The Fabian Socialist Contribution
"...who, remembering that those (policies of high taxation and centralisation of credit) were the demands of the Manifesto (issued by Marx and Engels in 1848), can doubt our common inspiration."
- Professor Harold Laski, famous Fabian Socialist theoretician in his
Appreciation of the Communist Manifesto for the Labour Party (1948).
This booklet is an expansion of a paper I gave
at the 1963 Annual Seminar of The Australian League of Rights. The
considerable interest in this paper clearly indicated that the subject
matter of the paper should be dealt with more extensively. This booklet
does not pretend to be an exhaustive examination of what is a vast
and complex subject. But it does seek to provide sufficient evidence
to demonstrate that so far from providing a defence against the Communist
advance, the Fabian Socialist movement has materially aided and abetted
The Fabian Socialist Contribution to the Communist Advance
The great Lord Acton, famous for his observation
that all power tends to corrupt, also made the penetrating statement
that "Few discoveries are more irritating than those which expose
the pedigree of ideas".
But as one of the famous architects of the British Welfare State, Sir William Beveridge, said, his programme was one of going "half-way to Moscow". Beveridge was a leading Fabian. His description of Socialism is a realistic one; an admission that it is moving in the same direction as the Marxists, only not as fast, and, as many sincere Socialists believe, not as far.
Must Look Beyond Labels
And what is the basic reality shared by all
brands of Socialists?
Unfortunately history has proved that once policies of centralised control are set in motion, they progressively gain momentum, and that as the momentum grows, the moderates responsible for the initial impetus either have to become more ruthless in order to attempt to deal with the results of the increased momentum, or they are pushed aside by those who have no scruples about being ruthless in the exercising of centralised power.
Every increase in the power of Government is at the expense of the individual, who, as he loses not only power to make decisions for himself, but also loses his sense of personal responsibility, tends to become more and more satisfied to depend upon the State. It is the undermining of the individual's belief in the basic principle of true freedom and the personal responsibility which goes with it, that has had such a deadly "softening up" effect on the peoples of the non-Communist world, and thus seriously lowered their resistance to the Communist challenge.
The Fabian Socialists have not only made a major
contribution towards this weakened resistance; they have provided
a smokescreen which has hidden the activities of both secret and
known Communists. In a secret message sent from London to the Internationale
in Geneva in 1870, Karl Marx said that the English would never make
their own revolution, and that foreigners would have to make it for
Their policy was one of influencing all other
political groups by infiltration and permeation. This policy has
been aptly described as one of Sovietism by Stealth. The Fabian
Society, which took its name from Fabius Cunctator, the Roman dictator
who eventually defeated Hannibal as a result of a policy of gradualness,
was launched in the winter of 1883-84 under the leadership of Professor
Thomas Davidson, "an ethical Anarchist Communist".
The policy of permeation soon started to bear
fruit. Politicians of all parties were influenced. George Bernard
Shaw has frankly described this policy:
The essence of the Fabian's Soviet-by-Stealth
programme was to exploit the natural tendency of all politicians,
irrespective of label, to concentrate power. The Fabians set about
influencing all politicians to support legislation which would so
start centralising power that a process of delegation of power to
a bureaucracy would become inevitable. Once the bureaucracy was empowered
to make regulations and decrees having the force of law, responsible
Parliamentary Government would be undermined, and the traditional
Constitutional safeguards of the individual's rights destroyed.
One of the great figures of the Fabian Socialist
movement, Professor Harold Laski, clearly outlined the Fabian technique
in the Fabian journal, New Statesman, September 10, 1932,
In his book, Democracy in Crisis, Laski
said that the first task of a Socialist Government would be
The Fabian technique of perverting the Parliamentary
system to destroy responsible Government was warned against by the
famous former Lord Chief Justice of England, Lord Hewart, in his
great classic, The New Despotism (1929).
The second World War, which the Marxist-Leninists
claimed was necessary to advance their revolutionary strategy for
world conquest, not only resulted in a major expansion of the Communist
Empire; it also gave the Fabian Socialists the opportunity of expanding
bureaucracy in every part of the English-speaking world, including
It is important to note that while the greatest rate of expansion takes place when there is a Government openly committed to increased Government planning, the expansion of bureaucracy has also continued under professed anti-Socialist Governments. These Governments are also subject to the influences of the Fabians, particularly in the field of economic and financial policy.
