Can Fascism Exist Without Capitalism?

Introduction: Understanding the Systemic Entanglement

The relationship between fascism and capitalism represents one of the most profound and historically significant interconnections in twentieth and twenty-first century political economy. This is not a superficial ideological alignment, nor can it be adequately explained through simple cause-and-effect relationships. Rather, the relationship between fascism and capitalism involves deep structural, material, and ideological roots that extend from the foundational contradictions inherent to capitalist systems themselves. To understand fascism is to understand a form of political domination that emerges specifically in response to the crises endemic to capitalist development, that mobilizes particular classes benefitting from capitalist relations, and that ultimately preserves capitalist property relations even while dramatically restructuring the political and social relations through which capital accumulation occurs.

A critical clarification must be made at the outset, for there is significant confusion regarding what “liberal capitalism” actually means. In contemporary political discourse, particularly in the United States, “liberal” has become synonymous with progressive politics, welfare-state expansion, and government regulation of markets. This represents a profound misunderstanding. Liberal capitalism, in its classical and contemporary meaning, refers to capitalism organized according to the principles of liberalism minimal government intervention in the economy, maximum individual economic freedom, private ownership and control of the means of production, and the operation of market forces to determine prices, production, and distribution.

Liberal capitalism is laissez-faire capitalism the ideology explicitly championed by the Republican Party and MAGA movement in the United States, which advocates for lower taxes, smaller government, free markets, deregulation of corporations, restrictions on labor unions, and the reduction of government-run welfare programs. The confusion arises because in much of Europe and political science terminology, what Americans call “liberalism” is actually “social liberalism” or “progressive liberalism” an ideology seeking to regulate capitalism through government intervention, redistribute wealth through taxation, and expand welfare provisions to address market failures and social need.

The distinction is crucial: liberal capitalism (what MAGA Republicans advocate for) is characterized by minimal government intervention, maximum reliance on market forces, and the freedom of private capital to accumulate without restraint. This stands in contrast to welfare capitalism or social democratic capitalism, where government actively intervenes to regulate markets, redistribute income, and provide social protections systems that seek to “temper raw capitalism” through democratic political power.

Understanding this distinction is essential because it reframes the fascism-capitalism relationship: fascism emerges not as a response to liberal capitalism’s failure to intervene enough in the economy, but rather as a response to liberal capitalism’s contradictions when those contradictions create crises of profitability and legitimacy, and when working-class organization threatens capital’s fundamental rule. Fascism uses the capitalistic system the framework of private property, profit-driven production, and market competition as the foundation upon which to assert totalitarian state control.

This analysis explores the multiple dimensions of fascism-capitalism connection: the economic structures fascist regimes established and their relationship to private property and capital accumulation; the class bases of fascist movements and their relationship to capitalist class interests; the historical conditions of capitalist crisis that give rise to fascism; the theoretical frameworks developed by Marxist, institutional, and liberal theorists attempting to explain this relationship; and the contemporary manifestations of fascist tendencies emerging from contradictions within modern capitalism. The contention advanced throughout this analysis is that while fascism and capitalism are theoretically distinct phenomena fascism being fundamentally a political system characterized by totalitarianism, militarism, and extreme nationalism rather than a necessary outgrowth of capitalist economics historically speaking, fascism has been inextricably linked to capitalist societies. Fascism has never emerged except in capitalist contexts, and there is compelling evidence suggesting that without capitalism, fascism could never have existed as a historical force.

The Intrinsic but Contingent Link: Theoretical Possibility versus Historical Reality

Before proceeding into detailed analysis, a fundamental theoretical clarification must be established: fascism can theoretically exist without capitalism, as it is fundamentally a political system characterized by totalitarianism, militarism, and extreme nationalism rather than a necessary outgrowth of capitalist economics. One might conceive of a fascist regime operating within a command economy where the state owns all means of production, maintaining totalitarian control, militaristic values, and extreme nationalism without the mechanisms of private property and capital accumulation that characterize capitalism.

However, this theoretical possibility must be sharply distinguished from historical reality. Historically, fascism has been inextricably linked to capitalist societies facing crisis. Fascism has consistently emerged in capitalist contexts where elites seek to preserve property relations and private wealth while crushing democratic and socialist challenges. This historical pattern without a single significant exception across the twentieth and twenty-first centuries suggests that while fascism and capitalism are technically distinct phenomena, they have proven deeply compatible and practically inseparable.

More precisely: while capitalism does not inevitably produce fascism (other political forms can manage capitalist rule), fascism has only emerged as a significant historical force within capitalist societies. The practical relationship is unidirectional: capitalism created the conditions, the classes, and the structural imperatives that made fascism possible and attractive to dominant elites. Without capitalism’s creation of the petty bourgeoisie, without capitalism’s periodic crises, without capitalism’s generation of working-class organization threatening capital’s rule, fascism would have no social base, no elites to finance it, and no structural reason for its emergence.

Thus, the thesis advanced here is this: fascism and capitalism are intrinsically linked. While theoretically they could exist apart, historically fascism is inseparable from capitalism because capitalism creates the necessary conditions for fascism’s emergence and provides the class interests fascism serves. Fascism is, in historical practice, capitalism’s totalitarian response to the contradictions capitalism generates.

Part I: The Theoretical Foundations of the Fascism-Capitalism Connection

Fascism as a Tool for Asserting Capitalist Control

At its most fundamental level, fascism functions as a mechanism through which capitalist elites assert and maintain control over the capitalist system when normal democratic and market mechanisms prove inadequate to the task. Fascism uses the capitalistic system preserving private property, market production, and profit accumulation as the foundation upon which to construct a totalitarian political state capable of suppressing all challenges to capitalist rule.

This point deserves emphasis: fascism does not reject capitalism or capitalism’s fundamental operations. Rather, fascism intensifies capitalism’s mechanisms while subordinating them entirely to state direction and nationalist ideology. The capitalist system continues to operate firms continue to produce commodities for profit, capitalists continue to accumulate capital, markets continue to function (albeit within state-mandated parameters). What capitalism loses under fascism is autonomy; what it gains is security from working-class challenge and democratic constraint.

Fascists explicitly recognized that they were using capitalism to assert control rather than dismantling it. As Mussolini articulated, fascism should be understood as a system preserving capitalism while transforming its political forms. The state would direct capital’s operations through corporatism and state intervention, but capital would remain the foundation of economic organization. Workers would lose all autonomous organization, labor would be completely controlled, and capital would accumulate without the restraints of democracy or unionization.

This represents a critical insight: fascism did not emerge to destroy capitalism but to save it. Capitalism, under conditions of crisis and working-class threat, requires fascism to restore the conditions for capital accumulation. Fascists use the capitalistic system to assert their control. There is compelling historical evidence that fascism has emerged specifically as a response to crises within capitalist systems. When capitalism faces legitimacy crises, economic instability, or threats from organized labor and socialist movements, fascism has served as a tool for protecting concentrated wealth and private property while eliminating democratic constraints.

The Marxist Framework: Fascism as Capitalist Class Response

The foundational theoretical understanding of fascism’s relationship to capitalism comes from Marxist analysis, particularly from the work of Leon Trotsky, Paul Sweezy, and subsequent Marxist theorists. This framework begins with a crucial insight: fascism does not represent a departure from capitalism or capitalism’s defense, nor does it emerge organically from fascist ideology alone. Rather, fascism represents a particular form of capitalist class rule that emerges when the normal mechanisms of capitalist domination parliamentary democracy, legal restraint, bureaucratic procedure can no longer adequately suppress working-class organization and socialist movements threatening to overturn capitalist property relations.

Trotsky’s analysis, developed during the rise of fascism in the 1920s and 1930s, identified fascism as a movement mobilizing the petty bourgeoisie the “frustrated middle class” squeezed between capital above and an organized working class below as a battering ram against working-class organizations. As Trotsky articulated in his works on fascism, “At the moment that the ‘normal’ police and military resources of the bourgeois dictatorship, together with their parliamentary screens, no longer suffice to hold society in a state of equilibrium the turn of the fascist regime arrives. Through the fascist agency, capitalism sets in motion the masses of the crazed petty bourgeoisie and the bands of declassed and demoralized lumpenproletariat all the countless human beings whom finance capital itself has brought to desperation and frenzy.”

