Article on "Allied Visions: The Success of the Atlantic"

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Allied Visions: The Success of the Atlantic Charter, Breton Woods, The Keynesian Economy and How to Recapture It

Any fan of William Faulkner will remember a quote of his from Requiem for a Nun where observes "The past is never dead. it's not even past (Requiem for a Nun)." While frequently quoted out of context, it was spoken by character Gavin Stevens in defense of southern traditionalism. In this case, some are packaging old political economy in new packages. The author of this essay would humbly observe that this is exactly the situation that exists now with regard to the evaluation of "authoritarian capitalism." This essay will examine whether or not authoritarian capitalism is a viable alternative to its Western liberal version (Bretton Woods style, classic Keynesian economics, now in need of resuscitation) in order to promote long-term economic growth and development. Unfortunately, the biggest failure of authoritarian capitalism is that it relies upon force and not human self-interest or freedom.

Unfortunately, the question is largely a non-sequitur, because it is the author's opinion that most of the liberal aspects of traditional Western capitalism have largely died out. However, if Swedish and Swiss examples are followed, along with some other innovations, it should be possible to recapture the prosperity of Breton Woods and the stability of capitalism that existed under the U.S. regime of the Glass-Steagall Act.

In bygone days, when people were not politically correct, authoritarian capitalism was referred to as corporatism, a term coined by Benito Mussolini. Today, when we have huge bailouts of corporations mandated by law by two different presidential administrations, it is crucial that we step outside of the left-right paradigm and look critically at the historical record of authoritarian capitalism and its present variations. Like a modern Matteoti, any objective investigation of the modern bailouts in most of the Western countries will find out that they are a spoils system for corporate elites. The reason that this author steps out of the left-right paradigm is that he does not see any baseline difference between the policies of George W. Bush and Barak Obama. Both have favored huge taxpayer giveaways to large banks and investment houses, with none of this money being given to people at the lower end of the spectrum in terms of loans on houses, businesses and what have you. In addition, the Obama administration is engaging in two activities that is absolute heresy in the eyes of orthodox Keynsianism. First, the continuation of the permanent war economy and second is the abolition of the destructive types of speculative investments in banking that would have been illegal under the Glass-Steagall Act of 1933 by FDR to combat the abuses that brought about the Wall Street Crash of 1929.

In this essay a historical myth, probably one of the biggest of the twentieth century, needs to be blasted into oblivion. The myth involves the idea that fascism was created by two lunatics named Mussolini and Hitler. These two evil men then started World War II and the good guys from the allies put them out of our misery.

What the best historical research actually reveals is that corporations such as Ford Motor Company, Standard Oil, General Motors, Dupont and IBM not only actively aided and abetted the rise of Hitler and Mussolini. Indeed, Hitler and Mussolini garnered massive corporate support on both sides of the Atlantic and business was very good. The very corporate international globalism that was supposed to avert war via appeasement in actuality brought about the very war that was feared and dreaded. Unfortunately, globalism since the beginning of the deterioration of the Breton Woods system in the 1970's has taken on most of the economic attributes that led us into the tragedy of the Second World War, minus some of the more venal aspects brought on by overt fascism.

In the first part of the essay, a historical case study will be considered from Nazi Germany regarding IBM and its functioning on both sides of the Atlantic as an indispensable tool of Hitler's Nazi Germany. Then, the author will consider recent experiences in authoritarian capitalism mandating billions of dollars to bail out failing corporations during the administration of George W. Bush. These policies have largely been continued by the administration of Barak Obama. Finally, the essay will consider how to recapture the halcyon days of Keynesian optimization of the capitalist economy realized under the administration of John F. Kennedy that was literally killed by Lyndon Baines Johnson in the rice paddies of Vietnam.

The revolving door between corporate CEO and U.S. government servants is illustrated explicitly when former Goldman Sachs executive and then U.S. Treasury Secretary Henry Paulson oversees a multi-billion dollar bailout that specifically benefits Goldman Sachs. Given the sorry performance of this authoritarian capitalism and its survival into the Obama administration, it is hard to see how it will promote long-term economic growth and development.

Historical Case Study of Corporatism and Nazi Germany

Like in abnormal psychology, it is frequently necessary to examine extreme cases of human behavior in history in order to see behaviors in stark relief. Similar to the extreme cases in abnormal psychology, this section of the essay will exam-ine the cor-po-rate rela-tion-ships between Ger-man and Amer-i-can firms that were crucial in the rise of the Third Reich. This cartel system allowed the Nazi war machine to navigate a course through the efforts to boycott and economically isolate Nazi Germany. The number of companies is seemingly with out end, but examining IBM will suffice to make the author's point. It will also serve as an example of corporatism at its worst and how the failure to control its excesses provided faults in the postwar system that eventually undid Bretton Woods and the Keynesian paradigm.

The behavior of IBM is just such a clear cut and all encompassing case. The relationship between IBM began in the first few weeks of Hitler's rise to power and then continued well into the Second World War. When Germany started on its campaign of murderous conquest, IBM and its European subsidiaries tailor made the technologies and equipment that facilitated the Final Solution.

While this is the main thrust of the book IBM and the Holocaust, what is more interesting to the author is the fact that IBM's role was critical in Hitler's rearming and the marshalling of resources in order to go to war. There was definitive collusion between the Third Reich and IBM's Thomas J. Watson, the popular American CEO of IBM. For his and IBM's spectacular provision of services to the economy of Germany, he was awarded by Germany the "Merit Cross of the German Eagle with Star. This was the highest award that the Reich could confer on any non-German (2001, p. 131)."

Like many of the country's biggest industrialists, financiers and influential companies, the IBM crew was openly supportive of the fascist countries of Europe. IBM knew exactly where all of its Hollerith data-processing machines were

While IBM and its German subsidiary was instrumental in processing data about Jews and other undesirables, it is more interesting to consider how IBM was playing both ends against the middle in the pull between the West and the Axis powers. Above and beyond IBM's role in keep track of the victims of the Nazi persecutions, the Hollerith data processing technology was irreplaceable in the Nazi drive to centralize and coordinate German industrial and civic operations. Truly, with the IBM data processing technology, they were able to streamline and realize previously undreamed of efficiencies and rather than prevented war, made it much more likely by its coordination and operation of the Third Reich's war economy (ibid, p. 86 -- 89).

What makes the IBM example so prescient is that Watson's services went far beyond the provision of machines and technical know how to prosecute the German war effort and to suppress and liquidate German enemies. What made his services so ultra-modern are corporate negotiated agreements that would be later ratified by countries without election or public consideration. Watson openly advocated for an "arrangement" between off the record meetings between corporate representatives from the U.S., U.K., France and the Axis countries. "Trade agreements" like this are authoritarian in nature. Watson claimed that such a trade agreement was meant to make it possible to move strategic, vital raw materials between the non-Axis and Axis nations. In IBM and the Holocaust, Edwin Black notes that the exchange of "the raw materials were needed by Axis powers solely for the sake of waging war (ibid, pp. 176-177)." It should also be noted that the business arrange-ment was to be made basically exclu-sively between busi-ness-men of the six nations. This type of appeasement arrange-ment, as well as the ratio-nal for it (i.e., "avert-ing war"), is definitely antic-i-pat-ing some of the inter-na-tional "free trade agree-ments" that have char-ac-ter-ized world com-merce in the last twenty years (ibid, p.p. 176-177).

IBM, like so many other corporations was so extensive with the Axis powers as that the economic… READ MORE

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