The New Deal, Italian Fascism, and German National Socialism are all similar examples of "national capitalism," according to an article published in the Harvard Business Review by Norman B. Gras, Isidor Straus Professor of Business.

"In 1922 Fascism was born in Italy and in 1933 Nazism in Germany and the New Deal in the United States," Professor Gras said. "All arose out of distress caused by postwar reactions of business. All were based on private business and all provided work for the working class."

"National capitalism was ushered into the United States with politicians' cries of 'driving the moneychangers from the temple,'" Professor Gras said. "It mattered not that financial capitalism had engineered the greatest material progress that the world had ever known in the same length of time.

The result in the United States is "a new rival system made up of old elements," he said. "The Germans call it 'national socialism'."

Describing national capitalism as "a system of business based upon private enterprise publicly controlled," Professor Gras said that it represents an entirely new alignment of business groups, and through increasing the rigidities of the economic system, "keeps business at a low state of performance" and also "allows no enthusiasm for expansion."

"Constant criticism, excessive regulation, credit control, and actual rivalry keeps business at a low state of performance. This rigid condition lies at just about the level of performance necessary to meet existing demand for goods and services and allows no enthusiasm for expansion.

"In other words, national capitalism freezes production at the level of existing demand for consumers' goods. The one exception occurs in the field of public works.