Chapter Fourteen
THE ULTIMATE MONOPOLY

Early examples of cartel support for totalitarian regimes; I.G. Farben's role in lifting Hitler out of political oblivion and converting the Nazi state into an instrument of cartel power.

At this point in our survey, the reader may wonder what all of this has to do with the politics of cancer therapy. The answer - as will become evident further along - is that it has everything to do with it. The politics of cartels and monopolies can be likened to a football game with specific goals and rules.

If one who had never heard of football before came across two teams playing on the field, and if he knew nothing at all about the sport, he would be totally confused as to what was going on. Likewise, we can look at the actions of giant corporations and government agencies but, if we are unaware of the rules that determine the play, we will never be able to understand why things happen as they do, or even be able to tell what is happening in the first place.

As outlined in the previous chapter, cartels and monopolies result from an effort to escape the rigors of free enterprise. In the long run, the best way to do that is to enlist the aid of government, to seek the passage of laws that will put the regulatory power of the state on the side of the business venture and against its competition.

An individual or a corporation can succeed in breaking the cartels if they are determined and talented enough and can raise the necessary capital. The capital is relatively easy if the promise of profits is great - as it will be if the cartel's marketing and pricing policies are far out of line. If they are not out of line, then the harm they do is relatively small and there is no pressing need to disrupt them.

It follows, therefore, that cartels and monopolies could not flourish as they do if they existed in a political environment of limited government.

Conversely, the more extensive the power of government, and the more it is accepted by its citizens as the proper regulator of commerce, then the more fertile is the ground for the nourishment and growth of monopolies and cartels.

It follows, also, that if big government is good for cartels, then bigger government is better, and total government is best.

It is for this reason that, throughout their entire history, cartels have been found to be the behind-the-scenes promoters of every conceivable form of totalitarianism.

• they supported the Nazis in Germany

• they embraced the Fascists in Italy

• they financed the Bolsheviks in Russia

And they are the driving force behind that nameless totalitarianism that increasingly becomes a grim reality in the United States of America.

At first glance, it seems to be a paradox that the "super rich" so often are found in support of socialism or socialist measures. It would appear that these would be the people with the most to lose. But, under socialism - or any other form of big government - there is no competition and there is no free enterprise. This is a desirable environment if one is operating a cartelized industry and also has powerful political influence "at the top."

That way, one can make larger profits and be part of the ruling class as well. These people do not fear the progressive taxation scheme that oppresses the middle class. Their political influence enables them to set up elaborate tax-exempt foundations to preserve and multiply their great wealth with virtually no tax at all. This is why monopolists can never be true capitalists.

In the narrow sense of the word, a capitalist merely is a person who believes in the concept of private ownership of property. But that is not an adequate definition for a clear understanding of the ideological conflicts between the term capitalism, as it generally is used, and opposing concepts such as socialism or communism. In many primitive tribes there supposedly is no such thing as private property.

Theoretically, all things are held by the chief on behalf of his followers. The net result, though, is that the property belongs to the chief, because he can do with it whatever he pleases. Freedom of use is the test of ownership. If you think you own a piece of property but cannot use it without permission from someone else, then you do not own it, he does.

The extent to which you do not have control over your own property is the extent to which someone else has a share of ownership in it. So the chief owns all the property, and that theory about holding it on behalf of his followers is just a ruse to keep them more or less content with the situation.

Likewise, our own TVA (Tennessee Valley Authority) and the national parks supposedly are owned by "the people."

If you really think you own a part of them, however, just try to sell your share. The TVA, the national parks, and all the other "public" property is owned by those who determine how it is to be used. Which means they are owned by the politicians and the bureaucrats - and the people who hold financial power over them.

In communist and socialist countries, almost all property supposedly is owned by "the people" - which means by the three percent who are members of the ruling elite. In the final analysis, everyone is a capitalist.

All desirable property is owned by someone. And some of the world's greatest wealth is very privately owned by communists and socialists who loudly condemn the "evil" doctrine of capitalism.

So just owning property does not make one a capitalist. The more classical and correct use of the word should include the additional concept of free enterprise, the open marketplace with an absence or a minimum of government intervention. It is with this connotation that the word capitalist is used here.

Returning to our point of departure, monopolists never can be free-enterprise capitalists. Without exception, they embrace either socialism or some other form of collectivism, because these represent the ultimate monopoly. These government-sponsored monopolies are tolerated by their citizens because they assume that, by the magic of the democratic process and the power of their vote, somehow, it is they who are the benefactors.

