The Spectator USA, February 1, 2021

In ‘What is Fascism?’ (1944), George Orwell complained that the word ‘fascist’ had been applied to so many groups, (including conservatives, socialists, communists and Catholics), beliefs and even species (dogs!) that it had been reduced to something close to meaninglessness. And yet, he observed:

‘Fascism is…a political and economic system. Why, then, cannot we have a clear and generally accepted definition of it?… To say why would take too long, but basically it is because it is impossible to define Fascism satisfactorily without making admissions which neither the Fascists themselves, nor the Conservatives, nor Socialists of any color, are willing to make.’

That was true then, and it’s true in 2021 — except that we should now add some of today’s harder-edged greens to Orwell’s list. A good number of their precursors in interwar Europe would not have been so diffident. Much of the environmentalism of that era was based in Germany, and much of it was fueled by the German far right’s distaste for big cities, which it saw as centers of racial
and cultural degeneracy.

Suspicion of the urban merged into a wider anxiety about the disruptive effects of capitalism and, by extension, industrialization. The flipside was veneration of the simple, natural and healthy agrarian life. This tied into an obsession with the organic, whether in the junk science of ‘organic’ food or, in a murderous understanding of what a nation freed of ‘impurities’ should be, a reductio ad infernum almost perfectly symbolized by the spectacle of prisoners at Dachau working at an organic herb farm just outside the camp.

Agreeing to a definition of fascism is complicated by the way that it developed in sometimes strikingly different directions. One constant, however, was a perception of fascism as a ‘third way’, neither socialist nor capitalist, towards a unified, organic state free from the class divisions that had torn much of Europe apart. Classes were recognized and, in theory at least, their distinct interests were represented within the machinery of the state, but as components of a single national community. Mussolini’s Labor Charter (1927) asserts that ‘the Italian Nation is an organism’— terminology, incidentally, unconnected with German-style environmentalism, even if, in the end, it too led to the cattle trucks. Rather than fight it out, the social classes were to work together, cooperating in the pursuit of goals set by a leadership that both guided and, supposedly, embodied the nation. The individual, needless to say, did not get much of a look-in.

The roots of this ideology, often labeled corporatism (a word derived from a vision of society as a single body), can be found in a line of primarily Catholic thought that evolved from reactionary beginnings but by the end of the 19th century included a firm commitment to ‘social justice’. That these ideas should lead to fascism was not inevitable. Corporatism also influenced the establishment of post-war West Germany’s social-market economy, a democratic success story if ever there was one.

The Nazis may have linked, in their rhetoric and in some measures, elements of their Volksgemeinschaft to corporatism, but it’s no surprise that Mussolini, the leader of a strongly Catholic country, did more to institutionalize corporatism than the Führer to his north, despite there being more than a touch of Potemkin about Italy’s corporatist structures. Thus employers and workers participated in ‘syndicates’ organized on an industry basis, and the Italian legislature’s lower chamber was eventually rearranged on nominally corporatist lines. At around the same time, corporatism became, to varying degrees, the political creed of other equally (if less bluntly fascist) Catholic states, including Portugal, Spain, Austria and Argentina.

These countries may have failed to measure up to corporatist ideals in practice, but that does not detract from corporatism’s potential as an instrument of social, economic and political control. To take one instance, Silvio Longhi, one of fascist Italy’s senior lawyers, explained that under corporatism, ‘the state recognizes and safeguards individual property rights so long as they are not being exercised in a way which contravenes the prevailing collective interest’; a less than reassuring reassurance.

Fast forward to 2019 and a statement by the Business Roundtable (which has now been signed by over 200 of America’s leading CEOs) purporting to ‘redefine the purpose of a corporation’. The longstanding principle that corporate executives’ primary obligation is to their shareholders has been ‘modernized’: companies are now to be run for the benefit of ‘stakeholders’, more specifically, customers, employees, suppliers, ‘the communities in which we work’ and, oh yes, shareholders.

