About Capitalism's relationship to Fascism
Is Capitalism a Threat to Democracy?
In London, in the nineteen-thirties, the émigré Hungarian intellectual Karl Polanyi was known among his friends as “the apocalyptic chap.” His gloom was understandable. Nearly fifty, he’d had to leave his wife, daughter, and mother behind in Vienna shortly after Austria lurched toward fascism, in 1933. Although he had long edited and contributed to the prestigious Viennese weekly
The Austrian Economist, which published such celebrated figures as Friedrich Hayek and Joseph Schumpeter, he had come to discount his career as a thing of “theoretical and practical barrenness,” and blamed himself for failing to diagnose his era’s crucial political conflict. As so often for refugees, money was tight. Despite letters of reference from eminent historians, Polanyi failed to land a professorship or a fellowship, though he did manage to earn thirty-seven pounds co-editing an anti-fascist anthology, which featured essays by W. H. Auden and Reinhold Niebuhr. In his own contribution to the book, he argued that fascism strips democratic politics away from human society so that “only economic life remains,” a skeleton without flesh.
In 1937, he taught in adult-education programs in Kent and Sussex, commuting by bus or train and spending the night at a student’s house if it got too late to return home. The subject was British economic history, which he hadn’t much studied before. As he learned how capitalism had challenged the political system of Great Britain, the first nation in the world to industrialize, he decided that it was no accident that fascism was infecting countries as disparate as Japan, Croatia, and Portugal. Fascism shouldn’t be “ascribed to local causes, national mentalities, or historical backgrounds,” he came to believe. It shouldn’t even be thought of as a political movement. It was, rather, an “ever-given political possibility”—a reflex that could occur in any polity experiencing a certain kind of pain. In Polanyi’s opinion, whenever the profit-making impulse becomes deadlocked with the need to shield people from its harmful side effects, voters are tempted by the “fascist solution”: reconcile profit and security by forfeiting civic freedom. The insight became the keystone of his masterpiece, “
The Great Transformation,” which was published in 1944, as the world was coming to terms with the destruction that fascism had wrought.