This might be true if they took the trouble to become informed on such matters, and if they had independent and honest candidates from which to choose, and if the political parties were not dominated by the super-rich, and if it were possible for men to win elections without vast sums of campaign money. In other words, these monopolies theoretically could work to the advantage of the common man on some other planet, with some other life form responding to some other motives, and under some other political system.

As for us Earthlings, forget it.

The reality, therefore, is that government becomes the tool of the very forces that, supposedly, it is regulating. The regulations, upon close examination, almost always turn out to be what the cartels have agreed upon beforehand, except that now they have the police power of the state to enforce them. And it makes it possible for these financial and political interests to become secure from the threat of competition.

About the only time that these regulations are used to the actual detriment of any of the multi-national companies or financial institutions is when they are part of the internal struggle of one group maneuvering for position or attempting to discipline another group. The "people" are never the benefactors.

One of the earliest examples of cartel support for totalitarian regimes occurred in Germany even before World War I. Those cartels which, later, were to join together into the I.G. Farben, supported Bismarck because they saw in his collectivist philosophy of government an excellent opportunity to gain favoritism in the name of patriotism.

Bismarck was the first to introduce socialized medicine as we know it in the modern world. He recognized that its appeal among the masses would make it an ideal opening wedge leading to more control over the rest of the economy later on. It was his view that socialized medicine would lead the way to a socialized nation. It was a pilot program studied and imitated by all the world's totalitarians in succeeding years.(1) And fascism was no exception.

In 1916, while still under the regime of Kaiser Wilhelm, an official of I.G. Farben, named Werner Daitz, wrote an essay that was printed and widely distributed by the cartel.

In it he said:

A new type of state socialism is appearing, totally different from that which any of us have dreamed or thought of. Private economic initiative and the private capitalist economy will not be crippled, but will be regimented from the points of view of state socialism in that capital will be concentrated in the national economy and will be directed outward with uniform impetus...

 

This change in capitalism demands with natural peremptoriness a reconstruction of a former counterpoise, international socialism. It breaks this up into national socialism.(2)

1. For background on Bismarck's first government health insurance program and its ultimate incorporation into the programs of the International Labor Organization (ILO), see Marjorie Shearon's Wilbur J. Cohen: The Pursuit of Power, (Shearon Legislative Service, 8801 Jones Mill Rd., Chevy Chase, MD., 20015, 1967), pp. 3-8.
2. Sasuly, I.G. Farben, op. cit., p. 53.

Here is a rare glimpse into the cartel mind. Note that, in the "new" socialism, there will be no conflict with economic initiative (for the cartels) and no threat to a "private capitalist economy" (meaning the private ownership of wealth, not the free enterprise system).

Capital will be "regimented" and "concentrated in the national economy and directed outward with uniform impetus" (controlled by government according to cartel priorities). The change will require a "reconstruction of a former counterpoise, international socialism" (an acceptance of certain features of Marxian communism which the cartels previously opposed).

And we must not only embrace the international socialism of Marx, but we must apply it differently to each country on the basis of national socialism (Nazism, fascism, or any other purely national manifestation of socialism).

Eighteen years later, the theoretical stratagem had become the reality On September 30, 1934, Farben issued a report that declared:

"A phase of development is now complete which conforms to the basic principles of national socialist economics."(1)

1. Scientific and Technical Mobilization, Hearings before the Kilgore Subcommittee of the Senate Committee on Military Affairs, Pt. XVI, p. 1971.

The encyclopedia reminds us that national socialism is the term used in Germany to identify the goals of the Nazi party.

In fact, the party's complete name was the National Socialist German Workers' Party (NSDAP). But Nazism was also identified with the fascism of Mussolini, and the two terms have come to be interchangeable. Although the two did differ in some minor respects, they both were merely local manifestations of national socialism, and were, consequently, totalitarian regimes regardless of the labels.

The dictionary definition of fascism is government control over the means of production with ownership held in private hands. That definition may satisfy the average college exam in political science, but falls far short of telling the whole story. In reality, the twentieth century fascism of Germany was private monopolist control over the government which then did control industry, but in such a way as to favor the monopolists and to prevent competition.

