"Investigation of Concentration of
Economic
Power.
Brady - Business as a System of Power
^^
Thus, there slowly emerges an apparent single view, a seeming common cause, and appearance of a general business "harmony," the semblance of a certain common business social philosophy which takes on form and content step by step with the growth and expansion of the centralized influence of the great peak associa- tions. ^^ And in proportion as this seeming internal unification takes place in organized business, one finds slowly being evolved parallel ideas vis-^-vis all other interests which, however and by whichever route they may come in conflict with any given business or aspect of business control, have no alternative but to appear to challenge the business world as a whole. Given comprehensive organization --the common ideal of the trade association all over the world this posture of affairs appears inevitable in the very nature of the case. If conflicting interests, as, for example, in the case of labor, are organized on an equally comprehensive basis, the effect will be thrown in much sharper relief. And it is an effect that has gradually become universally evident throughout the capitalistic world of the last half century.
How do the trade, employer, and business Spitzenverbdnde then proceed to meet challenges which they are led to interpret as in con- flict with the tenets underlying the capitalistic world as such? By somewhat varying routes, organized business amongst the several capitalistic countries has arrived at pretty much a common set of solutions. For the sake of brevity, and because they recapitulate a part of what has been said above, these may be summarized as follows:
3<< Consequently, the ejection or strategic demotion from the central councils of a Hjalmar Schacht, a Herr Thyssen or a Robert Stewart, not to mention the Jews when the opportune moment comes, becomes thoroughly understandable and a matter of course. Whoever does not play according to the accepted rules will be thrown out, just as whoever is weak will be absorbed in the strategies that lead to business mergers, and their expulsion or absorption is proof not of the weakness" but of the strength of organized business.
37 Which does not mean, of course, that the old conflicts do not exist, but that in a certain sense they have been "domesticated. " It is noteworthy that in the United States the growth of centralized business organization has been paralleled by both increasing concern over the fate of small business, and by its increased mortality (see the Prologue of the TNEC reports). In both Germany and Italy, the plight of little business, long before the outbreak of war, was becoming steadily worse.
? POLITICAL POLICIES
317
Control over popular organizations: the company union is father to the idea of universal, comprehensive, all-inclusive business-controlled joint labor-employer membership federations, of which the German Labor Front and the Italian General Confederation of Labor ^^ are the highest development to date. Similar ideas have run through the literature of American, French, and British business. An attempt was made to set up such a body in the United States in 1912; the Federation of British Industries was originally intended to include both labor and employers. The programs of De Mun, Harmel, and the French Social Catholic movement evolved similar ideas before the turn of the twentieth century ^^; the new French industrial re- organization plans follow similar lines. The ideas and patterns of the company union are applied wherever any other form of popular organization--of farmers, consumers, little businessmen, profession- als, women--has struck root. The idea is everywhere and in all coun- tries the same: mass organization centered around the ideologies of the upper business and social hierarchies and controlled by the self- appointed and self-perpetuating "natural" leaders from those ranks. The militarization of employer-employee relations: by a reassertion of authority in the hands of the employer similar to that which ob- tains in the army. This can be read from all complaints in the litera- ture of the Spitzenverbdnde and their subsidiary bodies when faced with effective labor protest, as in the events centered around the Bri- tish General Strike in 1926, the movements of the French Popular Front centered in the Matignon Agreement of June, 1936, the rise of the CIO in the United States and complaints demanding modifica- tion of the National Labor Relations Board, and in the successes of German, Italian, and Japanese employers, scored on the initiation of Fascist-type systems. A corollary is the militarization of legislative (substitution of the "edict" for statute law) and judicial (through the procedures of martial law) powers, with the consequent disappear- ance of the line between civil and military, the discipline of war and peace. The regimen of the "unorganized" industrial plant such as that of Ford is here prototypal of objectives seen as desirable by spokesmen who may have power to suggest or act in the larger sphere. The evolution of a ''harmony-of-all-interests'* propaganda in which the employer appears as benevolent pater familias: such was the blending which underlay the social legislation of Bismarck, the pro- grams of De Mun and Du Pin in the French Social Catholic move- ment, the Papal Encyclicals of Rerum Novarum in 1891 and Quad- ragesimo Anno in 1931, the "Clerical Fascism" of Dollfuss and Schuschnigg in Austria and of Franco in Spain, the NRA and some