They must continue to move, however reluctantly,
in the same direction as the Socialists until such time as they
are prepared to implement economic and financial policies which
are designed to place the full benefit of the free-enterprise and
private ownership economy at the disposal of the individual.
One of the most striking examples of a Government elected on a strong anti-Socialist policy, and subsequently continuing, although perhaps at a slower rate, the policies of those it displaced, has been provided by the Menzies Federal Australian Government, elected in December, 1949, mainly, but not exclusively, as a result of the reaction to the Chifley Government's attempt to speed up its socialisation policy by nationalising the banking system and thus creating a complete Government monopoly of financial credit.
It makes instructive reading today to go back
to Sir Robert Menzies' 1949 policy speech, in which he promised,
amongst other things, to reduce the burden of Government and to put
the shillings back into the pound.
While in the Opposition, the Liberals and Country
Party Members at Canberra had been strongly critical of the influence
of the Socialist "advisers" like Dr. H. C. Coombs, but the power
of these advisers has increased, not reduced, under the Menzies Government.
The case of Coombs is typical of what has happened.
In an address at the Melbourne University on
June 11, 1944, Coombs frankly proclaimed his totalitarian philosophy
when he said, "People could not expect complete freedom after
the war... It would be necessary for some individual to be given
the right to say what was best for the community."
Large Numbers Not Essential
Like Lenin, the genius who fashioned a practical
programme by which he said the Marxists could achieve world conquest,
the Fabians never regarded numbers as of major importance. A dedicated
minority with its members in key positions in society, could influence
and eventually control, the great majority.
Margaret Cole, leading Fabian Socialist, reveals
in her book on Sidney Webb's wife, Beatrice, that there were only
40 in the Fabian Society in its early years. "But," Mrs. Cole continued,
"the 40 members, and those who joined them within the next year or
two, contained a very high proportion of people who combined remarkable
intellectual ability with a strong sense of practical possibilities
. . "
Shaw made his position much clearer when he
said in 1948, as reported in the Evening Herald (Dublin) of
February 3, 1948, that "I am a Communist, but not a member of the
Communist Party. Stalin is a first-rate Fabian. I am one of the founders
of Fabianism, and as such very friendly to Russia.'' Unlike the genuine
''moderates'' who sincerely believed that Fabian-Socialism would
mean only a limited amount of central planning.
In the October, 1921, issue of the English
Labour Monthly, Shaw wrote that "Compulsory labour, with death
as the final penalty. . . is the keystone of Socialism".
"The Facade of "Respectability"
Results demonstrated that the Fabians had more
realistically assessed the techniques necessary for infiltration
and subversion in Britain than had the Marxists. Although, as we
shall see shortly, the Marxists must have been delighted with the
impact of the Fabians on the British middle and upper classes.
In his Remaniscences, the Socialist leader, Hyndman, wrote about "the bureaucratic Fabian Society which so assiduously promulgated the doctrine of middle-class permeation and high-toned intrigue."
Perhaps one of the most revealing statements
to be found in any of Bernard Shaw's political writings is on page
185 of Intelligent Women's Guide to Socialism and Capitalism.
This statement exposes the widespread myth that the leadership of
the Socialist movement has been provided by the manual workers or
the "have-not" members of society.
The Fabian concept of an elite of specialists, managers and administrators, to dominate and plan society, not only appealed to many members of the middle class, but it also attracted some of those from the upper class and even the aristocracy, who, having lost their former elite standing, looked at the "respectable" Fabian proposals as a means of regaining some of their lost influence.
Liaison with Marxist-Leninists
But behind the facade of "respectability" the
leading Fabians were quite willing to maintain both a personal and
philosophical liaison with their fellow Socialists, the Marxist-Leninists.
Although even a number of the Marxists could not bring themselves
to accept Lenin's revolutionary programme, the Fabians were willing
in1907 to help Lenin and his Bolshevik supporters to meet in London
after they had been driven out of Copenhagen, Denmark.
A classic example of how the Fabians have been
always willing to serve the Communists was the report on Soviet Russia
given by Sidney and Beatrice Webb after their 1931 visit to the Soviet.
