Diagnosing the Virus: Karl Polanyi Against Fascism

A LIFE ON THE LEFT GARETH DALE

were dispatched to Vienna “to explore official and semi-official avenues,” while Eva, through the intermediation of either Karl or Michael, sought help from the Quakers, and Karl purchased and sent her (and apparently Sophie and Egon too) train tickets for the Paris to London leg of her anticipated journey.47 According to Laura’s biographer Judith Szapor, the combined efforts of lawyers and Quakers, together with medical cer-

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tificates attesting to Laura’s failing health and the leniency (or corruption) of the Austrian police official in charge of the case, led to her release, on the very day of her scheduled hearing. She straightaway boarded a flight to London.48 During her time in London, Karl visited his sister frequently. She remained there for a year, her spirits at a low ebb as she underwent extended hospital treatment and awaited her eternally postponed U.S. visa.49 He would write her frequently, discussing the travails of family members or entertaining her with stories of daily life. (One recounts a lecture he gave to antifascists in early 1939, at which the audience of a dozen people all seemed very pleased—eleven of them with his enthralling oratory while the twelfth, presumably a “Nazi spy,” seemed to be gloating over the gathering’s small size.50) In March 1939, Laura, Karl, and Michael were joined in Britain by Adolf, who had been driven out of his adopted homeland of Italy.51 Four siblings were able to enjoy a rare reunion. But the occasion was haunted by the absent fifth. Sophie had remained in Nazi Austria.

DIAGNOSING THE VIRUS Fascism was something to be feared and fought, but also to be understood and explained—not solely in its actuality qua social movement or political regime but above all in its “essence,” its relationship to human history and to divine creation. Polanyi’s first major essay on the topic, The Essence of Fascism,” was written in 1934. Its gist is that fascism is a movement that seeks to assail three enemies si multa neously— socialism, democracy, and Christianity—and that this three-pronged character is its essential feature. In agreement with the Austro-fascist theorist Othmar Spann, he argued that socialism is the modern heir to democracy, but Polanyi argued that both are rooted in Christian traditions: the doctrine of the soul translates in secular terms to the princi-

ple of individual autonomy; from there it is a short hop to social equality and democracy (the “brotherhood of individuals”) and thence to “racial tolerance and pacifist internationalism.”52 As he recapped the case to students in Iowa, “Individualism leads to Liberalism, Liberalism leads to Democracy, Democracy leads to Socialism.”53 Because democracy, as continental Eu rope’s recent experience had demonstrated, “tends

In “Essence of Fascism” it is striking that Polanyi mentions fascism’s persecution of socialist parties, trade unions, Christian pacifists, and religious socialists, and proposes that Nazism aspired to establish itself “as a counter-religion to Christianity,” but nowhere does he mention Jews or Judaism. One commentator has expressed perplexity as to why, in his defining and putatively comprehensive treatise on fascism, Polanyi neglects to mention “the Jews as the primary focus of Nazi hatred.”56 Was this because the essay was to be published in a volume the subject of which was Christianity and the Social Revolution? If so, anti-semitism might then be expected to figure prominently in his other texts on fascism, but it does not. It is possible that his troubled attitude toward the Jewish Question played a part. Certainly, he underestimated the importance of anti-semitism to Nazism, and in 1933 he appears to have expressed irritation at the “Jewish press” for overstating the sufferings of Germany’s Jews.57 An alternative interpretation is that his essay’s main target was Spann, who, a supporter of the Heimwehr, was less prone to anti-semitism than the brownshirts across the Inn, and that Polanyi’s broader focus was on what is fundamental to fascism in general, not its Nazi subspecies.58 Certainly, his scope included a sizeable grouping of movements that were united in militant opposition to “representative democracy and working class institutions,” including the Black and Tans in Ireland, the Association of Awakening Magyars, Italy’s Fascio di combattimento, and Freikorps-style officers’ detachments in countries from Finland to Austria.59 Spann is singled out in “Essence of Fascism” in part because he was Austria’s pre-eminent far-right ideologue. Although little known today, he was a fascist celebrity of the time, guru of the fascist Kameradschaftsbund in the Sudetenland, admired by such German industrialists as Fritz Thyssen, courted by Germany’s Nazi Party and venerated

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is to prevent socialism, 55 democracy must be eliminated too.