38 Salvemini, Under the Axe of Fascism, Chapter VII. 89 See above, pp. 58-66.
? 3i8 POLITICAL POLICIES
of the American New Deal Legislation, the Japanese National Har-
monizing Movement, and, of course, the whole of "welfare capital-
ism. " The employer as "patron" or "trustee" becomes the beau ideal
of the business world. Correlatively the trustee concept still is ap-
plied in all other relationships of real or potential conflict between
organized business and the general public. The parallel to "indus-
trial relations" is "public relations," and this latter is growing by
every known criterion of relative importance in a sort of geometric
ratio to all other corporate publicity interests, both in the United
States and abroad. ^^ "Public relations" advances the concept of a nat-
ural "harmony" of interest between business and the public, business
and the consumer, business and social and economic progress. The
relationship is that of "trustee of the people's property and wel-
*i
fare. "
4. The"educationalemphasis"lookstwoways:towards"neutralizing"
the hostile amongst adults, while engraining "loyal" staff and espe- cially the younger generation "through the doctrine of the organiza- tion itself. " "Neutralization" involves recognition, wherever the Realpolitik of strategy may determine, of trade unions and simi- lar organizations; emphasis upon "cooperation" by promotion of labor-employer community activities; regional decentralization of plants; legal restraints upon the "abuse" of labor power; use of police power, strike breakers, espionage at need; the mobilization of the middle and professional classes into patriotic and other feder- ations; *2 attacks on opposition leadership under the guise of attack- ing "racketeering"; encouragement of fear of "aliens," "fifth-col- umnists," and other menaces which encourage in turn emphasis upon group loyalties, patriotic sentiments; especial types of interest programs and propaganda for women, children, and the aged, etc. Conversely, education of the young calls for control over apprentice- ship training; purge of school textbooks; vocational emphasis with belief in an eventual occupational stratification in which there is a one-to-one correspondence between economic station and presump- tive I. Q. ; *^ evolution of a system of rewards and punishments which
40 For example, the NAM public-relations program was first granted a small sum of money in 1934. By 1937 public-relations expenditures were larger than those for all purposes combined before 1934--a sum which was estimated, at commercial rates, to equal in that year around $36,000,000 for the whole United States. Since that year these expenditures have been probably doubled.
41 See Batchelor, Profitable Public Relations. Bureaucracy and Trusteeship. The Nazi motto, Gemeinnutz geht vor Eigennutz, carries the precise equivalent for Ger- man businessmen for the dictum, "A widespread, favorable attitude of mind is a first essential to effective trusteeship in big business. People must expect and assume that managers will look out for interests other than their own. Managers in turn will then attempt to live up to expectations. " TNEC Monograph No. ii, p. 130.
42 See pp. 287-90. 43 See pp. 280-86.
--
? POLITICAL POLICIES
319
turn on the axis of loyalty to the concern; the substitution of non- commercial for commercial incentives; of group and "social" for individual and personal incentives.
The key to control is political: executive authority and policy-form- ing power are concentrated in the same cooptatively renewed ranks, and these recognize that the key to power is twofold; (1) consolida- tion of all the "ins" in a solid, interest-conscious bloc; (2) a popular following, the key to which is alliance with any faction, movement, or party which has or may acquire popular following without dis- turbing the general social structure of command and subordination. This means compromise with the nouveau puissant as they are co- opted into the movement on all matters relating to "the take"--an old practice in relationships between political rings and powerful vested interests all over the world, but now generalized to entire national economics, and rationalized with an eye to sterilization of "take" knowledge and demand for participation below the upper ranks. And for these lower reaches, the evolving programs of the or- ganized business world look to well-ordered, and especially trained and loyal cadres of hierarchically controlled employees over whom as "leaders" they have complete charge--as Gignoux of the Con- federation Generale du Patronat Fran^ais expressed the matter "not only of men but of souls. "
The new power complexes are inherently expansive: two things are united in this reaching for political power. One is the tendency of all democratically irresponsible f>ower aggregations to expand with- out limit. And the other is the fact that the "life styles" of the units which form the cells of the new power pyramids have each and all been dominated by a tendency to expand without limit--a fact with which all great business leaders have been thoroughly familiar and which has been traced at great length by Sombart and others. Given control or power decisively to influence the national state, imperial expansion is inevitable. The more or less rational combination of fully articulated systems of protection and privilege combined with imperial expansion, on the one hand, and the integrative pressures of a rationally articulated industrial technology, on the other, lead logically to the concept of the next largest politically omnicompetent and coherently organized imperial area, "great-space economics"
(Grossraumwirtschaften). ^*
44 All through the Godesberg and Munich discussions the Federation of British Industries was carrying on negotiations with the Reichsgruppe Industrie. "On March 16, the day after the fall of Prague, the Dusseldorf discussions culminated in the signature in London of an agreement between agents of the Federation of British Industries and the Reichsgruppe Industrie to 'replace destructive competition by constructive cooperation. ' It contemplated the creation of a series of Anglo-German cartels. " Frederick L. Schuman, Night Over Europe, p. 107. Similar conversations
? 320 POLITICAL POLICIES
"The soul of Amenhotep is higher than Orion, and it is united with the underworld"--so runs a melancholy passage from the ancient Egyptian "Book of the Dead. " The roots of power of the several Spitzenverbdnde are intertwined in the sanctions of evolv- ing imperial class status, but monopoly-oriented business which attempts to evade effective democratic restraints can dominate government only through control over the thinking processes of the mass of the people who dwell at the base of the social pyramid. "Dangerous thoughts," as the Japanese are so acutely aware, breed democratic heresies. Antidemocratic "totalitarianism" can triumph only through ultimate consolidation of its "authoritarianism" by the seizure of political controls. Every single step in the path which leads in our times to use of the expedients which spell ultimate
resort to the coup d'etat are now sufficiently well known to be recognizable at a glance. And nothing fundamental in history, pro- gram, structure of organization, or social outlook divides clearly the policies of the Spitzenverbdnde within the "totalitarian" coun- tries from those of the liberal-capitalist states. Within Germany, Italy, Japan, and France these bodies made the critical decisions without which the final destruction of democracy could not have taken place.