The warm Soviet welcome in Moscow prompted the Webbs to observe that
"we seem to be a new type of royalty". But the top Marxist-Leninists
knew what they were about. Upon their return home the Webbs issued
their famous two-volume report, Soviet Communism - A New Civilization. This
work had far-reaching effects in the English-speaking world because
it was presented as a typical unbiased Fabian work, written by solid,
respectable British citizens.
The student of true history, which is not a series of disconnected episodes but a flow of policies stemming from philosophies, knows that current events can only be realistically assessed against the background of past ideas and beliefs. Literature has been one of the principal media for the dissemination of ideas. Which brings us to the special contribution of Shaw and Wells to the present plight of the world.
The Destructive Influence of Shaw and Wells
George Bernard Shaw and H. G. Wells, both early members of the Fabian Movement (Wells left when he could not gain leadership) played a major role in spreading ideas which have been decisive in producing the world in which we live today. And they had a tremendous impact upon many other English writers. It is significant that after spending all their lives using their undoubted creative abilities to destroy the faith of millions of people in traditional values and institutions, both Shaw and Wells became increasingly pessimistic about the future of man. They died lacking in any real faith.
The evil that men do lives after them, wrote Shakespeare.
This is certainly true concerning Shaw and Wells,
whose greatest contribution to the Communist advance was to help
undermine the backbone of Britain, the British middle and upper middle
class. In his strategical appreciation of the world situation, Lenin
said that the British Empire was the major barrier to the Communist
program. The ideological and economic attack upon the British middle
and upper middle class has been a tremendous factor in the weakening
of the British Commonwealth.
Fabian Contribution to British Retreat
While it would be untrue to claim that the Fabians
alone exercised the influence which resulted in the British prematurely
announcing that they were withdrawing from both Asia and Africa,
there is no doubt that the Fabian influences had a marked effect
in destroying self-confidence amongst that section of the British
people which had in the past supplied the administrators for colonial
The Communist leaders themselves have said that the retreat of the British from Africa has been one of the most significant developments since the end of World War II. This retreat is not only encouraging the Communists to prepare their future plans for Africa on the assumption that there will be increasing chaos; the Communists also know that every new African "nation" which joins U.N.O. supplies yet one more vote which can be used to further Communist strategy in using U.N.O. and its agencies.
While Communist strategy concerning the "Colonial Question" has always been based upon Lenin's teaching that the European powers should be attacked through their colonies, and open Communist propaganda has been concentrated upon furthering this strategy, this Communist propaganda has not had the same deep impact as that of the Fabian Socialists.
The Contribution of P.E.P.
As someone may be thinking that it is rather
strange that the British retreat from Africa gained its greatest
impetus following the famous wind-of-change address by Mr. Harold
Macmillan, the former Prime Minister of a British Conservative Government,
it should be noted that, apart from the fact that the British Government
is influenced by its many Socialist advisers in the Colonial Office,
Mr. Macmillan is not a genuine Conservative.
P.E.P.'s conspiratorial methods - typical Fabianism
- can be judged by the following instructions issued on 25th April,
1933, in conjunction with a broadsheet outlining the policy of Sovietisation
In view of the program of gradual Sovietisation supported by P.E.P., it is not surprising that Mr. Sieff made the claim that "The only rival world political and economic system which puts forward a comparable claim is that of the Union of Soviet Republics."
Big Finance and Socialism
Although the Fabian Socialists, like the Marxist-Leninist
Socialists, have always attempted to present themselves as the bitter
opponents of the "wealthy capitalists", the truth is that both groups
were helped decisively in their activities at critical periods in
their history by powerful financial groups.
While many students of revolution and subversion are familiar with the tremendous financial assistance to revolution in Russia by the international financier, Jacob Schiff of Kuhn, Loeb and Co., New York, and his associates, insufficient attention has been directed to the relationship between the same type of financiers and Fabian Socialism.
In her autobiography, Our Partnership,
Mrs. Webb reveals how she and her husband were helped to finance
the London School of Economics by the Rothschilds, Sir Julius
Wernher, and similar financiers.
