The bigger the corporate state becomes, the less con-
sumers’ desires will be satisfied. As Misesian analysis shows,
the corporate state must be an economic failure, no matter
what miracles are claimed. Tragically, fascism is all too often a
political success.
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