Foreword

Before Rene Guerra introduces Hayek’s insightful letter entitled Nazi-Socialism, let me
introduce Mr. Guerra.
I have had the privilege of introducing some selected works of Olavo De Carvalho to the
Anglo-Saxon world. De Carvalho and Guerra are both Latin Americans and students of
Marxism, including theory, practice, psychology, philosophy and history of the
movement. They are very well versed in all aspects and deserve our respect and gratitude
for their contribution to our understanding.
The depth of perception of both authors is quite similar, probably because, like
myself, both were once convinced that the Utopian theories and expectations of Marxism
would and should succeed (that is, before they began to understand the diabolical nature
of this movement). Both understand that Obama is a socialist, as do many Americans by
this time. However, they understand better than most of us what to expect of socialists
(who currently hide behind the label “progressives”) and why we should not trust the
members of the far left, which has been operating on the principle of stealth since the
Fabians came up with the idea of a peaceful takeover of the world back in the late 1800s
(hardly anyone has noticed since then, and many Republicans still don’t). Due to the
nature of the Left, it is and can only be, the enemy of the human race. It cannot be our
ally, it cannot be persuaded to accept our traditional or Christian ways, and no
compromise between a free system and a Marxist system can be tolerated (because they
work like a ratchet gear, never relinquishing any power once it is gained) – at variance
with what we are told by RINOs like John McCain and John Boehner, for example, who
are the last people we should be looking to for leadership.
Don Hank

Some Say Obama's "CHANGE" Is Not Socialism,

But Fascism..."Not Me," F.A. Hayek Would Say!
F. A. Hayek (1899 - 1991), Austrian by birth, British by naturalization. Economist and
polymath. Gravitas mentor of the Austrian School of economics. Advocate of classical
economic liberalism (i.e., free-entrepreneurism) and free-market capitalism. 1974 Nobel
Prize in Economics. 1991 U.S. Presidential Medal of Freedom. He also wrote the
monumental The Road to Serfdom, a book that every concerned American should read,
particularly now, when Obama is wrecking America.

INTRODUCTION Rene Guerra September 21, 2009

Fed up with pundits playing hopscotch all over the political spectrum
of authoritarianism and totalitarianism in an attempt to identify the
system that --with Obama and the Democrats at the vanguard --
undemocratic, collectivist, anti-free-enterprise forces are attempting
to impose on America? I am resorting to a memo that Austrian free-
entrepreneurism economist and Nobel laureate F. A. Hayek wrote to
the head of the London School of Economics, William Henry
Beveridge, the Fabian socialist who would become the father of the
welfare state and nationalized health care system of post WWII Great
Britain.

Hayek wrote his memo Nazi-Socialism to Beveridge in the spring of

1933, when Fascism and its Nazi manifestation were in their puberty,
less than two decades after the Bolshevik revolution in Russia. Hayek
had been an eyewitness to the birth and growth of Nazism in
Germany.

Rush Limbaugh has been at the forefront of those stating that what
Obama is inflicting on America is not Socialism, but Fascism, without
realizing that Fascism -- Nazism in Hitler’s Germany, Fascism proper
in Mussolini’s Italy, and Falangism in José Antonio Primo de Rivera’s
Spain -- is nothing but socialism behind another façade.

Fascism and Socialism are both siblings, or at worst, first cousins,

though dysfunctional ones. That's all. That’s Hayek’s main message
in Nazi-Socialism. He also points out the wishful thinking of some --
and the dallying with socialistoid ideas by others -- in the German
large-business strata that went along with Nazism and Hitler. The
same thing is happening in America, with some in "big-business"
going along with Obama’s "CHANGE".
Orthodox Marxists, Marxist-Leninists (aka Bolsheviks), Western
Marxists, Fabians and others ganged up on Fascism -- as they did on
Trotskyism -- for they saw in it a fierce competitor for the same place
at the dinner table of socialism.