In The Quarterly Review for January,
1929, Professor J. H. Morgan, K.C., wrote:
It would take a large work to outline the tremendous world-wide influence of the London School of Economics during the time it was dominated by such outstanding Socialists as Professor Harold Laski. Apart from the fact that its teachings have penetrated Universities in all parts of the world, it is interesting to note the number of key Government advisers of the English-speaking countries who were trained at the London School of Economics.
The influence of one man, Harold Laski, can
never be fully estimated. For example, any realistic assessment of
the role of Dr. H. V. Evatt in Australian politics would need to
consider his friendship with Laski.
President Roosevelt's considerable wealth did
not prevent him from enthusiastically accepting the advice and support
of the Fabian Socialists. In an address in the U.S.A. House of Representatives
on June 30, 1939, the Hon. John C. Schafer dealt with Roosevelt's
background, revealing him as a wealthy man who had been "an ex-international
banker of wide experience and former attorney for international bankers".
Several of the American Foundations have become little more than "fronts" for Socialist and, in some cases, Communist activities, providing further confirmation of the nexus between Big Finance and Socialism.
Alger Hiss, the American State Department official
who was later exposed as a top Soviet agent, was at one time after
the war President of the Carnegie Endowment for International Peace.
When Alger Hiss was exposed as a Soviet agent, he was befriended
by Mrs. Helen Lehman Buttenweiser. The same woman later supplied
most of the bail for Dr. Robert Soblen, brother of Morton Soblen,
one of the most important Soviet spies ever captured in the U.S.A.
Socialist Contribution to Communist Espionage
Further evidence of the close relationship between
the Fabians and the Communists is provided when a study is made of
Communist espionage. In his book From Smoke to Smother (1948),
Mr. Douglas Reed, former foreign correspondent for the London
Times, and author of a number of books on international affairs,
A long list could be prepared of Communists and pro-Communists who studied at the London School of Economics, or have been influenced by the Fabian Socialists. But we will content ourselves with selecting a comparatively small number of important examples to demonstrate the truth of this statement.
India's former Minister for Defence, Krishna
Menon, has a long pro-Communist record and was forced from office
in 1962 when the Chinese Communist attack took place.
The Canadian Royal Commission Report on Communist
espionage (1946), resulting from the defection from the Russian Embassy
by Gouzenko, listed the principal Canadian public servants engaged
in espionage activities on behalf of Soviet Russia. A big percentage
of these were graduates of the McGill University, an institution
in which the Fabian Socialists had long exercised considerable influence.
One of the leading espionage agents was Dr. Raymond Boyer, at the
time still a member of the McGill University staff. The Royal Commission
Report drew attention to the fact that Boyer was "a man of very substantial
independent means", providing yet one more example of the fallacy
of the widely-fostered view that Communism only attracts the poor,
and not the wealthy.
Fabianism at Harvard
However, it is when we turn to examine the Fabian
influence in the U.S.A., exerted principally through Harvard University,
that we find the most striking examples of the close relationship
between Fabian Socialism and World Revolution.
A classic example of how a Communist agent
operates behind a Fabian smokescreen of respectability, is provided
by a study of the career of one Oskar Lange, whose work On the
Economic Theory of Socialism, has been required reading at Harvard's
economic department. Lange was a graduate of the London School
of Economics, a background which fitted him to become a traveling
fellow of the Rockefeller Foundation, and later a lecturer
on economics at several American Universities.
The most famous of top Soviet agents produced
by Harvard is Alger Hiss. James Burnham observes in his Web of
Subversion (p. 80) that Hiss belonged to what came to be known
as the first Ware cell at Washington, and that almost the entire
membership of this cell came out of the Harvard Law School.
Another protégé of Frankfurter's was Mr. Dean Acheson, former American Secretary of State and the man who not so long ago told the British they were finished as a world force. It was Dean Acheson who did much of the groundwork for the momentous Roosevelt decision to extend diplomatic recognition to the Soviet gangsters in 1933. Acheson had been closely associated with the Fabians and said publicly after Hiss had been sentenced to imprisonment that he would not "turn his back" on him.
