Sudip Dutta

National Secretary, CITU

The use of the term Neo-fascism by a section of Left to characterize the current ruling political dispensation in India has ignited a serious debate within the Left as well as other political camps and social groups. Some of them want to put the label of full fascism. Some are in hurry to form an anti-fascist front!

The Working Class of India can’t remain as an indifferent spectator to this debate, because, understanding the State is integrally linked with the tactics to confront it.

First of all, the political nature of any regime should be analyzed primarily on the basis of its class component, contradictions and political-economic content. Accordingly, the action of state may vary in different juncture of history, in different countries. Many bourgeois democratic parliamentary systems have got transformed into authoritarian forms; all of them can’t be ascribed as fascist. On the other hand, a fascistic force may rise and operate within the Parliamentary system also.

So, in this text, we will try to point out some of the specific characteristics of fascism our time. We will try to analyze and understand the economic base of it and its structural differences from its older forms. The political-ideological manifestation of this order can be dealt in a separate piece.

Fascism of last Century: The economic crisis of 1920s and ’30s was the breeding ground for the rise of fascism in Europe. The 1929 Wall Street crash caused havoc over Germany. Unemployment rose to 33% and industrial production shrunk to 50%. Banks collapsed like house of cards and people were losing faith over the existing liberal democratic institutions. The specter of Soviet Russia was haunting the western capitalism; the fascism emerged as its savior. 

The core economic interventions of classical Fascism can be classified as follows: a) Regulating finance and taking control of capital from all big banks, along with personal savings kept in them, obviously for a certain period b) Diverting finance to state sponsored and profit guaranteed private heavy industries – especially metal and armaments c) Massive state investments in public infrastructure and creation of temporary jobs d) Issuance of treasury bonds and delivery bills in exchange for money forcefully taken from individual savings in the banks; the promissory notes were replaced with longer term bonds after reaching the maturity dates of the initial one, thereby pushing the crisis towards the future!

Fascism ensured a higher rate of profit for big industrial corporations by waiving corporate tax burden, restraining competition between capital and dismantling all form of labour resistances. It also created free labour by enslaving the hapless Jewish community.

However, as the rate of return on capital was insufficient to fulfil its promises, fascism had to attack other countries to accumulate capital through looting and plundering. This was also necessary to sustain the permanent military industry. Ultimately, fascism couldn’t survive, as it was defeated by the Great Red Army!

Now, what is New in contemporary Fascism:While there will be many similarities between the old and new form of fascism, let us try find out the specific peculiarities of our time. Firstly, finance had national centers at that time, so there were some scopes for regulation of finance by a Nation-State. Today, International Finance Capital is stronger than any Nation-State, making its regulation nearly impossible.Neoliberal-globalization has structurally constrained the scope of modern-day fascism.

Secondly, the economic dominance is shifting from productive capitalism to rentier capitalism. Now the top companies extract rent through monopoly rights over natural resources and State assets. Some collect rent for their digital platforms. And others invest in financial markets. Today’s gigantic rentier corporations frame government policies to loot labour of all sphere, even those engaged in petty production and self-employment also. So, the neo-fascist forceswill facilitate the squeeze of not only the sphere of production, but also that of reproduction. Need not to mention their lust for natural resources.

Thirdly, old fascist states attempted to postpone the crisis by issuing futuristic bonds. Strikingly, in the neoliberal era, the dominant financial instruments are various forms of short, middle and long-term future bonds and derivative trading. Even risk itself has been commodified as speculative bonds. Today, the Market has become so powerful that a fully fascist state may not be necessary to push public savings towards futuristic speculative investment. Until the Market crashes or Sovereign default appears, the fascist state may not need to take its full Avatar.

Fourth factor is the creation of a new middle-income group of consumers who benefitted from Neoliberalism. A section of them socially and ideologically legitimizes all neoliberal mechanisms. With the massive use of social media, they are the dominant opinion maker in society now. So, there may be no urgent need for the destruction of bourgeois-parliamentary setup by the fascist forces as whole. Strikingly, these ideological supporters of neoliberal-communalism are now hit by the crisis and there may appear a positive departure in their hegemonic class consciousness.