The caveat must be made here that Fabians stop at Socialism,

although many maintain that Fabians do so maliciously, serving as a
not-so-reluctant steppingstone to communism.

The Fascists in Italy under Benito Mussolini, and the Nazis under
Adolph Hitler in Germany resorted to a transitory symbiotic
relationship with the corporative strata of each of the two countries.
Fascists and Nazis ambiguously referred to that transitory
relationship as state capitalism, corporate socialism or corporatism. It
was Mussolini who embraced that system the most wholeheartedly.
Hitler flirted with it for a few years. The Falangists disliked it.
Hitler was a messianic ideologue with specific goals of territorial
expansion, as found in Mein Kampf. Mussolini was rather a populist
megalomaniac who engendered among the Italian people, and then
exploited, a nationalistic sort of nostalgia for the glories and
grandeurs of Imperial Rome. They needed time and allies to
consolidate power; hence their temporary symbiotic alliance with the
corporative strata, the one to build the Third Reich, the other, to re-
build Imperial Rome, both under Fascism.

Fascism created the impression of being materially more efficient

(i.e., output/input) than Marxism-Leninism in terms of running and
ruling societies. Hence also the fury that the rest of the Left
unleashed against Fascism.

Obama may be resorting to fascistoid temporary measures, but

sheer, full-fledged socialism is definitively his objective, and if he can
muster it, probably communism.

Others are opening their eyes to the threat that Obama poses to the
world. In Central America, the Panamanians elected a conservative
president, businessman Ricardo Martinelli. In Europe, the Germans
are opening their eyes and giving continually increasing support to
the pro-free-enterprise Free Democratic Party (FDP). This latter
development is of a great importance, for Germany is now setting the
political-economic tone in Western Europe. Read it for yourself.

Now for Hayek's memo:

Nazi-Socialism1
By Friedrich August von Hayek Spring 1933
Hoover Institution, F. A. Hayek Papers, Box/Folder 105 : 10.

F. A. Hayek (1899 – 1991), Austrian by birth, British by naturalization. Economist and polymath.
Gravitas mentor of the Austrian School of economics. Advocate of classical economic liberalism
(i.e., free-entrepreneurism) and free-market capitalism. 1974 Nobel Prize in Economics. 1991
U.S. Presidential Medal of Freedom.

Incomprehensible as the recent events in Germany must seem to

anyone who has known that country chiefly in the democratic post-
war years, any attempt fully to understand these developments must
treat them as the culmination of tendencies which date back to a
period long before the Great War. Nothing could be more superficial
than to consider the forces which dominate the Germany of today as
reactionary –in the sense that they want a return to the social and
economic order of 1914. The persecution of the Marxists, and of
democrats in general, tends to obscure the fundamental fact that
National “Socialism is a genuine socialist movement, whose leading
ideas are the final fruit of the anti-liberal tendencies which have been
steadily gaining ground in Germany since the later part of the
Bismarckian era, and which led the majority of the German
intelligentsia first to “socialism of the chair” and later to Marxism in its
social-democratic or communist form.

One of the main reasons why the socialist character of National

Socialism has been quite generally unrecognized, is, no doubt, its
alliance with the nationalist groups which represent the great
industries and the great landowners. But this merely proves that
these groups too –as they have since learnt to their bitter
disappointment –have, at least partly, been mistaken as to the nature
of the movement. But only partly because –and this is the most
characteristic feature of modern Germany –many capitalists are
themselves strongly influenced by socialistic ideas, and have not
sufficient belief in capitalism to defend it with a clear conscience. But,
in spite of this, the German entrepreneur class have manifested
almost incredible short-sightedness in allying themselves with a move
movement of whose strong anti-capitalistic tendencies there should
never have been any doubt.

