The Coming of the American Behemoth. Michael Joseph Roberto
profit in productive enterprises. Prosperity became increasingly based on greater speculation until the Great Boom turned into its opposite, the Great Depression. Nevertheless, the underlying cause for this later development inhered in the fundamental divide between capital and labor created by capitalist accumulation. The law that Marx discovered in 1867 to explain how modern industrial growth in England created greater poverty in an ever-rising sea of plenty, was applied by Corey in 1934 to explain how the prosperity of the 1920s caused the greatest economic crisis in contemporary world history.
IN 1938, MAGIL AND STEVENS argued that the germ of American fascism was present in monopoly capitalism in the 1920s when Big Business and the Republican Party created an “entire mechanism of repression” to subject the working and middle classes to its control and domination. For much of the Depression decade that followed, the U.S. ruling class was split on how to end the economic crisis. This was abundantly clear in the battles between Roosevelt and his New Dealers who sought to save capitalism through direct government intervention, and those who remained wedded to the laissez-faire doctrine and ruling-class politics of Roosevelt’s three Republican predecessors. Through it all, however, the power of monopoly-finance capital remained superior despite the labor insurgency of 1934 that required the reformist Roosevelt and his administration to usher in Social Security, the National Labor Relations Board, and other components of what we know as the welfare state.
Nevertheless, the power of capital over American society continued to grow throughout the New Deal as the final phase in the transition to state monopoly capitalism. As the epicenter of the world capitalist system—Pax Americana in the making—the United States was the one advanced capitalist nation that could save its own version of liberal capitalist democracy from collapse. As the world’s banker and leading creditor to other nations, it prevailed through boom and bust, prosperity and depression, while the myriad and pervasive powers of capital became ever more totalizing at home and abroad. From a Marxist standpoint, it was a course irreversibly determined by the imperatives of monopoly and finance capital—the laws of motion governing its movement and social character—to accumulate exponentially in order to sustain profitability at the highest levels throughout the system. Those who profited most by it then forged new policies aimed at enhancing the executive power of government over the legislative branches and the judiciary, all aimed at preventing a revolutionary socialist alternative, real or perceived, to rise up against it. Simply put, capitalist progress meant the increasing subjugation of labor. Here was the root of the violence, deception, and manipulation that Magil and Stevens recognized as “the entire mechanism of repression.” The advance of such power to create and destroy at ever higher levels was a sure indicator of fascism as a result of the decline and decay of American capitalism. The centralization of wealth and power, monopoly, had mandated the increasing antidemocratic politics of the ruling class.
Lewis Corey explained this in 1934 in The Decline of American Capitalism by demonstrating how capitalist accumulation and economic growth exacerbated fundamental and irreconcilable contradictions between capital and labor, now at a much higher stage of capitalist development than those Marx observed in nineteenth-century England. Still, Corey affirmed what Marx had discovered as one of many laws governing the motion of capital. The constant and necessary drive for capitalist accumulation during the booming 1920s had subjected American labor to even greater control by capitalists. Just as the seeds of the bust were evident in the boom, so were fascist processes aimed at the domination of capital over society. In the epicenter of world capitalism, fascism neither required an economic collapse, a strong working-class challenge to capitalist rule, nor the fiery rise of its most immediate antagonist, middle-class reaction.
American fascism came to life in the midst of prosperity as a property of capital, specifically in its constant quest to reproduce itself. This was what Magil and Stevens implied by terming Big Business and Wall Street as the “fountainhead” of American fascism and what they surely meant when they defined it as “the rule by finance capital.” As Corey noted, modern capitalism was in transition from its industrial stage to a higher form, monopoly-finance capital and imperialism, when Marx’s Capital was published in 1867. But nothing in this movement to a higher stage of development had fundamentally altered the general law of capitalist accumulation. Corey ably demonstrated that American capitalists were driven to do what Marx saw in their English predecessors: “To accumulate, is to conquer the world of social wealth, to increase the mass of human beings exploited by him, and thus to extend both the direct and the indirect sway of the capitalist.”43
In the decline and decay of monopoly-finance capitalism and imperialism, the highest and final stage of capitalism, as Lenin had argued, is where we find the germ of fascism in American capitalism during the period between the two world wars. From the standpoint of the present crisis of American and world capitalism, it is now evident that fascist processes aimed at the domination of capital over labor were embedded in capitalist production, in what Corey observed as “the perpetual struggle between the forces of expansion and decline.” As Corey says, “Accumulation tends to outstrip itself and limit the means of profitably investing capital, which results in a periodical overproduction of capital goods.”44 Since profits depend on the ability of capitalists to enlarge their markets to absorb the rising output of consumption goods, the failure to sustain this movement eventually compels capitalists to cut back on the production of capital goods.
Overproduction of capital goods reveals why capitalism is utterly contradictory at its core and inherently prone to crisis. This, Corey states, is “the real element” of capitalist decline:
Capitalist production tends to exhaust the long-time factors of expansion and to limit, at first relatively, then absolutely, the possibilities of economic advance. Capitalist production must yield profits and these profits must be converted into capital by means of an increasing output and absorption of capital goods. This is the accumulation of capital.45
The contradiction of supply outstripping demand is only made greater with economic growth and the concomitant advance of concentrated wealth and power—monopoly—which ultimately gives way to breakdown, crisis, and the threat of declining profits. “Monopoly answers the threat with control of markets, higher prices, limitation of output, and relative or absolute restriction of progress in technological efficiency.” For Corey, “this is an element of decline, as it emphasizes the incapacity to develop fully all the forces of production and consumption.” Instead of fluidity in the movement of capital required for further accumulation, monopoly instead becomes more rigid in the face of mounting contradictions in production and exchange, imposing greater controls over the domestic economy while seeking to counter the forces of decline with the export of capital abroad—in a word, imperialism.46 Throughout, capital strives to exercise greater control over all aspects of social and political life. These efforts, which are ultimately grounded in the fundamental contradiction between capital and labor, generate fascist processes aimed at the domination of the former over the latter.
From its very beginning, American fascism reveals in embryo the basic contradiction between capital and labor in the context of an unprecedented empire that defined the epoch of monopoly-finance capitalism and the contemporary world experience. In the U.S. epicenter during the 1920s, fascist processes inhered in the expansion and complexities of production and exchange, creating greater wealth and poverty at once and thus at every turn requiring mechanisms of repression at home and the ability to deliver militaristic clout whenever necessary in its imperial designs. To that end, the expansion of the means of production in the domestic economy also brought growing displacement of labor. This required capitalists to rely on the powers of government to defend their interests by disciplining and punishing the political forces of labor by whatever means necessary, while pioneering ways to persuade and manipulate mass consciousness through advertising, public relations, and propaganda.
Indeed, the global crisis of the 1930s brought fascism to power in its most brutal form in Germany. But political economy reveals fascist processes deep in U.S. capitalism a decade before Hitler’s rise, in the intensification of irreconcilable contradictions between capital and labor that also signaled the coming of the American Behemoth now fully upon us today. Fascism inheres in the processes of monopoly-finance capitalism that inevitably create a general crisis of the system, and from it the plausibility