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that doesn't mean that financial capture by 'the markets' and their political cronies and toadies isn't essentially fascist, or - more pertinently - ultimately as dangerous, in a slow-boil way, as Nazi-style fascism.

What other word can you use when a supposedly sovereign country immediately modifies its constitution on demand? Anschluss?

I still think Gleichschaltung in the meaning of forcible legal realignment and policy coordination is apposite.
When the state and large corporations cooperate to manage populations at their own expense, you have fascism. It doesn't matter if it's dressed up with jackboots, window breaking and flag-waving, or with serious editorials and pompous economic word salad.
Indeed: Political Aspects of Full Employment by Michal Kalecki (1943)
A solid majority of economists is now of the opinion that, even in a capitalist system, full employment may be secured by a government spending programme, provided there is in existence adequate plan to employ all existing labour power, and provided adequate supplies of necessary foreign raw-materials may be obtained in exchange for exports.

If the government undertakes public investment (e.g. builds schools, hospitals, and highways) or subsidizes mass consumption (by family allowances, reduction of indirect taxation, or subsidies to keep down the prices of necessities), and if, moreover, this expenditure is financed by borrowing and not by taxation (which could affect adversely private investment and consumption), the effective demand for goods and services may be increased up to a point where full employment is achieved.  Such government expenditure increases employment, be it noted, not only directly but indirectly as well, since the higher incomes caused by it result in a secondary increase in demand for consumer and investment goods.

How we have gone backwards in the last 70 years. Krugman: Fiscalization Watch
A correspondent informs me that Wolfgang Schaeuble, the German finance minister, has just given a speech asserting that excessive public debt caused the 2008 crisis. In fact, I'm told, he said that
It's actually undisputed among economists worldwide that one of the main causes - if not the main cause - of the turbulence - not just now, but already in 2008 - was excessive public debt everywhere in the world.
OK, we can prove that wrong immediately: I dispute it, Brad DeLong disputes it, Christy Romer disputes it, and I think we fall into the category of "economists worldwide".
Back to Kalecki
In should be first stated that, although most economists are now agreed that full employment may be achieved by government spending, this was by no means the case even in the recent past.  Among the opposers of this doctrine there were (and still are) prominent so-called 'economic experts' closely connected with banking and industry.  This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic.  That is not to say that people who advance them do not believe in their economics, poor though this is.  But obstinate ignorance is usually a manifestation of underlying political motives.

There are, however, even more direct indications that a first-class political issue is at stake here.  In the great depression in the 1930s, big business consistently opposed experiments for increasing employment by government spending in all countries, except Nazi Germany.  This was to be clearly seen in the USA (opposition to the New Deal), in France (the Blum experiment), and in Germany before Hitler.  The attitude is not easy to explain.  Clearly, higher output and employment benefit not only workers but entrepreneurs as well, because the latter's profits rise.  And the policy of full employment outlined above does not encroach upon profits because it does not involve any additional taxation.  The entrepreneurs in the slump are longing for a boom; why do they not gladly accept the synthetic boom which the government is able to offer them?  It is this difficult and fascinating question with which we intend to deal in this article.


One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment.

The dislike of government spending policy as such is overcome under fascism by the fact that the state machinery is under the direct control of a partnership of big business with fascism.  The necessity for the myth of 'sound finance', which served to prevent the government from offsetting a confidence crisis by spending, is removed.  In a democracy, one does not know what the next government will be like.  Under fascism there is no next government.

The dislike of government spending, whether on public investment or consumption, is overcome by concentrating government expenditure on armaments.  Finally, 'discipline in the factories' and 'political stability' under full employment are maintained by the 'new order', which ranges from suppression of the trade unions to the concentration camp.  Political pressure replaces the economic pressure of unemployment.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue Aug 30th, 2011 at 05:51:40 AM EST
[ Parent ]
I still think Gleichschaltung in the meaning of forcible legal realignment and policy coordination is apposite.

The two latter terms are apposite. The use of Nazi term itself is historically loaded rhetoric.

But whatever. The circumstances are such that it doesn't matter what we shout as long as we're shouting.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 30th, 2011 at 07:10:52 AM EST
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It's like Weltanschauung or überfordert... German is such a great language sometimes.
Usually I stay clear of connotation-rich German words that have no real equivalent in other languages. Their purpose is to obfuscate. But there is one that describes the eurozone's crisis management rather well. It is überfordert. The nearest English translation is "overwhelmed", or "not on top of something", but those are not quite the same. You can be overwhelmed one day, and on top the next. Überfordert is as hopeless as Dante's hell. It has an intellectual and an emotional component. If you are it today, you are it tomorrow.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue Aug 30th, 2011 at 10:42:16 AM EST
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