The libertarian to alt-right pipeline historically has followed three paths: A number of people who once identified as libertarian who were some combination of shallow, stupid, wicked, and cynical rejected the whole philosophy itself to become some flavor of fascist. Others who were not necessarily any of those estimated that the benefits of violently aggressive intervention in a few select areas of life outweigh the costs and became a non-libertarian zeroth positionist (neoreactionary, Propertarian, paleo or national conservative) or merely mistook libertarianism for classical liberalism, claiming to reject the former when in reality they were just rejecting the anti-liberty features of the latter. The third rejected liberal baggage while retaining both the philosophy and label of libertarian. The adjustments this third camp made were strategic, including heightened emphasis on values complementing the singular libertarian value of peace, while enshrining peace as at least as important as it ever has been for their nations. Another adjustment of significance was becoming embedded in third positionist activism, the belief being that fascism was a step toward a free society. I am of the third camp and was committed to the last strategy. The latter was a massive mistake.
Fascism’s allure today is its novelty as an ingredient in the redpill on globalism. Humans are creatures driven by simple conspiratorial narratives, and the narrative that the enormity of globalism in the present is only meaningfully opposed by a plucky remnant of supposedly the only movement that opposed globalism in the past is compelling. The real world, however, is messy, complicated, and often anti-climactic. Regardless of how much the world of today resembles what it would look like if the Elders of Zion were real and had their way, all the evidence points in the direction of white elites being co-puppeteers with jews rather than the former being puppets of the latter. I was captivated by the conspiratorial element as well, and as a result I joined up with a fascist secret society modeled on the Freemasons whose leaders I met a Propertarian event. The persuasive (if not professional) potency of documentaries such as The Greatest Story Never Told and Europa: The Last Battle created a good measure of sympathy for fascists within me, leading me to view them similarly to how normieconservatives view leftists, as basically good people who were merely misguided on a number of issues. The high professional and intellectual caliber of the society I joined reinforced this impression. Some of the society’s members never disappointed me; one even made a substantial contribution to fund raising campaign I ran for a family issue. As I engaged in debate with certain members as to the merits of right-wing libertarianism vs fascism it became apparent to me what a lousy bunch fascists are on average, however. They accused me of pacifism and wanting to poison children (by itself a contradiction!) because I don’t think our people are strengthened by looting each other and for opposing institutions like the FDA. The leader of the group claimed that I opposed principles necessary to right-wing thought, as well as read me out of the nationalist movement altogether by claiming that the debate was not right-wing libertarianism vs fascism but “libertarianism vs nationalism”. This was despite my being one of the group’s most steadfast and conscientious members. When I confronted him about this he never apologized or claimed that he meant the former, at which point I left the group in disgust and started Liberty+. Part of Liberty+’s mission is to make sure that fascists do not come to power when the globalists fall from it. Some right-wing libertarians remain of the opinion that fascists should be supported. What follows is why they should not.
Chase Rachels, who is one of my biggest influences, wrote an essay for his now-defunct blog Radical Capitalist (which I have archived in its entirety) in 2018 called “Fascism is a Step Towards Liberty.” The first time I read it, which was not long after publication, I, like him, was enamored with the fascist movement and was in full agreement. Having reread the essay six years later, however, with the benefit of extensive interaction with actual fascists and having been much better educated on what fascism specifically is and has been, I have now come to strongly disagree.
Rachels opens his article by stating that the purpose of Radical Capitalist is to help forge an alliance between libertarians and the Alt-Right. This, he writes, is for the purpose of remedying the shortcomings in each movement. What Rachels does not say explicitly is that because the shortcomings of the Alt-Righters who are not libertarian is to a large degree simply the fact of their not being libertarian, what the resulting fusion would ideally amount to is the Alt-Right becoming subsumed into the libertarian movement. This would resulting in a right-wing supermajority that defeats the left-libertarians, who are already a minority. The libertarians who go “Alt-Right” would do so in the manner that the third camp in the pipeline did as described in the first paragraph above. Chase directly implies, however, this ideal form of fusion in claiming (correctly) that “such an approach does not require a breach in libertarian principle, an endorsement of aggression, a repudiation of private property, nor an expansion of State power. “ This logically necessitates two outcomes for the non-libertarian Alt-Right: They either become libertarian or they are neutralized politically. It is strange therefore, that Rachels proceeds to argue in way that suggests he is accepting of authoritarianism on the Alt-Right. He continues:
“However, many lolberts have objected to this claim by countering “but much of the Alt-Right is fascist!!!.” Of course, the term “Fascist” and “Fascism” have been abused and stigmatized to the point to where they have become synonymous with pure evil. As such, they have lost much of their discernible meaning. This obfuscation and perversion of the concept of Fascism as well as other concepts and institutions such as nationalism, the nuclear family, monogamy, individualism, and capitalism is an integral facet of the Cultural Marxist agenda. The Manipulation of language is essential to surreptitiously undermine, gaslight, divide, and disorient one’s opponent. “
Fascism stigmatized itself in the eyes of patriotic pro-liberty people because of its numerous abuses inherent to its socialism and authoritarianism. That the rival socialists who defeated fascists happen to manipulate other concepts does not mean fascism does not deserve its stigma. Lies about nationalism, the nuclear family, and other features of “The Authoritarian Personality” are actually much more effective for their association with the true abuses of fascism. Goebbels himself emphasized the importance of propaganda containing a good measure of truth to persuade. One reason communism does not have the same association with authoritarianism, is not just because the communists won World War II, but also because it has a rich history of anarchism, whereas authoritarianism is a defining feature of fascism.