So, the neo-fascist forces may be attributed to all classical fascistic political-ideological-cultural characteristics, but there will be some limitations and departures from its century old avatar in its economic operation.

Now, while describing the core characteristic of Neo-fascism, we have mentioned that, the International Finance Capital is larger than any Nation-State, making any regulation over it difficult, and so it is difficult for fascism to take its classical form.

However, the US controls around 60% of global financial market value. Therefore, if the US attempts to impose some financial regulation, it may succeed to some extent. In this light, the analysis of the Trump tariff actions will be pivotal to understand the real power and limitations of the strongest Centre of neo-fascism of our time.

The US Neo-fascism – the Trump Tariff: Trump came in power with a slogan to control the Wall Street, i.e. the financial Centre of US. Generally there lie some options in front of him in this endeavor. For instance, he may pursue a strategic devaluation of the Dollar – reducing its exchange rate to boost US exports, reduce trade deficits (especially with China). This can ease debt burdens: a weaker dollar reduces the foreign-held US debt. This would not be a case of price deflation (which would require tight monetary policy) but rather exchange rate manipulation.  

The US Treasury and Federal Reserve may sell US dollars in foreign exchange markets while buying euros, yen, and yuan, thereby increasing the supply of US dollars. A historical precedent for this is the 1985 Plaza Accord, in which the US, Japan, and Germany agreed to weaken the dollar—a move that was successful but led to Japan’s economic bubble.

Trade war is another mechanism for regulating finance and it has already been heavily lodged by the Trump administration. This, we will explain it in a bit detail as it will be crucial for understanding the new form of fascism.

The problem in US capitalism starts with Dollar becoming the Reserve Currency for global trade. Dollar is necessary and attractive to all other countries and thus they want to export goods and services to US to get more and more US Dollar. It was beneficial for US also, as they can import anything at their own terms and conditions. So, US gradually became an import-based country losing its production and employment capacity while developing wide Trade Deficit with other manufacturing giants, especially China.

In real sense, this import bias stemming out of limitless financialization resulted in de-industrialization, revenue crunch and infrastructural decline in US. People were searching for stable jobs; discontent was rising and fascism started brewing up.

US total market capitalization over GDP rose to 205% in 2024 and public and private external debt shoot up to 70% of GDP. It exposes the vulnerability of the economic system. On the other side, US Dollar came down to 50% of global reserve; countries started trading in alternative modes than US Dollar. In this situation, Trump came in power and his administration desperately planned to follow a very risky and narrow path to restructure the US economy claiming to avert the bankruptcy of the state and a total collapse of US dollar system.

The methodology is to impose very high tariff on China, the largest exporter of goods to US. It is natural that, the tariff imposition will increase the price of imported commodities at US market. Now the Trump hypothesis is, with the onslaught of aggressive tariff mechanization, the global market will become highly volatile and Dollar will start returning back to its safe heaven – US. The demand of Dollar in world market will increase, and, the other currencies including the Chinese Yuan will start falling against Dollar. To continue its export to US, China may also depreciate its currency on its own. Hence, the end price of imported goods in US will not rise for the time being.    

In this process, they believe that, US will get more revenue from tariff and the actual burden will be borne by the Chinese people. At the same time, they hope to re-industrialize US by creating a void of Chinese goods in US market and expect to get back investment in productive US market creating further unemployment in global south. Certainly, this is a plan to tame the finance capital of US market and reorient it to manufacturing and infrastructural sector to some extent.

Actually, these are temporary negotiating tools for the slump period. The Trump plan envisages that the other countries will be compelled to surrender and sell Dollar to purchase special long-term century bonds of US treasury. In this way, then there will be more Dollar in market devaluating the currency and hence the export interest to US will reduce. At the same time, the risk of US economy will be shifted in future, that too to other countries. Hitler tried the same thing, but within the nation-state as finance was not globalized then.    