The American economist, Robert Brady, has correctly described the German fascist state as,

"a dictatorship of monopoly capitalism. Its 'fascism' is that of business enterprise organized on a monopoly basis and in full command of all the military, police, legal and propaganda power of the state."(1)

Stocking and Watkins summed it up this way:

The German chemical industries came as close to complete cartelization as the combined efforts and organizational talents of German business and a Nazi state could achieve - and that was close, indeed. Even before 1933, industrial syndicalization had progressed far, perhaps farthest of all in chemicals. Fascism merely completed the program and integrated the entire structure...

 

In the cartels which the Nazi state set up over German industry, it was often hard to determine where state control ended and cartel control began. Totalitarianism ultimately involved almost complete unification of business and state.(2)

This unification did not happen as a result of blind, natural forces. It came about as a result of long and patient efforts on the part of cartel leaders, plus the corruptibility of politicians, plus the abysmal naivete of the voters.

Long before Hitler became a national figure, the cartel had been the dominant force, behind the scenes, in a long succession of German governments.

Farben's president, Hermann Schmitz, had been a personal advisor to Chancellor Bruening. Dr. Karl Duisberg, I.G's first chairman, (also founder of the American Bayer Co.) and Carl Bosch, Schmitz's predecessor as president of I.G., created a secret four-man Political Committee for the purpose of forcing a controlling link with each of Germany's political parties.

At the Nuremberg trials, Baron von Schnitzler testified that I.G. did not hesitate to use plenty of hard cash in its role of hidden political manipulator. He estimated that each election cost the cartel about 400,000 marks - which in the 1930's was a considerable expenditure.

But in this way, the cartel was protected no matter who was victorious in the political arena.(3)

1. Sasuly, I. G. Farben, op. cit., p. 128.
2. Stocking and Watkins, Cartels in Action, op. cit., pp. 411, 501.
3. A parallel to the hidden manipulation of American political parties is both obvious and ominous. For the author's analysis of this situation, see his The Capitalist Conspiracy, (Westlake Village, CA: American Media, 1971). Also see his The Creature from Jekyll Island; A Second Look at The Federal Reserve, from American Media, 1995.

As early as 1925, the cartel was setting the pace for German politics. In a speech to the central organization of industry, the Reichsverband der Deutschen, Karl Duisberg explained:

Be united, united, united! This should be the uninterrupted call to the parties in the ... Reichstag... We hope that our words of today will work, and will find the strong man who will finally bring everyone under one umbrella for he [the strong man] is always necessary for us Germans, as we have seen in the case of Bismarck.(1)

At first, the cartel was not convinced that Hitler was the "strong man" that would best serve their purposes.

But his program of national socialism and his ability to motivate large crowds through oratory singled him out for close watching and cautious funding. Although certain leading members of the trust had cast their lot with Hitler as early as 1928, it wasn't until 1931 that the cartel officially began to make sizable contributions to the Nazi war chest.

Max Ilgner, a nephew of Hermann Schmitz, was the first to establish a close and personal contact with Hitler. Ilgner generally was referred to as I.G.'s "Director of Finance."

His real function, however, was as head of the organization's international spy network. Originally conceived as a means of gathering information about competitive business ventures, it expanded rapidly into a politically oriented operation that seldom has been equaled even by the efficient intelligence agencies of modern governments.

As Sasuly observed:

So complete was the coverage of every important aspect of conditions in foreign countries, that Farben became one of the main props of both Wehrmacht and Nazi Party intelligence... What is remarkable is the fact that the Supreme Command of the Army, which boasted of having the most highly-developed staff in the world, should call on a private business concern to do this work for it. Even more remarkable is Ilgner's own admission that relations with the OKW [Army Supreme Command] began as far back as 1928.(2)

1. Sasuly, I. G. Farben, op. cit. p. 65.
2. Ibid., pp. 97, 98.

In the following years, even closer ties were to be established by an I.G. official named Gattineau. Gattineau had been the personal assistant of Duisberg and, later, of Bosch. He also acted as I.G.'s public-relations director.

In the fall of 1932, the Nazi Party began to lose ground badly. Yet, out of all the contesting groups, the Nazis were most suitable to Duisberg's plans. So, at the crucial moment, the entire weight of the cartel was thrown in Hitler's direction. The initial financial contribution was three million marks! And much more was to follow.