Is it possible that the lesson will be learned elsewhere before it is too late?
were carried on between Japanese interests and the Federation of British Industries through a good deal of the crisis period when the Japanese took over Manchukuo. Nothing is to be found in the literature of the National Association of Manufactur- ers to indicate disapproval of the structure of controls effected through the ma- chinery of German and Italian Spitzenverbdnde, though considerable sympathy is frequently expressed that these latter should be so closely controlled by the govern- ment--a sentiment, incidentally, which the leading figures on the inner business circles in the totalitarian countries rarely reciprocate. Yet the Germans thought of NRA in 1935 as the equivalent of what they had brought on themselves, and won- dered not a little that there should be so much complaint among American business- men against their own program of "self-government in business" (The Germans use the same term), which they themselves had clearly helped to shape and guide from its initial stages on--and which must, so these same persons argued, be surely seen
as the inevitable pattern of the future if business and the capitalistic system are to survive in America as elsewhere.
? BIBLIOGRAPHY
OFFICIAL AND SEMIOFFICIAL SOURCES
Annuario Statistico Italiano, Series 2, Vol. VII (1917-18).
Commerce, U. S. Dept. of. Special Agents Series: No. 98, "Commercial Organizations in France"; No. 102, "Commercial Organizations in
the United Kingdom. " Washington, D. C. , 1915.
Bureau of Foreign and Domestic Commerce. Commercial and In-
dustrial Organizations of the United States. Washington, D. C. , 1931. Bureau of Foreign and Domestic Commerce, Trade Association Section of the Marketing and Research Division. "High Lights of
the NRA, Chart 3. " Washington, D. C. , July 10, 1934.
Congress of the United States, 75th Congress, 3d Session. Senate Docu- ment 173, "Message from the President of the United States, Trans- mitting Recommendations Relative to the Strengthening and En-
forcement of Anti-Trust Laws. "
Enqueteausschuss. Ausschuss zur Untersuchung der Erzeugungs- und
Absatzbedingungen der deutschen Wirtschaft. 1926-31. Fascist Confederation of Industrialists. Fascist Era, Year XVII. Federal Trade Commission. Docket No. 2191, Dec. 30, 1937. Federation of British Industries. Export Register. London, 1920.
"Industry and Action. " Pamphlet, undated.
Committee on the Organisation of Industry. Report, June, 1935.
International Labor Office. Series A, No. 31, Freedom of Association. Geneva, 1927. Vols. II, IV.
; Yearbook, 1936-37.
Jahrbuch der Berufsverbande im deutschen Reich. 1930.
Japan Year Book, 1938-39, 1939-40.
Labor, U. S. Dept. of. Bureau of Labor Statistics, Division of Industrial
Relations. Bulletin, No. 364, "Characteristics of Company Unions. "
Washington, D. C. , 1935.
Labour Research Dept. Studies in Labour and Capital, No. 5: "The
Federation of British Industries. " London, 1923.
La Follette Committee Reports. Parts 17, 18, 19, 20, 21, 45; No. 6, Part 6,
"Labor Policies of Employers' Associations. "
Liberal Industrial Inquiry. "Britain's Industrial Future. " London, 1938. Mitsubishi Economic Research Bureau. Monthly Circular, Dec, 1937. National Association of Manufacturers. Annual Conventions, Proceed-
ings (1903-29).
"Industrial Self-Government. " Series of bulletins, 1934.
? 322
BIBLIOGRAPHY
National Association of Manufacturers. "Industry and Action. " Pam- phlet.
Labor Relations Bulletin, July 20, 1936.
"The Nation's Industry Synchronized. " Pamphlet, undated. "The Nation's Industry--Organized. " Pamphlet, 1923.
"Unit Thinking and Unit Acting on the Part of American Indus-
try. " Pamphlet, 1935.
"Women, Partners with Industry in the Economic and Social Ad-
vancement of the Nation. " Brochure. --"You and Industry. "
Committee on Employment Relations. Report, 1926.
National Economic and Social Planning Association, Planning Pam- phlet No. 4, "Germany's Challenge to America's Defense. " Washing-
ton, D. C. , 1941.
National Industrial Conference Board. Industrial Standardization. New
York, 1929.
23d Annual Report, revised to Jan. 1, 1940.
National Resources Committee. The Structure of the American Econ- omy. Washington, D. C. , 1939.
Nye Committee on the Munitions Industry. 74th Congress, 2d Session, Report No. 944, Part 4.
Quadragesimo Anno. Papal Encyclical, 1931.
Rerum Novarum. Papal Encyclical, 1891.
Resume statistique de I'empire du Japon. Tokyo, 1912, 1924, 1930, 1934,
1936.
Temporary National Economic Committee. Hearings: Part 2, "Patents,
Automobile Industry, Glass Container Industry"; Part 5-A.
"Investigation of Concentration of Economic Power. " Pursuant to
Public Resolution, No. 113, 75th Congress.
Monographs: No. 7, Measurement of the Social Performance of
Business; No. 9, Taxation of Corporate Enterprise; No. 11, Bureauc- racy and Trusteeship in Large Corporations; No. 17, Problems of Small Business; No. 18, Trade Association Survey; No. 21, Competi- tion and Monopoly in American Industry; No. 24, Consumer Stand- ards; No. 26, Economic Power and Political Pressures; No. 27, The Structure of Industry; No. 29, The Distribution of Ownership in the 200 Largest Non-Financial Corporations; No. 31, Patents and Free Enterprise; No. 34, Control of Unfair Competitive Trade Practices through Trade Practice Conference Procedure of the Federal Trade Commission; No. 35, Large Scale Organization in the Food Indus- tries; No. 36, Reports of the Federal Trade Commission on the Nat- ural Gas, Gas Pipe, Agricultural Implement, Machinery, and Motor Vehicle Industries; No. 39, Control of the Petroleum Industry by
Major Oil Companies; No. 43, The Motion Picture Industry.