A careful observer must always have been aware that the opposition
of the Nazis to the established socialist parties, which gained them
the sympathy of the entrepreneur, was only to a very small extend
directed against their economic policy. What the Nazis mainly
objected to was their internationalism and all the aspects of their
cultural programme which were still influenced by liberal ideas. But
the accusations against the social-democrats and the communists
which were most effective in their propaganda were not so much
directed against their programme as against their supposed practice
–their corruption and nepotism, and even their alleged alliance with
“the golden International of Jewish Capitalism.”
It would, indeed, hardly have been possible for the Nationalists to
advance fundamental objections to the economic policy of the other
socialist parties when their own published programme differed from
these only in that its socialism was much cruder and less rational.
The famous 25 points drawn up b Herr Feder,2 one of Hitler’s early
allies, repeatedly endorsed by Hitler and recognized by the by-laws of
the National-Socialist party as the immutable basis of all its actions,
which together with an extensive commentary is circulating
throughout Germany in many hundreds of thousands of copies, is full
of ideas resembling those of the early socialists. But the dominant
feature is a fierce hatred of anything capitalistic –individualistic profit
seeking, large scale enterprise, banks, joint-stock companies,
department stores, “international finance and loan capital,” the
system of “interest slavery” in general; the abolition of these is
described as the “[indecipherable] of the programme, around which
everything else turns.” It was to this programme that the masses of
the German people, who were already completely under the influence
of collectivist ideas, responded so enthusiastically.

That this violent anti-capitalistic attack is genuine –and not a mere

piece of propaganda becomes as clear from the personal history of
the intellectual leaders of the movement as from the general milieu
from which it springs. It is not even denied that man of the young
men who today play a prominent part in it have previously been
communists or socialists. And to any observer of the literary
tendencies which made the Germans intelligentsia ready to join the
ranks of the new party, it must be clear that the common
characteristic of all the politically influential writers –in many cases
free from definite party affiliations –was their anti-liberal and anti-
capitalist trend. Groups like that formed around the review “Die Tat”
have made the phrase “the end of capitalism” an accepted dogma to
most young Germans.3

That the movement in more anti-liberal than anything else is closely

connected with another important aspect of it -- the anti –rational,
mystical and romantic sentiment, which has been growing for years
among the youth of Germany. The protest against "liberal
intellectualism", which was recently so strongly voiced by the
students of the University of Berlin, was not an isolated aberration but
a true expression of the feeling of great masses of the people.4 It
would be too long a story to go into all the different intellectual
sources of the anti-rational tendencies in art and literature which have
all converged –often to the amazement and consternation of their
originators—in the Nazi movement. But it must be said that here
again the main influence which destroyed the belief in the universality
and unity of human reason was Marx’s teaching of the class-
conditioned nature of our thinking, of the difference between
bourgeois and proletarian logic, which needed only to be applied to
other social groups such as nation or races to supply the weapon
now used against rationalism as such. How completely this Marxian
idea has permeated German thought can be seen from the fact that,
during the past few years, it has actually been promoted, as
"sociology of knowledge", to the rank of a new branch of learning.5 It
is obvious that, from this intellectual relativism, which denied the
existence of truths which could be recognized independently of race,
nation, or class, there was only a step to the position which puts
sentiment above rational thinking.

That anti-liberalism and anti-rationalism are so intimately bound up

with one another is easy to understand, and is, in fact, inevitable. If
rule by force by some privileged group is to be justified, its superiority
has to be accepted for it cannot be proved. But what is less easily
understood –though of immense importance—is the fact illustrated by
German and Russian development that the anti-liberalism which,
when confined to the economic field, today has the sympathy of
almost all the rest of the world, leads inevitably to a reign of universal
compulsion, to intolerance and the suppression of intellectual
freedom. The inherent logic of collectivism makes it impossible to
confine it to a limited sphere. Beyond certain limits, collective action
in the interest of all can only be made possible if all can be coerced
into accepting as their common interest what those in power take it to
be. At that point, coercion must extend to the individuals’ ultimate
aims and ideas, and must attempt to bring everyone’s
Weltanschauung into line with the ideas of the rulers.

