The Vampire Economy

Chapter III

CORRUPTION: MONEY POWER AGAINST ABSOLUTE POWER

“Under such conditions, corruption is not merely a vice but an economic necessity.”

A GERMAN manufacturer, executive manager (“Factory leader”) of an enterprise which employs 4,000 workers and a relatively large staff of office workers obtained a privileged position largely because he got along well with a prominent Party leader. This does not mean that the industrialist in question is necessarily an ardent Nazi. As a matter of fact, he is a man who makes friends easily both among Nazis and anti-Nazis. He sent a confidential report to a foreign friend about his experiences in Germany today.

 

Amsterdam, May 15, 1939.

My dear Mr. ——

I am here—in Amsterdam—for a couple of days and take this opportunity to write unrestrictedly to various friends abroad. I know you will be interested in hearing what is happening within Germany.

As for myself, my knowledge as a technical expert would not have been sufficient to enable me to struggle along during the past five years, were it not for the fact that our firm has the backing of a prominent Party man who comes to our assistance when we need certificates for foreign currency, raw materials, and so on. No firm in our trade can exist without such a “collaborator.” As it is, we have to spend considerable money for “juridical advice.”

It is not a question of simple bribery. The process is more complicated. I knew pre-War Russia. In general, bribery under Czarism was a simple affair. You could figure out how much you had to pay a State official by counting the number of stars on his uniform. The higher the rank, the more stars he wore, and the more you had to pay. It’s different in Germany today. Party members who control the distribution of raw materials and similar matters do not accept money directly. You do not offer money to a Party leader. You ask him whether he knows a good “lawyer” who might be of help in proving to the authorities the urgency of your demand for foreign exchange or raw material. He refers you to a “lawyer,” who gives you the necessary “juridical” advice—for which you pay—and eventually your request is granted. But the fees for this advice are extremely high, much higher than you would have had to pay in direct bribery or than you would have paid formerly to a first-rate lawyer on a retainer basis.

There are many cases, of course, where your “juridical adviser,” despite the high fees, cannot assist you. For instance, until a short time ago it was possible by skillful—and expensive—“interpretation” of the law to circumvent the law prohibiting branch offices from opening new distributing agencies. A few months ago, however, it became absolutely impossible to circumvent that law, and even the best contact man or “lawyer” could no longer assist you in a case of this kind.

Nevertheless, it is virtually impossible to function at all without maintaining close relations with one of these “lawyers.” He can tell you whether or not you have a chance to obtain what you are seeking. You come to depend upon him completely. A good “juridical adviser” knows exactly how far you can circumvent the law in any given case, or whether or not a recent change in Party leadership makes it possible to re-interpret a given decree.

I cite one of my own experiences: I needed foreign currency for my current trip to Amsterdam, and duly made a request for what I needed to the Administration for Foreign Currency. In reply, I received the following answer: “Absolutely impossible.” I thereupon went to my adviser and inquired of him how I might prove the “special urgency” of my business trip. He told me something I had not known before. A new ruling had been issued to the effect that factory leaders in my particular line of business could no longer obtain foreign currency for a business trip abroad. “Well,” I said, “what about a personal trip—in order that I might inspect some new types of machines for my personal information.” “This might be possible,” he said, “but it will cost you 300 Marks.” I paid the 300 marks and got the foreign currency without further difficulty.

Everywhere you will find new bonds of “friendship” between businessmen, “contact men” and “Party men” who are tied to each other by complicity in violations of laws and decrees. It is a kind of community of interest based on common risks…

I shall have to return to Berlin tomorrow.

All the best,

Yours,

. . . . . . . . . . . . . . . . . . . . . . . . . .

It is not unusual for businessmen to get together and discuss in a businesslike way how much has to be paid to a State or Party official in order to obtain some favor.

Two businessmen from western Germany, Herr Schmidt and Herr Mueller, met each other in a train on their way to Berlin.

Said Herr S.: “I must get in touch with the Raw Material Distribution Board. How much is it going to cost me to approach a Party member in that office?”