? BIBLIOGRAPHY
323
GENERAL WOBKS
Allen, George C. "The Concentration of Economic Control in Japan. " Economic Journal, XLVII (June, 1937), 271-86.
Japan; the Hungry Guest. London, 1938. Modern Japan and Its Problems. London, 1928.
Arnold, Thurman W. Address before the Denver Bar Association, May 15, 1939. Mimeographed release, U. S. Dept. of Justice.
Address before the National Association of Purchasing Agents, May 22, 1939.
"The Anti-Trust Laws, Their Past and Future. " Address over the Columbia Broadcasting System, Aug. 19, 1939. Released by the Tem- porary National Economic Committee.
Bottlenecks of Business. New York, 1940.
Asahi, Isoshi. The Economic Strength of Japan. Tokyo, 1939. Batchelor, Bronson. Profitable Public Relations. New York, 1938. Beckerath, Herbert von. Modern Industrial Organization. Trans. R.
Newcomb and F. Krebs; Introduction by F. W. Taussig. New York,
1933-
Berle, Adolph A. , Jr. , and Gardiner C. Means. The Modern Corpora-
tion and Private Property. New York, 1933.
Bezard-Falgas, Pierre. Les Syndicats patronaux de I'industrie metallur-
gique en France. Paris, 1922.
Bonbright, James C, and Gardiner C. Means. The Holding Company,
Its Public Significance and Its Regulation. New York, 1932.
Bonn, M. J. Das Schicksal des deutschen Kapitalismus. 1931.
Bonnett, Clarence E. Employers' Associations in the United States. New
York, 1922.
Boyle, John, Jr. "Corporation Patent Holdings. " Journal of the Patent
Office Society, XIX (Sept. , 1937), No. 9.
Brady, Robert A. The Rationalization Movement in German Industry.
Berkeley, Calif. , 1933.
The Spirit and Structure of German Fascism. New York, 1937.
Brandeis, Louis D. The Curse of Bigness. New York, 1934.
Brandt, Karl. "Junkers to the Fore Again. " Foreign Affairs, XIV (Oct. ,
1935)' 120-34.
Bratter, Herbert M. "The Role of Subsidies in Japan's Economic De-
velopment. " Pacific Affairs, IV (May, 1931), 377-93.
Bruck, W. F. Social and Economic History of Germany from Wilhelm
II to Hitler, 1888-1938. Oxford and New York, 1938.
Buchez, Philip. Essai d'un traite complet de philosophie du point de
vue du catholicisme et du progres. Paris, 1838-40.
Burnham, James. The Managerial Revolution. New York, 1941. Burns, Arthur R. The Decline of Competition. New York, 1936.
? BIBLIOGRAPHY
324
Byas, Hugh. The Japanese Enemy, His Power and His Vulnerability. New York, 1942.
'Japan's Censors Aspire to 'Thought Control. ' " New York Times, April 18, 1937.
"Japan's Fascist March. " New York Times, Dec. 15, 1940. Callman, Rudolf. Das deutsche Kartellrecht. Berlin, 1934.
Carrel, Alexis. Man the Unknown. New York, 1935.
"Cartelisation of England, The. " Economist (London), March 18, 1939. Chamberlain, Houston Stewart. Foundations of the Nineteenth Cen-
tury. New York, 1911.
Chamberlin, Edward H. The Theory of Monopolistic Competition.
Cambridge, Mass. , 1933.
Chamberlin, William H. Japan over Asia. Boston, 1937.
"Check on Production, A. " Economist (London), June 15, 1940.
M. "Towards a Concept of Workable Competition. " American Economic Review, XXX (June, 1940).
Comite de Prevoyance et d'Action Sociale. Le Role exact des delegues. Paris, 1937.
Corbin, John. The Return of the Middle Classes. New York, 1922. Corradini, E. II volere d'ltalia. Naples, 1911.
Crosser, Paul K. Ideologies and American Labor. New York, 1941. Darre, R. W. Neuadel aus Blut und Boden. Munich, 1939.
Davies, Ernest. National Capitalism. London, 1939.
Dobb, Maurice. Capitalist Enterprise and Social Progress. London, 1925. Duchemin, Rene P. Organisation syndicale patronale en France. Paris,
1940.
"SurI'AccordMatignon. "RevuedeParis,Feb. 1, 1937.
Dutt, Palme. Fascism and Social Revolution. London, 1934.
Ebenstein, William. Fascist Italy. New York, 1939.
"Economic Front, The. " Economist (London), Dec. 9, 1939.
Edwards, Corwin D. "The New Anti-Trust Procedure as Illustrated in
the Construction Industry. " Public Policy, II (1941), 321-40.
"Trade Barriers Created by Business. " Indiana Law Journal, Dec,
1940, pp. 169-91.
Einzig, Paul. "Hitler's 'New Order' in Theory and Practice. " Economic
Journal, LI, No. 201, April, 1941.
"Employers' Organisations in France. " International Labour Review,
July, 1927, pp. 50-77.
Engelbrecht, Helmuth C, and F. C. Hanighen. Merchants of Death.
NewYork, 1934.
Fascist Confederation of Industrialists. Fascist Era, Year XVII. "Federation of British Industry. " Engineer (London), Aug. 11, 1916.
