capitalist class.”3 In both cases, nationalist, racist, and terrorist mass movements rising primarily out of the lower middle class catapulted Mussolini and Hitler toward dictatorship—once they had secured the allegiance of the ruling classes in their respective countries. In the United States, however, embryonic fascism had emerged in a different form. Homegrown U.S. fascism lacked the visceral movements of its European counterparts, which in the case of Germany delivered the spectacle of Hitlerism. To dwell on analyzing American resemblances in relation to distinctive European forms was a mistake. “The national peculiarities of each country, its specific economic and social position, its historical traditions,” they wrote, “all play a part in shaping the form that fascist movements and fascism take.” Americans should not be looking for “a Man on Horseback riding down Pennsylvania Avenue, or a megalomaniac with a little mustache, making speeches in a big voice.” Rather than adhering to some “stereotyped formulae” to explain why fascism arose anywhere in the world, it was better to recognize its “diverse, and frequently subtle, forms” from one place to another.4 Still, to locate the germ of fascism in monopoly capitalism implied something common to all of them, and for communists like Magil and Stevens it could not be clearer what this meant. “Judged by its works, and not by its professions of faith, fascism stands forth as a form of rule by finance capital.”5 This was especially true for the United States. “The scattered streams and trickles of developing American fascism,” they wrote, “have a common source: Wall Street.” Big Business was the “fountainhead” of American fascism.6
A historic partnership between government and business during the First World War had created what Magil and Stevens called an “entire mechanism of repression” with an array of new agencies and legislation, including the War Industries Board in 1917 and passage of the Sedition Act a year later.7 All were designed to maximize cooperation between the two sectors in order to produce for the war and quash dissent or opposition to America’s involvement in it. This partnership, a leap in the advance of U.S. state monopoly capitalism, delivered profits never before seen to the largest capitalist enterprises during the war and in the decade that followed. As Magil and Stevens wrote:
The steady concentration of power in the hands of executive officials and the corresponding diminution in the power of legislative bodies … was encouraged by big business in the Harding, Coolidge and Hoover administrations, which used their enhanced powers in the interest of the monopolies. Commissions, executive officials and judges, appointed by the President and by state governors, and not elected by the people, were vested with unprecedented authority.8
As they make clear, the difference between capitalist states and those that went fascist was not a matter of “class content,” but in their respective “methods of rule.” In fascist states such as Hitler’s dictatorship, fascism
still represents the rule of finance capital, but in an open terrorist form, involving the complete destruction of democracy, the most brutal suppression of the people, the restoration of feudal relationships on the farms, the destruction of culture, the revival of medieval racial beliefs, the organization of all society for war. It means rule by the most ruthless and predatory sectors of finance capital; by dark reactionaries and fanatics who seek to impose upon modern capitalist society the primitive practices and beliefs of barbarism.9
When the crisis of capitalist rule in Germany became acute in January 1933 and the threat of communist revolution or a complete breakdown of the existing capitalist system seemed imminent, German elites, never champions of democracy, turned to Hitler as their only resort to protect, preserve, and further their class interests.10 As Magil and Stevens rightly observed, the transition from democracy to fascism in Germany had not occurred in a “single leap” but rather was the result of “a long process of whittling down democratic rights.” As for the United States, the transition from liberal capitalist democracy to fascism was still in its “preliminary” stage.11
As Marxists, Magil and Stevens described the historic origins of fascism in the most general terms. It had emerged in the twentieth century from contradictions in monopoly-finance capitalism, primarily “between the enormous forces of production … and the system of private appropriation—the profit system.”12 In this respect, they saw how repression inhered in capitalist growth itself as the result of a growing divide between the ruling class—which had become richer, fewer in number, and more powerful during the prosperous 1920s—and everyone below them in the pyramid of capitalist wealth. They knew that wages represented only a small part of what workers produced, leaving them unable to purchase the products of their labor at sufficient levels to gain a decent standard of living. Still, on this basis, the United States had achieved a “degree of temporary stabilization” in the national economy, but only in the short term. Basic capitalist contradictions had been “glaringly revealed” to those who paid attention. Even in the midst of prosperity, a widening gulf between mass production and consumption caused by “a technical revolution” had become historic by “dooming a large proportion of the productive system and millions of workers to permanent idleness.” Then the crisis came in 1929, and “the flimsy props” that had gone into the making of the Great Boom collapsed in a heap.13
But why did this happen? Since their primary motive in writing The Peril of Fascism was to educate Americans about fascism’s immediate threat to U.S. democracy, Magil and Stevens did not provide a more complex analysis of American fascism from the standpoint of political economy. For sure, they detected the germ of fascism in the United States in the myriad processes that created a spectacle of unprecedented capitalist economic growth during the Great Boom of the 1920s; then fascism became an ominous political force during the crisis years of the Great Depression.14 As Marxists, they surely knew that the “entire mechanism of repression” created by Big Business and the Republican Party had been necessary for the further accumulation of capital and profits. Given the main tasks at hand, however, Magil and Stevens went no further in examining the relationship between capitalism and fascism. Yet their seminal contribution to our understanding of the origins of American fascism remains vital.
Given our greater knowledge in the present, we can move beyond their historical and theoretical position in 1938. Fascist processes in the United States inhered in the drive for capitalist accumulation during the 1920s, a moment of unprecedented economic growth anywhere in the world-capitalist system. The inherent tendency in capitalist accumulation to create greater wealth fueled the simultaneous advance in the centralization of capital and capitalist ownership while displacing working people from the processes of production through technological innovation, thereby fueling a reserve army of labor of the unemployed and underemployed and a general population that became increasingly superfluous to existing methods of production, and thus to the needs of the capitalists. The germ of fascism inheres in the division of labor in the epoch of monopoly-finance capitalism and imperialism. In the end, this is what makes fascism the dictatorial rule of capital over American society.
To grasp how this occurred in the 1920s requires a brief look at one of the most important discoveries of Karl Marx, in Capital, his masterwork published in 1867.
MARX ON CAPITALIST ACCUMULATION: THE INHERENT SUBJUGATION OF LABOR TO CAPITAL
Geographer David Harvey, who has spent many years teaching and writing about capitalism, says that “Marx’s aim in Capital is to understand how capitalism works by way of a critique of political economy.”15 In the course of examining the anatomy of capitalist production, Marx demonstrates how the system it creates is contradictory to the core. In its constant and necessary drive to accumulate more capital, its movement increasingly subjects society to its imperatives. Owners and workers alike are bound to processes that give rise to a unique feature of the capitalist mode of production, the paradox of growing poverty in an ever-rising sea of plenty.
As Harvey says, Marx makes his case in Capital on the basis of concepts that appear to be a priori, or even arbitrary, but are in