Rachels goes on to contrast fascism with democracy, saying that our current system contains the worst elements of both. This is correct, however, he does not mention the commonalities between democracy and fascism, namely that both sanction statist violence in the name of the people, and that fascist regimes historically have arisen through democratic processes. He claims that knowing which of these is closer to libertarianism is “crucial” to libertarian strategy. This is questionable because it suggests there is some sort of necessary sequence is which various pro-liberty reforms are made. This is incompatible with the fact that libertarianism is grounded in timeless human universals, which means that we need to directly pursue a libertarian social order and takes wins toward that end everywhere we can get them, whenever we can get them. It does not matter whether the results of this process in the interim resemble more closely one bad system or another because those systems are bad and not our goal. To Rachels’ credit as of 2018, however he says this: “Of course, it may not be necessary to travel through the eye of Fascism in order to reach a libertarian social order, but we can at least recognize that it is a point along the correct trajectory (even if it’s a point that we are able to skip over.) “ Based on my recent conversations with Rachels, however, he now believes that fascism is a necessary near-term step not just to achieving libertarianism in full, but to saving the white race. This is strange for someone who used the metaphor of a hurricane to to describe fascism, a force that destroys indiscriminately.
He then accuses other libertarians critical of fascism of “purity spiraling” which he differentiates from “staying principled”. While I have no reason to doubt Anarchyball’s overall interpretation of libertarianism is as Rachels describes, the example he gives, however, is an uncompelling example of the pointless kind of purity spiraling that the libertarian movement is notorious for:
By the end of his days, Mussolini wanted to socialize 75% of all businesses with more than 100 employeesi. Regulation of industry increased when Hitler came to power, reversing the Weimar Republic’s late recovery. Even during his invasion of the Soviet Russia, Hitler admired Stalin and indicated that he wished to take Germany even further in direction of the Soviet’s central planningii. During the 1936 recession, the NSDAP became divided into two camps: a moderate one led by Reichsbank President Hjalmar Schacht and the Price Commissioner Dr. Carl Friedrich Goerdeler who wanted a reduction in military spending and autarkic trade policy, and a socialist one headed by Hermann Göring who wanted to dramatically increase the state’s central planning for the purpose of military build-up. Hitler ended up siding with Göring and implementing his Four Year Planiii. A factor in Hitler’s decision, apparently, was Göring’s lack of economic knowledgeiv. Both dictatorships repressed capitalist political parties. There has been no indication historically that fascist regimes move their countries in a freer direction. Because large business donors and the wealthy do not want socialization of their industries and estates and most voters want handouts, it is plausible that liberal democracy’s terminal state is a market-leaning business sector combined with a substantial welfare state. While fascist regimes also require some give and take with big businesses and the rich, they do not require their full support for their political survival. Top marginal tax rates in most Western countries have been reduced since World War II. The mob rule of direct democracy is of course quite communistic, however what we are dealing with today is a very far cry from that. Rachels follows up with this meme:
It would be uncharitable to Rachels to take this too literally, but it should be noted that saying we need to go through fascism to achieve liberty is something that is quite reasonable to push back on. As quoted earlier, as of 2018 Rachels did not believe it was necessary.
Rachels then goes on to define fascism using Smash Cultural Marxism as a source, which he claims will facilitate rational and productive evaluation. This is not very persuasive to libertarians, as Smash Cultural Marxism has no grounding in the traditions of libertarianism and independent economics, let alone the reactionary libertarianism of Hoppe. Predictably, therefore, SCM’s definition is self-serving, vague, and appalling to any liberty lover conversant in deconstructing predatory collectivist propaganda:
Fascism is based on free enterprise – but with constraints (the primary constraint being, “Is the particular economic activity in question good for our nation/people?”). Also, a businessman can become wealthy in a Fascist country, and the government has no objection to this (this is in stark contrast to Communism). Fascism also encourages private ownership of property (again, in stark contrast to Communism where private property is not allowed).
In a nutshell, Fascism basically tells entrepreneurs, “Go ahead and start a business, earn a lot of money, be successful, but don’t produce any products or services which damage our nation and our nation’s people… and make sure you treat your workers fair and pay them a living wage. If you don’t follow these rules, we’ll shut you down.”
With regard to banking, usury is not allowed under Fascism. The government tightly controls all aspects of monetary policy, including terms of lending. The government issues/prints money and lends it interest free, as needed, to grow the economy and ultimately serve the citizens.
Rachels, however, says of this: “From the above it seems clear that Fascist governments are favorable to market systems and private property. “
The qualifier “but” following anyone’s claim to grounding in freedom is a surefire tell that such a person intends to stomp freedom into the ground. The standard of “national good” is a collectivist blank check for the state to mulct the nation every which way. State control of the financial sector is poisoning and constriction of the economy’s very circulatory system. State monopolizing of money lending to prevent the payment of interest is an assault on time preference itself, an eminently rational convention derived directly from the natural pattern of cooperative growth and necessitated by mortality. The latter is so insane that it was never actually put into practice in either the Third Reich or Fascist Italy. Regarding this, Rachels writes something similarly bizarre: “Fascist governments also oppose the Central Banking System as evidenced by the fact that they issue currency directly as opposed to borrowing it into existence from the Central Bank.” Whether money creation is direct or debt-based is not what defines a central banking system as central, it is the state acting as the lender of last resort for banks it charters. When a private independent bank counterfeits depository receipts and lends them out, this also causes inflation in the exact same way a state can but no one calls it central. When states can inflate directly with the treasury there is no greater disincentive to do so than through the banking system; a number of free-market economists argue that they are more incentivized to. Given the preceding conditions, private property under fascism is private in name only, when the state decides what property you can buy or sell, how much, from/to whom, when, where, and for what reason, life under fascism is just a less honest form of communism. SCM’s claim that fascists are fine with “earning a lot of money” flies in the face of one fascism’s seminal thinkers in Gottfried Feder:
In spite of the doubtlessly existing agreement that the considerations of the public interest have to go before the private interests, remarkably there has been, according to the legal ideas valid among us, precisely with regard to the form of the use of property, no moral limitation determined beyond the criminal.