Thus, there slowly emerges an apparent single view, a seeming common cause, and appearance of a general business "harmony," the semblance of a certain common business social philosophy which takes on form and content step by step with the growth and expansion of the centralized influence of the great peak associa- tions. ^^ And in proportion as this seeming internal unification takes place in organized business, one finds slowly being evolved parallel ideas vis-^-vis all other interests which, however and by whichever route they may come in conflict with any given business or aspect of business control, have no alternative but to appear to challenge the business world as a whole. Given comprehensive organization --the common ideal of the trade association all over the world this posture of affairs appears inevitable in the very nature of the case. If conflicting interests, as, for example, in the case of labor, are organized on an equally comprehensive basis, the effect will be thrown in much sharper relief. And it is an effect that has gradually become universally evident throughout the capitalistic world of the last half century.
How do the trade, employer, and business Spitzenverbdnde then proceed to meet challenges which they are led to interpret as in con- flict with the tenets underlying the capitalistic world as such? By somewhat varying routes, organized business amongst the several capitalistic countries has arrived at pretty much a common set of solutions. For the sake of brevity, and because they recapitulate a part of what has been said above, these may be summarized as follows:
3<< Consequently, the ejection or strategic demotion from the central councils of a Hjalmar Schacht, a Herr Thyssen or a Robert Stewart, not to mention the Jews when the opportune moment comes, becomes thoroughly understandable and a matter of course. Whoever does not play according to the accepted rules will be thrown out, just as whoever is weak will be absorbed in the strategies that lead to business mergers, and their expulsion or absorption is proof not of the weakness" but of the strength of organized business.
37 Which does not mean, of course, that the old conflicts do not exist, but that in a certain sense they have been "domesticated. " It is noteworthy that in the United States the growth of centralized business organization has been paralleled by both increasing concern over the fate of small business, and by its increased mortality (see the Prologue of the TNEC reports). In both Germany and Italy, the plight of little business, long before the outbreak of war, was becoming steadily worse.
? POLITICAL POLICIES
317
Control over popular organizations: the company union is father to the idea of universal, comprehensive, all-inclusive business-controlled joint labor-employer membership federations, of which the German Labor Front and the Italian General Confederation of Labor ^^ are the highest development to date. Similar ideas have run through the literature of American, French, and British business. An attempt was made to set up such a body in the United States in 1912; the Federation of British Industries was originally intended to include both labor and employers. The programs of De Mun, Harmel, and the French Social Catholic movement evolved similar ideas before the turn of the twentieth century ^^; the new French industrial re- organization plans follow similar lines. The ideas and patterns of the company union are applied wherever any other form of popular organization--of farmers, consumers, little businessmen, profession- als, women--has struck root. The idea is everywhere and in all coun- tries the same: mass organization centered around the ideologies of the upper business and social hierarchies and controlled by the self- appointed and self-perpetuating "natural" leaders from those ranks. The militarization of employer-employee relations: by a reassertion of authority in the hands of the employer similar to that which ob- tains in the army. This can be read from all complaints in the litera- ture of the Spitzenverbdnde and their subsidiary bodies when faced with effective labor protest, as in the events centered around the Bri- tish General Strike in 1926, the movements of the French Popular Front centered in the Matignon Agreement of June, 1936, the rise of the CIO in the United States and complaints demanding modifica- tion of the National Labor Relations Board, and in the successes of German, Italian, and Japanese employers, scored on the initiation of Fascist-type systems. A corollary is the militarization of legislative (substitution of the "edict" for statute law) and judicial (through the procedures of martial law) powers, with the consequent disappear- ance of the line between civil and military, the discipline of war and peace. The regimen of the "unorganized" industrial plant such as that of Ford is here prototypal of objectives seen as desirable by spokesmen who may have power to suggest or act in the larger sphere. The evolution of a ''harmony-of-all-interests'* propaganda in which the employer appears as benevolent pater familias: such was the blending which underlay the social legislation of Bismarck, the pro- grams of De Mun and Du Pin in the French Social Catholic move- ment, the Papal Encyclicals of Rerum Novarum in 1891 and Quad- ragesimo Anno in 1931, the "Clerical Fascism" of Dollfuss and Schuschnigg in Austria and of Franco in Spain, the NRA and some