This formulation contains several essential elements. First, fascism emerges as a response to capitalist crisis specifically the crisis of capital accumulation and the threat posed by working-class insurgency. Second, fascism relies on mobilizing not the dominant capitalist class directly, but rather the petty bourgeoisie small merchants, craftspeople, clerks, technicians, intellectuals, and small landowners who face economic destruction from both directions. Third, fascism’s function, from the capitalist class perspective, is to “smash the working class, destroy its organizations, and stifle political liberties when the capitalists cannot achieve these goals through normal democratic means.”

The Marxist analysis emphasizes that “the essence and function of fascism consist of the complete abolition of workers’ organizations and the prevention of their reconstruction.” Without this specific function the pulverization of working-class power fascism cannot be understood. It is not simply authoritarianism or dictatorship; it is a specifically capitalist form of totalitarianism aimed at resolving the political problem posed by an organized proletariat and revolutionary socialist movements.

Paul Sweezy’s analysis in The Theory of Capitalist Development develops this framework by emphasizing the international capitalist context. He argues that fascism emerges in nations “the economic and social structure of which is seriously disrupted as the result of an imperialist war of redivision” and which have failed to experience a successful socialist revolution. Under such conditions, capital faces a crisis of profitability and political control. Fascism becomes the solution through “an alliance with fascism” whereby “the capitalist class hopes to re-establish the strong state, subordinate the working class, and extend its vital ‘living space’ at the expense of rival imperialist powers.”

This international dimension is crucial: fascism is not merely a response to domestic working-class threat, but equally a response to the competitive dynamics of capitalism understood internationally. The capitalist states that developed fascism Germany, Italy, Japan were the ones most threatened by the redistribution of global markets and colonial territories following World War I and the establishment of Soviet power. Fascism promised both the destruction of internal revolutionary threat and the aggressive expansion necessary to regain lost imperial positions.

Karl Polanyi’s Analysis: Fascism and the Deadlock of Market Society

Karl Polanyi, working from a different theoretical tradition that blended institutional economics, historical sociology, and political theory, arrived at a complementary but distinct analysis of fascism’s roots in capitalism. Writing during the interwar period and in the immediate aftermath of World War II, Polanyi diagnosed fascism as a response to what he termed “the deadlock of market society.”

Polanyi’s central contention was that the nineteenth-century attempt to create a completely self-regulating market system the utopia of liberal capitalism created unprecedented social dislocations and suffering. The commodification of labor, land, and money generated resistances from multiple directions: organized labor movements, socialist and communist parties, democratic parties seeking to protect social welfare, and peasant movements resisting land dispossession. These countermovements gained political power, particularly following World War I, and used democratic state institutions to restrict capitalist market autonomy in the interests of social protection and stability.

The result was an irreconcilable conflict between two imperatives: the imperative of market actors (capitalists pursuing liberal capitalism) to maximize profit through unrestricted market operations, and the imperative of political actors (representing classes harmed by market operations) to restrain the market in the interests of social stability. Democratic institutions became the arena of this conflict, with neither side able to secure permanent dominance. This produced what Polanyi called a “deadlock” a situation of institutional paralysis where neither market interests nor protection-seeking interests could impose their preferred solution through normal democratic procedures.

In Polanyi’s analysis, fascism emerged as one of two possible solutions to this deadlock. The other solution was socialism the extension of democratic control into the economic sphere through planned economy and working-class state power. Fascism represented the capitalist solution: the violent destruction of the political impediments to market autonomy by destroying the organizations of labor, the left, and democratic institutions themselves. Polanyi’s crucial insight was that “fascism arose when liberal capitalism’s internal contradictions created an ‘impasse’ that could only be resolved through the abandonment of democratic institutions.”

From this perspective, fascism is not merely compatible with capitalism; it is capitalism’s potential response to its own systemic failures and the threat of working-class organization. When capitalism’s contradictions become acute, when the crises it generates become unbearable for the dominant classes, when working-class organization threatens to resolve those contradictions through socialism, fascism emerges as the capitalist class’s answer: preserve capitalism by any means necessary, including the complete destruction of democracy.

Critically, Polanyi emphasized that fascism was not anti-capitalist in any fundamental sense, despite its rhetorical attacks on certain forms of capitalism. Rather, “fascist philosophy envisioned a society of depoliticized subjects, purged of individualism and autonomy, organized into a social totality geared toward capitalist production and international conflict.” The goal was not to overthrow capitalism but to remove the democratic and organizational constraints that capitalism’s own success had generated.

Adorno and Horkheimer: Culture Industry and the Fascist Mentality

The Frankfurt School theorists Max Adorno and Theodor Horkheimer, writing from within capitalism but in exile from Nazi Germany, developed an analysis emphasizing the cultural and psychological dimensions of fascism’s relationship to capitalism. Their work in Dialectic of Enlightenment and subsequent writings identified what they termed the “culture industry” the industrialized, commodified production of culture as integral to both capitalist domination and fascist mobilization.

Adorno and Horkheimer argued that under capitalism, culture becomes just another commodity produced for mass consumption according to the imperatives of profit maximization. The culture industry manufactures desire, standardizes aesthetic experience, homogenizes diversity, and renders populations passive and docile consumers incapable of critical thought or autonomous action. Crucially, they made explicit connections between this capitalist culture industry and Nazi Germany: “Horkheimer and Adorno make consistent comparisons between Fascist Germany and the American film industry. They highlight the presence of mass-produced culture, created and disseminated by exclusive institutions and consumed by a passive, homogenised audience in both systems.”

The implication is that fascism does not represent a departure from capitalist culture but rather its logical culmination the complete subsumption of human consciousness and creativity into the imperatives of profitable production and political domination. Where capitalism creates atomized, consumption-oriented subjects stripped of authentic community and autonomous will, fascism mobilizes these subjects through the culture industry in service to the totalitarian state. The two systems, while appearing opposed, share the common project of eliminating genuine human autonomy and freedom.

Antonio Gramsci: Hegemony, Fascism, and Passive Revolution

Antonio Gramsci, the Italian Marxist imprisoned by Mussolini and writing his Prison Notebooks under fascism, developed a framework that understood fascism as a particular form of capitalist hegemony. For Gramsci, capitalist rule operates through two coordinated mechanisms: force (exercised by the state’s repressive apparatus) and consent (manufactured through civil society institutions media, education, churches, associations, etc.). Under normal conditions, the ruling class maintains hegemony primarily through consent, allowing subordinate classes limited participation and satisfaction of certain demands.

Fascism, in Gramsci’s analysis, represents a breakdown of this hegemonic equilibrium. When the ruling class can no longer manufacture sufficient consent, when working-class and peasant movements threaten to break hegemonic control, the capitalist class resorts to what Gramsci termed “passive revolution” a restructuring of capitalism that maintains bourgeois class rule while dramatically changing its forms. Fascism is one such passive revolution: it uses naked force to destroy working-class organizations and democratic institutions, but it does so in the name of national regeneration, social harmony, and the interests of the nation rather than openly in the interests of capital.

Gramsci’s analysis suggests that fascism represents not a negation of capitalism but rather capitalism’s attempt to restore hegemonic stability through extreme forms of violence when consent-based mechanisms have failed. The capitalist state retains its fundamental character as an instrument of class rule, but the specific institutional form and methods change dramatically.

Part II: Economic Structures and Mechanisms of Fascist Capitalism

The Preservation of Private Property and Capital Accumulation

One of the most fundamental characteristics distinguishing fascism from socialism is its absolute preservation of private property relations and capitalist commodity production. This is not a secondary feature but rather the economic foundation upon which fascist political structures rest. Understanding fascism requires grasping that while fascist regimes dramatically expanded state intervention in economic life, they did not eliminate private ownership of the means of production. Rather, they subordinated private property to state direction while preserving the profit motive and property rights.

As the Econlib encyclopedia entry on fascism explains: “Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners.” The state did not take ownership of factories, mines, banks, and commercial enterprises; rather, it dictated how these privately-owned assets would be utilized, what would be produced, at what prices, with what labor costs, and to what profit margins. The owners retained legal title and the right to profit; they lost the autonomy to make economic decisions independent of state direction.