Neo-fascism, a subservient instrument to Neo-liberalism: But the problem is, Trump administration wants to do all of these things without imposing any practical regulation over finance capital and without creating any fiscal deficit. They want to protect the reserve status of Dollar, and their entire plan is conditional to the monetary policy of other countries, especially China. If Chinese currency doesn’t depreciate, the inflation will rise in US market and any rise in interest rate to control inflation will further reduce the scope of investment.

On the other hand, if the other countries start trading in alternative instruments, as some of the European countries already have hinted, it will tremble the reserve currency status of US Dollar, leading to de-Dollarization and de-hegemonization of US power. US is home to only 13% of global export market now and the role of Dollar as global reserve is reducing. Certainly, there is almost no scope to control the finance capital, even for US, within the neo-liberal order and without challenging its diktats. So, neo-fascism will not be a stable political order and will periodically re-establish the neo-liberal rulings.

The neo-fascism in India: In summary, the crisis of neoliberalism is the origin of neo-fascism and the economic policy of neo-fascism in any country like India will eventually be subservient to neo-liberalism.

Fascistic forces will emerge again and again in neo-liberal order to divert public reaction mostly using religious or racial jingoism. RSS-BJP came into power by deceitfully claiming to offer an alternative to the existing neoliberal regime. But in reality, it has ensured an unprecedented degree of monopolization to its favoured cronies. It enforces authoritarianism in society and politics to dismantle all resistance.

Neoliberalism in India will never allow its neo-fascist forces in power to either increase the fiscal deficit, or tax the rich. Therefore, there is no room to seek a solution to the neo-fascist order within the neoliberal doctrine. With every seven-eight year cycle, the crisis will deepen further. In the interim period, if any liberal government comes, it will follow the same neoliberal dictate and there will always be a chance of the revival of the neo-fascist forces. So, neo-fascism will be a new, different and long-standing phenomenon in our world order and in India also, simultaneously existing with neoliberalism.

The Path ahead: The primary task in this situation is to mount ideological, political, social and cultural fight against Neo-fascist RSS-Hindutva forces of our country. And it should be premised on providing holistic concrete alternatives to the ongoing exploitative order. A radical reactionary ideology can only be fought by a more radical and progressive ideology. And so, the call for popularizing socialist alternatives is not based on any hypothetical situation but an essential imperative in the objective condition of the systemic crisis.

The core of our resistancetactics should be to mount militant popular movement against the privatization of public assets (Hitler rampantly privatized the electricity sector), plundering of natural resources, informalization of employment relations including the massive introduction of trainees and apprentices, erosion of labour rights, coercion of petty production and the labour engaged therein (US Free Trade Agreements will destroy the domestic agriculture), curtailment of subsidies for subsistence and attacks on democratic actions. 

We must put special attention to the Labour Codes in this regard. Certainly, the Labour Codes along with the three newly enacted NyaySanhitas (Penal Codes) are meant to dismantle and destroy all possible scopes and forms of resistance on part of the organized working-class movement. This is to ensure the higher and higher rate of surplus extraction and profit for the capitalist masters of the Modi government. Certainly, the General Strike of 20^th May is an ordeal to challenge the neo-fascist ruling dispensation. 

We have to prioritize the strategic sectors like Electricity, Coal, Petroleum, Transport, Railway, Finance. Workers of these sectors can cripple any State, how much authoritarian it may be. 

We have to plan coordinated strike against the preferred monopolies of the Neo-fascist order. The anti-privatization struggle should be the spearhead of this. So, it must be elevated to political ideological sphere of class struggle.

As the Neo-fascism can’t resolve the problem of unemployment, a long-planned, well-coordinated struggle for stable and regular employment should be made a priority task.

We have to build strong struggle against rapid expansion of private micro-finance agencies. It can mobilize a great section of population against the hegemonic dominance of finance capital in their everyday lives.

A militant, united action of people against the neoliberal order, with a concrete pathway of transcendence towards a new society, is the only way to prevent Neo-fascism from acquiring full power. Only the militancy and spread of our Struggle can make the mass progressively radicalized. The working class have to prepare itself to respond to the Neo avatar of the old Fascism i.e. neo-fascism – with all concreteness and might.