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 fact historical. This is because his “method of inquiry starts with everything that exists—with reality as it’s experienced, as well as with all available descriptions of that experience by political economists, philosophers, novelists and the like.” Marx then subjects this material to “rigorous criticism” from which he forms “simple but powerful concepts that illuminate the way reality works.” This method, which became central to Marx’s work in the mid-1840s when he began his studies in political economy, involved two main steps: conceptualizing empirical evidence and then using those concepts as the basis for discovering the myriad deceptions that abound in the capitalist world. In the first volume of Capital, Marx began with the concepts, especially those he believed made sense of capitalist realities and the historical forces that created them.16 Marx’s conceptual arguments about production were derived from his knowledge of Great Britain in the 1850s and 1860s, then the most advanced capitalist nation, as well as in other parts of Europe and North America where similar conditions existed but were not as highly developed.17
Marx’s masterwork is a detailed and complex treatise that reveals how capital as accumulated wealth in many forms—most importantly as money—must always expand, thereby enlarging the mode of production, which raises the magnitude of the total product. This is how growth and prosperity are sustained across the capitalist system, and it must occur to offset what Marx viewed as a tendency toward stagnation and an eventual crisis. This would become a general condition of capitalism with the further development of technology operating on the basis of monopoly and finance capital. Marx had expounded this tendency in Capital. What concerns us here, however, is how he explains that sustained growth depends on the ability of capitalists to produce and sell commodities as efficiently as possible in order to maximize profits—and to do this exponentially. This is their sole purpose as capitalists. Their success always comes at the expense of the workers, whose laborpower is the one thing workers own and, therefore, must sell to the capitalists to survive. For Marx, this contradiction between capital and labor, between the capitalist and the worker, was evident in certain laws of motion peculiar to industrial capitalist production, revealing why economic growth created wealth and poverty together, and how the capitalist assumed even greater control and domination over the worker.
CAPITALIST ACCUMULATION AND THE PERMANENT DIVIDE OF CAPITAL AND LABOR
One of Marx’s most important laws of motion, “The General Law of Capitalist Accumulation,” is the title of a chapter in Capital. Here Marx explicates why the sole purpose of accumulation is forever to raise the value of capital. This involves the drive to increase productivity—the rate of output per hour—by replacing human labor with machines, making production more efficient and thereby sustaining the rate of profit required for further capital investment. The consequence of this is not only the growth of output but the chaining of the vast majority of society, the working class, to the systemic imperatives and dictatorial powers of capital. As capital expands, so does the power of those who own and control it. Two major contradictions occur. Accumulation, which generates fierce competition between capitalist enterprises, drives the less efficient and profitable out of the market, resulting in the greater concentration