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to lead towards Socialism,”54 and because the raison d’être of fascism

by members of both the Heimwehr and the Christian Social Party— including by its leader, and two-time Federal Chancellor Ignatz Seipel.60 Seipel’s successor, Dollfuss, adopted Spann’s Catholic corporatism, with its vision of a medievally inspired Ständestaat, as his own frame of reference—as became conspicuously evident in the new constitution that Dollfuss brought in on May 1, 1934, following the abolition of the

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last vestiges of democracy. In part, too, Polanyi focuses on Spann because he expressed with unusual clarity a view that he shared: that socialism, including Marxism, is “thoroughly individualistic” and that representative democracy therefore opens the door to socialism.61More intriguingly, Spann also posed a challenge to guild socialists. Drawing on the work of Adam Müller, a reactionary Romantic economist who railed against economic individualism and advocated a return to a medieval order, he proposed that guilds be resurrected and positioned as a central pillar of the Austrian Ständestaat. In response, Polanyi sought to etch the sharpest possible line between fascist and socialist guild orders. The guild system, he warned, had become “the watchword of two opposite groups: those who regard it as the utmost expression of individual liberty as well as those who make it the embodiment of a social ideal which is the very negation of individual liberty.” 62 When their paths had crossed in Hinterbrühl, Spann was already developing his reactionary version of the guild system. Some five years “before the corporative principle can be said to have emerged in Italian Fascist politics,” Polanyi noted, the Viennese professor had made it “the basis of a new theory of the State.” 63 But in Italy the boundary between fascism and guild socialism had become grievously blurred—most notably by Polanyi’s own cousin, Pór. In the same year that his Fascism appeared, Pór published a second book, Guilds and Co-Operatives in Italy, which praised Mussolini for his labor policies (and included an appendix by none other than G. D. H. Cole).64 Pór justified his embrace of despotism in terms familiar to the left: Mussolini’s movement was a “revolutionary” project designed to construct “a functional democracy” and to unify society; Italy would be reorga nized as a corporatist unit, via a revolution in which fascist trade unions would play an elevated role, drawing their inspiration from Italy’s “Mediæval Guilds and Guild Republics.” 65

In a raft of essays in the mid-1930s Polanyi charted a critique of Spann that vigilantly differentiated right- and left-wing versions of the principles of social unity (or “totality”), “function,” and guild organization. In an abstract, academic sense Spann was right to suggest that “functional and corporative organ ization” is more adequate to the “essential nature” of society than the chaotic, atomistic, and centrifugal

conception of social order that would supplant equality with hierarchy, with freedom stringently defined as action according to preordained rules.66 Spann’s application of functional theory to modern society, with power to be vested in economic and political “chambers,” supposedly offered an institutional alternative to capitalism, but Polanyi argues that it does nothing of the sort. In a socialist order, “the Political Chamber,” embodying and expressing “the Idea of common human Equity and Justice,” would take precedence; under its sway, private property “would tend to turn into ‘Socialist,’ i.e. public property.” In Spann’s model, in contrast, “it is emphatically the Economic, not the Political, Chamber which dominates. And this settles the matter, whether Spann likes it or not, in favour of Capitalism.” 67 Indeed, in Spann’s “functionally orga nized” fascism, private property rules in an “even more downright and thorough” manner than in liberal capitalism. This was clear for all to see in the corporatist Austria of 1934. Whereas a genuine functional state would democratically elevate the political sphere, giving greater say to the “common man,” in Austria it was the business class that had been empowered, with a “functional mask” slipped on to disguise the abolition of democracy.68 With this, Polanyi had arrived at the essence of fascism. It lay not in Spann’s utopia but in what it sought to obscure: the construction of an ultracapitalist regime dedicated to reducing workers to commodityproducing automata, for which their exclusion from the political sphere is a prerequisite.69 As a regime, fascism represents the rescue of capitalism “ under the aegis of the capital ist class” and with revolutionary means, including the introduction of a planned economy; as a movement, it “is borne by those classes which are most opposed to the workers.” 70

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any reasonable and scientific definition of society’s organic character, and his “romantic predilections turn him towards the Middle Ages,” to a

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structure of liberal capitalism, but his concept of totality went far beyond

Workers are least susceptible to the “emotional epidemic” of fascism; the intelligentsia is its breeding ground—serving to remind us that “education is no safeguard against social superstition.”71 The secret of fascism’s advance, however, was not the numerical strength of its support base, but first, the tacit support it received from capitalists, the judiciary, the army and police, and second, the weakening of the labor move-

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ment.72 Why, though, should its victories have been achieved so swiftly?