It is, to be sure, forbidden to act with violence against one’s fellow man (extortion — murder — manslaughter — betrayal and illegitimate enrichment, etc.), but it has never and nowhere been forbidden to pile up immeasurable wealthv
Although Hitler ultimately dismissed Feder as economic adviser as a concession to his industrial backers, property and wealth in the Third Reich was still subject to a significantly higher degree of confiscation than it is in America today.
Rachels acknowledges that these features of fascism are anti-libertarian, but minimizes them as a “wash” for their similarity with our current system. This is the opposite of convincing.
Rachels then quotes SCM describing fascism’s extensive anti-degeneracy measures. Chase attempts to pass these measures off as a wash with the current system, writing, “various forms of artistic expression are regulated “. This is not true, at least for America. The Brandenburg vs Ohio Supreme Court ruling of 1969 permitted all forms of expression that are not incitements of violence, and even to qualify as incitement the violence exhorted to must be both imminent and likely to happenvi. There is of course, Operation Mockingbird and the CIA’s boosting of modern art like that of Jackson Pollock, but news media is not art, and in terms of freedom of expression, subsidy is not comparable to regulatory suppression. Rachels could cite regulation of ideas and culture through our government school system, but this ignores the significant fact that homeschooling is broadly legal in America, whereas the Third Reich banned it in 1938vii. Rachels says it is “certainly” better for degenerate rather than wholesome content to be censored, but this is probably more true for the masses than the high-openness, often creative minority for whom censorship creates a significant Streisand Effect. Rachels also ignores the dysgenic effects of prohibitionism’s expropriation of the non-degenerate to fund the impossible task of decimating the degenerate. The current legality of vices that were not legal under fascism is a mark in favor of our current system. Rachels also ignores that certain infringements on liberty that currently exist in formerly fascist countries like Germany such as restrictions on smoking and homeschooling are holdovers from fascism. Rachels reminds us that “ we’re comparing the current State to Fascism, not a libertarian social order to Fascism “. Even on this count fascism does not measure up to our own terrible system in significant ways, but moreover, why should we as libertarians be comparing fascism to our current system in the first place rather than to a free society? Our current system is such a low bar that even attempting to make the case that in many areas it’s a wash with fascism is by a libertarian standard a massive indictment of fascism. I will return to the why later. For now, consider that having unconvincingly attempted to paint large sectors of the respective systems as a wash, Rachels then drops this howler:
“Moreover, many libertarians often times (and incorrectly) confuse the Nation with the State. The nationalist sentiment of a population does not necessarily translate into a pro State sentiment. In fact, Fascism tends to promote the idea of “family” and “ethnic community” first. This presents a hard limit on the expansion of the State.”
Fascists by the very constitution of their ideology (and etymology) bind the nation and state into one: “Everything within the state; nothing outside the state” in Mussolini’s summation. Why are errant libertarians to be criticized here while fascists are let off the hook? Although Rachels is correct that nationalism is not necessarily statism, this a NAXALT argument because it is believed to be by nationalists (and not just fascist nationalists).
Yes, fascism promotes the idea of “family” and “ethnic community” first so that it can hide behind them while ruthlessly looting them. Protein intake and children’s heights plateau’d and even declined in some areas under the Third Reichviii, and to the extent the Reich supported family at all it was with dysgenic policies such as housing subsidies. Dysgenics in the name of eugenics suits fascism because it helps create a weak and dependent nation lacking resistance to the state’s predation, a nation that is brainwashed into believing they are being elevated to ubermensch. Note the parallel with liberal democracy where the nation is enslaved with great efficiency because it believes that democracy makes them free. Fascism in theory presupposes that putting these “first” means being pushed into “first” by the state as necessary, which is implied expansion rather than a limiting factor. Fascism is defined by the belief that there should no limits on the scope of the state’s activity, so long as it puts family, community, and nation “first”. Because what counts as first is subjectively defined by the state this is a blank check for statist intervention, the extreme opposite of a “hard limit”. It is inexcusable for a libertarian to fall for such a basic statist ruse so credulously. Rachels attempts to make a case for limited fascism by contrast with globalism, which by definition is the lowest bar possible: “This is in distinct contrast with other globalist States, such as the US, which contend that all people from any background may fall under the “protections” and “jurisdiction” of a global “humanitarian” democracy. Thus, there is no ideological limit to the size of the current State. “
To make the case for such an absurdity as limited fascism, Rachels is forced to stretch our current liberal democratic nation state as an object of comparison to a fully globalist one. The relevant criterion here is not whether a limiter of the state’s scope is nominally restrictive, it is whether in practice it is an objective limiter that actually functions as such like the libertarian property norm. The macro-linguistic national groups that fascism rules (by definition) is not a significant difference of scope in this context compared to multi-national or global empires. They are both sufficiently large, that unlike family or community, that collective affinity between one random household and another within is negligible. While there is a significant difference in the administrative practicality of maintaining control between the geographic scales; there is no significant difference between them as limiters of the state’s activity scope within their territories; they are in this regard both worse than worthless because they are pretextual instances of the collectivist anti-concept of the “common good”.