Herr M. answered: “Well, it all depends on what kind of a Party member you have to deal with. If he no longer believes in National Socialism, it will cost you a hundred marks. If he still does, five hundred marks. But if he is a fanatic, you will have to pay a thousand marks.”

An Italian economist and editor who is familiar with present conditions in Italy was asked by the author: “What are the relations between businessmen and the State bureaucrats in Italy?”

“I can answer in one word—corruption,” he declared. “The businessman in Italy has as much influence as he has money to bribe the bureaucrats. Without cash you are a helpless subject of the State.”

The word “corruption” is not to be taken in the sense in which we normally use it in democratic countries. Under fascism, it is not primarily the power of money which corrupts, but rather does corruption spring from the power of the State.

Whereas in democratic countries the businessman may use his money to influence legislation and public opinion and thus operate as a source of power and corruption, in fascist countries he can exist only as the subject upon whom State power operates. The corruption in fascist countries arises inevitably from the reversal of the roles of the capitalist and the State as wielders of economic power.

Viewed in this light, the statement of the Italian economist is more comprehensible and is well illustrated by several cases which he cited. Unfortunately, the names and data which he gave to prove his point cannot be revealed, for to disclose them would endanger the lives of those involved. But these cases are so typical that names do not matter. For example, an Italian manufacturer, owner of an enterprise in which his family had worked for generations, produced a certain kind of light machine of chrome steel. Knowing that he would have to replenish his supply of steel shortly, he wrote to the proper State official in plenty of time to avoid any interruption of work in his plant. Two months passed without a reply. He wrote again and again, stressing his urgent need of materials. Finally the order permitting him to buy the necessary chrome steel arrived—but there was none obtainable. Only a few days’ supply remained and he was faced with the necessity of closing down his factory. Then suddenly an “angel” appeared, a gentleman unknown to the firm, who said he had heard about the firm’s plight through a friend in the State Office for the Distribution of Steel. He just “happened” to know that he would be unable to obtain immediately the required steel, unless a satisfactory private arrangement could be made, in which case, of course, he and his friend would use their influence to see that immediate delivery was effected. “By chance” he had at his disposal exactly the quantity of steel needed by the firm, but, unfortunately, the price was double the official rate—because steel, especially of the required quality, was scarce.

Such a transaction was, of course, illegal, but the Italian industrialist knew perfectly well that refusal to accept the proposition would not only result in the closing of his plant, but might mean his denunciation by fascist officials. His business would be ruined. He paid the price demanded. Having become a party to an illegal transaction, in which the fascist officials protected themselves through good friends among those higher up, he was, thereafter, even more at the mercy of the bureaucrats. Ultimately the fascist State official became a silent “partner” in the firm, and the manufacturer had no further trouble in obtaining steel and other materials.

Similar stories could be told about German manufacturers. Rome and Berlin have become the headquarters of many agencies specializing in providing “good connections” (that is, acting as glorified public relations counsels) for their clients. The “connections” are with State and Party officials holding key positions in offices which make decisions regarding the distribution of raw materials and the issuance of certificates for foreign exchange, subsidies for exports, permits for new construction, and the like.

Large German and Italian firms maintain branch offices in Berlin and Rome respectively with staffs of “reliables” whose sole job it is to visit the proper State officials and Party leaders, entertain them, establish good connections and friendly relations, and otherwise protect the interests of their concerns. Smaller firms which cannot afford such a staff are served by independent agencies. There are hundreds of such agencies, sometimes fraudulent in the sense that they have no genuine influence, more often with real friends in high places, from whom, unofficially and illegally, it is possible to get concessions and privileges.

New elements—not adequately covered by the term “graft”—exist in the relations between businessmen and State officials in Germany and Italy. It is not true that any capitalist with plenty of money can buy the influence of State bureaucrats. The businessman’s influence depends on more than merely the amount of cash he spends for graft.