Polanyi’s explanation emphasizes neither the support fascism received from capitalists and other elites nor the strategy of the labor movement but the underlying political-economic crisis that had materialized in the late nineteenth century before being unleashed on the world from 1914 on. If this megacrisis had a single root, it was the entrenched “hostility of capitalism to popular government.” As such, fascism was nothing but the latest and most virulent outbreak of the “antidemocratic virus” that had been inherent in industrial capitalism from the outset.73 At the end of the 1930s, Polanyi elaborated this thesis in an essay, “The Fascist Virus.” Using materials from Britain, it surveyed the fears of nineteenth-century elites that enfranchising the working classes would spell the end of capitalism. “Only if the poor bore their lot patiently,” they argued with reference to the economic “laws” established

by Thomas Malthus and David Ricardo, “would they be safe from starvation, only if they resigned themselves to their misery could they survive at all. They must therefore be kept away from the levers of government, which they would other wise try to use to wreck the property system on which the community depended for their subsistence.”74 In different ways, the axiom that democracy and capitalism were incompatible was defended by conservatives (Edmund Burke, Robert Peel), liberals (Thomas Babington Macaulay), and socialists (Robert Owen) alike. Peel opposed the Chartist demand for universal suffrage on the grounds that it would “impeach the constitution of the country.” Macaulay, the historian of Rome and member of parliament, warned that “institutions purely democratic must sooner or later destroy liberty or civilisation, or both.” The danger was plainly visible in the United States, too, where “the majority is the government and has the rich, which are always a minority, absolutely at its mercy.” That unfortunate nation, Macaulay opined in 1857, had entered a downward spiral that would end

in the destruction of liberty or civilization. “ Either some Caesar or Napoleon will seize the reins of government with a strong hand,” he thundered, or the United States “will be as fearfully plundered and laid waste by barbarians in the twentieth century as the Roman Empire was in the fifth.” 75 For Polanyi, Macaulay’s words anticipate fascism. Given that the de-

inevitably be deployed in their interests and against civilization, capitalism will have to be rescued by Caesarist technique. (In the modern vernacular: fascism.) The same era in which Macaulay expressed his fears of latter-day Huns and Vandals had also witnessed early presentiments of fascism in literature: in Dostoevsky, we see the demands for an “impossible freedom” of the people deflected by spiritual despotism into a condition of permanent dependence, joyfully accepted by the masses; later examples included the dystopias of H. G. Wells, in which a laboring population is reduced to a subhuman condition, and Jack London’s apparition of a people crushed under the iron heel of big business. Their premonitions were based on a valid intuition: that capitalist elites would have little choice but to deploy extreme mea sures to counter the democratic aspirations of the uprising working class. Despite such portents, Polanyi continued, liberals in the age of Dostoevsky and London were able to blithely assume that universal suffrage would yet mesh harmoniously with a flourishing market economy. They could point to the fact that several countries had broadened the franchise without much ado. Was this not robust evidence that the conflict between democracy and capitalism was abating? No, he argues; their sense of security was a fantasy. It had been facilitated by a series of contingent and transitory phenomena, such as the expansion of the world market and “the false impression created by the prosperous American scene.” 76 Following the war, all such illusions were dispelled as the result of a twin transformation: capitalism’s lurch from laissez-faire to an orga nized, regulated form, which enabled political power to immediately and effectively steer the economy, and the extension of the franchise.

The concession of universal suffrage, it was plain to see, would lead to the working class exerting a “decisive influence upon the state” but this,

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selves by pressing for political and industrial democracy, which would

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structive effects of the market mechanism oblige workers to defend them-

in turn, would induce market panic and the “imminent danger of a complete stoppage of the productive apparatus,” because parliaments “weaken, discredit and disorganise” market capitalism, by meddling with its self-regulating mechanisms.77 As a consequence, democracy had become dysfunctional. It depressed the profitability of the economic system, which began to grind to a halt.78 While the workers sought to

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to diminish working class influence either through suborning democ-