The collectivist and anti-individualistic character of German National

Socialism is not much modified by the fact that it is not a proletarian
but middle class socialism, and that it is, in consequence, inclined to
favour the small artisan and shop keeper and to set the limit up to
which it recognizes private property somewhat higher than does
communism. In the first instance, it will probably nominally recognise
private property in general. But private initiative will probably be
hedged about with restrictions on competition so that little freedom
will remain. Artisans, shop-keepers and professional men will, in all
likelihood, be organized in guilds, like those of the medieval crafts,
which will regulate their activities. In the case of the wealthier
capitalists, state control and restriction of income will leave little more
than the name of property, even while the intention of correcting the
undue accumulation of wealth in the hands of individuals has not yet
been carried out. Even at the present moment, state commissioners
have been put in charge of many important industries and, if the more
radical wing of the party has its way, the same is likely to happen in
many other cases.6 At the present time, when the National Socialist
party has grown to such an enormous size, and accordingly
embraces elements with very divergent views, it is, of course, difficult
to say which views on economic policy hold the field, it will mean that
the scare of Russian communism has driven German people
unaware into something which differs from communism in little but
name. Indeed, its more than probable that the real meaning of the
German revolution is that the ling dreaded expansion of communism
into the heart of Europe has taken place but is not recognised
because the fundamental similarity of methods and ideas is hidden b
the difference in eh phraseology and the privileged groups. For the
present, the German people have reacted against the treatment
received from the community of democratic and capitalistic countries
by leaving that community.

Nothing, however, would be less justifiable than that the nations of

western Europe should look down on the German people because
they have fallen victims to which, in this country seems a kind of
barbarism. What must be realized is that this only the ultimate and
necessary outcome of a process of development in which the other
nations have been for a long time steadily following Germany—albeit
at a considerable distance. The gradual extensions of the field of
state activity, the increase in restrictions on international movements
of both men and goods, sympathy with central economic planning
and the widespread playing with dictatorship ideas, all tend in this
direction. In Germany, where these things had gone furthest, and
intellectual reaction, which will now hardly survive, had been definitely
under way. The fact that the character of the present movement is so
generally misjudged makes it seem likely that the reaction in other
countries will speed up, rather than weaken, the operation of these
tendencies which lead in the direction in which Germany is now
going. So far, there seems little prospect that the reversal of these
intellectual tendencies elsewhere will come in time to prevent other
countries from following Germany in this last step also.
1
The memorandum may be found in the Hayek Paper, box 105, folder 10, Hoover Institution
Archives. In the original memo quotation marks enclose "Nazi" in the German style, and
Socialism was originally spelled "Sozialism" but was corrected – Ed.
2
Gottfried Feder (1883-1941) was an early economic advisor to Hitler. A fundamental element of
his economic teaching was the concept of "interest slavery" and his recommendation that interest
be abolished. Once he came to power, Hitler abandoned Feder’s program in order better to
attract the support of German industrialists. -- Ed.
3
For more of Die Tat, see chapter 12, note 41. -- Ed.
4
The student protests in Berlin culminated in a boo0burning in the Opernplatz on the night of May
10, 1933. --Ed.
5
Karl Mannheim was one of the leading proponents of "the sociology of knowledge”. See
especially his Ideology and Utopia: An Introduction to the Sociology of Knowledge, trans. Louis
Wirth and Edward Shils, a volume in the series The International Library of Psychology,
Philosophy, and Scientific Method (New York: Harcourt, Brace, 1936. –Ed.
6
In the first few months of Nazi rule, self-appointed Nazi party radicals simply marched into
certain enterprises and took them over, usually granting themselves and their accomplices large
salaries and other perks. Goering and the other Nazi leaders considered these self-styled
Komisars dangerous, and by late 1933 had rooted them out. –Ed.