A businessman who is an old Party member may get many favors for which another would have to bribe some Nazi official. A businessman who has criticized the regime at some time or another may find it advisable to protect himself by improving his relations with a local Party leader. For this he will have to pay, while those who had always made regular contributions without grumbling would not feel it necessary to make an extra contribution to the Party. Consequently, many companies have found it too expensive to keep an executive who does not get along sufficiently well with Party authorities or whose political record makes him suspect in the eyes of a Party secretary. It is economical to replace such a man by a “reliable Party member” even though the latter may know nothing of the business. But he must have friends in power, or at least contact through intermediaries with the State officials upon whose goodwill the concern is dependent. The friends and intermediaries must, of course, be reliable Party people who have survived all purges and are still trusted by the government. The very nature of the Nazi party makes these “old Party members” realists who are apt to exploit their positions for personal gain within the safe limits dictated by national interest. They rarely, however, become active businessmen themselves, regardless of how much wealth they accumulate, as they find it far safer to remain in the bureaucracy and levy tribute for the distribution of patronage.

This tribute is paid in actual cash, for money has not lost its role under fascism. Even the Party badge does not entitle the wearer to appropriate whatever he sees or needs. He must have money to pay for it. There are exceptions, of course, such as the raiding of Jewish homes, but homage is paid to the general rule by terming such raids “spontaneous.”

A superficial observer might easily claim that such a regime does not differ fundamentally from liberal capitalism; some governmental forms have changed perhaps, but the role and position of the capitalist or businessman have remained what they were before. Money still rules the world—democratic or fascist.

Such a conclusion would be just as false or incomplete as the opposite one, suggested in recent literature, that fascism is a new brand of feudalism in which the private capitalist has become merely a tool of the State—where absolute power has entirely taken the place of money power. This estimate overlooks new features in Nazi society and the unique position of the capitalist under fascism.

Fascist society still relies on a money economy, and is driven by money spending and the passion to earn more money. But there is a novel feature which does violence to the essence of liberal capitalism under which money must be earned through work or the use of capital.

Sources of money in the fascist State are open to those who have power, simply by virtue of their power. Nazi officials, though they cannot take what they want without paying for it, are in a position to obtain money for themselves by merely taking it from capitalists who have funds available with which to purchase influence and protection.

This power is not illegal but grows naturally out of the system and is organized and made legitimate by the State. It is exercised by State organizations representing naked power—the S.S. (Elite Guard), the regular police forces under the command of Party leaders, the fanatics of the Hitler Youth organization, the Gestapo—all led by Party members who are personally tied up with one leader or another.

The leaders of these groups operate without the restriction of a constitution or of courts, and they wield a tremendous influence upon the economic and business life of the nation.

In this set-up, private capitalists who have funds at their disposal naturally still exert great influence. The social background of the Nazi official renders him particularly responsive to the lure of money and private property. As a former member of the ruined middle class, he lost his savings and economic security in the struggle for existence. His low salary as a State official would seem to bar him from wealth. But in his hands he now holds naked power—and the capitalist must share his funds with very many State officials if he wishes to share their political power, to win their favor and, thereby, provide for his own necessities.

Despite the great centralization of power in the hands of the highest leaders of the Party, there is wide variety in the role played by the provincial or municipal bureaucrats in their relations with private capital. Certain capitalists are so situated that they share in the power which a Party leader has at his disposal. A big industrialist, for example, who is in close contact with one of the important leaders of the Party, himself becomes an authority to the minor Party leader in his district. He reflects the authority of the national leader by whom he is befriended. He might even become a Party leader himself, at least of the provincial or district bureaucracy. Herr Thyssen and Herr Krupp need not court their district Party leaders. They themselves are greater authorities than the minor leaders, although neither Herr Thyssen nor Herr Krupp could defy the will of Hitler. Manufacturers who are of importance only on a provincial scale will endeavor to gain influence inside the district Party leadership—a low rung of the Party ladder—while the small businessman will be glad if he succeeds in being on good terms with his local leader.

Behind the scenes, different business interests compete with each other, influencing the “leaders” and trying to get their representatives appointed to key positions. The greater financial strength of the big concerns and trusts facilitates their getting into close contact with the chief political leaders.