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deploy their electoral power to protective ends, economic elites strove

reframing of the point, “have reached a deadlock, because they have

racy, pressing leftist governments to accede to their will, or, when that failed, by the forcible suppression of democracy. The “fascist era,” in this perspective, heralded the “total crisis of a market orga nized industrial society,” with fascism itself conceived of as the last throw of the dice by embattled capitalist elites (or, as he put it later, the “reaction of the middle classes” to the workers’ revolts in Russia and elsewhere).79 Fascism, in short, was the pathological symptom of the fact that, as Hitler put it in his Düsseldorf speech of 1932, economic inequality and political equality are incompatible.80 Democracy and capitalism, in Polanyi’s become the instruments of two different classes of opposing interests,” and this is the clue as to why the social upheavals of the age were characterized by such “cataclysmic vehemence.” 81 There were only two ways out of the deadlock. Its underlying cause was the liberal utopia of the self-regulating market. This had generated an unsustainable acceleration of change and the “disembedding” of the economy from the social fabric and these, together, were bound to wreak civilizational collapse.82 A cure could only come about if society were to unify once again, with the scission between politics and economics sutured. Fascism represented a reunification of society on an inegalitarian, undemocratic basis; socialism its reunification on the basis of ideals of equality and the extension of democratic principles throughout society. A modern industrial society, Polanyi concluded, can in the long run be either fascist or democratic and socialist. History had entered a new phase. No longer would world order be determined by confl icts among empires and nation-states. Now the battleground was the sociopolitical strug gle between fascism and socialism- democracy, with its front lines drawn both within and between nations.83

AU X I L I A R Y A C T I V I S M Fascism was a movement to be feared, to be explained, but also to be opposed, and its rise was undoubtedly one factor behind Polanyi’s mid1930s return to activism. The defi ning purpose of the Polanyi- GrantMacmurray circle, which was at the core of the “Christian Left,” derived

institutional change effected by legislation, but also the “personal field” of education, culture, and municipal activity, a quotidian realm to which religion has privileged access.84 Conversely, contemporary Christian Socialists “ were vague as to the nature of Socialism”; therefore the formation of a knowledgeable, radical ginger group could serve the socialist movement in its antifascist campaign.85 Polanyi’s circle set about gaining an institutional foothold, initially by winning an audience among existing members of the Aux. They wrote to Tawney, a prominent Aux member, to invite him to consider their suit. At the meeting it became apparent that although the Labour eminence grise supported their efforts to form a Socialist Christian group, it should be autonomous from the Aux. They were reluctant to accept this advice, but the Aux’s general membership plainly shared Tawney’s view.86 Swallowing his aversion to camping, Polanyi attended an Aux summer camp at Sandy Balls in the New Forest,87 helped to draft and edit Christian Left bulletins and memoranda, and gave lectures at numerous meetings—especially on Marx’s early works, which had recently been published in German and which, he enthused, “may still save the world.” 88 He explicated the early writings for his anglophone audience, presenting them as the key to Marx’s mission and as a trove of profound insights into the problem of alienation in capitalist conditions.89 Although some saw Polanyi as perched on the movement’s radical fringe, he himself did not view his location in quite that way.90 At one meeting, at which Macmurray and Fairfield were present, alongside Malcolm Spencer (author of Economics and God) and J. H. Oldham (Christianity and the Race Question), he quipped that he was “almost the most conservative of the circle.”91 That said, the thrust of his group’s involvement in the Aux was to push it from its previous position as a “fortress of conservatism” over to “socialism,” a battle they won in 1935.92

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“impersonal sphere” of political life narrowly conceived, the sphere of

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from their belief that effective social change must target not only the

Arguably, the major fruit of Polanyi’s Christian-socialist engagement— and his “greatest success here in Britain”—was Christianity and the Social Revolution.93 It was designed as a counterblast to Christianity and the Crisis, a collection of essays by prominent Christian clerics that (its title notwithstanding) treated the Great Depression and its attendant evils with a fusty complacency. Christianity and the Crisis was con-

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structed around the consoling premise “that Chris tian ity had the wherewithal to withstand the current social crisis just as it did one hundred years earlier when William Wilberforce and others accomplished in the Great Emancipation Act the liberation of both Black Slavery and White Slavery.” Moreover, it barely acknowledged the communist phenomenon and made no mention of fascism whatsoever. The response of Polanyi and his comrades was to publish a book that openly broached these topics and allowed communists to speak for themselves.94 They found a fitting publisher in Victor Gollancz, who was rapidly making his name with a series of contemporary classics, such as Orwell’s Down and Out in Paris and London.95 Polanyi guided the editorial team and worked closely with contributors—Macmurray, Joseph Needham, and Wystan Auden, among others—to achieve a near-ideal balance of opinions.96 (One perspective for which he had called, without success, for representation was the “Marxian atheist,” to be authored by Lukacs, or, if he refused, Franz Borkenau.)97 His efforts were rewarded when some 11,000 copies were sold, aided by a favorable review from Tawney in the New Statesman and Nation, which highlighted Polanyi’s chapter for commendation.98 In a series of pamphlets and letters, as well as lectures to such bodies as the Society of Jews and Christians, Polanyi set out his religious philosophy and his understanding of the global political situation. The kernel of the former was the axiom that Christianity had revealed to humanity that its “spiritual nature” (or “true nature”) is individual freedom. “Because there is God,” as he put it, “the individual has an infinite value.”99 In this phrase one can see the indissoluble linkage—central to Christian doctrine, in Polanyi’s hermeneutic—between freedom, community, equality, and universalism. For the “Christian discovery of personality is the discovery of the truth that every human being has a soul to save”;100 ergo all humans are morally equal, they cannot act ethically without reference to their coexistence with others, and, in aggregate,