Rachels then quotes Mises on fascism:
This quote ignores the context that the because the fascists had brutally crushed pro-liberty reactionary opposition, the fascists were the only remaining faction with the political power in certain countries to fight the communists. It also ignores that the fascist ranks were swollen themselves with communists who had no opposition to their ideologies economic depredations, and were merely opposed to the imperialism of foreign communists. This quote is also taken out of context. It comes from Mises’ 1927 book Liberalism. It is found in Chapter 1: The Argument of Fascism, where earlier in the paragraph Mises criticizes fascism: “Repression by brute force is always a confession of inability to make better use of the better weapons of the intellect – better because they alone give promise of final success. This is the fundamental error from which Fascism suffers and which will ultimately cause its downfall.”ix
Later in the paragraph Mises writes: “That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. The sentence that follows Rachels’ quote is: “But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.
Rachels maintains to this day that fascism is justified as such an emergency makeshift. I will address this in detail later. For now I will point out that Mises discovered himself to be naive about what he perceived as fascists’ intentions, for he would later be forced to flee his native Austria when National Socialist Germany took over. Mises went on to write a whole book excoriating fascism called Omnipotent Government. He was, as I was, redpilled by life experience.
In the next section of the article Rachels attempts to make the case fascism is better categorized as capitalist rather than socialist. This section suffers from continued out-of-context quotation, bad sourcing, and taking fascist propaganda at face value.
He begins with the truism that all polities are a mixture of capitalist and socialist elements. This is an error not just because it is a truism (all property crime is a deviation from a free market) but because “capitalism vs socialism” is itself Marxist dialectic. Marxists made the term capitalism as an object to be defended and subject to their criticism. Property in capital needs no more defense than in anything else. Rachels then claims that although Hitler called himself a socialist and claimed to oppose capitalism, the capitalism that Hitler opposed was specifically the version corrupted by state meddling. While there was a fair amount of meddling in the capitalism of Hitler’s day, some of which Hitler opposed, it is clear from his writings and overall policymaking that he opposed freedom in the use of capital itself. As mentioned above, Hitler was heavily influenced by Gottfried Feder, who was explicitly opposed to free market capitalism. Although he ultimately dismissed Feder as economic adviser, it is telling that Hitler made him adviser in the first place, and the dismissal was motivated not by fundamental disagreement with Feder, but to allay the fears of his industrial backers that he would implement some of Feder’s more radical anti-business proposals. Here it should be mentioned that in 1932 campaign financing from industry was overwhelmingly against the Nazis, as historian Henry Ashby Turner pointed outx. The same is true for Italian Fascism: Fascism certainly was not a movement supported by big business in Italy either. The fascist government played an immense role in the economy to the detriment of the capitalists. Historian A. James Gregor observed that
“…the Italian business community, in general, welcomed the disappearance of Fascism. Fascism never served the interests of Italian business.”
It is also telling that Hitler retained the overtly communist Goebbels as propaganda minister until the very end.
Next Rachels produces the quote from Hitler that is memed by his apologists in an attempt to contrast his National Socialism from Marxist socialism:
‘Socialist’ I define from the word ‘social’ meaning in the main ‘social equity’. A Socialist is one who serves the common good without giving up his individuality or personality or the product of his personal efficiency. Our adopted term ‘Socialist has nothing to do with Marxian Socialism. Marxism is anti-property; true socialism is not. Marxism places no value on the individual, or individual effort, of efficiency; true Socialism values the individual and encourages him in individual efficiency, at the same time holding that his interests as an individual must be in consonance with those of the community. All great inventions, discoveries, achievements were first the product of an individual brain. It is charged against me that I am against property, that I am an atheist. Both charges are false. Adolf Hitler in the Sunday Express on September 28, 1930
First, note the source and date. This quote was publicly directed while Hitler was a prominent politician but had not yet achieved ultimate power. Even on its face it is just a rehash of Rousseau, but the reason for its tone of moderation is that this is the classic pivot toward the center that politicians pull once they have mobilized their base behind them. The broader electorate’s more milquetoast sensibilities must be pandered to as well. This is a departure from the overt influence of Marx on of the NSDAP’s 25 Point Programxi, which Hitler never modified. In 1932, the same year the NSDAP was elected to power, Franklin Roosevelt’s running mate, John Nance Garner, accused Herbert Hoover of “leading the country down the path of socialism.”1. The policies both Hitler and Roosevelt imposed would do this despite. Rachels attempts to whitewash Germany’s downgrade under the NSDAP, however. He cites the Economics of Fascism Wikipedia article. On a topic such as this, communist-run Wikipedia is not very credible, as communists are motivated to associate capitalism with fascism to the greatest extent possible. Evidence suggestive of this bias is found in the fact that a search for “privatiz” on the page returns 48 results while “socializ” and “nationaliz” return a combined 5. As of the time of this article’s writing, the introduction to the Wikipedia article reads: “Historians and other scholars disagree on the question of whether a specifically fascist type of economic policy can be said to exist. “. This is not surprising, because fascism has little specific economic doctrine beyond “national interest”, so it ends up being whatever the state deems expedient. The article also mentions that Hitler himself affirmed this at one point “The basic feature of our economic theory is that we have no theory at all”: In practice this results in a great deal of intervention, both because of fascism’s collectivism and because of self-interest’s persistence when people attain positions of unlimited power. It is no different from other forms of socialism in this regard. Rachels cites the article’s mentioning of industry privatization under fascism:
Fascist governments in both Italy and Germany privatized state-owned enterprises at certain times.[33][34][35] These privatizations were carried out in the early stages of both regimes (1922–1925 for Italy and 1934–1937 for Germany) and represented a reversal of the policies of the democratic governments which had preceded them. The democratic governments had brought a number of industries under state ownership and the fascists decided to return them to private ownership.[36] In doing so, they went against the mainstream economic trends of their time, when most Western governments were increasing state ownership.[37][38]
One thing to note is that some of these privatizations were of industries that had been socialized earlier by the very same fascist governments. In debunking the claim that privatization absolves fascism of socialism, PraxBen makes an important distinction between privatization and liberalization:
“Privatization simply means putting legal ownership into the hands of a private individual. But the private individual can be a member of a socialist or workers’ party, or have a legal monopoly granted to them by the government, or be subject to extreme governmental regulations. This type of privatization can favor socialist parties when they don’t have full control over the government. It’s better to have an industry privatized under a party member than nationalized under their opposition. Liberalization, on the other hand, deregulates state power and gives ownership to individuals in a competitive free market.”
