Neo-Liberalism or Fascism ‘Light’?


“Fascism should more appropriately be called Corporatism, because it is a merger

of State and corporate power.” Benito Mussolini


The UK economy today has some startling similarities with both Nazi Germany and apartheid South Africa. The overriding image of fascism is the Nazi jackboot trampling over the brave democratic countries of Europe, and fascism itself will always be associated with a totalitarian state, racial superiority, concentration camps and most of all, the Second World War. Yet the economic and financial system that underwrote political fascism has not received much publicity since the victors always write history. Germany lost the Second World War but well before the final defeat, the Western Allies were fighting a new war – the Cold War – against Russia, their old ally, and communism. West Germany was the new ally on the front line facing the Soviets, so it was better to bury much of the truth of Nazism, including the economic system.

In the totalitarian world of the Soviet Union, the state owned, and ran, a centrally planned economy. In Nazi Germany the government did the planning, but mainly contracted private companies to produce the goods and services needed, giving them an outright monopoly, or making them part of a cartel. Today, it is conveniently forgotten that household names such as ThyssenKrupp, Mercedes, BMW, VW, Porsche and Hugo Boss made vast profits in an environment where there were no unions, few regulations and cheap labour, and very often slave labour from the concentration camps.

I.G. Farben, makers of Zyklon B – the gas used in the gas chambers – was broken up after the war, and out of this break-up, Bayer and BASF came into existence. In return for the Nazi Government’s largesse, the companies did not involve themselves in politics, and besides the slave labour they used, they were often the beneficiaries of tax breaks.

In apartheid South Africa, companies had cheap labour from the non-whites living in appalling conditions in townships, and often, when the cheap labour was in one part of the country and the work was in another, the workers were transported and accommodated in overcrowded shoddy hostels. They were on contracts, with no unions, and the security forces enforced the very one-sided contracts. The workers sent money home and, normally, only went home once a year at Christmas and, just in case this situation wasn’t beneficial enough for the companies, there were also beneficial tax breaks as well!!

These companies operated in mining, construction, road transport, wine and spirit distilling and brewing beer. The best known are probably South African Breweries, which is now SABMiller, the second-largest beer company in the world. Gencor, now BHP Bilton, is a global mining conglomerate, and Investec, now a normal bank (if that isn’t an oxymoron!). These three companies are now respectable, and quoted on the London Stock Exchange.

After the Second World War, the main political parties accepted that the UK was a mixed economy, with clear dividing lines between the state and private enterprise. Public transport, social housing, health, education, social services, correctional services, job training services, utilities etc were all run and operated by government, centrally or locally, directly or indirectly.

But over the last 30 plus years the neo-liberal market economy has changed all that, and today there are four main ways that the State and corporate power are being merged into corporatism – through outright privatisation, franchising, contracting out and PFI (Private Finance Initiative). What all these have in common is, firstly, the loss of any semblance of democratic accountability at local or national level. Secondly, they provide cheap labour, since EU and UK law allows gangmasters to recruit from low- wage economies, especially in Eastern Europe. Lastly, there are the inevitable tax breaks, which are really tax avoidance. There are so many tax loopholes in the UK that it hardly takes a genius to ensure that the large companies pay very little tax. Closing the loopholes would seem sensible, but the regrettable truth is that there has been no political will to do this by successive governments.

The rationale, we are repeatedly told, is that private enterprise is more efficient than state run industries, and this has become a quasi-fundamentalist religious belief of all UK governments for over 30 years. Strangely, it is only British state-run industries that are deemed inefficient, since French state-controlled EDF has been allowed to run one of the big six British energy companies. EDF are also asking for large subsidies from the British taxpayer to build a nuclear power station at Hinckley Point in Somerset. The design will be the same as the planned Flamenville nuclear power station in France, where the original budget of 3.3 billion Euro is now estimated at 8 billion Euro!!

Arriva Trains are owned by Deutsche Bahn (DB), the German state-controlled railway company, and cynics say that the high UK fares on Arriva’s old clapped-out trains allow the Germans to travel on new trains with low fares!! Deutsche Bahn is the second largest transportation company in the world, and one of its subsidiaries is DB Shenker Logistics – which has just celebrated 50 years in South Africa!!

There are only a small number of companies that can compete for the privatisations, contracting out, franchises and PFI contracts. A study of the various shareholder registers will show that the shareholders are often the same. An example is G4S and Crapita (apologies Freudian slip, or reading Private Eye too much – Capita) who both have the same largest shareholder – a very large US investment fund named Investco. Is this really competition?

It can be argued that though there are economic similarities with Nazi Germany and Apartheid South Africa, Britain is a democracy and not a totalitarian state. However, Britain’s democracy, based on first-past-the-post, will always have severe democratic failings, especially the legitimacy of a Government elected on the basis of the votes of about 36% of the people who actually voted – which is less than 25% of those entitled to vote. This has been the average percentage of votes gained by most modern Labour and Tory governments.

However, any democratic audit will show that over the last 30 years, our personal freedoms have been reduced, especially for protest. All strikes now require ballots conducted over a period, which can eliminate the effectiveness of industrial action. Picketing was decriminalised by the Conspiracy and Protection of Property Act 1875, and the 1906 Trades Dispute Act gave protection from a Trade Union being sued for damages caused by a strike. However, the Trade Union and Labour Relations (Consolidation) Act 1992 bans secondary picketing, and only gives protection under civil law for pickets who are acting in connection with an industrial dispute at or near their workplace, and providing that their picketing is only designed to peacefully persuade a fellow worker to join the strike!

Demonstrations need police agreement in advance, and that includes the route, so that a spontaneous demonstration as a reaction to events is, essentially, illegal. Even when the protestors follow the agreed route, there can be problems, and ‘kettling’ has entered the English language as the process whereby the police force a large group of protestors into a small area and keep them there for hours. The police have more power to arrest on suspicion, and without any evidence, than ever before, and the line between legitimate protest and terrorism is being clouded by both statute and an increase in police powers. More cases can be heard in camera, with the defence restricted on the direct questioning of prosecution witnesses. Legal aid is being cut, and protest is becoming a crime.

An example is Leyton Marsh where Rowena Johnson, a peaceful protestor has found herself being threatened with eviction costs of £335,000.  Her crime? She joined a protest against Leyton Marsh being used as a basketball Olympic training facility, and tried to stop other peaceful protestors being forcibly evicted from the site.

It is not just political protest that is being curtailed. On Sunday 13th January this year, some Manchester City fans took a home-made banner to Arsenal to protest against the high price of tickets for away fans. The police told them that if their banner was not taken down they would be arrested, and they would not see the football match for which they had paid £62 each!!

The Conservative-Liberal Democrat coalition agreed that they would restore the right to peaceful protest, but they have carried on the tradition of the Thatcher, Major, Blair and Brown governments in reducing our rights to peaceful protest. At the same time, all these governments have handed more and more control of public services to a profit-making private sector, where there is no pretence of democratic accountability. It is time that the 99% increased peaceful protest and demanded a return of that democratic accountability. If not, we will really be on a one-way street that leads to corporatism or fascism ‘light’.

Michael Gold has just started blogging at



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