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The Middle Class Is COLLAPSING. Fascism Could Be Next | Aaron Bastani Meets Clara Mattei

{"content": "## The Pitch

A professor of economics is making a provocative argument: capitalism isn't a natural or inevitable system — it's a political construction that requires constant force to maintain. And without understanding how it actually works, we can't recognize what's threatening our democracy.

Clara Mattei has spent years studying the relationship between liberal economic theory and the rise of fascism. Her research suggests we're more than a decade into something that looks alarmingly like a rerun of the 1930s — with rising radical right political polarization, middle class decline, and wage suppression. She's not just talking about history. She says it's happening now.

Who Is Clara Mattei?

Mattei teaches economics in the United States, previously in New York and now in Tulsa, Oklahoma. Her first book was published in 2022 — Capital Order — which examines how capitalism functions as an invisible order that traps everyone. She's also involved with the Forum for Real Economic Emancipation, an attempt to democratize economic decision-making and build alternatives to a system she argues isn't designed to work for ordinary people.

Her new book is called Escape from Capitalism. The subtitle makes her argument explicit: Economics is political — and other liberating truths.

What Is the Capital Order?

Mattei describes capitalism not as a spontaneous or natural system, but as an arrangement built on political force. The foundation of what people call the market economy or free market rests on what's actually the most unfree relation of all: the wage labor relationship.

"The capital order is an invisible order which traps us all," Mattei argues. "Growth under capitalism happens because most of us have given up agency into the production process — we don't really get to choose what happens during our day." Even workers at companies like Google, she notes, are complicit in producing value for shareholders while the company makes deals with militaries that bomb children.

The system requires constant political coercion to function. People must be made more dependent on markets through austerity policies — cutting social expenditures, taxing workers rather than capital gains, increasing unemployment through interest rate hikes. These aren't natural market outcomes. They're political choices that preserve conditions favorable to investors.

The Fascism Connection

Mattei's PhD focused on how liberal economic theory connected to the rise of Italian fascism. Her research found that austerity programs and wage suppression directly generated fascism — and what followed.

"We're returning to that world," she says. "In fact, we're more than a decade into something which seems potentially in Europe anyway like a rerun."

The parallels aren't accidental. A century ago, similar conditions led to political catastrophe. References to fascism and World War II might feel dated — but Mattei argues they feel dated only because we've forgotten how quickly such conditions can return.

The Inequality Crisis

The statistics Mattei cites are stark: in the UK alone, one out of three children lives in poverty while billionaire wealth has increased sixfold since 2014. Globally, twelve people own more than the bottom half of the world's population — roughly four billion people. Half the world lives on less than $6.85 per day.

"We are in the most obscene and unprecedented moment in terms of inequality," Mattei says. "Two billion people are food insecure. At the very top, accumulation has never been so abundant."

Elon Musk's personal fortune is approaching three quarters of a trillion dollars — a figure that would have seemed impossible a generation ago. In the United States, nineteen people have accumulated almost $2 trillion in just two years while half of households are financially insecure and most workers can't afford a delayed paycheck.

The Taxation Problem

Mattei argues the system isn't just failing to help people — it's actively working against them through regressive taxation. Workers pay taxes on their wages. Meanwhile, inheritance tax has been almost abolished, corporate taxation keeps falling, and wealthy individuals like Elon Musk don't need to sell their shares — so those shares accumulate without ever being taxed.

"The very rich are untaxed," Mattei explains. "And if they die, their children will get that money without even being taxed."

This creates a situation where people produce value but don't keep the majority of it. The state uses tax revenue to derisk and incentivize private investors rather than funding social services — with military spending accelerating.

A Counterargument

Critics might note that framing every problem as structural capitalism oversimplifies complex issues. Some economists argue that markets can be reformed without overthrowing them entirely, and that focusing on systemic transformation distracts from more immediate reforms like strengthening worker protections or expanding social safety nets. Mattei's response is that reform only addresses symptoms — not the root cause.

The system is constructed so the story we know is that if we don't do well it's probably our fault. We haven't tried hard enough. This is a complete myth.

Bottom Line

Mattei's strongest argument is that capitalism isn't inevitable or natural — it requires political force to maintain, which means it can be changed by political force. The historical parallels to fascism aren't metaphorical; they're structural. The biggest vulnerability is strategic: her solution requires mass mobilization and systemic change at a time when many people still believe the system works if you work within it. That belief may be the biggest barrier to the transformation she argues we need.

Deep Dives

Explore related topics with these Wikipedia articles, rewritten for enjoyable reading:

  • Benito Mussolini 93 min read

    The guest's PhD research examined the relationship between liberal economics and the rise of Italian fascism under Mussolini

  • Italian fascism 51 min read

    The excerpt discusses how austerity programs and wage suppression contributed to the rise of Italian fascism

  • Austerity 39 min read

    The article specifically mentions that austerity programs were key factors in generating fascism a century ago

the big big corporations are all benefiting from the genocide not just in Palestine but also in Sudan the silent genocide no one speaks about many places I mean the military economy is the way in which this the shareholder profit grows and this is something that I think right now more than ever we need to be able to say capitalism and humanity just don't fit together a rising radical right political polarization ation, downward mobility of the middle class. I'm talking, of course, about the 2020s, but we've been here before, namely a century ago. It didn't end well. You might already know that.

But references to fascism, World War II, Hitler, Mussolini can sometimes feel dated or even excessive. Today's guest would disagree, however. Her PhD was on the connection between liberal economics, liberal economic theory, and the rise of fascism. She says that austerity programs and pushing down wages were the things that generated fascism and what followed.

She also contends we're returning to that world. In fact, we're more than a decade into something which seems potentially in Europe anyway like a rerun. So, what is liberal economics and what is its relationship to fascism? Is capitalism even possible running alongside democracy?

Or are these two systems which simply can't work together? All important conversations and all tied up in a new book published by Clara Mate, escape from capitalism, economics is political and other liberating truths. Clara Mate, welcome to Downstream. >> Thank you for having me.

>> Who are you? >> I'm >> Let's start from the top. So I'm the author of the book we're discussing today called Escape from Capitalism. Economics is political and other liberating truths.

I'm a professor of economics. I teach in the US. I was teaching in New York and now I moved to Tulsa, Oklahoma. And the reason is that I also started with other members of the group um the forum for real economic emancipation or free.

So freef free forum.org is where you can get more information of what we do. But essentially it is an attempt to redemocratize our economy, take action in what is right now an economic system that is really not working for people and it's not designed to work for people. So a conversation about why we need to change our perspective and our narrative about the economy and ...