Why Fascists Admired Keynes’s Economics

“Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal.”

So wrote the British fascist James Strachey Barnes in his 1928 book Universal Aspects of Fascism, which included a glowing preface written by Mussolini himself. “In fact,” Barnes continued, “Mr. Keynes’s excellent little book, The End of Laissez-Faire… might, so far as it goes, serve as a useful introduction to fascist economics.”

Even today, crackpots apply Keynes’s name to economic nonsense, hoping that some of his credibility will rub off; what might be called “Keyneswashing.” Was Barnes “Keyneswashing” fascist economics, or is there a genuine similarity with the Keynesian variety?

Laissez-Faire

Keynes defined “laissez-faire” as the “idea of a divine harmony between private advantage and the public good.” Adam Smith’s legacy, he summarized was, “in the main, to allow the public good to rest on the natural effort of every individual to better his own condition.”

The balance rested on two pillars, Keynes reasoned. First was ideology: if economic theory was followed to its conclusion, laissez-fire would be found at the end. He argued that this was not so, that the great economists — Adam Smith, David Ricardo, John Stuart Mill — had said no such thing, that this was only “what the popularizers and the vulgarizers said.” It was they, not the economists, who “fixed laissez-faire in the popular mind as the practical conclusion of orthodox political economy.”

Second, an accident of historical circumstance meant that “the corruption and incompetence of eighteenth-century government, many legacies of which survived into the nineteenth” coincided with “material progress between 1750 and 1850 [which] came from individual initiative, and owed almost nothing to the directive influence of organised society as a whole.” This practical experience, it was said, confirmed the “ a priori reasonings” of the economists.

By the time Keynes published The End of Laissez-Faire…