38 Salvemini, Under the Axe of Fascism, Chapter VII. 89 See above, pp. 58-66.
? 3i8 POLITICAL POLICIES
of the American New Deal Legislation, the Japanese National Har-
monizing Movement, and, of course, the whole of "welfare capital-
ism. " The employer as "patron" or "trustee" becomes the beau ideal
of the business world. Correlatively the trustee concept still is ap-
plied in all other relationships of real or potential conflict between
organized business and the general public. The parallel to "indus-
trial relations" is "public relations," and this latter is growing by
every known criterion of relative importance in a sort of geometric
ratio to all other corporate publicity interests, both in the United
States and abroad. ^^ "Public relations" advances the concept of a nat-
ural "harmony" of interest between business and the public, business
and the consumer, business and social and economic progress. The
relationship is that of "trustee of the people's property and wel-
*i
fare. "
4. The"educationalemphasis"lookstwoways:towards"neutralizing"
the hostile amongst adults, while engraining "loyal" staff and espe- cially the younger generation "through the doctrine of the organiza- tion itself. " "Neutralization" involves recognition, wherever the Realpolitik of strategy may determine, of trade unions and simi- lar organizations; emphasis upon "cooperation" by promotion of labor-employer community activities; regional decentralization of plants; legal restraints upon the "abuse" of labor power; use of police power, strike breakers, espionage at need; the mobilization of the middle and professional classes into patriotic and other feder- ations; *2 attacks on opposition leadership under the guise of attack- ing "racketeering"; encouragement of fear of "aliens," "fifth-col- umnists," and other menaces which encourage in turn emphasis upon group loyalties, patriotic sentiments; especial types of interest programs and propaganda for women, children, and the aged, etc. Conversely, education of the young calls for control over apprentice- ship training; purge of school textbooks; vocational emphasis with belief in an eventual occupational stratification in which there is a one-to-one correspondence between economic station and presump- tive I. Q. ; *^ evolution of a system of rewards and punishments which
40 For example, the NAM public-relations program was first granted a small sum of money in 1934. By 1937 public-relations expenditures were larger than those for all purposes combined before 1934--a sum which was estimated, at commercial rates, to equal in that year around $36,000,000 for the whole United States. Since that year these expenditures have been probably doubled.
41 See Batchelor, Profitable Public Relations. Bureaucracy and Trusteeship. The Nazi motto, Gemeinnutz geht vor Eigennutz, carries the precise equivalent for Ger- man businessmen for the dictum, "A widespread, favorable attitude of mind is a first essential to effective trusteeship in big business. People must expect and assume that managers will look out for interests other than their own. Managers in turn will then attempt to live up to expectations. " TNEC Monograph No. ii, p. 130.
42 See pp. 287-90. 43 See pp. 280-86.
--
? POLITICAL POLICIES
319
turn on the axis of loyalty to the concern; the substitution of non- commercial for commercial incentives; of group and "social" for individual and personal incentives.
The key to control is political: executive authority and policy-form- ing power are concentrated in the same cooptatively renewed ranks, and these recognize that the key to power is twofold; (1) consolida- tion of all the "ins" in a solid, interest-conscious bloc; (2) a popular following, the key to which is alliance with any faction, movement, or party which has or may acquire popular following without dis- turbing the general social structure of command and subordination. This means compromise with the nouveau puissant as they are co- opted into the movement on all matters relating to "the take"--an old practice in relationships between political rings and powerful vested interests all over the world, but now generalized to entire national economics, and rationalized with an eye to sterilization of "take" knowledge and demand for participation below the upper ranks. And for these lower reaches, the evolving programs of the or- ganized business world look to well-ordered, and especially trained and loyal cadres of hierarchically controlled employees over whom as "leaders" they have complete charge--as Gignoux of the Con- federation Generale du Patronat Fran^ais expressed the matter "not only of men but of souls. "
The new power complexes are inherently expansive: two things are united in this reaching for political power. One is the tendency of all democratically irresponsible f>ower aggregations to expand with- out limit. And the other is the fact that the "life styles" of the units which form the cells of the new power pyramids have each and all been dominated by a tendency to expand without limit--a fact with which all great business leaders have been thoroughly familiar and which has been traced at great length by Sombart and others. Given control or power decisively to influence the national state, imperial expansion is inevitable. The more or less rational combination of fully articulated systems of protection and privilege combined with imperial expansion, on the one hand, and the integrative pressures of a rationally articulated industrial technology, on the other, lead logically to the concept of the next largest politically omnicompetent and coherently organized imperial area, "great-space economics"
(Grossraumwirtschaften). ^*
44 All through the Godesberg and Munich discussions the Federation of British Industries was carrying on negotiations with the Reichsgruppe Industrie. "On March 16, the day after the fall of Prague, the Dusseldorf discussions culminated in the signature in London of an agreement between agents of the Federation of British Industries and the Reichsgruppe Industrie to 'replace destructive competition by constructive cooperation. ' It contemplated the creation of a series of Anglo-German cartels. " Frederick L. Schuman, Night Over Europe, p. 107. Similar conversations
? 320 POLITICAL POLICIES
"The soul of Amenhotep is higher than Orion, and it is united with the underworld"--so runs a melancholy passage from the ancient Egyptian "Book of the Dead. " The roots of power of the several Spitzenverbdnde are intertwined in the sanctions of evolv- ing imperial class status, but monopoly-oriented business which attempts to evade effective democratic restraints can dominate government only through control over the thinking processes of the mass of the people who dwell at the base of the social pyramid. "Dangerous thoughts," as the Japanese are so acutely aware, breed democratic heresies. Antidemocratic "totalitarianism" can triumph only through ultimate consolidation of its "authoritarianism" by the seizure of political controls. Every single step in the path which leads in our times to use of the expedients which spell ultimate
resort to the coup d'etat are now sufficiently well known to be recognizable at a glance. And nothing fundamental in history, pro- gram, structure of organization, or social outlook divides clearly the policies of the Spitzenverbdnde within the "totalitarian" coun- tries from those of the liberal-capitalist states. Within Germany, Italy, Japan, and France these bodies made the critical decisions without which the final destruction of democracy could not have taken place.