Economist Germa Bels observes:
“Whereas the modern privatization in the EU has been parallel to liberalization policies, in Nazi Germany privatization was applied within a framework of increasing control of the state over the whole economy through regulation and political interference.”
This is consistent with the Nazi’s disregard for private property as described above. They made this disregard official in abolishing Germany’s constitutional right to private property on February 28th, 1933. When private property is private in name only, privatization of industry is also private in name only. Businesses under fascism were dictated as to how much they could produce, pay workers, to whom they could sell, for how much, and when. PraxBen writes2: “The Nazi state introduced measures commonly found in state socialism, such as national investment boards, state control of prices, banking, and foreign trade, and regimentation of business activities. Economic historian Peter Temin wrote,”
“Both governments reorganized industry into larger units, ostensibly to increase state control over economic activity. The Nazis reorganized industry into 13 administrative groups with a larger number of subgroups to create a private hierarchy for state control. The state could therefore direct a firm’s activities without acquiring direct ownership of enterprises.”
Of Fascist Italy, PraxBen writes: “Mussolini mandated union membership, harshly regulated industries, and socialized over 80 firms.”
The stock holdings of banks were confiscated by the fascist government, and practically bankrupt companies were taken over. As a result, the Italian government held substantial positions in numerous other businesses as well as controlling interests in others, including iron production, naval building, and shipping.“
Rachels moves on to discuss fascism and central banking. He quotes Red Ice:
When Hitler’s period as Chancellor of Germany began, the German people had no work, no money and were starving. A wheelbarrow full of 100 billion-mark banknotes could not buy a loaf of bread at the time, and many Germans were living in shacks after countless homes and farms had been seized by Rothschild/Rockefeller-controlled banks.
In his 1967 book The Magic of Money, Hitler’s Reichsbank President, Dr. Hjalmar Horace Greeley Schacht, let out the big secret:
“The mark’s dramatic devaluation began soon after the Reichsbank was “privatized,” or delivered to private investors.”
In other words, responsible for the post-war hyperinflation was not the German government, but rather the privately owned central bank in Germany, and its monopoly over the creation of money. Germany’s economy was crashed and devastated by bankers… that is, until Hitler arrived.
After Hitler was elected, refusing to play ball with the Rockefeller-Rothschild rules, one of the first things he did was fix the corrupt, debt-based financial system. By completely thwarting the international banking cartels, the Nazi government issued its own currency known as Reich Marchs, which were debt free and uncontrollable by international financial interests.
…If America nationalized their currency as Hitler did for Germany, they would effectively sever all ties with international bankers, the manipulation of their government and economy would cease, and they would live debt-free. Just as Hitler issued debt-free currency for Germany, Abraham Lincoln setup an interest free banking system in the United States when he was President, and he was murdered for it. Former US president Andrew Jackson issued interest-free currency, and two shots were fired at his head in an assassination attempt, but the shots misfired and he survived. John F. Kennedy issued interest-free currency during his presidency and we all know how he met his untimely demise.
After Germany’s public banking system was installed, world Jewry responded by declaring war on Germany, including a global boycott of German goods. Within two years, the German economy was flourishing with its new-found stable, and inflation-free currency.
Red Ice’s summary of Germany’s banking history is packed with distortion. Their first claim that Germans were destitute as of 1933 omits the fact that Weimar’s hyperinflation peaked in 1924. By the time the Nazis came to power the economy had already recovered significantly. They quote a highly non-objective source in Schact, the former director of the Reichsbank, who would naturally want to distance a state central bank from hyperinflation by blaming it on the private sector. Schact’s quote is a spurious, post-hoc attribution that ignores that the Weimar Reichsbank was fundamentally a state institution; its private equity ownership feature is of a quite different nature from ordinary ownership in a corporation (to his credit Rachels corrects Red Ice on this immediately below their quote). The Third Reich’s own policies were somewhat inconsistent with the hostility today’s national socialists have toward private banks, because the NSDAP privatized Germany’s four largest commercial banks shortly after taking powerxii. The Federal Reserve system of the US is similarly structured but has never caused hyperinflation. The overwhelming majority of central banks in the world are fully state-run, and multiple fully state-run banks have caused hyperinflations. Although private banks can inflate, a free banking system quickly drives inflationists out of business as non-inflationist banks redeem the unbacked depository receipts at the inflationist ones. When it is discovered that the receipts are counterfeit this causes a run and the bank shuts down. By contrast, when a state with a monopoly on money production inflates, either directly or through its banking partners, no one has any economic recourse, resulting in a mass wealth transfer from late recipients of the newly printed notes to early recipients. The cause of the Weimar hyperinflation was the German government’s monetization of its crippling reparations debts from World War I. One could argue that this was not the German government’s fault because those debts were imposed by the Triple Entente in the Treaty of Versaille, but that simply pushes the blame back a step where it still lies with states.
