NFU’s Robert G. Lewis article, published in 1954: Revolution from the Right

-courtesy of Tom Giessel

Corporate Socialism Emerges as the Chief Threat to American Democracy

by Robert G. Lewis, NUF Washington Correspondent

A TOTALITARIAN revolutionary movement is being developed in the United States. It seeks far-reaching and fundamental changes in the American way of life, in the laws of the land, and even in the form of our government through drastic alterations in the Constitution. Yet many Americans are only dimly aware of its presence and its aims.

  • Some American’s and many people in other countries see ominous parallels between what is happening here and what happened in many countries of Europe after World War I. The totalitarian movement being developed here has many distinctive characteristics. But in all important respects, it closely parallels the totalitarian movements of Naziism, Fascism, and Communism.

Parallels Hitler

The contemporary American totalitarianism is being led and developed primarily by wealthy business interests for the purpose of solidifying and extending their economic and political power. In this respect it closely follows the example of Hitler’s Nazi movement, which won support from the masses for the ambitions of German cartels and financial institutions. It is even more similar to the Corporate State of Mussolini’s Fascism. It is similar also to Communism, which seeks mass support for increasing the power and privileges of the Communist bosses.

For lack of a better name, the contemporary American totalitarianism might be called “Corporate Socialism”-which is fairly descriptive of its nature. It has not yet developed to the point of naming itself.

How It Develops

Totalitarian movements have four distinctive aspects. First, the movement itself-the people who lead and are “in the know,” and those who follow blindly. Second, they have definite and far-reaching aims to increase the privileges and power of the leaders, although they are never stated forthrightly. Third, distinctively immoral methods are used to reach the movement’s aims. And fourth, they erect a radical ideology, a doctrine to which all must subscribe with-out deviation and with fanatical devotion.

  • ”Corporate Socialism,” is developing in all four aspects, and in a characteristically totalitarian pattern. The movement has not yet jelled into a political party as Communism, Nazism, and Fascism did. It may never do so, because the two-party system is deeply imbedded in United States politics while multiple parties come and go repeatedly in most other countries. But Corporate Socialism is moving unmistakably in the direction of a cohesive movement, with recognized leaders, increasing agreement on ideology, and a widening pattern of immoral political methods.

The basic method used by all totalitarian movements is the creation in the public imagination of a “devil” or a “scapegoat” upon whom the ills of society can be blamed and against whom the hatred of the masses can be directed while, behind the scenes, the movement’s leaders carry out their ambitions.

  • The Nazis blamed a “stab in the back” by a “Marxist-Jewish conspiracy” for Germany’s defeat in World War I. Although Germany was outnumbered and outgunned after the U.S. entered World War I, German militarist welcomed Hitler’s face-saving explanation for their defeat. Once the German people were brain-washed into accepting the idea, it became possible once again to lead them on a course of reckless military adventure.

The Communists likewise create “devils” against whom they in-flame their followers. Generally their scapegoats are “Capitalist war mongers,” with many variations to suit the local situation.

The Corporate Socialists are trying to use the fear of Communism as a material out of which to create their scapegoats. Communism is a genuine menace to Americans, through sabotage and espionage at home, and through military and political aggression abroad. So was defeat in World War I and its economic consequences a painful humiliation to proud Germans. And so are colonialism, unfair working conditions, and grinding exploitation by absentee landlords legitimate grievances of the poverty-stricken people to whom the Communist appeal.

Agitation Without Honesty

But in no case do the totalitarian agitators deal honestly with the legitimate fears and grievances of the masses. They simply exploit them and enlarge them to further their own ambition for power and privilege.

The development of an ideology is another basic aspect of all totalitarian movements. They must have a “faith” which both fits in with the aims of the leaders and attracts a fanatical following.

A method universally followed by totalitarians seeking to fasten their new ideology upon the public’s mind might be called a “hypnotic switch.” The basic values and practices of the traditional social order are subjected to extreme but insidious attacks. The exaggeration, repetition, and sheer lung-power of the attacks gives them spurious plausibility. At the same time, the radical new doctrines of the totalitarians are infiltrated into the public consciousness as substitutes for the traditional way of looking at things.