The Role of Harry Dexter White
But just as important as Alger Hiss, but generally
less known, in the Communist conspiracy was Harry Dexter White, who
started his career as a lecturer in economics at the Harvard University. The
famous British economist, J. M. Keynes, not generally recognised
as being a Fabian-Socialist, once described White as America's principal
Keynesian economist. White and Keynes were close friends, the significance
of which will be examined later. White played a major role in shaping
American policies which helped further the Communist revolutionary
Two very influential products of the Keynesian-Fabian economics taught at Harvard were V. Frank Coe and Lauchlin Currie. Like White, both were Communist agents. And White helped advance the careers of Coe and Currie in the American Administration. Currie was educated at the London School of Economics before going to Harvard. As we will see later, early in the war Keynes and White were working on the idea of an International Bank. And White included Coe and Currie in his conferences with Keynes. In 1944 Coe was the technical secretary of the Bretton Woods Conference and later became the principal administrative officer of the International Monetary Fund. It was not until 1952 that Coe was seriously challenged as being a Communist agent.
The history of the International Monetary Fund provides further evidence of a nexus between international financial groups, Keynesian-Fabians and International Communism. James Burnham observed in his book The Web of Subversion (p. 132) that "The International Monetary Fund is one of the most important 'specialized agencies' set up within the United Nation's complex . . . it is supposed to assist in the international 'stabilization' of currencies. From its beginning, and before its beginning, the International Monetary Fund has been closely encompassed by the web of subversion."
Another important "front" organisation created
by the American Fabian Socialists, was the New School for Social
Race and Revolution
Another member of the New School was
one Franz Boas. Although comparatively few people have heard the
name of Boas, he made a major contribution to the use of race as
a factor in the revolution in the U.S.A. While at the Columbia University,
Boas laid the foundations in the U.S.A. of the so-called anthropological
science which claims that there are no basic differences between
The decision by the Supreme Court was enthusiastically applauded by the Keynesians and the Communists, and it has opened the floodgates of revolution in the U.S.A. as the Communists and their dupes foster a growing race crisis which is used to demand more powers for the Federal Government at the expense of the States. The unfortunate Negroes are but raw material to the revolutionaries, who have swept aside the moderate anti-Communist Negro leaders who have attempted to warn their fellows against being used for revolutionary purposes. Mr. Justice Felix Frankfurter, the ex-Harvard Professor and long-time Fabian, led the American Supreme Court in making a decision which so delighted his fellow Fabians and the Communists.
THE KEY ROLE OF J. M. KEYNES
Although it is generally admitted that the economic and financial theories of the late Baron J. M. Keynes have had a tremendous impact in all Western nations, particularly the nations of the British Commonwealth, and the U.S.A., it is an astonishing fact that most supporters of the free-enterprise, private ownership economic system, regard Keynes as a "capitalist economist" whose work was primarily concerned with economic and financial adjustments which would have as much as possible of the capitalist system. The truth about Keynes and his vital contribution to the world-wide revolution is so contrary to the fable about him being a "capitalist economist," that, in considering Keynes and his ideas, we are presented with yet another frightening example of how revolutionaries can advance behind a smokescreen of respectability.
While it is probably true that the rank and
file of Communists really believe their charge that Keynesian economics
are but an attempt "to prop up a tottering capitalist system," Communist
leaders are well aware of the direction in which Keynesian economic
teachings are taking those non-Communist nations which have adopted
An examination of Keyne's history reveals him
as a true Fabian. And prominent Socialists like the late John Strachey,
leading English Fabian theoretician, have openly commented on how
Keynesian teachings can advance Socialism. In his book, Contemporary
Capitalism, 1956, p. 284, Strachey exposes the falsity of the
claim that Keynes was concerned with "saving capitalism." "But the
capitalists have really had good reasons for their reluctance to
be saved by Keynesian policies. If we look more closely at the remedies
proposed, we shall find that Arthur Smithies, "Schumpeter and Keynes',
in Schumpeter, Social Scientist, Harvard University Press,
1951, p. 136, their implications are much more drastic than they
seem to be at first sight. And when we come in later volumes of this
study to consider the results of the application of Keynesian measures
in America, Germany and Britain, respectively, we shall find that
in fact the changes effected by them have been subtle, but nevertheless
The Communists and Fabians are as one in their
recognition of the fundamental truth that one centralised control
tends to cause another, and that the end result is State control
of everything. As it comes as a surprise to many to be confronted
with the view that such a widely respected man as Baron Keynes was
a conscious agent of revolution, it is essential to examine briefly
During the first World War Keynes sought to
keep himself out of the firing lines by a technique used by many
other young Socialist radicals: he sought an appointment to a Government
service which might exempt him from military duty. But he was eventually
forced to file as a conscientious objector and was criticised by
his mother for his unpatriotic stand.