As Sasuly described it:

Hitler received backing more powerful than he had ever dared hope for. The industrial and financial leaders of Germany, with I.G. Farben in the lead, closed ranks and gave Hitler their full support... With that backing, he quickly established a blood-thirsty fascist state.(1)

Not only did the money arrive in what seemed like unlimited quantities, but many of the leading German newspapers, which were either owned by or beholden to the cartel because of its advertising accounts, also lined up behind Hitler.

In this way, they created that necessary image of universal popularity that, in turn, conditioned the German people to accept him as the great leader. Germany's strong man had suddenly appeared.

Even in the United States this same heavy-handed tactic was used. If an American newspaper was unfriendly to the Nazi regime, I.G. withheld its advertising - which was a tremendous economic lever.

In 1938, I.G. sent a letter to Sterling Products, one of its American subsidiaries, directing that, in the future, all advertising contracts must contain,

"...a legal clause whereby the contract is immediately cancelled if overnight the attitude of the paper toward Germany should be changed."(2)

1. Ibid., pp. 63, 69.
2. Ibid., p. 106.

As previously stated, Schmitz had been the personal advisor to Chancellor Bruening.

After Hitler came to power, he became an honorary member of the Reichstag and also a Geheimrat, a secret or confidential counselor. Another Farben official, Carl Krauch, became Goering's trusted advisor in carrying out the Four-Year Plan. But, as a matter of policy, the leaders of the cartel avoided taking official government positions for themselves, even though they could have had almost any post they desired. In keeping with this policy, Schmitz repeatedly had declined the offer to be named as the "Commissar of German Industry."

The Nazi regime was the Frankenstein monster created by Farben.

But Farben was, at all times, the master, in spite of shrewd efforts on its part to make it look to outsiders as though it had become the helpless victim of its own creation. This was extremely wise, as was demonstrated later at the Nuremberg trials.

Almost all of these men were deeply involved with the determination of Nazi policies throughout the war - and even had coordinated the operation of such concentration camps as Auschwitz, Bitterfeld, Walfen, Hoechst, Agfa, Ludwigshafen, and Buchenwald for the value of the slave labor they provided. They built the world's largest poison-gas industry and used the product experimentally on untold thousands who perished in those camps.(1)

In May of 1941, Richard Krebs, who had been first a Communist and then a Nazi (and subsequently turned against both),(2) testified before the House Committee on Un-American Activities and said:

The I.G. Farbenindustrie, I know from personal experience, was already in 1934 completely in the hands of the Gestapo. They went so far as to have their own Gestapo prison on the factory grounds of their large works at Leuna and ... began, particularly after Hitler's ascent to power, to branch out in the foreign field through subsidiary factories.(3)

1. For an excellent account of Farben's role in administering these camps, see The Devil's Chemists, by Josiah E. DuBois, Jr., legal counsel and investigator for the prosecution at the trial of I.G. Farben's leaders at Nuremberg, (Boston: Beacon Press, 1952).
2. See Krebs' own personal account, written under the pen name of Jan Valtin, entitled Out of the Night (New York: Alliance Book Corp., 1941). Richard Krebs is not related to Dr. Ernst T. Krebs, Jr.
3. As quoted by Ambruster, Treason's Peace, op. cit., p. 273.

At the Nuremberg trials, however, the leaders of Farben were dismissed by the judges, not as Nazi war criminals like their underlings who wore the uniforms, but as over-zealous businessmen merely in pursuit of profits. At the conclusion of the trials, a few were given light sentences, but most of them walked out of the courtroom scot-free. Yes, their strategy of remaining behind the scenes was wise, indeed.

One cannot help drawing parallels to political realities in the United States. More and more, we are learning that the men who wield the greatest power in America are, not those whose names appear on our ballots, but those whose signatures appear on the bottoms of checks - particularly when those checks are for campaign expenditures.

From time to time, the operations of these finpols (financierpoliticians) are exposed to public view, and, for a fleeting second, we see their presence in every sphere of government activity.

Time and again we have learned of some private sector wielding undue influence in foreign policy, monetary decisions, farm programs, labor laws, tariffs, tax reform, military contracts, and, yes, even cancer research. We are assured, however, that these manipulators are just businessmen. They are not politically motivated for, otherwise, they would run for office or would accept appointments to important public posts.

If they have any political ideology at all, undoubtedly, they must oppose socialism because, see, they are rich capitalists! They may be guilty of greed and a little graft, but nothing more serious than that.

Let us hope that the memory of Auschwitz and Buchenwald will dispel such nonsense while there still is time.
 

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