The Specter of Centrally Planned Economic Fascism Continues to Hover over the United States
By Robert Higgs • Monday March 19, 2012 11:49 AM PDT • 31 Comments
During World War II, the U.S. government created and operated a system of fascist central planning. (I have described this system in my books Crisis and Leviathan and Depression, War, and Cold War.) After the war, much of this system was abandoned, but it was revived in large part during the Korean War, and it was retained afterward in the form of statutory authority for its reinstatement whenever the president might so order under the authority of the Defense Production Act of 1950, as amended. As I wrote in Crisis and Leviathan (p. 246), after the Korean War “[t]he wartime wage-price and production controls lapsed, although the authority to reinstate the production controls remained”—that is, the Defense Production Act was never repealed, and it has been in force continuously since its initial passage, though amended from time to time. Under this statute, the president has lawful authority to control virtually the whole of the U.S. economy whenever he chooses to do so and states that the national defense requires such a government takeover.
The latest executive order to stipulate in detail how the president will exercise these standing powers over energy, transportation, human resources, raw materials, and so forth—stating in particular the subordinates to whom he will delegate various specific powers, among other things—was issued last Friday, March 16, 2012. It shows plainly that private control of economic life in the United States, to the extent that it survives, exists solely at the president’s pleasure and sufferance. Whenever he chooses to put into effect a full-fledged operational fascist economy, controlled from his office, he has the statutory power to do so; all he has to do is to murmur the words “national defense” and give the orders. In this regard, as Paul Begala’s infamous saying puts it, “stroke of the pen, law of the land, kinda cool.”
Tags: American History, Civil Liberties, Corporatism, Defense, Economics, Fascism, Law, Military, Nationalism, Power, Presidential Power, Property Rights, The State, War 
If the people allow the White House to control our way of life he is crazy as a sh ..t house rat. A fight will be in the streets of America. The Boston Tea Party will look like a Sunday picnic, and those who swore to defend the Constitution, as the President and all government officers and Congress are not upholding their oath, and the military and our courts must make sure the Constitution is followed, in my opinion.
dale briggs | Mar 19, 2012 | Reply
It troubles me that America lost its belief that government power is malignant, corrosive, and corrupting. President Obama’s March 16th executive order justifies this view of power. At least the popularity of Ron Paul gives hope that the dream of restricted government replaced by individual freedom hasn’t vanished.
Dave Thomas | Mar 19, 2012 | Reply
DUDE! Splendid piece indeed. Please repair “Paul Bengala’s” [sic] for your archives! Your description of fascism in American history is rarely grasped by any of us, and you do a good job making it interesting.
Donny YORK | Mar 19, 2012 | Reply
That is some very scary business.
Speedmaster | Mar 20, 2012 | Reply
Dr. Higgs:
A couple of questions. (1) Is this contingency planning on the part of the administration or is it planning along a continuum to bring us fully into the Europian model of the welfare state? (2) I’ve almost completed Charles Murray’s “Coming Apart.” His thesis is that America is coming apart at the seams on the basis of class and abandonment of the virtues that made us what we “were.” The virtues are being lost and the class lines are becoming sharper even while we become more ethnically and culturally diverse. Is he correct? Do you see any of these trends in your studies? (3) Murray believes we are close to the tipping point of departure from the things that made us the envy of the world. Do you?
Phil Dillon | Mar 20, 2012 | Reply
Begala’s infamous saying should be interpreted as “stroke of the pen, total power, kinda cool.” The concept of total power was designated by the twisted cross symbol in old Norse mythology. Perhaps the imperial class should be reminded of the old saying, “If the shoe fits, wear it.”
Marc Swanson | Mar 22, 2012 | Reply
there will be no fights in the streets, just as there were no fights in the street when Wilson did this in 1917 and Roosevelt did it in 1932. No, the American people will grin & bear it, and allow it to happen. The vast majority of Americans are too enamored of the government to resist, and the few that do resist will find their groups infiltrated, and their every move watched. These resisters will be branded as terrorists, and locked up rather quickly. The few spectacular resistance efforts that do happen will be bloodily crushed, and the government will use them as examples of how it is defending the people. Just as happened in the New York City draft riots of 1863.
The delusion of the government being of the people, by the people and for the people is one of its greatest strengths.
PaulTheCabDriver | Mar 26, 2012 | Reply
Something VERY big is going to happen in US (and of course, affecting the whole world.)
Maybe the dollar meltdown or another great war is on the rise, or both.
Government’s next steps? I guess tough gun control laws and mandatory biometric identification...
Diogo Siqueira | Mar 27, 2012 | Reply
“...in the form of statutory authority...”
You seem to think that the laws proclaimed by Congress and approved by the president have authority. But is there really such authority, and if so, from where would it come? The federalists’ constitution?
Lysander Spooner argued persuasively that the constitution doesn’t rest upon consent, and so it lacks authority. In fact, there’s at least one more objection to which I’ve never once heard a good rebuttal.
Let’s go back to Article VII. It reads that the constitution will be established if certain criteria, also given in A7, are met. A problem, however, is that prior to establishment, A7 is moot. On this basis alone we can conclude correctly that there’s no good reason to have included A7.
Further, even though nine states’ conventions ratified the constitution, the federalists argue in a circle when they invoke A7 as a basis for supposing that their favorite imaginary law has authority.
So Publius’ constitution has no authority, the DPA of 1950 has no authority, and Obama has no authority to issue executive orders.
Paul Trombley | Mar 27, 2012 | Reply