Red Ice’s claim that the Reichsmark was debt-free is a trivially debunked falsehood. Not only did the Reich issue debt, it forced businesses to buy it3, as well as forcing conquered countries such as Greece to loan it money that was never paid back4. Rachels even contradicts Red Ice himself by quoting Hoppe on German National Socialism later on in the article, where Hoppe compares the Reich’s monetary and fiscal performance with that of New Deal America. One of the points of comparison is the debt burden each country had. Red Ice celebrates Abraham Lincoln of all people for issuing currency that was supposedly debt-free in greenbacks. The greenbacks were the first currency issued by the US government that were not fully redeemable for specie, which is one of the many crimes Lincoln has to his name. The whole purpose of Lincoln’s issuance of greenbacks was to create more debt to finance his war against the Confederacy than commodity money would allowxiii. Red Ice also claims that the attempt on Andrew Jackson’s life was because he issued debt-free money. Jackson did not issue any new currency; he simply vetoed the renewal of the charter of the Second Bank of the United States, thereby ending it. John F. Kennedy never issued his own money either, let alone debt-free, he merely issued Executive Order 11110 delegating to the Treasury his preexisting authority to issue silver under the Thomas Amendment of the Agricultural Adjustment Act, as amended by the Gold Reserve Act. This was merely a temporary measure; Kennedy himself was in favor of phasing out silver certificates in favor of Federal Reserve Notes and called upon Congress to do this5.
Crucially, none of these presidents sought to prohibit outright a real driver of inflation: The fraudulent practice of “fractional reserve banking”. None of them sought to prohibit anything that can be objectively described as debt slavery either, which is forcing taxpayers into debtor status to whomever holds government debt. Neither did Hitler. Red Ice seems to be implying that debt is the fundamental problem in money production. This is not true; a bank can counterfeit all the depository receipts it can for itself, spend them, then skip town rather than lending any of them out. This is what states do when they inflate directly, sans the necessity of skipping town. Lending counterfeit money is simply a longer con. Nearly all debt in any advanced economy is denominated in money; barter is inefficient enough in the present, let alone across time. To be fair to Red Ice, it is unlikely that their position is that debt per se is bad, but that the production of money through debt issuance is bad. This is true because it is an instance of material tampering with the supply of money, but neither the debt part nor the increase in the supply is what is fundamentally problematic. For anyone, including a bank, to destroy a stockpile of depository receipts belonging to someone else without their consent would also be destructive, not only because it would significantly hinder the owner’s ability to withdraw his deposit on demand, but also because it would distort interest rates upward due to the artificial scarcity created by such a hindrance. This detail may be subtle but it is crucial because failure to understand it because the debt bias creates an excessive bias against banks. While states create much more debt then any bank can on its own, debt becomes associated with banks in the public mind because the public has much less hands-on experience with state scrip than with mortgages and credit cards. This bias leads to the conclusion that rather than tampering with the money supply by any party being the problem, the problem is private banks issuing depository receipts for money stored for safekeeping and convenient transfer, because this perfectly legitimate practice is so superficially similar to “fractional reserve banking”, which is the fraudulent practice of lending such receipts, or counterfeit copies thereof, without the depositor’s consent. Although depository receipts can serve as a medium of exchange alongside money, they are not themselves money because of their non-homogeneity; the level and quality of warehousing services varies from bank to bank. A receipt from an uninsured bank that gets robbed will be worth less than one from a sound bank. A proper money supply barely changes if at all, while the number of depository receipts in circulation can change significantly depending on the general demand for security and transfer services. Depository receipts are mistaken for debt because in the lay public’s mind debt merely means “owing somebody something”, rather than a contract exchanging money across time. Depository receipts are demand deposits, however, and the right to redeem them on demand excludes them from the category of debt. It is time deposits that are invested in debt, and as such fall into an entirely separate category of banking service which is investment. The core investment in which banks have expertise is loans. The bank offers to use its expertise in evaluating creditworthiness to make loans it believes will be paid back, and shares the interest with the investor. The investor accepts the credit risk along with the bank. Although these securities sometimes trade on a secondary market and can function to some degree as a medium of exchange within such a market, their inability to be redeemed on demand and their non-homogeneity in terms of credit underwriting quality decidedly excludes them from the category of money as well. In the current fractional reserve system insured on the taxpayer’s dime, however, the crucial difference between the two basic types of services that banks provide is badly muddied. Banks have little incentive to disclose the fact that the money intended merely to be warehoused is in fact being invested, because if the investment goes bust the deposit is insured up to $250,000 by the FDIC. This is before even getting to implicit bailout guarantees and access to emergency lending from the Federal Reserve. It is doubtful a free-market banking system would ever feature services like interest-bearing checking accounts, certainly not accounts both bearing interest and offering unlimited check writing ability. Warehousing is a fee-based, not an interest-based service. It is little surprise, therefore, that economic populists like Red Ice get the money issue so badly wrong.
