The presidential election of 1932 was about Wall Street selecting a candidate willing to implement actual fascist plans in America. Unlike the Democratic party candidate Franklin D. Roosevelt, Republican party candidate Herbert Hoover refused to submit to Wall Street’s demands. Hoover recorded the details of the courageous decision that cost him the White House in his memoirs:
Among the early Roosevelt fascist measures was the National Industrial Recovery Act (NIRA) of June 16, 1933. The origins of this scheme are worth repeating. These ideas were first suggested by Gerard Swope (of the General Electric Company) at a meeting of the electrical industry in the winter of 1932. Following this, they were adopted by the United States Chamber of Commerce. During the campaign of 1932, Henry I. Harriman, president of that body, urged that I agree to support these proposals, informing me that Mr. Roosevelt had agreed to do so. I tried to show him that this stuff was sheer fascism; that it was merely a remaking of Mussolini’s ‘corporate state’ and refused to agree to any of it. He informed me that in view of my attitude, the business world would support Roosevelt with money and influence. That, for the most part, proved true.
So how did the United States, the land of the free and the home of the brave, turn into a fascist country? Let’s begin by defining my terms.
Defining Some Key Terms
According to Lawrence H. White’s book The Clash of Economic Ideas, “The system of cartelization and planning by ‘corporatives’—government-business-labor boards with government the controlling partner—was known as corporativism or fascism.” The term “business cooperation” was often a euphemism for “cartelization of an industry.” The motive was to portray business cooperation as a good thing and business competition as a bad thing. The term “planning” was popularized by Mussolini and eagerly embraced by Franklin Roosevelt, according to Herbert Hoover’s memoirs:
During Roosevelt’s first eight years the guiding phrases of the New Deal were not ‘Communism,’ ‘Socialism,’ and ‘Fascism,’ but ‘Planned Economy.’ This expression was an emanation from the caldrons of all three European collectivist forms. The phrase first popularized by Mussolini, and often mouthed by the Communists and the Socialists, was itself a typical collectivist torture of meaning. It was not a blueprint, but a disguise. It meant governmental execution and dictation.
“Blueprinting” society was an idea often associated with Rexford G. Tugwell, Roosevelt’s chief economic adviser, according to John T. Flynn. “The future ahead must be planned always, and the technicians will be set to work to realize the dream in the blueprints. A blueprinted world—this is the vision—the organized, disciplined, planned, and blueprinted society.” According to Flynn, Tugwell was appalled by the idea of leaving things to chance or to individual initiative.
Finally, the definition of “corporativism” found in the glossary section of Ludwig von Mises’s magnum opus, Human Action: A Treatise on Economics, is interesting because it mentions the role of “government experts” under fascism. The entire economy was divided by the Italian Fascist Party into 22 sectors, and each sector was represented by a corporation. “The council of each corporation was presided over by a Fascist Party member and was comprised of government appointed ‘experts’ and representatives of employees, employers and the Fascist Party.” However, in practice, the corporation council members often rubber-stamped Mussolini’s decisions.
The Thesis of Corporate Socialism
Frederic Bastiat’s dictum is that “socialism is a system where everyone attempts to live at the expense of everyone else.” Corporate socialism is, according to Antony C. Sutton’s book Wall Street and FDR, a system consisting of a few big businesses who live at the expense of everyone else in society because these privileged businesses possess legal monopolies in key sectors of the economy. Under corporate socialism, big businesses want to “minimize the degree to which economic decisions in society are made in the market place” because the accumulation of great monetary wealth is very difficult “under the impartial rules of a competitive laissez-faire society.” Consequently, the corporate socialist wants to encourage the “political way” of running an economy. Based on this political approach to running an economy, the corporate socialist wants to seize control of the police power of the state because the corporate socialist prefers political coercion to voluntary exchange on the free market. Moreover, the corporate socialist wants to control government regulatory agencies; the corporate socialist wants to be a “regulated businessman.” The regulatory agencies are used “to shield favored industries from competition, to protect their inefficiencies, and to guarantee their profits.”
How Sutton Developed and Defended His Thesis
“One can trace a literary path,” Sutton wrote in Wall Street and FDR, “by which prominent financiers have pushed for national planning and control for their own benefit and that ultimately evolved into the Roosevelt New Deal.” Sutton started his thesis defense by referring to the 1906 work by Frederick Clemson Howe called Confessions of a Monopolist. Sutton did a similar thing in his other book called Wall Street and the Bolshevik Revolution. According to Howe, “These are the rules of big business. They have superseded the teachings of our parents and are reducible to a simple maxim: Get a monopoly; let Society work for you: and remember that the best of all business is politics.” Howe’s monopoly strategy advised corporate socialists to cover all of this up by saying that they were acting in “the name of the public good” and in “the public interest.”
Next, Sutton presented a long list of what he called Wall Street “financier-philosophers,” people who wrote books defending the corporate socialist way of organizing the economy while working prominent jobs connected to Wall Street or big business. The impact of some of these writings can still be felt today. For example, Paul Warburg’s major contribution to the American economy was the Federal Reserve. However, many of these “financier-philosophers” are completely unknown to the modern reader. Unfortunately, I do not have enough space to describe these writers in detail, so I will simply mention one more. Bernard Baruch served as the “economic dictator” of the United States during World War I. In Sutton’s estimation, Baruch was “probably the most prestigious Wall Streeter of all time, perhaps even exceeding in influence both Morgan and Rockefeller.” As chairman of the War Industries Board, he wrote about the “change-over of a planned wartime economic system to a planned peacetime economic system.” Frances Perkins, Secretary of Labor under FDR recorded how Baruch brought fascism to America:
At the first meeting of the Cabinet after the President took office in 1933, the financier and adviser to Roosevelt, Bernard Baruch, and Baruch’s friend General Hugh Johnson, who was to become the head of the National Recovery Administration, came in with a copy of a book by Gentile, the Italian Fascist theoretician, for each member of the Cabinet, and we all read it with great care.
Public domain.
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