Posted on 11/12/2008 11:57:20 AM PST by stockpirate
The difference between the systems, wrote Mises, is that the German pattern "maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets." But in fact the government directs production decisions, curbs entrepreneurship and the labor market, and determines wages and interest rates by central authority. "Market exchange," says Mises, "is only a sham."
Mises's account is confirmed by a remarkable book that appeared in 1939, published by Vanguard Press in New York City (and unfortunately out of print today). It is The Vampire Economy: Doing Business Under Fascism by Guenter Reimann, then a 35-year old German writer. Through contacts with German business owners, Reimann documented how the "monster machine" of the Nazis crushed the autonomy of the private sector through onerous regulations, harsh inspections, and the threat of confiscatory fines for petty offenses.
"Industrialists were visited by state auditors who had strict orders to examine the balance sheets and all bookkeeping entries of the company or individual businessman for the preceding two, three or more years until some error or false entry was found," explains Reimann. "The slightest formal mistake was punished with tremendous penalties. A fine of millions of marks was imposed for a single bookkeeping error."
Reimann quotes from a businessman's letter: "You have no idea how far state control goes and how much power the Nazi representatives have over our work. The worst of it is that they are so ignorant. These Nazi radicals think of nothing except ‘distributing the wealth.' Some businessmen have even started studying Marxist theories, so that they will have a better understanding of the present economic system.
"While state representatives are busily engaged in investigating and interfering, our agents and salesmen are handicapped because they never know whether or not a sale at a higher price will mean denunciation as a ‘profiteer' or ‘saboteur,' followed by a prison sentence. You cannot imagine how taxation has increased. Yet everyone is afraid to complain. Everywhere there is a growing undercurrent of bitterness. Everyone has his doubts about the system, unless he is very young, very stupid, or is bound to it by the privileges he enjoys.
"There are terrible times coming. If only I had succeeded in smuggling out $10,000 or even $5,000, I would leave Germany with my family. Business friends of mine are convinced that it will be the turn of the ‘white Jews' (which means us, Aryan businessmen) after the Jews have been expropriated. The difference between this and the Russian system is much less than you think, despite the fact that we are still independent businessmen."
As Mises says, "independent" only in a decorous sense. Under fascism, explains this businessman, the capitalist "must be servile to the representatives of the state" and "must not insist on rights, and must not behave as if his private property rights were still sacred." It's the businessman, characteristically independent, who is "most likely to get into trouble with the Gestapo for having grumbled incautiously."
"Of all businessmen, the small shopkeeper is the one most under control and most at the mercy of the party," recounts Reimann. "The party man, whose good will he must have, does not live in faraway Berlin; he lives right next door or right around the corner. This local Hitler gets a report every day on what is discussed in Herr Schultz's bakery and Herr Schmidt's butcher shop. He would regard these men as ‘enemies of the state' if they complained too much. That would mean, at the very least, the cutting of their quota of scarce and hence highly desirable goods, and it might mean the loss of their business licenses. Small shopkeepers and artisans are not to grumble."
"Officials, trained only to obey orders, have neither the desire, the equipment, nor the vision to modify rules to suit individual situations," Reimann explains. "The state bureaucrats, therefore, apply these laws rigidly and mechanically, without regard for the vital interests of essential parts of the national economy. Their only incentive to modify the letter of the law is in bribes from businessmen, who for their part use bribery as their only means of obtaining relief from a rigidity which they find crippling."
Says another businessman: "Each business move has become very complicated and is full of legal traps which the average businessman cannot determine because there are so many new decrees. All of us in business are constantly in fear of being penalized for the violation of some decree or law."
Business owners, explains another entrepreneur, cannot exist without a "collaborator," i.e., a "lawyer" with good contacts in the Nazi bureaucracy, one who "knows exactly how far you can circumvent the law." Nazi officials, explains Reimann, "obtain money for themselves by merely taking it from capitalists who have funds available with which to purchase influence and protection," paying for their protection "as did the helpless peasants of feudal days."
"It has gotten to the point where I cannot talk even in my own factory," laments a factory owner. "Accidentally, one of the workers overheard me grumbling about some new bureaucratic regulation and he immediately denounced me to the party and the Labor Front office."
Reports another factory owner: "The greater part of the week I don't see my factory at all. All this time I spend in visiting dozens of government commissions and offices in order to get raw materials I need. Then there are various tax problems to settle and I must have continual conferences and negotiations with the Price Commission. It sometimes seems as if I do nothing but that, and everywhere I go there are more leaders, party secretaries, and commissars to see."
