Only two paths are therefore open before present society.
One is the path of fascism.
The other is the path of communism.

-R. Palme Dutt, Fascism and Social Revolution (1934)

This story is not pretty. It is shocking and brutal. It is the story of fascism, a monumental attack by the desperate capitalists upon the international working class.

Modern fascism came into its own in 1918, after World War I. In 1945, it absorbed a crushing defeat from workers, many millions of them led by communists. By the end of this first period of modern fascism, the fascist overlords were annihilated.
In Hungary, a virulent form of fascism developed in response to a failed revolution. In 1918, workers took to the streets against the Hapsburg monarchy and the handful of barons that had ruled the country for centuries. Inspired by the magnificent example of the Bolshevik Revolution in Russia, Hungary’s working class turned to communists to lead a revolution. In March 1919, in the capital city of Budapest, a united front of working-class forces, including the untrustworthy social democrats but under the leadership of the Communist Party, seized power and declared a Hungarian Soviet Republic. For five months, these heroic workers fought against the old ruling class, the new capitalists, the petty bourgeoisie, and expeditionary armies from Czechoslovakia, Romania, and France intent on crushing the communists.

For a time, the working class controlled many districts of Hungary. But the powerful forces arrayed against them, a betrayal by the social democrats, and the vacillations of top communist leaders led to the defeat of the dictatorship of the proletariat. In August 1919, the capitalist armies of Romania and France, in league with a Hungarian “National Army” under the right-wing Admiral Miklos Horthy, crushed the Hungarian Soviet Republic in a bloodbath.

Fascism as the  outcome of modern capitalism

In 1933, the Nazis took power in Germany. Within months, the entire nation was under the heel of these fascist cutthroats. Big business reigned supreme, and the largest communist party in the capitalist world was systematically destroyed. The victorious advance of fascism in Italy, Portugal, Hungary, and Japan now reached a climax.

The Communist International, or Comintern, had to ponder the reasons for these defeats. In 1934, R. Palme Dutt, a leading comrade in the Communist Party of Great Britain, published his Fascism and Social Revolution. As a reference point, Progressive Labor Party defines fascism as a period of capitalism in an economic and political crisis that can be resolved only by war. Inter-imperialist rivalry over resources and markets leads to more desperate competition among the bosses of leading national powers. 

As these bosses prepare for larger wars, they can no longer rule within the constraints of liberal democracy, the mythology that masks the reality of the capitalists’ absolute class dictatorship. “Free and fair elections,” “the rule of law,” “due process,” constitutions, independent unions—all must be abandoned or obliterated. The bosses have no choice but to ruthlessly discipline or eliminate opposing factions within their own class. They’re also forced to normalize state terror, and to use more overt, vicious racism—typically culminating in mass murder—to attack and divide the working class. To survive, the fascist bosses must command workers’ loyalty to their nationalist war agenda.

Dutt used dialectical materialism to show that fascism is the natural and logical form of government for declining monopoly capitalism, just as liberalism had been the natural scaffolding for expanding competitive capitalism. The clash of ideas and parties in liberal democracy corresponds to a stage of capitalism marked by technical progress and marketplace competition. The regimented terror and decadence of fascism corresponds to a concentrated monopoly in the marketplace and the anti-scientific depravity of the capitalist class in the 1930s, and increasingly so today. If one accepts Dutt’s premises, a communist party must rule out any strategy based on the defense of liberal democracy.

Dutt began with a description of the crisis of capitalism:

Capital can no longer utilize the full labor power of the productive population. Monopoly capitalism is more and more visibly choking the whole organization of production. “Today they are burning wheat and grain, the means of human life. Tomorrow they will be burning living human bodies,” Dutt wrote prophetically.

Scientific and technical advances are increasingly rejected by the capitalist class. This decadence expresses itself in the growing revolt against science, reason, cultural development, and liberal philosophy, all characteristic of ascendant capitalism. In their place, the capitalists turn to religion, spiritualism, mysticism, anti-scientific illusions, and racism.

Bourgeois parliamentary democracy has outlived its usefulness: “It is clear that liberal democracy has played out its historical role.”

Trade is restricted. Free trade is the lifeblood of ex¬panding capitalism, confident of its strength. Trade restrictions and thinly disguised trade wars are the hallmark of decaying capitalism. Under full-blown fascism, war becomes national policy.
Social democrats and labor misleaders will sell out the working class. Since they oppose the dictatorship of the proletariat, these class traitors inevitably end up in bed with the fascists.

Does this mean that fascism can’t be beaten? On the contrary, says Dutt: “Fascism is not inevitable. Fascism only becomes inevitable if the working class follows the line of reformism, of trust in the capitalist state.’’ In other words, the fight against fascism cannot trust liberal democracy and its anti-worker leadership. To preach confidence in liberal democracy--in legalism or constitutionalism—is to guarantee the victory of fascism.

In 1935, the 7th Congress of the Comintern met to consider the communist response to the fascist offensive. In the Comintern’s main report, Georgi Dimitrov backed away from the sharpest conclusions in Dutt’s book. He ignored the roots of fascism in liberal democracy. He left unmentioned Dutt’s thesis that fascism is the inevitable form of government for modern capitalism.

Dutt had argued for a tactical fight against the fascistization of the liberal regimes, but only toward the primary goal of organizing a communist revolution. Dimitrov made the rescue of liberal democracy primary and revolution secondary. He proposed an anti-fascist united front with the treacherous social democratic leaders, a strategy that would have disastrous consequences.