Herr Kurt Weigelt is a leading member of the Kolonialpolitisches Amt of the N.S.D.A.P. He is also a managing director of the Deutsche Bank! Furthermore, Herr Weigelt is a member of the Supervisory Board of the Deutsch-Ostafrikanische Gesellschaft, Deutsch-Asiatische Bank, Dette Publique Ottomane, Straits and Sunda Syndicate (Batavia) and of other colonial enterprises. The Bureau for Foreign Affairs of the N.S.D.A.P. is under the leadership of an old Party member, but one of its National Office leaders is Herr Werner Daitz, a director of the Possehl concern, and a member of the Supervisory Board of two very powerful industrial concerns—Kloeckner and Flick. Obviously, big industrialists have been more successful than other groups in penetrating the decisive committees of the Party, while the Party permeates the whole governmental bureaucracy.

There is a general correlation between the size of a business and the rank of the Nazi officials with whom personal contact is established. This correlation is weakest just where the need is greatest. There are too many small businessmen seeking the favors of the local Party leader, and they do not have enough money to make the granting of such favors interesting to him.

Of all businessmen the small shopkeeper is the one most under control and most at the mercy of the Party. The Party man, whose good will he must have, does not live in faraway Berlin; he lives right next door or just 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 or to reveal any kind of dissatisfaction. But how can Herr A., a shoemaker in Augsburg, South Germany, avoid grumbling if he has to pay about 28 per cent of his small income—less than the wage of an industrial worker—for taxes. His case is quite typical.

In 1937-1938, Herr A. had a total income of 2,400 marks. He paid 1,012 marks for materials, tools, and costs for the maintenance of his workshop. His net income was 1,012 marks. But he must pay about 28 per cent of his small net income (88 marks monthly) for taxes and compulsory contributions, as follows:

 

			2 per cent Turnover Tax	48	marks
			Income Tax	85	“
			Trade Tax	10	“
			Municipality Tax	15	“
			Citizen Tax (Head Tax)	36	“
			Church Tax	3	“
			Guild Contribution	24	“
			Winter Help	3	“
			Contribution for Chamber of Artisans	4	“
			Health Insurance	60	“
				288	“

The following story illustrates the plight of the independent artisan under the new regime. A Berlin locksmith, whom we shall call Herr Z., had a small but long-established shop. His father had owned it before him, and his grandfather before that. He had a modest but very steady trade in the neighborhood, consisting mostly of contracts to keep the locks of apartment houses in order. He had never engaged in politics.

About two years ago another locksmith, Herr Y., came into the district and opened a shop directly opposite Z.’s. Y. was an old Party member and also belonged to the S.S. He was a regular attendant at Party functions, and many of the neighbors suspected him of being connected with the Gestapo, the dreaded Secret State Police. It was remarkable how suddenly any neighborly gathering would break up when Y. joined it.

Owing to his being an outsider and to the aversion he aroused in the neighborhood, Y.’s business did not prosper particularly at first. Then, gradually, a change set in, which was brought about in the following way. Each of the apartment houses with which Z. enjoyed a repair contract had a Nazi housewatcher or Blockwalter. These are reliable Party members whose job it is to keep an eye on everyone in their apartment house, or their city block, and to report any person suspected of being a “dangerous element.” Y. knew the local Party secretary well and, in due time, denounced Z. as a “dangerous element,” constantly criticizing the system and stirring up his customers against it. As a result, the local Party secretary found it necessary “in the interest of the State” to influence the Nazi superintendents to transfer all their repair business to his friend Y.

Another report tells of the vain fight of the owner of a newspaper stand against a monopoly protected by the Nazi-dominated court.

At a Hamburg railway station, Herr P. used to sell his newspapers and magazines. He had a good stand which had been installed by his father many years before. Travelers who pass that station today can no longer meet Herr P., for after four years of National Socialism he had to leave his stand, having been put out of business by a large distributing concern, the Norddeutsche Zeitschriftenzentrale. This concern has close relations with influential Party leaders in Hamburg and dictates its terms to independent newspaper dealers. Those who do not accept the terms get no newspapers. Herr P., determined to defend his economic independence, appealed to the law. Believing Hitler’s promises to the small businessman, he thought the courts would surely decide in his favor. But the decision of the court fully upheld the Norddeutsche Zeitschriftenzentrale, declaring:

In the economic struggle the right of anybody to pursue his own interests even at the expense of somebody else cannot be denied.… This applies also to monopolist articles.… The proprietor of a monopoly has the right to exploit his monopolist position.… The monopolist power has not been misused if it supplies one businessman with and excludes another businessman from the supply of monopolist articles.1

The authoritarian position of the provincial and local bureaucrats—and the degree to which the local Party bureaucracy is independent of industrialists and businessmen—varies with the social structure in different sections of the country. In districts where big industrial magnates have direct relations with the top flight of Party leaders, the local bureaucracy is largely dependent on—in some cases, a tool of—the big concern or trust. In districts where only small and medium-sized firms exist, however, the Party bureaucracy is much more authoritarian and independent.

A dual power exists under fascism: the indirect power of money and the direct power of the Party leader.

The minor Party leader of the district is dominated by the power of big money, but he is able to exercise his power over the smaller businessman and to extort from him contributions to funds under his control. However, in certain situations, this minor Party official might also become a threat to the big businessman by virtue of his position as a functionary in the State apparatus who takes his orders directly from the Fuehrer.

When the industrialist pays money to a Party official to obtain privileges, that is indirect power—corruption as we know it. But when the Party official extorts tribute as a result of the capitalist’s outright fear, without guaranteeing the latter an equivalent in return, that is an example of direct power and is the distinct contribution of fascism to corruption as such.

If we are to seek an historic parallel, we must go back to feudal times. The small landed proprietor, who was a helpless victim of attacks and pillaging by war lords and knights, preferred to put himself under the “protection” of one feudal lord to whom he paid a regular tribute and from whom he expected a certain measure of protection against the attacks of other feudal barons.

Most businessmen in a totalitarian economy feel safer if they have a protector in the State or Party bureaucracy. They pay for their protection as did the helpless peasants of feudal days. It is inherent in the present lineup of forces, however, that the official is often sufficiently independent to take the money but fails to provide the protection.

The preceding chapter described the decline and ruin of the genuinely independent businessman, who was the master of his enterprise, and exercised his property rights. This type of capitalist is disappearing but another type is prospering. He enriches himself through his Party ties; he himself is a Party member devoted to the Fuehrer, favored by the bureaucracy, entrenched because of family connections and political affiliations. In a number of cases, the wealth of these Party capitalists has been created through the Party’s exercise of naked power. It is to the advantage of these capitalists to strengthen the Party which has strengthened them. Incidentally, it sometimes happens that they become so strong that they constitute a danger to the system, upon which they are liquidated or “purged.”

A few pointed examples of Nazi “get-rich-quick” success stories follow:

In Munich, Party Comrade Christian Weber’s rise to wealth was meteoric. In 1932 he was employed as a janitor at the Blauer Ochsen restaurant where he devoted all his spare time to Nazi activity. As an old Party fighter he is now one of the wealthiest and most powerful of Munich’s citizens. This former janitor now sports a string of race horses, is the proprietor of several transportation companies and owns the largest tract of land in Daglfing. He owns the big Hotel Wagner in Munich and the brewery connected with the hotel. He practically controls all the gas stations in Munich, and the suburban bus traffic, a source of great income in itself. Somehow, he learned in advance of the plan to construct an airdrome at Erding, bought land there cheap from the peasants, and sold it to the State at a handsome profit. A similar transaction in Reim, near Munich, where the largest airdrome in Europe is to be erected, added 500,000 marks to Weber’s fortune. The land was purchased with State bonds.

Comrade Weber feels quite safe, for he is a personal friend of the Fuehrer himself. Weber once heard that the Gestapo was keeping a file in which the facts as to his graft occupied a prominent place. He went to Gestapo headquarters, was given the file, and destroyed it.

