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In 1928-9, more or less coinciding with the ascendancy of Stalin in the Soviet Union and the policy of rapid industrialisation and the collectivisation of agriculture, the Comintern adopted a policy of refusing to distinguish between 'Social Democracy;' and Fascism and indeed suggested that this 'Social Fascism' could represent a greater threat to the Socialist future than Fascism red in tooth and claw.

In retrospect the policy looks like a foolish mistake but the retrospect is structured by the rise of Hitler. In fact the Comintern responded quite quickly to the new threat posed by the Nazi government, switching to the policy of the united, or popular front. Prior to 1933, however, Fascism in power was the rather less bloody rule of Mussolini in Italy. Social Democracy in power could be seen as the SDP in Germany which, in the anarchy following the end of the war and the embargo forcing Germany into a humiliating treaty, had used the proto-Fascist Freikorps to prevent a Communist revolution; or it could be seen as the Labour governments in Britain, with a large element of the old Liberalism into it, unable to break free of the supposedly scientific principles of classical economics. Or it could be seen as 'Mondism' (from Alfred Mond, Lord Melchett, manager of ICI who had organised the 'Mond-Turner talks between leading industrialists and trade union leaders) - the willingness to learn from and work with the existing entrepreneurial class that was embraced by Bevin.

What Fascism and Social Democracy had in common was an effort to improve working class living conditions within a capitalist framework, still leaving control over the means of production and exchange in private hands. The difference between them was the extent to which capitalism and the private owners of industry were expected to adapt to the requirements of the state as representing the interests of society as a whole, including the working class. The reason for ultimately preferring 'Social Fascism'/Social democracy to real Fascism was that real Fascism also wanted to bend the institutions of the working class - the unions - to the requirements of the state, thereby severely constraining the activities of the Communists. The liberalism of the Social Democrats which prevented them from challenging the bourgeoisie also prevented them from effectively challenging the Communists so that, although in terms of social policy they might have been worse than the Fascists, they were, from the Communist point of view, less dangerous.