The American Billionaires Who Fell In Love With Fascism Are Not the First

“The abuse of buying and selling votes crept in and money began to play an important part in determining elections. Later on, this process of corruption spread in the law courts and to the army, and finally, when even the sword became enslaved by the power of gold, the republic was subjected to the rule of emperors.” —Plutarch, Gaius Marcius (Coriolanus)

“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group, or by any other controlling private power. ” —Franklin Delano Roosevelt, April 29, 1938 (Message to Congress)

In Adam Tooze’s The Wages of Destruction: The Making and Breaking of the Nazi Economy, there is a remarkable description of a February 1933 meeting that occurred shortly after Adolf Hitler was chosen as German chancellor. It is remarkable because it occurred almost a century ago, a prelude to one of the darkest chapters in world history. It is a period that has been thoroughly historicized; yet something about it is eerily familiar and up to date.

The newly installed Nazis summoned the oligarchs of German commerce and industry—Krupp, the heads of IG Farben and the largest steel companies, and others—to Hermann Goering’s estate outside Berlin so that Hitler could “explain his policies.” While the moguls expected a dialogue (in deference to their financial power), Hitler appeared late, addressed them at some length, and departed without answering questions.

The influx of contributions from big capital was a decisive factor in the Nazis winning the March 1933 elections, the last competitive election in Germany for the next twelve years.

The bargain, as Hitler’s underlings explained to the attendees, was this: he had just promised the oligarchs to bring parliamentary democracy to an end, smash the Communist Party, and destroy independent unions. There was to be an election the following month; the capitalists’ part of the deal was to pay up with very large political contributions. It was not a question of should they pay, they must pay; what better return on investment could the captains of industry possibly want?

And pay they did: in the following weeks, millions of Reichsmarks flowed into Nazi Party coffers that had been severely short of funds. Tooze believes that the influx of contributions from big capital was a decisive factor in the Nazis winning the March 1933 elections, the last competitive election in Germany for the next twelve years.

Fast forward to 2024. In April, Donald Trump met with oil executives at his Mar-a-Lago estate in Floride. After hearing a complaint from one executive about supposedly excessive fossil-fuel regulation, Trump surprised the group with a blunt proposition: raise $1 billion and send him to the White House, and the oil industry will get everything it wants, from a repeal of tailpipe emission regulations to the junking of EV incentives. It would be a “deal” the industry could not pass up.

Press reports of the exchange noted the surprise of the industry executives at the crassly transactional nature of Trump’s offer, although why they felt it necessary to make this disclaimer seems quaint, if not disingenuous. As a former congressional employee, if there is one thing I learned, it is that a meeting with any representative of a business interest always carried an implicit quid pro quo. The coyness over being explicit about a cash transaction is simply the lobbyist camouflaging his greed with a veneer of decorum.

The popular mind so thoroughly associates rich people with reactionary, or for that matter fascist, politics (Mr. Potter in It’s a Wonderful Life is a hardy perennial) that we may have become numb as to the reasons. The wealthy themselves, or most of them, have long believed that any regime to the left of Dwight Eisenhower, in addition to leaving the economy in ruins, might unleash Bolshevik mobs to storm the millionaires’ mansions and murder them in their beds. (Although Robert Welch, the wealthy founder of the John Birch Society, claimed that Ike himself was a “dedicated, conscious agent of the communist conspiracy.”)

The contradictory part is that multiple sources state that economic growth in the United States has been substantially better under Democratic presidents than their Republican counterparts. The New York Timesestimated in 2021 that since 1933, average yearly GDP growth was 4.6 percent under Democratic administrations and 2.4 percent under Republicans. That growth rate is nearly double—are the rich blind to this? (If so, they are not the only ones: polling consistently shows that the public mistakenly thinks that the economy does better under Republicans than Democrats).

Objective examination of the facts is unlikely to be the primary consideration of society’s moguls, any more than it is with the general public. A tycoon may be a genius at producing widgets or vaporware, but that does not mean he understands the workings of the largest economy in the world (although his ego misleads him into thinking he does). Myth-encrusted beliefs, like Horatio Alger’s tale, can cause a rich businessman to think that by its very nature, a booming, full-employment economy can sap the entrepreneurial drive and go-getter spirit among the riffraff.

Hence the economic lore common among libertarian writers (the coat holders of the wealthy) that depressions are a “healthy” correction to too much prosperity, particularly if prosperity has been achieved by Keynesian economics. Thus, the policy advice that billionaire Andrew K. Mellon, the secretary of the treasury from 1921 to 1932, gave to President Herbert Hoover at the onset of the Great Depression: “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”

The wealthy rarely refrain from moralizing about the less fortunate. It helped that Mellon, even if his own fortune might have taken a tiny dent, was never going to stand in an unemployment line or dine at a soup kitchen, just as Wall Street’s authors of the 2008 financial meltdown were far less likely to suffer its effects than the people they suckered into obtaining subprime mortgages. (Mellon, who engineered whopping tax cuts for the rich in the 1920s, was likewise an instigator of the asset bubble that led to the Crash of ’29).

Like relapsed heroin addicts the oligarchs have come streaming back to the high they get from Trump and their visions of paying zero taxes.

We are entitled to suspect that those who command the heights of capital have reasons, based both on ideology (rugged individualism and the character-building quality of poverty for others) and objective circumstances (they are the last to suffer from a depression), not to be unduly concerned about the state of the macroeconomy. We might even speculate that their compassion for the downtrodden is distinctly limited.

The captains of industry and finance typically run their businesses like the captain of a ship: a dictatorship. Since the model works for them, why not in government? It’s the mentally lazy popular cliché that “government should be run like a business.”

This may account for the love affair between American moguls and fascist dictators. Henry Ford’s admiration for Hitler is well known, and the admiration was mutual. Thomas W. Lamont, the J.P. Morgan Banker who was very influential in government circles, described himself as “something like a missionary” for Italian fascism, regarding the Italian leader as “a very upstanding chap” who had “done a great job in Italy.” In 1938, the very eve of world conflict, Fred Koch, sire of the Koch brothers, built an oil refinery in Nazi Germany precisely when Hitler most needed high-octane fuel for his war machine.

So it is today. In the wake of January 6th, wealthy donors thought it politic to distance themselves from Donald Trump and other Republicans supporting insurrection. But like relapsed heroin addicts the oligarchs have come streaming back to the high they get from Trump and their visions of paying zero taxes. Politico’s headline says it all: “Never mind: Wall Street titans shake off qualms and embrace Trump.”

How fitting then, that Timothy Mellon, grandson of Andrew K., is now in the news. His political views suggest he is the reincarnation of Old Man Mellon: “In a self-published 2015 autobiography, Mellon called social safety net programs ‘Slavery Redux,’ adding: ‘For delivering their votes in the Federal Elections, they are awarded with yet more and more freebies: food stamps, cell phones, WIC payments, Obamacare, and on, and on, and on. The largess is funded by the hardworking folks, fewer and fewer in number, who are too honest or too proud to allow themselves to sink into this morass.’”