A minor State official in Bremen was charged with embezzlement of State funds. In defense he said: “The President of our Senate, Party Comrade Heidrich, has embezzled over 1,500,000 marks from a foundation established as a legacy by citizen Wolter. Our S.S. and S.A. leaders got a share of the spoils. One cannot take amiss what the big leaders do and should not be condemned for following their example.” Detailed proof of the fraud perpetrated by the Bremen leaders was given to the court. The only result of these revelations was that Heidrich no longer appears quite so prominently at meetings and in the newspapers. He still keeps his job, and no one dares mention the facts exposed at the trial. The minor official is, of course, in prison, not so much for his crime as for his indiscretion.

Rudolph Hess, prominent member of the Reich Government as personal representative of the Fuehrer, was an undistinguished, unknown middle-class citizen when he entered the Nazi ranks. Recently he had built, for his own use, one of the finest and most luxurious homes in Germany. German industrialists have difficulty obtaining building materials and labor. Hess did not.

Propaganda Minister Goebbels was an impoverished intellectual in the days when the menace of fascism seemed remote to the German people. Until 1933 he lived on the meager salary which he received as a Party functionary. His rise illustrates the operation of direct power—getting without giving. He simply let it be known to his Party friends in the Municipal Council of Berlin that a large gift would be acceptable to him. He is now the owner of extensive estates near Berlin, formerly the property of the municipality, recently given to him as a “present” by the Berlin Chamber of Commerce in recognition of his “services to the nation.”

Hitler, too, receives liberal presents. On Obersalzberg, near his domicile, Wachenfeld, a new estate has been created. The State bought up all the peasant holdings and demolished the farm buildings. In a short time there will be a model farm, under a management appointed by Hitler, with the most modern technical equipment—a gift from Hitler to Hitler.

This is only the latest of Hitler’s acquisitions. He is a “partner” in the Franz Eher Publishing Company in Munich—the most prosperous in Germany. It controls more newspapers than did even Hugenberg when he was leader of the Deutsch-Nationale Volkspartei (Conservative Nationalists). The author of Mein Kampf has received royalties of several million marks; over 5,000,000 copies of the book have been printed. It is sold under State compulsion. Hitler’s castle was bought with State funds, not with his private funds. It must be added that Hitler is a vegetarian, a “mystic” and a “romantic” who disapproves of drinking parties and other extravagant behavior, and who is extolled as a model of modesty and heroic simplicity—extolled as such by Party bureaucrats anxious to counterbalance widespread whispers about orgies and extravagances of Party leaders.

These cases feature outstanding “leaders.” However, the same process is producing countless nouveaux riches in almost every town and district throughout Germany.

In an atmosphere of general distrust and corruption, “friends” help “friends” among the Nazis, but who can be sure of continued friendship and loyalty in an emergency, in a land where honor is a lost virtue? New jealousies constantly flare up among intriguing careerists who are apt to stab their best friends in the back. Family ties have acquired special and considerable importance—blood is thicker than water. A relative to whom one is attached is likely to be “reliable.” Fortunate indeed is one who has a member of his family in the upper bureaucracy. Businessmen who possess relatives in the Party apparatus are relatively well protected from abuse by Party officials and can usually win special privileges which give them advantages over competitors less fortunately connected. These privileged capitalists are in turn willing to make larger contributions to the Party than others do. This business aristocracy is very restricted; it is almost impossible for outsiders to enter this inner circle.

The life of the German businessman is full of contradictions. He cordially dislikes the gigantic, top-heavy, bureaucratic State machine which is strangling his economic independence. Yet he needs the aid of these despised bureaucrats more and more, and is forced to run after them, begging for concessions, privileges, grants, in fear that his competitor will gain the advantage.

The press represents another unique feature of Nazi corruption. Under a parliamentary democracy, such as in France, political influence can be secured by using money to create favorable or unfavorable public opinion. Political corruption of this type cannot exist under totalitarian rule.

It is impossible in the totalitarian countries for a capitalist or political group to buy a newspaper, or to influence a newspaper’s editorial policy through advertising or other financial means, in order to support a candidate in an election campaign or to oppose some proposed legislation. There are no parties or candidates to support or oppose and legislation is not proposed but decreed. The sole contribution to an “election” campaign would be a “gift,” to the ruling party, for fascist propaganda. The logical outcome of a fascist system is that all newspapers, news services, and magazines become more or less direct organs of the fascist party and State. They are governmental institutions over which individual capitalists have no control and very little influence except as they are loyal supporters or members of the all-powerful party.