This arrangement is not accidental but represents a fundamental feature of fascism’s appeal to capitalist classes. Capitalists retained their property and continued to accumulate capital indeed, under Nazi Germany and Fascist Italy, capitalist profits often rose significantly compared to pre-fascist periods. The quid pro quo was the acceptance of state dictation regarding production decisions and the guarantee that no socialist or communist movement would challenge private property relations. As historian Adam Tooze noted regarding German business support for Nazism, business leaders became “willing partners in the destruction of political pluralism in Germany” because they understood that fascism would preserve their property rights and eliminate working-class threats to capital’s authority.

Nazi Germany provides the paradigmatic case. Following Hitler’s appointment as Chancellor, German business groups made substantial financial contributions to the Nazi Party, calculating that a Nazi dictatorship would deliver what democracy had failed to provide: elimination of organized labor, suppression of socialist and communist parties, and the freedom to restructure production according to capital’s needs. In exchange, business leaders knew their property rights were secure. The Nazi regime never nationalized German industry; instead, it extended state control over private firms through cartels, licensing requirements, production mandates, and the threat of violence against any disobedience.

As one source notes: “Business profits also rose very rapidly, as did corporate investment” under Nazism. Far from being economically hostile to capital, fascism proved an effective mechanism for restoring capitalist profitability precisely because it eliminated the constraints on capital accumulation that had been imposed through working-class organization and democratic political pressure. Workers’ wages were frozen, collective bargaining was abolished, the right to strike was eliminated, and working hours were extended, all while capitalist profit rates climbed.

Corporatism: The Merger of State and Capital

The economic form fascism adopted to achieve this subordination of private property to state direction while preserving capital accumulation was corporatism. This represents perhaps the most distinctive economic institutional form of fascism, and understanding it is essential to grasping how fascism managed the contradiction between private property and totalitarian state control.

Corporatism, in the fascist formulation, was theoretically presented as a “third way” between liberal capitalism and socialism. Mussolini explicitly articulated this when he stated that “Fascism should more appropriately be called Corporatism because it is the merger of state and corporate power.” The corporate state was supposed to organize society into occupational groupings corporations representing all producers in each economic sector. Rather than workers and employers competing through market forces or negotiating through autonomous unions and employer associations, they would be organized into state-controlled corporations where representatives of workers and employers would jointly determine production, prices, wages, working conditions, and the size of firms, all ostensibly in service to the national interest.

In theory, this promised to harmonize class interests, eliminate the class conflict generated by capitalism, and direct economic activity toward national goals rather than private profit. In practice, corporatism functioned to subordinate both workers and employers to state control while ensuring that capital retained ultimate authority and continued to accumulate profit. The critical distinction is that fascist corporatism was fundamentally distinct from syndicalist models that had influenced some early fascist thinking. While syndicalism envisioned worker control of production through unions and cooperatives, fascist corporatism was explicitly hierarchical, with the state at the apex dictating terms to both workers and employers.

As the detailed analysis of Italian fascist corporatism reveals, while the system appeared to grant formal representation to workers through labor syndicates, “the configuration of fascism was far from a government of the petty bourgeoisie” or workers. Instead, “it is the most ruthless dictatorship of monopoly capital.” Labor unions were replaced by mandatory state-controlled organizations; collective bargaining was eliminated; strikes were forbidden; and wages were set by state officials in consultation with employers. The supposed harmony of interests meant that workers’ interests were simply overridden whenever they conflicted with capital’s demands or the state’s priorities.

For employers, corporatism provided both security and enhanced control. The state guaranteed that there would be no working-class uprising, no independent unions, no labor unrest. In exchange, employers had to operate according to state directives regarding production. As one analysis notes, “corporatism appears to have expanded state power not only over the workers, but also over employers, who had enhanced economic power but were unable to impact national policy outside their industries, forced to submit to the national interests as defined by the Fascists.” However, this subordination was fundamentally asymmetrical: employers’ property rights and profit-making capacity were guaranteed and enhanced, while workers were stripped of all autonomous organization and reduced to obedient labor power.

The operation of corporatism in practice demonstrates this dynamic. In Italy, particularly after 1934, Mussolini boasted that “three-quarters of the Italian economy, industrial and agricultural, is in the hands of the state,” achieved through the creation of the Institute for Industrial Reconstruction (IRI). Yet this did not represent nationalization in the socialist sense. Rather, IRI became a holding company that coordinated private firms, directed their production, and ensured their profitability while preventing them from acting independently. By 1939, Italy had achieved “the highest rate of state-ownership of an economy in the world other than the Soviet Union,” with the state controlling “over four-fifths of Italy’s shipping and shipbuilding, three-quarters of its pig iron production and almost half that of steel.” Yet throughout this massive expansion of state control, private firms retained ownership and continued to profit.

Cartels, Monopoly Capitalism, and State Direction

Closely related to corporatism was the fascist reliance on cartels and monopolistic industrial organization. Fascist regimes across Europe dramatically extended cartelization of industry, using state power to mandate that competing firms form cartels to coordinate production, prices, and labor costs. In Germany, cartels became the mechanism through which the Nazi state coordinated the economy without direct nationalization. Large firms in chemicals (I.G. Farben), armaments (Krupp), and other strategic sectors agreed to cartelization in exchange for guaranteed profitability and elimination of working-class resistance.

This cartelization represented an intensification of monopoly capitalism the concentration of economic power in fewer and larger firms. By the time fascism emerged in the 1920s and 1930s, capitalism had already undergone significant concentration, with large cartels and monopolistic firms dominating major sectors of the economy. Fascism accelerated and politicized this concentration, using state power to eliminate the remnants of competitive capitalism and to ensure that only large, state-coordinated firms survived.

The relationship between industrial concentration and fascism’s rise is not coincidental. Research examining the role of industrial monopolies in Nazi Germany concludes that “industrial concentration did facilitate the rise of Nazism and, particularly, its consolidation of power.” Large firms like Krupp, I.G. Farben, and Siemens possessed bureaucratic and organizational resources that the nascent Nazi Party lacked. These monopoly firms provided organizational models for state coordination of the economy; they provided crucial financial support; and crucially, the existing cartel structures were easily appropriated by the Nazis as mechanisms to enforce state control over the entire economy.

As one detailed analysis explains, the connection operates through several mechanisms: “a Faustian bargain in which dominant firms exchanged financial and other material support for Hitler for implicit guarantees that their dominant positions would be protected and furthered in the new regime; the ability of monopoly firms to lend the Nazi Party bureaucratic and organizational resources capable of dominating entire industries and swaths of German society; cartel structures that were easily appropriated by the Nazis to centralize power over industry, coerce unwilling firms to follow the regime’s policies, monitor dissidents, and generally steer the course of industry to the regime’s purposes.”

Thus fascism did not emerge from free competitive capitalism but rather from its monopolistic phase what Marxist theorist Jürgen Kuczynski characterizes as “monopoly capitalism,” which preserves “the fundamental traits of capitalist production,” such as production for the market by privately owned firms employing workers for wages, but under conditions of extreme concentration and state direction.

Military Production and Rearmament: Militarized Capitalism

A critical dimension of fascist economic structures was the massive redirection of economic resources toward military production and rearmament. This was not incidental to fascism but rather constitutive of its economic system. Fascist regimes simultaneously eliminated unemployment, restored capitalist profitability, and prepared for imperial war through military Keynesianism the deliberate use of military spending to stimulate economic growth and employment.

Nazi Germany’s economic recovery in the 1930s, often cited as evidence of fascism’s economic success, was achieved primarily through massive rearmament. As unemployment had reached nearly 30% during the Great Depression, the Nazi regime initiated a comprehensive rearmament program that redirected millions of workers into arms production, military service, and military-construction projects. By 1935, unemployment had declined significantly, not through genuine economic recovery but through military mobilization.

This militarized economy served multiple functions for fascism. First, it solved the capitalist problem of unemployment a constant threat to social stability under capitalism by absorbing surplus labor into military production and military service. Second, it restored capitalist profitability by guaranteeing enormous markets for armaments and military equipment, with the state absorbing all risk and ensuring profit. Third, it prepared the military-industrial capacity necessary for imperial war, which fascist ideology identified as the solution to the resource and market constraints that capitalism faced.

Paul Kalecki, a Polish Marxist economist writing during World War II, identified this dynamic incisively. The problem capitalism faces, Kalecki argued, is that permanent full employment is “unsound from the point of view” of capitalist class interests because it would eliminate the wage-suppressing effects of unemployment. However, military spending provided a mechanism to achieve full employment while simultaneously enriching capitalists through military contracts. “One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment.”