Is it possible that the lesson will be learned elsewhere before it is too late?
were carried on between Japanese interests and the Federation of British Industries through a good deal of the crisis period when the Japanese took over Manchukuo. Nothing is to be found in the literature of the National Association of Manufactur- ers to indicate disapproval of the structure of controls effected through the ma- chinery of German and Italian Spitzenverbdnde, though considerable sympathy is frequently expressed that these latter should be so closely controlled by the govern- ment--a sentiment, incidentally, which the leading figures on the inner business circles in the totalitarian countries rarely reciprocate. Yet the Germans thought of NRA in 1935 as the equivalent of what they had brought on themselves, and won- dered not a little that there should be so much complaint among American business- men against their own program of "self-government in business" (The Germans use the same term), which they themselves had clearly helped to shape and guide from its initial stages on--and which must, so these same persons argued, be surely seen
as the inevitable pattern of the future if business and the capitalistic system are to survive in America as elsewhere.
? BIBLIOGRAPHY
OFFICIAL AND SEMIOFFICIAL SOURCES
Annuario Statistico Italiano, Series 2, Vol. VII (1917-18).
Commerce, U. S. Dept. of. Special Agents Series: No. 98, "Commercial Organizations in France"; No. 102, "Commercial Organizations in
the United Kingdom. " Washington, D. C. , 1915.
Bureau of Foreign and Domestic Commerce. Commercial and In-
dustrial Organizations of the United States. Washington, D. C. , 1931. Bureau of Foreign and Domestic Commerce, Trade Association Section of the Marketing and Research Division. "High Lights of
the NRA, Chart 3. " Washington, D. C. , July 10, 1934.
Congress of the United States, 75th Congress, 3d Session. Senate Docu- ment 173, "Message from the President of the United States, Trans- mitting Recommendations Relative to the Strengthening and En-
forcement of Anti-Trust Laws. "
Enqueteausschuss. Ausschuss zur Untersuchung der Erzeugungs- und
Absatzbedingungen der deutschen Wirtschaft. 1926-31. Fascist Confederation of Industrialists. Fascist Era, Year XVII. Federal Trade Commission. Docket No. 2191, Dec. 30, 1937. Federation of British Industries. Export Register. London, 1920.
"Industry and Action. " Pamphlet, undated.
Committee on the Organisation of Industry. Report, June, 1935.
International Labor Office. Series A, No. 31, Freedom of Association. Geneva, 1927. Vols. II, IV.
; Yearbook, 1936-37.
Jahrbuch der Berufsverbande im deutschen Reich. 1930.
Japan Year Book, 1938-39, 1939-40.
Labor, U. S. Dept. of. Bureau of Labor Statistics, Division of Industrial
Relations. Bulletin, No. 364, "Characteristics of Company Unions. "
Washington, D. C. , 1935.
Labour Research Dept. Studies in Labour and Capital, No. 5: "The
Federation of British Industries. " London, 1923.
La Follette Committee Reports. Parts 17, 18, 19, 20, 21, 45; No. 6, Part 6,
"Labor Policies of Employers' Associations. "
Liberal Industrial Inquiry. "Britain's Industrial Future. " London, 1938. Mitsubishi Economic Research Bureau. Monthly Circular, Dec, 1937. National Association of Manufacturers. Annual Conventions, Proceed-
ings (1903-29).
"Industrial Self-Government. " Series of bulletins, 1934.
? 322
BIBLIOGRAPHY
National Association of Manufacturers. "Industry and Action. " Pam- phlet.
Labor Relations Bulletin, July 20, 1936.
"The Nation's Industry Synchronized. " Pamphlet, undated. "The Nation's Industry--Organized. " Pamphlet, 1923.
"Unit Thinking and Unit Acting on the Part of American Indus-
try. " Pamphlet, 1935.
"Women, Partners with Industry in the Economic and Social Ad-
vancement of the Nation. " Brochure. --"You and Industry. "
Committee on Employment Relations. Report, 1926.
National Economic and Social Planning Association, Planning Pam- phlet No. 4, "Germany's Challenge to America's Defense. " Washing-
ton, D. C. , 1941.
National Industrial Conference Board. Industrial Standardization. New
York, 1929.
23d Annual Report, revised to Jan. 1, 1940.
National Resources Committee. The Structure of the American Econ- omy. Washington, D. C. , 1939.
Nye Committee on the Munitions Industry. 74th Congress, 2d Session, Report No. 944, Part 4.
Quadragesimo Anno. Papal Encyclical, 1931.
Rerum Novarum. Papal Encyclical, 1891.
Resume statistique de I'empire du Japon. Tokyo, 1912, 1924, 1930, 1934,
1936.
Temporary National Economic Committee. Hearings: Part 2, "Patents,
Automobile Industry, Glass Container Industry"; Part 5-A.
"Investigation of Concentration of Economic Power. " Pursuant to
Public Resolution, No. 113, 75th Congress.
Monographs: No. 7, Measurement of the Social Performance of
Business; No. 9, Taxation of Corporate Enterprise; No. 11, Bureauc- racy and Trusteeship in Large Corporations; No. 17, Problems of Small Business; No. 18, Trade Association Survey; No. 21, Competi- tion and Monopoly in American Industry; No. 24, Consumer Stand- ards; No. 26, Economic Power and Political Pressures; No. 27, The Structure of Industry; No. 29, The Distribution of Ownership in the 200 Largest Non-Financial Corporations; No. 31, Patents and Free Enterprise; No. 34, Control of Unfair Competitive Trade Practices through Trade Practice Conference Procedure of the Federal Trade Commission; No. 35, Large Scale Organization in the Food Indus- tries; No. 36, Reports of the Federal Trade Commission on the Nat- ural Gas, Gas Pipe, Agricultural Implement, Machinery, and Motor Vehicle Industries; No. 39, Control of the Petroleum Industry by
Major Oil Companies; No. 43, The Motion Picture Industry.