The Nazis, for example, sought to overcome habits engendered by more than a thousand years of Christianity in Germany by preaching that the ancient, war-like Pagan religion was the “genuine” German tradition. Similar in method and purpose are the propaganda attacks that are made in American today against religious authorities, particularly those who seek to apply the moral precepts of civilized religion to human relationships on earth instead of limiting their concern to life after death.

Hearings Aim Low

The hearings of a Congressional committee investigating educational institutions and non-profit scientific foundations are one example of this form of Corporate Socialistic propaganda. The entire investigation was set up so as to reflect unfavorably upon the schools and foundations financed by such men as John D. Rockefeller, Henry Ford, and Andrew Carnegie. The aim is identical with those of Communism or Nazism-to discredit the nation’s time-honored institutions and its religious and intellectual authorities.

The “investigation,” headed by Re. Reese (R-Tenn.), was led into a revealing trap by Rep. Hays (R-O.), one of the Committee’s minority members. Rep. Hays read the following statements, and asked one of the investigation’s “experts” on subversion to evaluate them:

“But all agree (said the statement read by Re. Hays) and there can be no question whatever that some remedy must be found, and quickly found, for the misery and wretchedness which press so heavily at the moment on the large majority of the very poor… By degrees it has come to pass that working men have been given over, isolated and defenseless, to the callousness of employers and the greed of unrestrained competition… (By) concentration of trade in the hands of a few individuals… a small number of very rich men have been able to lay upon the masses of the poor a yoke little better than slavery itself.”

’Expert’ Testimony

The Committee “expert” on subversion declared this statement tends toward “collectivism,” and he termed it an “emotional product without one word of truth.” Rep. Hays then read another passage, as follows:

”The effect of civil change and revolution has been to divide society into two widely different castes. On the one side, there is the party which holds the power because it holds the wealth… on the other side there is the needy and powerless multitudes… If working people can look forward to obtaining a share in the land, the result will be that the gulf between vast wealth and deep poverty will be bridged over, and the two orders will be brought nearer together.”

When the Committee “expert” on subversion was asked for his opinion of these statements by Rep. Hays, he charged that all are closely comparable to Communistic literature propaganda!

At this point, Rep. Hays dropped his bombshell. He revealed that the statements he had read were quoted verbatim from Papal Encyclicals, written by Pope Leo XIII in 1891 and by Pope Pius XI in 1931.

The Reese Committee’s propaganda generators could not, of course, make anyone believe that the two Roman Catholic Popes were “soft on Communism.” But many educators, clergymen, and writers have been branded publicly as suspect for uttering identical views, thus helping to discredit religious and philosophical standards which stand in the way of the immoral methods of the totalitarians. The truth is that the quoted statements are not “communistic” whether spoken by a minister, teacher, farmer, brick-layer, or politician. And when it takes a Pope of the Roman Catholic Church to get away with saying them, it indicates how far the Corporate Socialist totalitarians have proceeded on the road to imposing thought control in America.

The slogan “creeping socialism,” coined by the electric utility lobby, has a very similar purpose-to substitute a new, un-American item of doctrine for the time-honored standard that has prevailed. Public power has a venerable place in American life; among the very first power systems in American were publicly-owned as well as private plants, and public ownership of utilities was common throughout the country half a century ago. The utility propaganda seeks to establish a false image of history in the public mind, to make it seem that public power is an alien un-American development sponsored by subversive elements.

For or Against

The simplest form taken by the Corporate Socialists’ “hypnotic switch” technique to implant their new ideology is plain un-Communism-being against everything the Communists say they’re for, and being for everything the Reds say they’re against. This suits the purpose of the agitators for two reasons: (1) It lends itself to exploiting the prevailing fear and dislike of Communism, and (2) It happens to provide many opportunities for attacking the traditional American way of life. There are two obvious frauds in this route to a new ideology.