In The End of Laissez-Faire Keynes not only put forward concepts concerning political and economic controls; he even advocated social control of the number of children each family should have. An American publisher, Clarence W. Barron, who met Keynes in 1918 described him as '"a Socialist of the type that does not believe in the family." We might observe in passing that Keynes never had any children.
Like many Socialists, Keynes was also a hypocrite. Although he was "not a great friend of the profit motive," and attacked vigorously both savings and investment by individuals, his own speculations on the international money market built up his assets from £4,000 in 1919 to £506,000 by 1937. Using the "inside" knowledge they gained in the British Treasury Department, Keynes and his associates organised their own investment company to further their own private interests. It is not surprising that Keynes described Ivor Kreuger, one of the world's greatest swindlers as '"the greatest financial intelligence of his time" (New York Herald Tribune, July 18, 1960).
According to a publication, Keynes at Harvard (1960),
issued by the Veritas Foundation, ""a check of several hundred of
the more prominent Fabian Socialists in England, and their counterparts
in the United States, shows that with hardly an exception they manage
to live in a high style either through speculation, profit-making
or draw high salaries in government, tax-exempt foundations, universities
or unsuspecting corporations . . . Prominent agitators against "Capitalism',
according to data to Who's Who in America, have profited as individuals
in all the above categories."
Following his visit to Soviet Russia in 1925,
Keynes published three articles later issued by the Fabian Socialist
Hogarth Press as A Short Visit to Russia. Although he was
horrified by the mass terror, Keynes suggested that "'In part, perhaps,
it is the fruit of some beastliness in the Russian nature - or in
the Russian and Jewish natures when, as now, they are allied together".
Fascists and Nazis Use Fabians
It is important to note that the totalitarian
philosophy underlying Keynesian theories made them acceptable to
both the Fascists and the Nazis. Mussolini observed that "'We were
the first to assert that the more complicated the forms of civilization,
the more restricted the freedom of the individual must become." That
is what the Fabian Socialists also preach.
Fabian and other Socialists who are so fond
of using the term "'Fascist" as a dirty swear word against anti-Communists,
should have their attention directed to a further statement by Barnes
in his book, that '"all this (Keynesian teaching) is pure Fascist
premises," and to the fact that during the Fascist regime in Italy
not only Keynes, but other Fabian Socialists were translated and
Keynesian theory made such an impact in Nazi Germany that in 1935 Professor Carl Fohl produced a work which was a duplication of Keynes' General Theory. Students of the use of Communism, Nazism and Fascism cannot help be struck by the fact that all three were revolutionary movements which were directed by individuals with Socialist backgrounds. It is true that Nazis and Fascists fought bitterly against Communists, but they were in fact battling for the same type of mind. A number of observers have drawn attention to the fact that many German Communists became Nazis, while after the war many Nazis found no difficulty in becoming Communists.
The American writer, John T. Flynn, in his penetrating examination of the ""creeping revolution" in the U.S.A., The Road Ahead, states ". . . the line between Fascism and Fabian Socialism is very thin. Fabian Socialism is the dream. Fascism is Fabian Socialism plus the inevitable dictator."
It is a fact of the greatest historical significance that Keynesian Social economics, now so widely accepted in the non-Communist world, were accepted by both the Nazis and the Fascists, and are the Fabian method of weakening the foundations of the free-enterprise system and forcing it in the direction which the Communists claim leads '"inevitably" towards Communism. As a good Fabian, Keynes grasped early in his career the importance of influencing Government policies through first influencing economists. Keynes also calculated how , if economic instructors could be influenced by a politically inspired economic theory, his ideas would then permeate the whole of the community. Keynes made his objective clear with the following observation in his General Theory of Employment Interest and Money: "the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else."
In a letter to Fabian leader Bernard Shaw, Keynes said he was writing a book on economic theory "which will largely revolutionise . . . the way the world thinks about economic problems. When my new theory has been duly assimilated and mixed with politics and feelings and passions, I can't predict what the final upshot will be in its effect on action and affairs."