The interconnection between fascist political domination and military-industrial capitalism reveals a profound structural relationship: fascism requires militarism not merely as political ideology or expression of aggressive nationalism, but as economic necessity. Capitalism in its monopolistic phase, facing chronic problems of overproduction and underconsumption, requires vast military spending to absorb surplus capital and ensure continued profitability. Fascism, as a form of capitalist state power, institutionalizes this militarism as permanent economic policy.

Part III: Class Composition and the Social Base of Fascism

The Petty Bourgeoisie and Economic Anxiety

The mass base of fascism the social classes that provided fascist movements with millions of followers, the personnel for fascist organizations, and the voters who brought fascists to power was not the working class but rather the petty bourgeoisie. This is a crucial distinction for understanding fascism’s relationship to capitalism. Fascism does not represent working-class interests even when it mobilizes working-class support; rather, it mobilizes the intermediate classes threatened by both capital and labor, redirects their anxiety and rage away from capitalist relations themselves, and channels this mobilized population against the organized working class.

Trotsky characterized the petty bourgeoisie as “human dust” a vast, heterogeneous class including small artisans and merchants, clerks, technicians, accountants, teachers, small landowners, and professionals whose economic position is perpetually precarious. These classes own small amounts of capital a shop, a farm, a small business but lack the economies of scale of large monopoly capital. They are constantly threatened with proletarianization the loss of their property and descent into wage labor. Simultaneously, they are conscious of their distinction from workers and aspire to join the wealthy bourgeoisie.

The Great Depression and the broader capitalist crises of the early twentieth century devastated the petty bourgeoisie. Farmers faced foreclosure and bankruptcy. Small shopkeepers were driven out of business by chain stores and department stores. Clerks and professionals faced unemployment. The value of savings evaporated through inflation. This economic destruction created what Umberto Eco termed the “appeal to the frustrated middle classes, disquieted by economic crisis or political humiliation and frightened by social pressure from below.”

Crucially, the petty bourgeoisie’s crisis was not merely economic but also ideological and psychological. The petty bourgeois consciousness is fundamentally antagonistic to working-class organization and socialism. Small property owners view the organized working class not as fellow exploited people but as a threat to their property and their dream of upward mobility into the capitalist class. When both capitalism and socialism appear to be failing them when economic crisis destroys their livelihoods and socialist organization promises expropriation of their property they become available for political movements promising to restore order, national greatness, and their position in a stable hierarchy.

Fascism provided this promise. It offered to the petty bourgeoisie a vision of national renewal in which they would reclaim their rightful position. It blamed capitalism’s failures on corruption, cosmopolitanism, and foreign influence rather than capitalism itself. It blamed working-class power for the chaos and disorder that threatened their property. And it promised to restore a harmonious social order in which everyone knew their place, in which traditional values would be reinstated, and in which national strength would be rebuilt.

The Marxist analysis emphasizes that fascist movements actively mobilized the petty bourgeoisie precisely because of their economic anxiety and class consciousness. As Trotsky explained, fascism “mobilizes the classes which are immediately above the proletariat, and which fear falling to its level; it organizes and arms them by means of finance capital, under the protection of the official State, directing them towards the destruction of all proletarian organizations.” The petty bourgeoisie became the foot soldiers of fascism, the mass base that carried out the violent destruction of working-class organizations, unions, and leftist parties.

The Lumpenproletariat and Declassed Elements

Beyond the petty bourgeoisie, fascism also mobilized what Marx termed the lumpenproletariat the declassed layers of the population, those without stable employment or regular access to wage labor. In the context of capitalist crisis and chronic unemployment, the lumpenproletariat grew dramatically. These included unemployed workers, chronically underemployed individuals, homeless people, released prisoners, and other marginalized populations.

Capitalism itself creates this lumpenproletariat through its normal operations. The constant drive to increase productivity through mechanization and rationalization throws workers out of employment. The boom-and-bust cycles of capitalism create periodic mass unemployment. Wars, depression, and economic restructuring displace populations. These declassed and demoralized elements possess no organizational resources, no stable connection to the labor process, and no stake in the existing order. They exist in a state of perpetual precarity and desperation.

Fascism consciously recruited these elements, offering them a sense of purpose, community, and occasional material sustenance through fascist organizations, paramilitary groups, and make-work programs. The lumpenproletariat provided the shock troops for fascist street violence, the members of organizations like the Nazi SA (Stormtroopers) or the Italian blackshirts who carried out the physical destruction of leftist organizations.

As Trotsky explained, fascism mobilizes “the bands of declassed and demoralized lumpenproletariat all the countless human beings whom finance capital itself has brought to desperation and frenzy.” The crucial point is that capitalism itself creates the conditions for these elements’ availability for fascist mobilization. Fascism does not contradict capitalism; rather, it exploits the misery that capitalism generates among the excluded and marginal to destroy the organized power of those who threaten capital’s rule.

The Capitalist Class: Reluctant but Decisive Support

While the petty bourgeoisie and lumpenproletariat provided fascism’s mass base, fascism’s consolidation of power required support from the capitalist class specifically the largest industrial and financial capitalists, the monopoly capital controlling the most significant sectors of the economy.

The relationship between big capital and fascism is complex and often misrepresented. It is not the case that capitalists created fascism or consciously planned its rise. Fascism emerged initially as a mass movement of small property owners, declassed elements, and radical elements from the left (many early fascists, including Mussolini, came from the socialist movement). Capitalists initially regarded fascist movements with some suspicion and did not provide major financial support.

However, as fascist movements demonstrated their capacity to destroy working-class organizations through street violence and as the threat of socialist revolution became acute during the economic crises of the late 1920s and early 1930s, capitalists reassessed. Faced with the choice between parliamentary democracy that constrained their power and fascist dictatorship that would destroy the left entirely, capitalists increasingly threw their support behind fascism.

German industrial capitalists provide the paradigmatic case. The major industrialists Krupp, I.G. Farben, Siemens, and others were reluctant supporters of Hitler until 1933. After the banking crisis of 1931 and the rise of Nazi electoral strength, major industrialists concluded that Hitler was preferable to the chaos of parliamentary politics and the threat of communist revolution. They provided crucial financial support in the 1932-1933 period. Gustav Krupp, head of the Krupp steel empire, “embraced Nazism shortly prior to the seizure of power by the Nazi Party and continued his allegiance thereafter. He played an important part in bringing to Hitler’s support other leading industrialists and through the medium of the Krupp firm… from time to time made large scale contributions to the [Nazi] Party Treasury.”

Once fascists assumed power, capitalists discovered that they had made a profitable bargain. The Nazi regime delivered everything capitalism needed: the destruction of independent labor unions, the suppression of strikes and working-class organization, the elimination of communist and socialist parties, guaranteed markets for armaments and military production, and the possibility of imperial expansion to overcome resource constraints. In exchange, capitalists retained their property rights, continued to accumulate capital at enhanced rates, and had their political interests represented by the fascist state.

The relationship is often described as a “Faustian bargain” capitalists gained what they wanted but lost political autonomy to the fascist leadership. Yet this characterization must be carefully understood: capitalists’ loss of political autonomy was limited and compensated by the total victory over their class enemies. As long as fascism preserved private property, ensured profitability, and protected capital’s fundamental interests against the working class and socialists, capitalists were willing to cede political decision-making to fascist leaders.

One contemporary analysis captures this dynamic: “In exchange, owners and managers of German businesses were granted unprecedented powers to control their workforce, collective bargaining was abolished and wages were frozen at a relatively low level. Business profits also rose very rapidly, as did corporate investment.” This was an arrangement that capitalists could live with even flourish under indefinitely.

Part IV: Historical Conditions: Capitalist Crisis and Fascism’s Emergence

The Great Depression and Economic Catastrophe

The historical emergence of fascism is inseparable from the Great Depression and the broader capitalist crises of the early twentieth century. While fascist ideology existed before the Depression, fascist movements remained marginal until economic catastrophe created the conditions for their mass mobilization. The Depression did not cause fascism in a mechanistic sense, but it created the specific conditions of mass desperation, class conflict, and institutional breakdown that made fascism a viable political project.