  • In the first place, it makes the mistake of taking the Communists at their word. Communists have developed the art of lying to its highest degree. They are clever and cynical politicians, and probably have less intention of ever keeping their campaign promises than anyone in the business if they come to power

In the second place, and partly for the same reason, “un-Communism” is not necessarily effective “anti-Communism.” When the Communists are campaigning for power in Indo-China by promising to give land to the poor farmers, their enemies aren’t likely to get very far by promising the exact reverse-to keep the land in the hands of a few rich landlords. In such a situation, a political platform in line with the “communistic” sentiments expressed by the two Catholic Popes quoted above-which expresses the humane and slowly-evolved ideals of Western civilization and Christianity, is by far a more effective program for opposing Communism.

Admiral Ben Moreell

  • Perhaps the most extreme example of the un-Communism approach toward a radical new ideology for America has been promulgated by Admiral Ben Moreell, chairman of the board of Jones & Laughlin Steel corporation, and the man chosen by the Administration to head the Hoover Commission’s task force which is planning the reorganization of government activities in the fields of electric power and natural resources. Moreell condemns American institutions older than the Declaration of Independence as “communistic” – including public roads and free public schools!
  • As might be expected, Moreell views such institutions as income and inheritance taxes, government regulation of railroads and other utilities, government licensing of certain businesses, and public power projects with unmitigated horror.

Moreell set forth his un-Communism ideology in a widely-circulated speech to the American Petroleum Institute in 1952. After charging that a wide range of U.S. governmental activities fit into the Communist program, Moreell concluded:

”… since Marx (Karl Marx, founder of Communism) enunciated his doctrine slightly more than 100 years ago, we Americans have adopted in varying degrees-practically his entire program!”

Marx and the TVA

Moreell charged that acquisition of land “for public purposes” is “in strict accord with Marxist doctrine,” citing specifically that “The public purpose may be an irrigation or flood control district, a Tennessee Valley Authority, a Bonneville power project, forest land, an oil reserve, or any one of a number of others.”

He also attacked the income tax as a “communist plant,” declaring: “That iniquity was first imposed on Americans in 1913… To the federal income tax should be added the various state income taxes. This process of progressive confiscation of income is, of course, in complete accord with the communist plan of ‘wresting’ by degrees, all capital for the (owners of private property)’.”

Moreell called public electric power projects “a noteworthy case” of the communistic platform plank for government ownership of “instruments of production,” giving as other examples “Government planning for the improvement of deserts, swamps, and river valleys.” Noting that “atomic energy is now a complete government monopoly,” he remarked: “One can easily foresee what will happen when the production of power by atomic energy is economically feasible.”

“And the entire scheme of agricultural subsidies based on ‘parity’, or a percentage thereof, thus linking farm prices to industrial wages, is certainly part and parcel of that ‘combination of agriculture with manufacturing industries’ envisaged by this plank of the communist platform.”

Name Calling Denied

Moreell denied that he was “name calling,” or that he means to call any one of the specific measures he listed “communism” or a person who believes in them “a communist.”

“But the fact remains,” Moreell declared, “that according to the father of Communism, all of the measures I have listed are communistic ideas. And so long as I support any of them, I am-according to Marx-supporting the communist program…”

Moreell’s effort was to tear down and destroy faith in the American way of life and our form of government by smearing it as “practically his (Marx’s) entire program.” This is invariably the first mission of totalitarian agitators-the existing system must be destroyed to clear the way for imposing the new system.

It is extremely significant also that Moreell spoke with great contempt of our system of government. The income and inheritance tax “iniquity” transfers money from the wealthy to “political adventurers,” he sneered. He expressed great mistrust of majority rule and dislike for democracy. “Will any thinking persons say that a law is ‘right’ merely because a majority has voted for it?” he questioned. The whole theme of his speech-and the theme of practically all Corporate Socialist propaganda-is that the people can not be trusted. Communism pay sneak in “by a vote of the majority,” he charged. It is “ballots” and not “bullets” that he really fears, Moreell admitted.

