The old socialists had argued for the taking over of the instruments of production by the state which would manage them for the benefit of the people… - John T. Flynn

In 1933, suddenly, with little or no consideration in the great disorder and fever of the collapse, Congress passed the National Recovery Act. That act authorized the President to bring about a complete and comprehensive organization of industry and to make rules and regulations governing every phase of its activities. Under practically every category of industry and finance the entire nation was organized into what the Italians would call ‘corporatives’; what we called code authorities. These code authorities, under the authority of the President, were empowered to make rules, to regulate production, prices, distribution, competition in all its phases. These regulations had the force of law and under them men could be hauled into court on civil and criminal liabilities. Some men were actually jailed for violating them. It is, I think, a fair statement that the President, under the NRA, exercised the right to make laws over at least half, if not more, of the domain within which Congress ordinarily legislates. The Supreme Court, in a unanimous decision, declared this law unconstitutional and based its opinion entirely on the proposition that Congress had delegated its legislative power to the President, who in turn had delegated it to the code authorities.

The commonly accepted theory that fascism originated in the conspiracy of the great industrialists to capture the state will not hold. It originated on the Left. Primarily it gets its first impulses in the decadent or corrupt forms of socialism—from among those erstwhile socialists who, wearying of that struggle, have turned first to syndicalism and then to becoming saviors of capitalism, by adapting the devices of socialism and syndicalism to the capitalist state.

These two baleful mistakes gave Franklin Roosevelt a power which he used ruthlessly. He used it to break down the power of the states and to move that power to Washington and to break down the power of Congress and concentrate it in the hands of the executive. The end of these two betrayals—the smashing of our economic system and the twisting of our political system—can only be the Planned Economic State, which, either in the form of Communism or Fascism, dominates the entire continent of Europe today. The capitalist system cannot live under these conditions. Free representative government cannot survive a Planned Economy. Such an economy can be managed only by a dictatorial government capable of enforcing the directives it issues. The only result of our present system—unless we reverse the drift—must be the gradual extension of the fascist sector and the gradual disappearance of the system of free enterprise under a free representative government.