The Great Depression of 1929-1933 represented a profound crisis of capitalist reproduction. In Germany, which had depended heavily on American loans for economic recovery after World War I, the collapse was catastrophic. Unemployment reached nearly 30% by 1932. Industrial production collapsed. Banks failed en masse. Government debt accumulated. The middle classes watched their savings evaporate through currency devaluation.

The Depression revealed the bankruptcy of liberal capitalism’s promises. Liberal capitalism, with its ideology of minimal government intervention, free markets, and laissez-faire economics, offered no solution to mass unemployment. The government, fearing a return of hyperinflation, refused to engage in expansionary spending. The elected political parties whether conservative, liberal, or social democratic seemed incapable of addressing the crisis. Democracy itself appeared weak and ineffective.

It was precisely under these conditions that fascism rose to electoral prominence. As the unemployment queues lengthened, Hitler’s vote totals grew. The Nazi Party received minimal votes in the 1928 elections but rose to become the largest party by 1932, riding the wave of mass desperation and the perceived failure of democracy and liberal capitalism. Fascism offered what democracy and liberal capitalism could not: apparent strength, decisive action, and promise of national renewal through state intervention, rearmament, and imperial expansion.

Capitalists, facing the prospect of communist revolution (communist parties were also growing in electoral strength), calculated that fascism was preferable to democracy’s apparent inability to govern or suppress the left. The banking crisis of 1931, particularly the failure of Danatbank, proved decisive. Research demonstrates that “in locations exposed to Danatbank there was a clear upward shift in voting for the Nazis.” The financial system’s collapse demonstrated that normal capitalism and liberal market mechanisms had failed; fascism offered a way to restore order and state power capable of imposing order and protecting capital.

Unemployment, Economic Anxiety, and Fascist Mobilization

Beyond the aggregate economic collapse, the Depression created conditions of mass unemployment and economic anxiety that proved crucial for fascist mobilization. The psychological and social effects of chronic unemployment extended far beyond loss of income. Unemployment destroyed workers’ sense of dignity, purpose, and identity. It broke social bonds. It created desperation.

For the petty bourgeoisie, unemployment of family members meant economic ruin. Small shopkeepers and farmers, already marginalized by larger capitalist enterprises, faced absolute destruction. Young educated professionals teachers, engineers, administrators faced unemployment and the prospect of permanent downward mobility.

This economic anxiety was channeled by fascist propaganda into rage against specific targets: communists and socialists who supposedly threatened capitalism and order; Jewish people whom Nazi ideology blamed for both capitalism and communism; unions and labor leaders supposedly responsible for inflation and conflict; and finally, democracy itself as a weak and ineffective system incapable of restoring order.

Crucially, fascist propaganda did not blame capitalism itself for the crisis. Rather, it blamed corrupted or failed capitalism, capitalism led astray by particular groups (communists, Jews, immigrants, corrupt elites), and promised that fascism would restore capitalism to health through nationalist discipline and unity, state intervention to direct capital toward productive purposes, and imperial expansion.

Capitalist Crisis and the Imperative of Working-Class Suppression

The underlying structural condition for fascism’s emergence was not merely economic depression but the specific threat posed by organized working-class movements. In Germany and Italy, as in other advanced capitalist countries, the immediate post-World War I period had witnessed revolutionary uprisings of workers attempting to establish communist governments. In Germany, the Spartacist Uprising of 1919 and later armed conflicts threatened the capitalist state’s existence. In Italy, the “Biennio Rosso” (Red Biennium) of 1919-1920 saw factory occupations, general strikes, and the emergence of powerful communist organizations.

These revolutionary movements were defeated, but their organizations labor unions, socialist parties, communist parties remained powerful forces in European politics. They continued to threaten capital through strikes, mass organization, and electoral activity. The establishment of the Soviet Union provided an organizational and ideological model for these movements.

For the capitalist classes of Germany and Italy, the central political problem was how to prevent working-class revolution while maintaining capitalism. Parliamentary democracy, with universal male suffrage and mass electoral politics, gave the organized working class significant political power. Socialist and communist parties could make electoral gains. Unions could organize strikes. The state, while formally a capitalist state, had to make concessions to working-class pressure.

Fascism offered the solution: the complete suppression of working-class organization without the need for socialism. As Trotsky explained, “the bourgeoisie through the fascist agency solved this problem by crushing its enemies and opponents with violence, preventing any organization of its rivals.” The specific historical function of fascism was to accomplish what parliamentary capitalism could not: the total destruction of working-class power.

One contemporary analysis articulates this with precision: “Fascism can come to power ‘at the moment that the ‘normal’ police and military resources of the bourgeois dictatorship, together with their parliamentary screens, no longer suffice to hold society in a state of equilibrium’ and to guarantee the profits of the capitalists.” When parliamentary mechanisms of class rule fail to suppress working-class power adequately, the capitalist class turns to fascism as an extraordinary mechanism of coercion.

Part V: Ideological Dimensions and the Capitalist Basis of Fascist Ideology

Nationalism, Imperialism, and Capitalist Expansion

Fascism’s extreme nationalism and imperial ideology are not incidental to its relationship with capitalism but rather expressions of capitalism’s internal dynamics. Fascism’s emphasis on national greatness, national expansion, and imperial conquest reflect capitalism’s competitive character and its need for continuous expansion of markets, resources, and spheres of capital investment.

Capitalism, as a global system, necessarily involves competition between capitalist states for control of markets, raw materials, colonies, and spheres of investment. This competition is “solved” at different historical moments through different mechanisms: colonial empire-building, competitive trade wars, or military conquest. The late nineteenth and early twentieth centuries witnessed the division of the world among the imperial powers. However, some capitalist powers Germany, Italy, Japan were excluded from this imperial division or came to see their position as threatened by rival imperial powers.

Fascist ideology, with its emphasis on the nation as the supreme unit of loyalty, on the inevitability of national struggle, and on the necessity of imperial expansion to secure resources and living space, articulated capitalism’s need for imperial expansion in the language of national rebirth.

Hitler’s concept of Lebensraum (living space) directly expressed this capitalist need: Germany required conquered territories in Eastern Europe to secure resources, agricultural land, and markets necessary for capitalist development and population growth. The Nazi ideology of racial hierarchy was deployed to justify this imperial conquest as a natural expression of superior German (Aryan) peoples conquering inferior races.

As Hannah Arendt analyzed, nineteenth-century imperialism the first wave of European capitalist expansion had already normalized the categories of racial hierarchy and nationalism that fascism would elevate to totalitarian ideology. “Nineteenth-century imperialism, with its pursuit of power and profit, transformed European politics and contributed to the disintegration of the sovereign nation-state” and “contributed to the politicization of race” as a justification for imperial conquest.

Fascism synthesized these capitalist imperialist impulses into totalitarian ideology and practice, using the state’s full power to mobilize society for imperial war and conquest in service to capitalist expansion.

Anticommunism and Anti-Socialism as Defense of Capitalism

Fascism’s virulent anticommunism and anti-socialism represent not a fundamental opposition to any form of authoritarianism but rather a specific defense of capitalist property relations against their negation by socialist and communist movements. Fascism’s anticommunism is rooted in capitalism’s need to prevent the working class from successfully expropriating capital and establishing socialism.

Fascists, particularly Nazis, recognized communism and socialism as existential threats to capitalism. These movements explicitly advocated for the expropriation of capital, the elimination of private property in the means of production, and the establishment of working-class state power. Fascists understood that if communism succeeded, capitalism would be destroyed. Therefore, anticommunism became fascism’s central ideological mission.

Nazi ideology went further, developing conspiracy theories linking communism to Jewish capitalism and claiming that both were Jewish creations meant to undermine Germanic (or national) strength and independence. This ideological move attempted to reconcile fascism’s sometimes contradictory attacks on both capital and communism by positing that both were expressions of foreign, Jewish, cosmopolitan influence corrupting the nation.

But the fundamental reality was that anticommunism meant defense of capitalist property relations. Any movement threatening the expropriation of capital faced fascist repression. Moderate socialists advocating democratic reform of capitalism faced persecution. Syndicalists advocating worker control through unions faced elimination. Communists advocating revolution faced extermination. All were presented as enemies of the nation, but they were fundamentally threats to capital.