In its fullest flowering so far, the ideology of Corporate Socialism has gone somewhat beyond the “tear down the old system” and the simple “un-Communism” stages. The movement’s brain trust, largely concentrated in its own endowed tax-free foundations and big advertising and public relations agencies, is working full time to coin suitable terminology and to refine the doctrines. Their most highly-polished product so far is identified by the term “free private enterprise.”

Each of those three words-“free,” “private,” and “enterprise”-is highly respected and valued by American’s The new label was coined a few years ago by public relations experts of the National Association of Manufacturers to substitute for the name “capitalistic system,” which the NAM felt had become identified in the public mind with too many past sins. Ironically, the new label appeared just at the time when rapid changes in the nature of capitalism were making it less accurate than ever before to describe it as either “free,” “private,” or “enterprising.”

For one thing, business concentration has proceeded at a breath-taking pace in the years since World War II began. At present, domination of every important industry excepting agriculture is concentrated in the hands of one, two, or three big corporations. Some huge corporate business and financial institutions dominate big chunks of several entire industries. The tremendous scale of modern productive enterprise, together with the invulnerable economic advantage enjoyed by the giants, makes it impossible for anyone excepting another giant to be “free” to enter any important field.

In the traditional concept of capitalism, business is financed by its owners out of their earned savings and the profits they are able to make at prices set in a competitive market. But with the advent of gigantic oligopolistic financial-manufacturing-trading corporations, the nature of investment capital formation has been altered completely. Capital funds for modern corporate business are no longer contributed primarily by the private owners. In all respects except eventual ownership and control, the process of capital formation is primarily socialized.

The April, 1954, issue of Survey of Current Business, published by the Department of Commerce, bears out the degree to which the function of providing capital funds to corporate business has been socialized.

In the eight years, 1946 to 1953, corporations acquired a total of $249 billion in capital funds. Of this total, the owners (stock-holders) contributed only $15.3 billion-just 6 percent of the total-through investments in stocks. All of the balance was provided by two major institutions of private socialism, through which the costs of financing business are distributed broadly upon the people.

Largest Source

The largest of these socialized sources of capital funds is the customers of business. Profits “plowed back into the business” have, of course, been one source of capital since capitalism began. This source was originally thought of quite properly as part of the “fair return” or interest on invested money. But when the concentration of business reached the point that free competitive pricing was eliminated, the nature and the scale of retained profits took on a completely different nature. The authority of the market was replaced as the fixer of prices by the authority of the oligopoly. And the authority possessed by the oligopoly of a handful of companies dominating each field enables them to fix the price level of their commodity substantially at the monopoly price. If there were only one auto firm in the field, for example, the price of the new car you buy would be substantially the same, other factors being equal, as it is with three giants in the business.

Monopolies Tax Customers

The private authority of the oligopoly thus enables it to levy upon its customers a sales tax to provide the funds it wants for financing its growth, in addition to what it must have to pay its manufacturing and sales costs, all wages and salaries, and a suitable return (interest) to the owners both on money invested directly by them and money previously collected from the customers, and to the company’s lenders. The funds thus collected by the authority of the oligopoly become its own property, just as taxes collected by the authority of government become government property.

In the eight-year period, the customers provided 65 percent of all new corporate capital funds-$165 billion-about half of it (33 percent or $81.8 billion) in the form of retained profits. The other half was contributed in the form of depreciation reserves ($61.4 billion), and reserves (collected faster than they came due) for taxes and other liabilities. A small but important chunk of working capital was provided by one business to another in the form of sales on credit, accounting for $25 billion or 10 percent of the total.

The authority of government is used also to help the corporations obtain capital funds from the public. Tax-amortization subsidies, guaranteed profit clauses in defense contracts, government-financed factories, price support buying from mining companies, subsidies to shiplines, airlines, and publishers, the huge government interest subsidy to the banking system, and a host of other public contributions to the corporations have substantially eliminated the element of “risk” from modern corporate big business.