Keynes Assisted by Marxists
Keynes' most important book, The General
Theory of Employment Interest and Money, was first published
in 1936 and was immediately hailed by Socialists everywhere. It
is important to stress that Mrs. Joan Robinson, an internationally
recognised Marxist, was one of the main economic experts who collaborated
with Keynes on his project. Another leading Socialist economic
expert, R. F. Kahn, contributed so much that "his share in the
historic achievement cannot have fallen very far short of co-authorship."
Following his visit to Soviet Russia late in 1946, when he had lengthy discussions with Stalin, Professor Laski made the important public statement that English Socialists and Russian Socialists were approaching the same objective by different roads. As we have seen, Laski and Keynes were fellow-Fabians who had collaborated over many years.
International Monetary Fund serves Communist Program
In view of the fact that J. M. Keynes' economic
teachings and their application are furthering the Communist advance,
not halting it, we must also examine closely why Harry Dexter White,
the top Communist agent, and his Communist associates worked so closely
and harmoniously with Keynes to create the International Monetary
Fund and the World Bank.
This is surely a fact of tremendous importance
to be considered by every person genuinely concerned about understanding
the nature of the forces operating in the current world situation.
It is not without significance that when the Chifley Labor Government
at Canberra was working for the ratification of the Bretton Woods financial
agreements, the Australian Communist press supported the Chifley
Government, and urged support for the agreements.
White was chairman of the Bretton Woods
Conference in 1944, at which 44 nations were represented and
at which the International Monetary Fund was established
with an initial capital of over 8 billion dollars. Keynes had anticipated
that White would be the Managing Director of the International
Monetary Fund. Keynes "felt that under White the Fund would
be in safe hands".
Keynes' attitude towards the Communists at this
time was outlined in a letter to Sir John Anderson on July 21, 1944,
in which he said:
Even after White had been publicly exposed as
a Soviet agent, none of the Keynesians anywhere expressed concern
about White's subversive role. In fact they came out publicly against
the "witch hunts", providing further evidence of the close affinity
between the Communists and the Fabian Socialists.
The Reality of Socialism
The underlying philosophy of all Socialist policies,
whether advanced by the Marxist-Leninists, the Fabians, or any other
brand of Socialists, is collectivist, reactionary, and opposed to
the freedom of the individual. All central planners fear individual
freedom, because no one can predict how the individual is going to
use his freedom.
Now the basis of true freedom is economic freedom.
The widespread ownership of private property, decentralised and genuine
competitive free enterprise, the inheritance of any form of property
or money from one's forebears, the obtaining of dividends from investments
, and the making of financial profits are all detested by the Socialists.
One of Keynes' main contributions to the Socialist advance, was to attack the principle of private savings and private investment. According to Keynesian economics, the economy should be increasingly geared to Government investment for '"social purposes", the "'social purposes" to be decided, not by the free choice of individuals, but by Government planners.
Centralised control of the creation, issue and
cancellation of financial credit is essential to operate the Keynesian
policies, while high taxation becomes progressively more of an instrument
of control rather than a necessity for raising money for Government
In his Appreciation of the Communist Manifesto
for the Labour Party, issued in 1948 to commemorate the 100th
anniversary of Marx's basic document, Fabian Harold Laski asked
the revealing question,
The Fabians openly proclaimed early in their
history that the use of high taxation was one of their chief means
of reaching the Socialist State. They also stated that "'to the Socialist,
the best of Governments is that which spends most." Although both
the Fabian and the Marxist Socialists direct much of their propaganda
at the evils of Monopoly, this is but another example of throwing
up a smokescreen to mask the truth that the progressive concentration
of economic power is welcomed.
It is the Keynesian Socialist financial and economic policies which are aiding the Communists by making it appear that this concentration is inevitable, and inherent in the free-enterprise economic system. There is no doubt that Keynes set out deliberately to foster economic concentration and to undermine the middle class - "the Bourgeoisie".
Joseph Schumpeter, the neo-Marxist from Harvard University, summarised the Keynesian view in the following passage in his book, Capitalism, Socialism and Democracy (1950). "The perfectly bureaucratized giant industrial unit not only ousts the small or medium-sized firm and 'expropriates' its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income - but also what is infinitely more important, its function."