Patriarchy and Gender Oppression as Capitalist Reproduction

Fascism’s extreme patriarchy and the rigid assignment of women to reproductive and domestic labor roles reflect and intensify the patriarchal structures fundamental to capitalist societies. While sometimes presented as fascism’s return to traditional values, fascist patriarchy was actually a modern restructuring of women’s role in capitalist reproduction adapted to fascism’s needs.

Fascist regimes, particularly Italy and Germany, enacted policies explicitly designed to maximize female reproduction and restrict women’s labor-force participation. In Italy, women with large families were granted tax breaks and monetary compensation, economically incentivizing reproduction while pushing women out of wage labor. Nazi ideology emphasized women’s duty to the nation through childbearing, with incentives for “racially fit” women to bear children and restrictions on “racially unfit” women’s reproduction.

These policies served multiple capitalist functions. First, they secured a reproducing working-class population. Capitalism requires constant reproduction of the working class workers must be born, fed, clothed, and educated so they can be exploited as wage laborers. This reproductive work is overwhelmingly performed by women without compensation and is essential to capitalism’s functioning. Fascism intensified state control over women’s reproductive labor to ensure continuous working-class reproduction.

Second, by pushing women out of wage labor into domestic reproduction, fascist patriarchy reduced competition for jobs and facilitated wage suppression for remaining workers. With women confined to unpaid household labor, fewer workers competed for wages, which could be driven downward.

Third, fascist patriarchy reinforced hierarchical social structure. If women, as more than half the population, were assigned subordinate roles based on biological sex and confined to household dependency, this demonstrated that social hierarchy and obedience to authority were natural and inevitable. Everyone except men of certain races/nations should accept their assigned place.

Contemporary scholarship articulates how patriarchy is intrinsic to capitalist reproduction rather than merely fascism’s idiosyncratic feature: “Patriarchal structures are weaved into the nature of capitalism, as they help define classes and create roles for the division of labour.” Fascism did not invent capitalist patriarchy; rather, it intensified and weaponized existing patriarchal structures in the interests of fascist state power and capital accumulation.

Social Darwinism, Eugenics, and Capitalist Competition

Fascist ideologies of racial hierarchy, eugenics, and the glorification of struggle and competition derive from and reflect capitalist ideologies of social Darwinism. These ideologies attempt to naturalize capitalism’s competitive character and justify the massive inequalities and suffering it generates by appealing to pseudo-scientific theories of biological evolution and natural selection.

Social Darwinism emerged in the late nineteenth century as a philosophical justification for competitive capitalism. Herbert Spencer and others argued that the competitive struggle for survival in capitalist markets mirrored biological evolution, with the strong (wealthy capitalists) naturally succeeding and the weak (poor workers) naturally failing. This ideology justified both the exploitation of workers and the colonization of non-European peoples, presenting them as the inevitable result of natural selection.

Fascism, particularly Nazism, absorbed these social Darwinist ideas and extended them from individual and class competition to racial and national competition. Nazi ideology claimed that races were engaged in a perpetual struggle for survival and supremacy, with the Aryan race destined to dominate through its superior biological qualities. This ideology provided the justification for genocidal racism, eugenics policies, and imperial conquest.

Critically, Nazi social Darwinism did not reject capitalism or competition; rather, it synthesized capitalism’s competitive character with racial ideology. “Nazi social Darwinist beliefs led them to retain business competition and private property as economic engines.” The Nazi regime preserved capitalist competition among firms (regulated and directed by the state) while extending competitive struggle to the biological and racial realm through eugenics and racial purification.

The connection between capitalist competition and fascist racism demonstrates how fascism does not contradict capitalism’s fundamental logic but rather extends it into new domains. Capitalism’s fundamental organizing principle competition for resources, markets, and survival among self-interested units (individuals, firms, nations) naturally generates ideologies justifying this competition. When these competitive ideologies are racialized and nationalized, they become fascist ideology. Fascism thus represents not a negation of capitalism but the radicalization of capitalism’s competitive logic into totalitarian form.

Part VI: Fascism and the Destruction of Working-Class Power

The Suppression of Labor Unions and Independent Organizations

Understanding fascism requires understanding it as fundamentally a political response to the organized power of the working class. The destruction of independent labor organizations represents fascism’s central economic and political function. Fascism does not merely regulate labor or impose unfavorable labor conditions; rather, it aims at the complete elimination of autonomous working-class organizations and the reduction of workers to atomized, powerless individuals subject to absolute state control.

In Nazi Germany, this process occurred rapidly and systematically. When the Nazis assumed power in January 1933, Germany possessed one of the world’s largest and most powerful labor movements. The free trade union movement counted millions of members organized into powerful federations. Socialist and communist parties represented millions of voters. Works councils and union organizations provided workers with structures for collective action and representation.

The Nazi regime’s response was swift and total. After the manufactured Reichstag Fire in February 1933, the regime suspended civil liberties and arrested communist and socialist leaders. In May 1933, shortly after the international workers’ day celebrations, the Nazi regime outlawed all independent labor unions. The regime’s paramilitary stormtroopers raided union offices across the country, beat union officials, murdered many, and arrested thousands for imprisonment in concentration camps like Dachau.

Crucially, Dachau was “specially built to imprison and murder trade unionists, members of the Communist Party (KPD), the Social Democratic Party (SPD) and other dissidents.” The targeting of union and leftist leaders reveals fascism’s true enemy: organized working-class power.

In place of independent unions, the Nazi regime created the German Labor Front (DAF), a state organization that workers were forced to join. The DAF was explicitly controlled by the Nazi party and employers, not workers. Collective bargaining was abolished. The right to strike was eliminated. Wages and working conditions were set by state officials in consultation with employers, with workers having no voice.

The result was the complete powerlessness of the working class. Wages were frozen while working hours increased by 20 percent. Workers could not organize, strike, or resist. The labor process became subject to absolute state control and employer dictation. What capitalism had struggled to achieve through economic and political competition the complete subordination of labor to capital fascism accomplished through state terror and totalitarian control.

Similar processes occurred in Italy and other fascist regimes. In Italy, more than 30,000 railway workers were sacked after Mussolini came to power. Union leaders were arrested and imprisoned. By 1926, only fascist organizations were allowed to represent workers. The pattern was consistent across fascist states: the total destruction of independent working-class organizations and the reduction of workers to powerless individuals subject to state and employer control.

The Lumpenproletarianization of Labor and the Creation of Desperation

Fascism’s suppression of labor organizations occurred simultaneously with the objective impoverishment and precarity of the working class. Wages were frozen or reduced. Employment became insecure, with workers subject to dismissal at the will of employers and the state. Working conditions deteriorated. Any resistance or insubordination meant not merely job loss but arrest and imprisonment.

This transformation of the working class from a potentially dangerous organized force into a lumpenproletarianized, desperately poor, and terrified population served multiple functions for capitalism and fascism. First, it eliminated the working class as an organized political force. Without unions, without parties, without protected spaces for assembly and discussion, workers could not coordinate collective action. Their atomization rendered them powerless.

Second, it suppressed wages and enhanced capitalist profitability. Wages could be driven downward without fear of strike action. Working hours could be extended. Safety conditions could be degraded. All of this meant enhanced profit extraction from labor.

Third, the desperate precarity of workers’ conditions bound them to dependence on the state and fascist authorities for survival. The state controlled access to employment. It determined wages and conditions. Workers, stripped of their organizations and facing starvation, became dependent on the state and fascist authorities for their very survival. This dependence was further intensified by state surveillance, propaganda, and the ever-present threat of arrest and concentration camps.

Part VII: The Contemporary Manifestations of Fascism-Capitalism Connections

The Financial Crisis of 2008 and the Resurgence of Right-Wing Populism and Fascism

The historical analysis of twentieth-century fascism’s roots in capitalist crisis finds contemporary relevance in the aftermath of the 2008 financial crisis and the subsequent rise of fascistic movements and right-wing populism worldwide.

The 2008 financial crisis represented the most severe capitalist crisis since the Great Depression. The collapse of the housing market, the failure of major financial institutions, and the near-total seizure of credit markets created conditions of economic catastrophe. Unemployment spiked. Millions lost their homes. Entire regions experienced economic devastation. The state intervened with massive bailouts for financial institutions, while workers and the poor received minimal relief.