Red Ice claims that “if America nationalized their currency as Hitler did for Germany, they would effectively sever all ties with international bankers, manipulation of their government and economy would cease, and they would live debt-free”. This is delusional. America’s currency is already nationalized; the private features of the Federal Reserve system, as the preceding explanation should have made clear, are incidental regardless of their extent. Their actual extent is not all that significant; the Federal Reserve was created by an act of Congress, has to requisition money for its operations from the Treasury, enjoys the privilege of legal tender laws, holds regulatory power over its member banks, and has its governors appointed by politicians. It is an independent agency, meaning it operates independently of other agencies and does not carry out orders on monetary policy directly from Congress or the President. The latter can still influence policy, however, in their power to appoint and confirm personnel. A truly private (or liberalized, as defined above) institution has none of these features. A private feature that does exist is a limited equity stake in the system held by member banks, however, such equity does not return a pro-rata dividend but a fixed payout rate of 6%; the remainder of profit goes to the Treasuryxiv. The equity shares do not have voting rights like common shares of a corporation, the system is authoritarian central planning of a kind that third positionists should like: nominal private ownership belying state control. Dispensing with the nominally private features and fully nationalizing the monetary system would simply make the Federal Reserve system like the overwhelming majority of central banks already in existence, and the majority of such banks inflate worse than the Fed. It should also be noted that money can be produced independently of both banks and government, historically this is quite common. The rise of cryptocurrency is driving this home further. If the state were to nationalize all banking functions, which Hitler came close to doing (referred to by Red Ice’s use of the term “public banking” for Hitler’s system) this would be catastrophic for the reasons attentive to socialism of any crucial industry. Red Ice blithely ignores the basic fact that increasing the government’s power over the economy increases the capacity for systemic manipulation and abuse thereof. There’s even a term for this: Keynesianism. Keynesianism is the belief that the government can manipulate the economy into greater prosperity through deficit spending and inflation. Keynesianism is banking-agnostic, but the effects of deficit spending and inflation are no less destructive when the government does these things with cronies in other industries than with banks. Red Ice’s claim that Germany’s economy recovered in two years is mainly based on the labile metric of GDP, a metric which is easily manipulated through Keynesian policies, a metric which in other contexts Red Ice have dismissed for the same reasons. The claim that world jewry declared war on Germany is a meme based on a sensationalist Daily Express headline from 1933. The vast majority of jews do not work in banking, nor do those outside banking understand the destructiveness of fractional reserve banking to them. and it was quite reasonable for them to wish to starve the national socialist regime of the fruits of their labors, as that regime had made explicit its intent to arbitrarily prohibit jews from working in a number of occupations they had relied on historically for sustenance. Because at the time jews had no state, it is ridiculous to take this headline of “declares war” anywhere close to literally.
While Rachels does correct Red Ice on one point of fact, it feels perfunctory in light of how much distortion on their part he simply lets slide. Sometimes what is unsaid makes a stronger case than what is, and what Rachels does not say in terms of correcting Red Ice’s distortions makes a strong case against his.
Perhaps sensing this on some level, Rachels goes on to cite a much more authoritative source in Hoppe’s “The Economic Doctrine of the Nazis”. Rachels does so for the purpose of comparing the Third Reich with New Deal America. On a number of standard macroeconomic metrics, the Reich appears superior. For the most part I will not dispute the veracity of the metrics themselves. I will say that employment can be highly misleading due to its variance with labor force participation and discouraged worker effects. It is likely even more misleading in the case of the Reich, which had mandatory national service for its youth and introduced military conscription earlier than did the Roosevelt regime. According to the Wikipedia article on the economics of Nazism, real wages fell 25% between 1933 and 1938. The article also mentions that “Hitler’s administration decreed an October 1937 policy that “dissolved all corporations with a capital under $40,000 and forbade the establishment of new ones with a capital less than $200,000,” which swiftly effected the collapse of one-fifth of all small corporations.” Not even Roosevelt’s administration passed something that egregious. Although we must take communist-run Wikipedia articles on Nazism with a grain of salt, it hardly needs to be said that like the system of today, the New Deal is an abysmally low bar for comparison. The Reich’s faster recovery from the depression in terms GNP per capita is also misleading due to its massive military build-up to invade Czechoslovakia and Poland. Hoppe also points out that inflation as measured as measured by consumer and wholesale price indices was much lower in Germany than the US. There are of course significant limitations to price indices as a measure of inflation, but the key point to make here is that the Third Reich, like its supposed enemies and Weimar predecessor, was still inflationary. Hoppe mentions that Hitler lowered taxes in a number of areas such as automobiles, housing construction, and property. Hoppe does not mention, however, that tax revenue from corporate taxes increased 1,365% from 1933-1938 while GNP (which includes the taxation that is government spending) increased by only 57%. Total fiscal revenues grew 110% over this periodxv.
Hoppe praises Hitler for his “significantly more enlightened” understanding of monetary economics, quoting Hitler declaring: “The value of a currency depends on the volume of production behind it. Falling production weakens it; rising production strengthens it. Money is only a matter of paper production; the real task is to increase production to the extent money is increased.” This is a classic case of someone with right-wing instincts in Hitler having the right instinct about an issue but drawing the wrong conclusions. Hitler is right about the effect of production on money, perhaps under the recency bias of Weimer hyperinflation, falsely reduces money to a ‘matter of paper production’ (likely confusing depository receipts with money as discussed earlier). He also appears to assume that increase of the money supply is an inexorable, exogenous force. Hitler correctly concludes, given this false premise, that maintaining purchasing power requires an increase in economic activity. The Keynesian bias is clear, assuming correct translation, in the phrase “the real task is to increase production.” He views people as passive sluggards who need to be prodded by the state to produce enough to keep up with the rate of monetary increase. The policies this view results in, of course, create a turbo-charged treadmill of an economy where the state inflates faster than people can keep up their production with, with those of least means, especially fixed means, often falling off completely.