The well-known American Fabian and admirer of Keynes, Stuart Chase, in his book, A New Deal, a slogan which President Roosevelt borrowed for his Administration, wrote: "Mr. Keynes, following Karl Marx,. used the great cooperation as an institution increasingly ripe for state control or outright ownership. He finds many parallels with the state trusts of Soviet Russia."
In an article in the London Sunday Express,
1920, H. G. Wells made the following lucid comment concerning the
same point made by Chase:
Fabian-Socialist financial and economic policies produce the economic centralisation which the Communists then claim proves that Marxism-Leninism has '"scientifically" demonstrated that capitalism develops "inevitably" through monopoly-capitalism to Socialism.
Basic Economic Truths
The current policies of centralisation in the
spheres of industry, Government and finance are not going to be halted
by merely attempting to draw attention to the evils resulting from
these policies, and not demonstrating that a study of basic economic
truths reveals that alternative policies leading to greater individual
freedom and security are possible.
The basis of all wealth is sunshine, solar energy, water and the soil.
It is self-evident that no individual, or group of individuals, produced this wealth. The Christian could put the position as follows: Sunshine, solar energy, water, soil, are a part of God's capital. They were a gift to the human being in the same way that a father gives a property to his son. The fact that some individuals might use an inherited asset, one towards which they contributed no labour whatever, in a wasteful or immoral manner, is not a legitimate reason for abolishing the principle of inheritance. It is simply an argument in favour of developing a greater sense of responsibility and morality in individuals inheriting wealth.
Thousands of years of human history have clearly
demonstrated that collectivism encourages a far more irresponsible
and anti-social attitude towards wealth of any kind than does private
personal control. Not only has the human being inherited the basic
capital wealth mentioned; he has also inherited the truths of the
The claim that "labour produces all wealth" is not only false; it becomes progressively more false as the cultural heritage is expanded with the result that labour as such is a diminishing factor in production.
Those who really desire to attack Socialist economic and financial policies which are driving the non-Communist nations towards the same centralization suffered by people living in the Communist nations, have got to expose and oppose every attack upon the inheritance principle. They must insist that the tremendous potential benefits from the accumulated knowledge of centuries are available to the individual. Present policies of economic and financial centralism, are rapidly leading to more and more control over productive resources being exercised by central planners acting in the name of the Government.
The essence of true economic democracy is that
the individual consumer, using his money "'vote", induces a number
of competing retailers and producers to compete for his ""vote" by
offering him better and cheaper goods and services. The sane, realistic
purpose of production should be to supply the genuine, freely-expressed
desires of individuals. The free-enterprise, competitive system,
based upon the concept of private ownership of property, operating
in a society where the Government's main function is to uphold a
rule of law which ensures that no individual can interfere with other
individuals' rights, provides the basis for a major step forward
in real freedom for all individuals.
More and more Government intervention in the
field of production and distribution as advocated by Keynes, produces
an ever-increasing bureaucracy which decides how the . , nation's
heritage is to be used. This is justified under the slogan that the
Government must provide '"Full Employment".
The real credit of a nation is its productive
Evidence of this development is already mounting in every Western nation where the Fabian tactic of gradualism is being applied. If the Communist strategy for obtaining a World Monopoly of Power is to be defeated, then not only must all policies for further centralising power be vigorously challenged; but there must also be a progressive decentralisation of all power, political, financial, and economic under the effective control of individuals who can then be made personally responsible for their actions.
If the supporters of the free society are not capable of advancing appropriate policies for decentralising power, for ensuring that the individual does gain access to his own heritage, then not only will they not defeat the Communist challenge; they will get what they deserve.
Although far from being as exhaustive as it
might be, this survey of the Fabian Socialist Movement in relationship
to the Communist advance, forces the admission of the following general
The Fabian Socialists have not only produced
a fertile recruiting ground for the Communists; many of them have
actively collaborated with the Communists. And when they have not
directly collaborated, they have provided an effective smokescreen
for the Marxist-Leninists, both helping to shield Communist activities
and to mask the Communist advance.
Published by the Australian League of Rights, Box 1052. G.P.O. Melbourne 3001.