In this totalitarian paradigm, a businessman, declares a Nazi decree, "practices his functions primarily as a representative of the State, only secondarily for his own sake." Complain, warns a Nazi directive, and "we shall take away the freedom still left you."
In 1933, six years before Reimann's book, Victor Klemperer, a Jewish academic in Dresden, made the following entry in his diary on February 21: "It is a disgrace that gets worse with every day that passes. And there's not a sound from anyone. Everyone's keeping his head down."
It is impossible to escape the parallels between Guenter Reimann's account of doing business under the Nazis and the "compassionate," "responsible," and regulated "capitalism" of today's U.S. economy today. At least the German government was frank enough to give the right name to its system of economic control.
_________ Ralph R. Reiland, owner of Amel's Restaurant in Pittsburgh, is associate professor of economics at Robert Morris College. Further Reading: Ludwig von Mises, Omnipotent Government (Libertarian Press, [1944] 1985); Guenter Reimann, The Vampire Economy: Doing Business Under Fascism (Vanguard Press, 1939); F.A. Hayek, The Road to Serfdom (Chicago, 1947). Books by Mises and Hayek are available in our on-line catalog.
c) copyright The Ludwig von Mises Institute, 1998
I think all will see and learn that we are being taken over by the Socialists in much the same manner as Hitler did in Germany.
I think all will see and learn that we are being taken over by the Socialists in much the same manner as Hitler did in Germany.
We will survive an Obama presidency -- Americans are very resilient. Yes there is the great potential for extreme hardship for many. But the lack of freedom of speech is one thing that absolutely abhors me. I see it coming and have already witnessed disension comments being resoundingly squashed.
This is how America will feel in several months.
I haven’t read the book you mentioned but I have been researching and posting about this topic here for maybe two years. After finding this about a year ago I post it every few months or so.
FDR liked the German socialist model and a lot of what we presently see happening here is explained in this article.
I think America is already feeling that way, just not enough of us.
The Activism sidebar is reserved for News/Activism of the FR chapters. Not this.
Just bought the last copy of The Vampire Economy at Amazon. I guess I can read it and weep...
Big Business, Big Labor, Big Government. Big Bailouts.
Screw everyone else.
The Democrat party today is a putrid stew of both Fascists and Marxists. They jockey for power with each other, but together they work toward power over the rest of us.
This really started under Franklin Frickin’ Roosevelt, and has advanced under every Dem president since then. Sadly, none of the Republican presidents, except Reagan, has done anything to roll it back. Moderate-to-Liberal Republican presidents, such as Nixon and the two Bushes, have actually aided the advance.
Don’t be put off by the fact that Jonah Goldberg writes for National Review, or that his mother is Lucianne Goldberg.
Also, don’t be put off by his caveat in the early pages that “this is not an academic work.”
The fact is, he makes an excellent and excruciatingly-thorough case, better than many self-described academic works on any subject.
It’s out in paperback late-winter or early-spring 2009.
I wish the comparisons between Obama and Hitler were rhetoric, the comparisons between his civil defense force and the brownshirts silly. Unfortunately, I'm not sure there's any substantial difference between Germany 1933 and the United States as we mght be next year. "We want to spread your wealth around" - Obama - is not so different from the Nazi goals from 1933, and neither is the suppression of dissent and the use of government microregulation as a hammer. "So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them," - Obama.
We knew Obama was a socialist. Is there a difference between whatever President Elect Obama is and a National Socialist?
C'mon...give him four years and you won't recognize America. :(
sorry.
I look at people who voted for him, and I already don't recognize my country. Someone I considered a conservative, almost, along the lines of McCain describes Obama as if he'd fallen in love at first sight. "Obama will put a final end to war. Obama will bring us all together. Obama is transformational."
Check out this link from another thread.
http://www.armytimes.com/news/2008/09/army_homeland_090708w/
I knew the instant that he appeared at the podium for that keynote address in 2004 that he was being groomed for the Presidency. But 4 years later? This is spooky. And I mean Hitlerian. The 1860 election was essentially a referendum on slavery, and Lincoln's election virtually assured civil war. I don't know if people were smart enough to see this as a referendum on socialism, or just so blinded by hatred of Bush and fearful of the (I believe) contrived economic crisis, but this is a watershed that historians will look back on with awe. And the winner gets to write the history.
It's still available at Mises.org.
I would argue that it started under Lincoln, but Roosevelt deserves every bit of opprobrium you want to throw at him.
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