If this statement were a one-off, it could be regarded as a piece of largely meaningless PR put out by businesspeople alarmed by the extent of American disenchantment with the existing economic order. Unfortunately, it is not. C-suite after C-suite is abandoning shareholder primacy (a concept denounced by Joe Biden as ‘a farce’) in favor of ‘stakeholder capitalism’. Stripped of euphemism, that means overriding shareholder property rights based on what Silvio Longhi would have described as ‘the prevailing collective interest’.

The ‘collective interest’ doing the most to drive this switch is, it seems, the need to safeguard the environment, and, more particularly, to halt climate change. But for so many corporate managers to suddenly announce a major shift in the way they plan on discharging their duties suggests that something less than spontaneous is going on.

That, indeed, is the case. These converts to stakeholder capitalism are reacting to something rather more concrete than the illusion of a fiery planet, not least the surge in, to use the self-congratulatory label, ‘socially responsible’ investment. This cause (or grift) has been taken up by some of the biggest asset managers in the world, including the largest of them all, BlackRock, which has nearly $8 trillion under management — investors that large are not easy to ignore.

The ‘stakeholder’ argument has attracted the attention of climate warriors for quite some time. Claus Leggewie, a German academic and the coauthor of The End of the World as We Know It: Climate, the Future and the Prospects for Democracy (2009), dismisses fears that tackling climate change might represent a threat to democracy, maintaining instead that what is required is ‘a real change in consciousness… and a new stakeholder culture’; another less than reassuring reassurance.

Stakeholder capitalism is being used as a device to push through consequential economic and social change without going through the normal democratic hoops. Much of this effort is focused on the environment and climate change, but by no means all. Companies are also being nudged (or simply shoved) to embrace the wider objectives — diversity quotas and all the rest — that any woke corporation should be looking to do. Even the Nasdaq is playing its part, seeking the right to compel its listed companies to satisfy certain diversity standards when appointing their boards, regardless, naturally, of what shareholders may want.

Put another way, stakeholder capitalism is an excuse for diverting corporate resources that ought to be used to generate return for shareholders. Instead, they are used to pursue an agenda set by a cabal of the unelected, including corporate chieftains, activists, NGOs, foundations, supranational organizations, Davos Man (the World Economic Forum’s Klaus Schwab has been making the stakeholder case for decades) and elements within the state, not infrequently with the encouragement of the government, but all too often without the approval of the legislature.

Today’s stakeholder regime may not have some of the institutional attributes of 20th century corporatism (there are no ‘corporative chambers’ in any legislature), if not the institutional recognition (check out how often the EU refers to, and works with, those it views as acceptable stakeholders). But it is difficult not to see it as an expression of corporatism that is, if anything, less of a sham than its infamous predecessors.

It’s smarter too. Rather than overthrow democracy, stakeholder capitalism bypasses it. The pressure on companies to conform to the demands of the climate warriors is not only coming from the activist posse and investment managers. Regulators are also getting in on the act, with, say, central banks coming closer to forcing financial institutions to disclose the risk that climate change allegedly may pose to their businesses, itself part of a broader process (in which banks and investment managers are playing an active part) designed to increase the cost of capital to companies deemed to be doing the wrong thing. Or, to take another example, accountancy bodies, as private institutions even less democratically accountable than central banks, are busy dreaming up mechanisms that will again use ‘disclosure’ on climate risk (and other preoccupations of the socially responsible) as a weapon to impose change on the companies accountants supposedly serve.

The stakeholder regime has, at the very least, an intellectual ancestor in common with fascism when it comes to climate change. But it shows only impatience with democracy, rather than outright opposition to it, at least for now. However, a significant portion of its green wing, while lacking many, but not all, of the peculiarities of prewar fascist environmental concerns, which were mainly German — with some quieter British echoes — does share a deep dislike of individual choice and free markets with the jackboot boys of old, emphatically so at its extreme. If nothing else, this is a reminder of how easily and how often far right and far left converge.

And not just the far left. As we wait to see how much of the Green New Deal will be implemented, recall Roger Shaw, a progressive writer, describing the original New Deal as ‘employing Fascist means to gain liberal ends’. It could happen here (again), and perhaps it already has. What’s more, ‘liberal’(even in the debased American usage of that term) may no longer mean what it once did.