Socialized Bankers

The other socialized source of capital is lending institutions, which contributed $46 billion or 18 percent of the total new capital acquired by corporations in the eight year period. It was channeled into the corporations through bond subscriptions, bank loans, and mortgage loans. The origin of most of these funds is the savings of the people in banks, insurance policies, and trust funds. Unlike those who contribute capital when they buy at oligopolistic prices, the lenders are paid for the use of their capital. But they have practically no control over the use of their funds.

The achievement of this degree of concentrated control over the American economy is in fact a revolutionary accomplishment. This obviously revolutionary change in the nature of the American economy also has great political and social implications. Totalitarian movements are always a response to some kind of revolutionary situation-either profound changes already made or to profound changes being propelled by drastically altered economic, social, and political relationships.

Revolution’s End

The economic revolution of the American corporations is virtually completed. The totalitarian faction among those who control them, with their political, intellectual, and propaganda functionaries, is trying to stabilize the newly-achieved concentration of power. To do so, they realize that their economic domination must be extended into the political and intellectual fields. That is what furnishes the steam behind the growing movement of totalitarian Corporate Socialism.

It explains also the specific targets at which the Corporate Socialists aim their shots. Their specific objective is to prevent the orderly processes of the democratic American political system from adjusting to the new situation in accordance with traditional American ideals of equity, justice, freedom, and most important of all, broad distribution of effective power among the citizens. The people, in time, would restore freedom and perhaps competition to the economy through such old-fashioned devices as anti-trust measures, government-sponsored “yard stick” competitions, cooperatives, tax policies, and others. In order to prevent that from happening, the Corporate Socialists feel that they must ga in centralized control of the government, too.

No Crackpots

The Corporate Socialist party is no collection of mere crackpots. It is endorsed with varying degrees of completeness by the Chamber of Commerce of the U.S., the National Association of Manufacturers, National Associated Businessmen, and the Farm Bureau. The Foundation for Economic Education, which is the movement’s chief ideology factory, has a board of trustees that reads like a stud book of the Wall Street fraternity. Men highly placed in the Eisenhower Administration, including ex-President Hoover, head of the planning commission for reorganizing the entire government, and Moreell, chairman of that commission’s main tasks force, are last-ditch advocates of fundamental aspects of its doctrine. President Eisenhower himself has accepted the label “creeping socialism” for TVA. A significant minority of U.S Senators and Representatives espouse even its most extreme dogmas.

In recent months, Corporate Socialistic political methods have begun to vear close to the violence and lawlessness so characteristic of Nazis and Communists. Mrs. Flanders, wife of the Vermont Republican who authored a resolution demanding that Sen. McCarthy (R-Wis.) answer questions under oath that were raised by a Senate Committee investigating irregularities in his taxes and other financial matters, was so besieged with telephone calls threatening violent harm that she moved out of her house. The Wisconsin weekly editor who headed the “Joe Must Go” recall petition drive was given bodyguard protection by his hotel while in New York because of threats on his life.

The late Sen. Hunt, according to published reports, was blackmailed by political foes to withdraw from the Wyoming Senatorial contest this fall; if true, that is a felony. Sen. McCarthy openly invited government employees to violate the law and their oath of office to give him confidential documents. These and many other incidents indicate an ominous trend toward the breakdown of law and order and the introduction of violence into American political methods.

Some Reassuring Signs

But despite the foreboding signs, there are many in the American scene that are reassuring. The Constitution of the United States has proved to be the most durable political document in the world-and the system of government that developed within its bounds has weathered many grave storms. In doing so, it has led the civilized world in the degree of liberty, equity, and justice that it provides to its citizens. Under the Constitutions, the people have succeeded in directing their economy so as to provide themselves with an unprecedented and fabulous standard of living. Its promise for the future-if the American people keep their eyes on the ball-offers boundless opportunities for the expanding welfare and freedom of its citizens. And it offers a brilliant example to a world which years today for the unparalleled combination of general welfare individual dignity in a democratic society, and personal freedom that is the real promise of the American way of life.


Note: This article was published in 1954, but could have easily have been this week. MC

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