The final section of Rachels’ article addresses the objection that some libertarians have to dictatorship as such. He rebuts this objection with Hoppe’s observation that long-tenured rulers naturally have a longer-term stake in the welfare of a nation than do politicians who have to concern themselves with a short-term election cycle. While Rachels’ rebuttal is correct as far is it goes, he does not address the fundamental problem that is naturally associated with dictatorship: the unlimited potential scope of the government’s activities. A democratic republic where natural law is esteemed, which is to say, where people only vote on who enforces natural law, rather than vote on law itself, is superior to a regime where an autocrat can legislate anything on a whim, or worse, anything behind the pretext of “national interest” as in fascism.
Rachels’ concludes:
At this point, it should be clear why a move towards Fascism from our current position would be a move towards liberty. Thus, we as libertarians should not be averse to allying with the Alt-Right simply because some of them are Fascist. This is perfectly fine. Fascist governments have a relatively healthy respect for private property and free enterprise. They oppose the Central Bank. They promote traditional western values and institutions. Of course, the most satisfying aspect of Fascism is its ability to mercilessly destroy the Communist threat.
It is not at all clear beyond the presumably much more restrictive immigration policy (though even here fascism is inferior to our system) that fascism is much of a move toward liberty at all. Immigration restriction does not at all distinguish fascism from other reactionary ideologies. It is perfectly reasonable to wish to avoid association with a phenomenon because it contains a significant element of toxicity. We justify discriminatory behavior against dangerous diversity with Mark Levin’s quip: “If you knew one Skittle in bowl was poisoned but not which, would you eat any?” In the case of the Alt-Right, however, which comprises disparate factions loosely connected by opposition to globalism, it is trivial for right-wing libertarians to embrace only the other factions that are well-aligned with us, such as Propertarians, paleoconservatives, and neoreactionaries. Fascists are to be excluded. Their respect for private property and free enterprise is a sham; not only do they not oppose a central bank, the historical instances of fascism retained pre-existing central banks and increased its power. Moreover, they are committed to the monopolization of money production through the state. Fascism goes sharply against Western values: Its genuine collectivism is against actualist individualism, its authoritarianism is against liberty, its monopolistic centralization is against political competition. Fascism failed to defeat communism historically, included numerous communists among its ranks high and low, and ideologically differs from communism more in emphasis than in substance. Fascists are inveterate enemies of libertarians, and it is strange that this even needs to be said. That being said, forming alliances with certain enemies can be expedient when facing a common threat. This is always provisional, however, and must be treated with caution. In the comments to the essay, Rachels indicated agreement with this as of 2018. He said explicitly then that he did not see fascism as a necessary or ideal step to liberty. He now sees fascists as not only potential allies but friends, however, and believes that fascism is now necessary to save the white race, and possibly liberty, but to him the latter is something that can be discussed “later”. Well I’m not waiting to discuss the evil of authoritarianism until later, I’m going to attack it with all my might now and through the end of my days. Part II will rebut Rachels’ current position.
Sources
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iiZitelmann, Rainer “How Hitler Became a Believer in the State-Planned Economy” FEE, February 22, 2022. https://fee.org/articles/how-hitler-became-a-believer-in-the-state-planned-economy/
iiiKershaw, Ian (2000). The Nazi Dictatorship: Problems and Perspectives of Interpretation. London: Bloomsbury Academi. Pp 18-20
ivBullock, Alan. (1991) Hitler and Stalin: Parallel Lives New York: Knopf. ISBN 0-394-58601-8 pp 440-4
vFeder, Gottfried. The German State on a National and Socialist Foundation (trans. Alexander Jacob). Self-published, 1923 Pg 15
vi“Brandenburg v. Ohio” https://infogalactic.com/info/Brandenburg_v._Ohio
vii Poole, Christian. “The Nazi Origins of Germany’s Ban on Homeschooling” June 22, 2020. https://thinkingwest.com/2020/06/22/nazi-ban-homeschooling/
viiiBaten, Jorg, & Andrea Wagner. “Autarchy, Market Disintegration, and Health: The Mortality and Nutritional Crisis in Nazi Germany 1933-1937.” CESifo, 2002. https://www.ifo.de/DocDL/cesifo_wp800.pdf
ixhttps://quotepark.com/quotes/1946647-ludwig-von-mises-it-cannot-be-denied-that-fascism-and-similar-movem/
xToland, John, Adolf Hitler (1992), p. 277.
xi“National Socialist Program” https://infogalactic.com/info/National_Socialist_Program
xiiChristoph Buchheim and Jonas Scherner (June 2006). “The Role of Private Property in the Nazi Economy: The Case of Industry” (PDF). The Journal of Economic History. Cambridge University Press. p. 406.
xiiiTerrell, Timothy, “The Dollar Crisis of 1861–1865: Greenbacks, Gold, and Confederate Dollars“ 10/25/2023 https://mises.org/podcasts/2023-supporters-summit/dollar-crisis-1861-1865-greenbacks-gold-and-confederate-dollars
xivMartinez, Brandon “Are Central Banks Private?” Martinex Politix Investigates July 13, 2023 https://odysee.com/@martinezperspective:2/central-banks-martpol:b
xvReichs-Kredit-Gesellschaft, Germany’s Economic Situation at the Turn of 1938/39 (1939), p. 62.
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