This does not mean that there are no connections between newspapers and private groups. The Frankfurter Zeitung is still under the influence of the chemical trust, I. G. Farbenindustrie A.G.; the Deutsche Bergwerks Zeitung and the Deutsche Allgemeine Zeitung are closely connected with the iron and steel trust, while the Voelkischer Beobachter is directly the property of the Nazi party—i.e., the personal property of the Fuehrer and his business manager. These distinctions in newspaper ownership still find expression in the treatment given certain economic questions in the various papers. While these differences are sometimes illuminating they are relatively slight and never lead to open disagreements. Any differences of opinion are found solely in indirect allusions recognizable only by experts; 99 per cent of the contents of all newspapers are practically identical.

This absence of opportunity to buy editorial opinion does not mean that the editors of the newspapers in totalitarian countries are more honest than their brothers in the democracies. In countries where freedom of the press exists, editors may often be corrupt, but they are under no compulsion to be dishonest. If an English or American newspaper lies or distorts the facts for the benefit of certain business interests, if privately owned public utilities buy newspaper space for propaganda against public ownership, they risk exposure by rival independent newspapers, or investigation by governmental committees.

Under fascism or any totalitarian regime an editor no longer can act independently. Opinions are dangerous. He must be willing to print any “news” issued by State propaganda agencies, even when he knows it to be completely at variance with the facts, and he must suppress real news which reflects upon the wisdom of the leader. His editorials can differ from another newspaper’s only in so far as he expresses the same idea in different language. He has no choice between truth and falsehood, for he is merely a State official for whom “truth” and “honesty” do not exist as a moral problem but are identical with the interests of the Party.

The fascist dictator cannot be defeated in elections. He tolerates no criticism or opposition, inside or outside his party. The civil liberties which make it possible for a political opposition to get rid of unpopular rulers have been destroyed. Hence the fascist politicians can be far more independent of the financial oligarchy than is ever possible under the most autocratic of parliamentary systems. And it follows that fascist capitalists who pay graft do not necessarily get their quid pro quo.

Such a system also changes the psychology of businessmen. Their experiences teach them that the old right of property no longer exists. They find themselves compelled to respect the “national interest” or the “welfare of the community.” On the other hand, they also learn that the privileges and advantages which a businessman might obtain from the State depend largely on “good connections” with State officials. Those who do not play the game but who still abide by the old rules of fair play cannot survive in this new kind of economic struggle. Businessmen must claim that everything they do, any new business for which they want a certificate, any preferment in the supply of raw materials, etc., is “in the interest of the national community.” This claim is justified in so far as a business transaction or investment serves to strengthen the country’s military position. Inevitably, every businessman endeavors to identify his personal and private interests with the “national interest,” and it depends largely on political “connections” and influence whether and how far that claim will be regarded as justified by the State. Under such conditions, corruption is not merely a vice but an economic necessity.

Laws and decrees are issued by the State according to immediate needs and, emergencies. Officials, trained only to obey orders, have neither the desire, the equipment, nor the vision to modify rulings to suit individual situations. 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. So does corruption become a liberative force under fascism!

The novel feature of corruption under fascism is that despite the magnitude it has assumed, no businessman can be sure that he will get the expected results, nor can he foretell what the party leader whom he has treated “generously” will do next. The party member is merely a cog in a gigantic machine. The authoritarian rule of the party relies upon a top stratum of old party members, an “old guard” closely connected with the executives on top through many personal ties, common interests and experiences. Nothing is so zealously watched by authoritarian leaders as the first signs of any new group arising which may endanger their supremacy. This makes it impossible for even the most important industrialist to secure for himself and his corporation the control of the Party machine, to become the “power behind the throne.”

Apparently, the businessman has no way out of this plight. New economic difficulties for the State offer no hope of a change. On the contrary, the Nazis, instead of reducing state expenditures, turn to the capitalists for sufficient funds to prevent any economic breakdown which might endanger the fascist system and the self-appointed representatives of the “racial community.”