Crucially, this represented a profound legitimacy crisis for the political establishment and liberal capitalism. The ideology of free markets, deregulation, and the efficiency of capitalist competition had dominated the previous three decades under neoliberalism an intensified form of liberal capitalism advocating for minimal government intervention, deregulation, privatization, and the suppression of labor organization. The financial crisis revealed this ideology as bankrupt. Yet the political response massive state bailouts of capitalist institutions while austerity was imposed on workers further delegitimized the system.

As Joseph Stiglitz, a Nobel Prize-winning economist, has analyzed, neoliberal capitalism created the conditions for fascism’s contemporary resurgence. Decades of neoliberal policies union-busting, privatization, deregulation, and financial deregulation had intensified inequality and economic precarity for the vast majority of the population. The wealthy and corporations benefitted from state protection and bailouts while workers faced austerity. This generated mass alienation from liberal democratic institutions and the political parties defending the capitalist system.

In this context, right-wing populist and fascistic movements emerged. In the United States, the Trump movement, while not fully fascist, incorporated fascistic elements: extreme nationalism, attacks on democratic norms, scapegoating of immigrants and minorities, and appeals to restore national greatness. In Europe, explicitly fascistic movements like the Golden Dawn in Greece and the National Front in France rose in response to austerity, unemployment, and the perceived failure of the European Union and liberal democracy.

Notably, contemporary fascistic and right-wing populist movements often advocate for nationalist capitalism state intervention in the economy to protect national capital and national workers against global capitalist competition, combined with maintenance of private property and profit mechanisms. This represents a shift from the free-market liberalism championed by neoliberalism, toward what might be termed “national capitalism” or state-directed capitalism.

The connection to capitalist crisis is clear: “The global police state and 21st century fascism are interwoven. The global police state generates conditions propitious to the ascendance of fascist projects.” As in the 1930s, capitalism’s crisis of profitability and legitimacy creates openings for fascist movements that offer simple solutions (expel immigrants, tear up international agreements, strengthen the nation through state intervention) and promise national renewal through authoritarian means.

Neoliberalism and the Creation of Conditions for Fascism

Neoliberalism the dominant form of capitalism since the 1980s, representing an intensification of liberal capitalism’s principles created conditions conducive to fascism’s contemporary resurgence in ways parallel to interwar capitalism’s role in fascism’s original emergence.

Neoliberalism, despite its ideology of deregulation and free markets, has in practice meant state support for capital through mechanisms including: privatization of public services, bailouts for financial institutions, union-busting and labor suppression, and the creation of security and surveillance states.

The result has been massive inequality, precarity for the majority of the working class, and the destruction of stable employment relationships and working-class organizations. Neoliberalism dismantled the labor organizations and welfare states that had provided working-class security and political power. It left workers atomized, desperate, and anxious precisely the conditions that gave rise to fascism in the 1930s.

In this context of economic desperation and the perceived failure of both capitalism and establishment left alternatives, right-wing populist and fascistic movements have flourished by offering scapegoats (immigrants, minorities, “cosmopolitan elites”) and promises of national renewal through stronger state intervention and authoritarian control.

Neoliberalism also created what some analysts term “disaster capitalism” the concentration of wealth and power in the hands of oligarchs willing to finance political disruption and the destruction of democratic norms to further their interests. As one analysis explains, “the path to unbridled wealth and power is through political disruption and destabilization. These ‘disaster capitalists’ back right-wing populists who want to tear up treaties and international organisations like the EU while promoting extreme nationalism and culture wars.”

The parallel to fascism’s relationship with capital is striking: just as in the 1930s capitalists backed fascism to destroy working-class power and preserve capital, neoliberal elites in the contemporary period back right-wing populist and fascistic movements to maintain their privileges and prevent working-class organization.

Twenty-First Century Fascism and Transnational Capital

Contemporary analysis of twenty-first-century fascism identifies both continuities and transformations in fascism’s relationship to capitalism. Twentieth-century fascism represented the fusion of reactionary political power with national capital facing threatened marginalization in global markets. The fascist state protected national capitalists from international competition while pursuing imperial expansion to secure markets and resources.

Twenty-first-century fascism, by contrast, operates in an era of transnational capital corporations and financial institutions operating across national borders, integrated into global supply chains and financial networks. Right-wing populist movements in the contemporary period express both nationalist backlash against this transnational integration and elite efforts to restructure global capitalism toward state-directed, nationalist forms. As one analysis argues: “In contrast to twentieth-century fascism as the reaction of national capital, right-populism is the reaction of transnational capital in the face of neoliberalism’s political and economic discontents.”

Yet the fundamental character remains similar: fascism represents the use of totalitarian state power, extreme nationalism, and violent suppression of working-class organizations to resolve crises of capitalist profitability and legitimacy.

The critical point is that contemporary fascism, like its twentieth-century predecessor, emerges not from the healthy functioning of capitalism but from capitalism’s crises. The legitimacy of liberal democracy and capitalist markets erodes. Working-class and popular forces develop oppositional consciousness. The political establishment’s inability to resolve economic crises creates an opening for radical alternatives. Fascism emerges as capital’s radical response promising national renewal while preserving capitalist property relations through totalitarian suppression of working-class power.

Part VIII: Theoretical Synthesis and the Inescapable Connection

Having examined the economic structures, class dynamics, historical conditions, and ideological dimensions of fascism-capitalism connection, several conclusions emerge forcefully:

First, fascism is not a departure from capitalism but a particular form of capitalist state power. While fascism involves state intervention that appears to contradict capitalist principles, fascism does not eliminate private property, capital accumulation, or market production. Rather, it subordinates all economic activity to state direction while preserving property relations and ensuring capitalist profitability. Fascism represents capitalism without the constraints of liberal democracy, parliamentary representation, or autonomous labor organization. Fascists use the capitalistic system to assert control maintaining capitalist property relations while restructuring political forms to achieve totalitarian state domination.

Second, fascism emerges specifically in response to capitalist crises and working-class threat. The theoretical frameworks developed by Marxist, institutional, and liberal scholars agree on this point: fascism is not a transhistorical phenomenon but a specifically modern product emerging under specific capitalist conditions.

When capitalism faces profound crises of profitability and legitimacy, when working-class and socialist organizations threaten the very basis of capital’s rule, when parliamentary democracy proves inadequate to suppress working-class power, fascism becomes the capitalist class’s preferred solution. Fascism offers something neither parliamentary capitalism nor regular authoritarianism offers: the complete mobilization of society through totalitarian means for the destruction of working-class power and the reassertion of capital’s dominance.

Third, fascism’s mass base reflects capitalism’s dynamics. The petty bourgeoisie small property owners facing destruction from both monopoly capital and working-class organization provides fascism’s primary recruitment base. Capitalism’s creation of economic desperation, unemployment, and precarity among the lumpenproletariat provides additional recruitment material. Both of these classes are products of capitalism’s normal operations. Fascism mobilizes their anxieties and rage to destroy the organized power of the working class.

Fourth, fascism’s ideologies reflect capitalism’s fundamental character. Nationalism, imperialism, racial hierarchy, patriarchy, and social Darwinism are not foreign to capitalism but rather reflect and extend capitalism’s competitive logic. Capitalism’s competition between units (firms, individuals, nations) for markets, resources, and profit naturally generates ideologies justifying this competition. Fascism synthesizes these ideologies into totalitarian form.

Fifth, fascism succeeds in accomplishing what capitalism cannot through normal means: the complete subjugation of labor. Liberal capitalism faces constant contradiction: it requires mass labor power, mass consumption, and the political legitimacy that comes from periodic concessions to working-class pressure. Yet each concession, each recognition of labor rights, each welfare provision, threatens profitability. Fascism solves this contradiction by eliminating all concessions and reducing labor to complete subjugation.

Sixth, fascism and capitalism are intrinsically linked while remaining theoretically distinct. Fascism can theoretically exist without capitalism, as it is fundamentally a political system characterized by totalitarianism, militarism, and extreme nationalism. However, historically, fascism has been inextricably linked to capitalist societies. Fascism has consistently emerged in capitalist contexts where elites seek to preserve property relations and private wealth while crushing democratic and socialist challenges. Most importantly: while capitalism does not inevitably produce fascism, fascism would not have emerged as a historical force without capitalism. Capitalism created the conditions, the classes, and the structural imperatives that made fascism possible. Without capitalism’s crises, without the petty bourgeoisie capitalism creates, without the threat of working-class organization capitalism generates, fascism could never have emerged. Thus, while theoretically they could exist apart, historically and practically, fascism and capitalism are inseparable. Fascism represents capitalism’s ultimate answer to the contradictions capitalism generates.