they are destined to create a community, with each existing in and through their fellows. This represented a moral recognition of which pre- Christian civilizations had been ignorant, and it was destined to become the dominant force in history.101 This prospectus was not smug Christo-Whiggery. A new conjuncture had been reached at which a further move “towards community is inevitable, if humanity is to sur-

coming transformation. Indeed, it had inadvertently constructed one of the obstacles to that transformation: the Judaeo-Christian postulate of “the absoluteness of the individual’s freedom, freedom also from society” had given rise, “step by step, to the complex society engendered by the machine.”103 If we unpack this asseveration, it contains two interconnected elements: individualism’s false turn, and the complexity of industrial society. Moral individualism, Polanyi maintained, flourished first in Christianity but only truly came to the fore with the religious and socioeconomic revolutions associated with Calvin and capital, which, respectively, Weber and Tawney had chronicled. For three centuries of youthful capitalism and early anticapitalist movements, “moral individualism and liberal Christianity fitted the occasion.” As socioeconomic complexity and marketization increased, however, their appropriateness to human requirements declined.104In a complex industrial society, humans cannot avoid coercing others, a circumstance that is evaded by a purely individual relationship with God or a Tolstoyan stance of “abstention,” and it demands instead collective moral reflection on social relationships in their entirety.105 Jesus had not conceived of society as “the necessary framework within which human freedom and community were to be realized,” for the problem of freedom in a complex society could not have been posed in his day.106A millennium and a half later his approach, keyed to the needs of “simple” societies, still underpinned the liberal Christian ideal. It exhibited no awareness of “the reality of society,” its institutions or its history, and viewed power “in all its manifestations as evil.”107 The consequences had become increasingly malign and included an obeisance to the “cult of efficiency” and “idolatry of the authority of science and technology.”108 The liberal Christian ideal,

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tions to steer the “reform of consciousness” that was indispensable to the

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vive,”102 and Christianity did not have the wherewithal in its own tradi-

Polanyi argued further, was culpable for encouraging technology worship. Echoing Sandy Lindsay, on whom more below, he posited two types of individualism: the “atheist” kind, which exalts “the passions of the individual ego at the cost of God,” and “religious individualism,” which values individuals “ because they have soul.”109 The former is peculiarly pernicious when combined with the rise of the market and the

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“machine.” In these circumstances it had generated “egotistic, competitive individualism of the destructive type,”110 and this, in turn, facilitated the rise of market society.

Liberal Christian ity, in Polanyi’s analysis, has fallen short. It had proved incapable of reconciling moral individualism with moral community. Ever since Jesus, the truth had been known that human beings cannot fulfi l their true nature except in communion with their fellows, and it was the disavowal of this truth by liberal individualism and its foiling by market society that had occasioned the interwar crisis.111 In the 1930s, at the height of his religious zeal, Polanyi held that Christianity “is also the force that is alone able to solve it”112—but not the churches in their existing state, for they are culpable of extolling misery as a sign of salvation and of encouraging the masses “towards a resigned, if not joyful acceptance of the sufferings of life, while turning their minds passionately against revolutionary ideas.”113 Nor even would Christianity as a body of doctrine suffice. While he believed “more than ever, in the Christian interpretation of existence,” he had become “convinced that the New Testament is insufficient” and that “a post- Christian” age was dawning.114 Christian individualism had to be reinterpreted in a form attuned to the realities of modern industrial society. In this view, socialism was the true inheritor of Christian individualism, and the movement uniquely able to fulfi l its original promise.

THE BALLIOL NEXUS If the Christian Left constituted Polanyi’s core political-intellectual milieu in the mid-1930s, a second, intersecting, circle comprised Labour Party intellectuals, such as Cole and Tawney. Already in Vienna, when discussing his impending move to Britain, he had mentioned to Michael that he would relish the opportunity to revive his acquaintanceship with