? BIBLIOGRAPHY
323
GENERAL WOBKS
Allen, George C. "The Concentration of Economic Control in Japan. " Economic Journal, XLVII (June, 1937), 271-86.
Japan; the Hungry Guest. London, 1938. Modern Japan and Its Problems. London, 1928.
Arnold, Thurman W. Address before the Denver Bar Association, May 15, 1939. Mimeographed release, U. S. Dept. of Justice.
Address before the National Association of Purchasing Agents, May 22, 1939.
"The Anti-Trust Laws, Their Past and Future. " Address over the Columbia Broadcasting System, Aug. 19, 1939. Released by the Tem- porary National Economic Committee.
Bottlenecks of Business. New York, 1940.
Asahi, Isoshi. The Economic Strength of Japan. Tokyo, 1939. Batchelor, Bronson. Profitable Public Relations. New York, 1938. Beckerath, Herbert von. Modern Industrial Organization. Trans. R.
Newcomb and F. Krebs; Introduction by F. W. Taussig. New York,
1933-
Berle, Adolph A. , Jr. , and Gardiner C. Means. The Modern Corpora-
tion and Private Property. New York, 1933.
Bezard-Falgas, Pierre. Les Syndicats patronaux de I'industrie metallur-
gique en France. Paris, 1922.
Bonbright, James C, and Gardiner C. Means. The Holding Company,
Its Public Significance and Its Regulation. New York, 1932.
Bonn, M. J. Das Schicksal des deutschen Kapitalismus. 1931.
Bonnett, Clarence E. Employers' Associations in the United States. New
York, 1922.
Boyle, John, Jr. "Corporation Patent Holdings. " Journal of the Patent
Office Society, XIX (Sept. , 1937), No. 9.
Brady, Robert A. The Rationalization Movement in German Industry.
Berkeley, Calif. , 1933.
The Spirit and Structure of German Fascism. New York, 1937.
Brandeis, Louis D. The Curse of Bigness. New York, 1934.
Brandt, Karl. "Junkers to the Fore Again. " Foreign Affairs, XIV (Oct. ,
1935)' 120-34.
Bratter, Herbert M. "The Role of Subsidies in Japan's Economic De-
velopment. " Pacific Affairs, IV (May, 1931), 377-93.
Bruck, W. F. Social and Economic History of Germany from Wilhelm
II to Hitler, 1888-1938. Oxford and New York, 1938.
Buchez, Philip. Essai d'un traite complet de philosophie du point de
vue du catholicisme et du progres. Paris, 1838-40.
Burnham, James. The Managerial Revolution. New York, 1941. Burns, Arthur R. The Decline of Competition. New York, 1936.
? BIBLIOGRAPHY
324
Byas, Hugh. The Japanese Enemy, His Power and His Vulnerability. New York, 1942.
'Japan's Censors Aspire to 'Thought Control. ' " New York Times, April 18, 1937.
"Japan's Fascist March. " New York Times, Dec. 15, 1940. Callman, Rudolf. Das deutsche Kartellrecht. Berlin, 1934.
Carrel, Alexis. Man the Unknown. New York, 1935.
"Cartelisation of England, The. " Economist (London), March 18, 1939. Chamberlain, Houston Stewart. Foundations of the Nineteenth Cen-
tury. New York, 1911.
Chamberlin, Edward H. The Theory of Monopolistic Competition.
Cambridge, Mass. , 1933.
Chamberlin, William H. Japan over Asia. Boston, 1937.
"Check on Production, A. " Economist (London), June 15, 1940.
M. "Towards a Concept of Workable Competition. " American Economic Review, XXX (June, 1940).
Comite de Prevoyance et d'Action Sociale. Le Role exact des delegues. Paris, 1937.
Corbin, John. The Return of the Middle Classes. New York, 1922. Corradini, E. II volere d'ltalia. Naples, 1911.
Crosser, Paul K. Ideologies and American Labor. New York, 1941. Darre, R. W. Neuadel aus Blut und Boden. Munich, 1939.
Davies, Ernest. National Capitalism. London, 1939.
Dobb, Maurice. Capitalist Enterprise and Social Progress. London, 1925. Duchemin, Rene P. Organisation syndicale patronale en France. Paris,
1940.
"SurI'AccordMatignon. "RevuedeParis,Feb. 1, 1937.
Dutt, Palme. Fascism and Social Revolution. London, 1934.
Ebenstein, William. Fascist Italy. New York, 1939.
"Economic Front, The. " Economist (London), Dec. 9, 1939.
Edwards, Corwin D. "The New Anti-Trust Procedure as Illustrated in
the Construction Industry. " Public Policy, II (1941), 321-40.
"Trade Barriers Created by Business. " Indiana Law Journal, Dec,
1940, pp. 169-91.
Einzig, Paul. "Hitler's 'New Order' in Theory and Practice. " Economic
Journal, LI, No. 201, April, 1941.
"Employers' Organisations in France. " International Labour Review,
July, 1927, pp. 50-77.
Engelbrecht, Helmuth C, and F. C. Hanighen. Merchants of Death.
NewYork, 1934.
Fascist Confederation of Industrialists. Fascist Era, Year XVII. "Federation of British Industry. " Engineer (London), Aug. 11, 1916.