Seventh, the relationship is historically contingent but structurally rooted. Fascism does not emerge inevitably from every capitalist crisis; whether fascism coalesces as a political force depends on specific historical circumstances, the strength of working-class alternatives, the ideological sophistication of fascist movements, and contingent political events.

However, the structural conditions for fascism’s possibility are inherent to capitalism. As long as capitalism creates crises of profitability, as long as it generates economic desperation and political alienation, as long as working-class organization threatens capital’s rule, the possibility of fascism remains latent within capitalism. Fascism represents capitalism’s ultimate answer to the contradictions capitalism generates.

Conclusion: The Inevitable Dance of Capital and Fascism

The examination of fascism’s relationship to capitalism reveals not a superficial ideological alignment or temporary historical coincidence, but rather deep structural integration. Fascism emerges from capitalism’s contradictions, mobilizes classes created by capitalism’s dynamics, establishes economic systems preserving capitalist property relations, and accomplishes what liberal capitalism cannot: the complete suppression of working-class power and the unfettered extraction of surplus value.

Capitalism generates the conditions for fascism through its normal operations: the creation of unemployment and economic desperation, the generation of economic inequality and resentment, the destruction of working-class organizations that had imposed constraints on capital accumulation, the intensification of competition and nationalist rivalries, and the creation of ideologies of racial and national hierarchy that serve capital’s competitive logic.

When capitalism faces profound crises when its processes of accumulation break down, when working-class and socialist movements threaten expropriation, when liberal democratic institutions prove incapable of suppressing these threats capitalist classes turn to fascism as the solution. Fascism promises to restore capitalist profitability through the total mobilization of society and the violent suppression of all oppositional forces. While capitalism can theoretically exist without fascism, fascism has never existed without capitalism; fascism is capitalism’s totalitarian form when capitalism’s normal mechanisms of rule have failed.

The historical evidence is overwhelming: the rise of fascism in the 1920s and 1930s, the support of industrial capitalists for fascist movements, the preservation of private property and capital accumulation under fascism, the dramatic suppression of working-class organizations, the initiation of imperial wars to overcome capitalist resource and market constraints, and the contemporary resurgence of fascistic movements in the aftermath of the 2008 financial crisis and neoliberalism’s failure to provide stable accumulation and legitimacy.

To understand fascism, one must understand it as capitalism’s totalitarian answer to its own contradictions. Fascism is not capitalism’s opposite but its radicalization the form capitalism takes when liberal restraints are stripped away and the state consciously mobilizes all of society’s resources toward capital’s restoration and the working class’s total subjugation.

The connection between fascism and capitalism is not accidental, not merely ideological, not simply a matter of unfortunate historical alliances. Rather, the connection is rooted in the fundamental structures and dynamics of capitalism itself. Fascism has emerged repeatedly in capitalist societies facing crisis, and the conditions that generate fascism’s possibility remain endemic to capitalism as long as capitalism continues its processes of accumulation and working-class subjugation. While fascism could theoretically exist in non-capitalist forms, historically it could never have emerged without capitalism, and it represents capitalism’s most extreme mechanism for maintaining class rule when all other mechanisms have failed.

Bibliography

“Fascism,” EconLib: The Library of Economics and Liberty

“The Economic Leadership Secrets of Benito Mussolini,” Cato Institute

“Economics of Fascism,” Wikipedia

“Fascism shattered Europe a century ago and historians hear echoes today in the U.S.,” UC Berkeley News

“Economics of Fascism,” Wikipedia

“Karl Polanyi on the Rise of Fascism and Market Economy,” Economic Sociology

“Fascism is a Reaction to Capitalist Crisis in the Stage of Imperialism,” Historical Materialism

“Fascism,” Wikipedia

“The Marxist Roots of Classical Fascism,” The Anarchist Library

“Fascism, from The Theory of Capitalist Development,” MR Online

“Marxism,” Wikipedia

“The laws of fascism’s emergence,” Communist Party USA

“The Crisis of Market Society and the Fascist Solution in the Work of Karl Polanyi,” Academic Works CUNY

“Capitalism in decadence, the petty bourgeois in crisis, and fascism,” Lotta Comunista

“Fascist Corporativism and the Myth of the New State,” Central European University ETD

“Karl Polanyi’s Great Transformation and the Countermovement,” Jacobin

“Mussolini on the Corporate State,” Political Research Associates

“Corporatism,” Wikipedia

“Economy of Nazi Germany,” Wikipedia

“Nazism,” Wikipedia

“Trotsky on Fascism: Lessons for our time,” Socialism.com

“What Is Fascism?,” Left Voice

“Lumpenproletariat,” Wikipedia

“How Big Business Bailed Out the Nazis,” Brennan Center for Justice

“Fascist syndicalism,” Wikipedia

“Nationalism, Communism, Fascism, and Authoritarianism,” Fiveable

“Italian fascism,” Wikipedia

“Economy of fascist Italy,” Wikipedia

“Extreme nationalism,” Britannica

“Understanding fascism, and placing it on the political spectrum,” Reddit

“Fascism and ideology,” Wikipedia

“Class collaboration,” Wikipedia

“The military-industrial complex as a variety of capitalism,” Post Keynesian Economics

“Class struggle unionism and anti-fascism,” People’s World

“Fascism/Nazism,” Ayn Rand Institute

“Understanding the rising threat of fascism in the U.S.,” Communist Party USA

“Why do people think Fascism is the state/public ownership,” Reddit

“The Great Disorder: Fascism and Economic Crisis,” Notre Dame History

“Political Aspects of Full Employment,” Jacobin

“Notes on Fascism,” Eruditorum Press

“Great Depression,” Wikipedia

“Social Darwinism Facts & Worksheets,” Kids Konnect

“May 1933: The Dissolution of Labor Unions in Nazi/Fascist Germany,” APWU

“Nazism, socialism and the falsification of history,” ABC News

“This is Why Everyone is Suddenly Talking about Social Darwinism,” Verderamade

“Fascism and Monopoly,” Michigan Law Review

“Social Darwinism”

“The ITF and the fight against fascism,” International Transport Workers’ Federation

“Culture industry,” Wikipedia

“The American Way of Fascism,” Puntorojo Magazine

“What did the Fascists do when they suppressed women’s rights?,” Reddit

“The Culture Industry: Fanaticism as Redemption”

“On Accumulation and Empire,” Taylor & Francis Online

“The Rise of Misogynoir Fascism”

“Mass Mentality,” KRITIKE

“Marx’s ‘Capital:’ Class 9,” Liberation School

“Gender and/in the nation: Converging and diverging discourses,” Historical Materialism

“Dialectic of Enlightenment,” Wikipedia

“From Finance to Fascism,” American Economic Association

“Can Twenty-First Century Fascism Resolve the Crisis of Global Capitalism?,” Marxist Sociology

“’Neoliberal capitalism’ has contributed to the rise of fascism, says Nobel laureate,” ABC News

“A Marxist Explanation: Historical Fascism vs. Right Populism,” Happy Medium Magazine

“’Neoliberal capitalism’ has contributed to the rise of fascism,” Reddit

“Defining Populism and Fascism Relationally,” Academia.edu

“Antonio Gramsci,” Wikipedia

“Ur-Fascism,” Wikipedia

“Totalitarianism, the Inversion of Politics,” Library of Congress

“Antonio Gramsci (1891-1937),” Saraswati IAS

“Ur-Fascism,” The Anarchist Library

“Introduction,” Contemporary Thinkers

“Antonio Gramsci & Cultural Hegemony,” The Collector

“Umberto Eco on Fascism,” Graham Scambler

 Beyond Thought

“Gramsci and hegemony,” Powercube.net

“Laissez-faire,” Wikipedia

“An extensive Welfare-state is not the same as a Social Democracy,” Reddit

“Political positions of the Republican Party (United States),” Wikipedia

“Laissez-faire,” Corporate Finance Institute

“Social democracy,” Wikipedia

“MAGA’s true believers don’t understand capitalism,” Salon

“The Global Hinterland of Social Democracy,” SCUP

“A Tale of Three Rights? Understanding How Republicans Are...,” Italian Institute of International Affairs

“Market economy,” Wikipedia