Part Two




Chapter Thirteen



A review of the science of cancer therapy; a summary of the politics of cancer therapy; the early history of the I.G. Farben chemical and pharmaceutical cartel; the cartel's early success in the United States; and its "marriage" with DuPont, Standard Oil, and Ford.

A review of the science of cancer therapy; a summary of the politics of cancer therapy; the early history of the I.G. Farben chemical and pharmaceutical cartel; the cartel's early success in the United States; and its "marriage" with DuPont, Standard Oil, and Ford.

In Part One we presented the science of cancer therapy. Before proceeding with Part Two, the politics of cancer therapy, let's review briefly the major points previously covered.

As we have seen, cancer is the unnatural and unchecked growth of trophoblast cells which, themselves, are a normal and vital part of the life process.

Trophoblast cells are produced in the body as a result of a chain reaction involving the hormone estrogen. Estrogen always is present in large quantities at the site of damaged tissue, possibly serving as an organizer or catalyst for body repair.

Cancer, therefore, can be triggered by any prolonged stress or damage to the body - whether it be smoking, or chemical additives to our food, or even certain viruses - for these are what trigger the production of estrogen as part of the normal healing process.

Nature, fortunately, has provided a metabolic barrier - a complex mechanism to limit and control the growth of these trophoblast cells. Many factors are involved, but the most direct-acting of them appear to be the pancreatic enzymes and the food factor known as a nitriloside or vitamin B17, a unique compound that destroys cancer cells while nourishing and sustaining all others.

The answer to cancer, therefore, is to avoid excessive damage or stress to the body, to minimize foods that preempt the pancreatic enzymes for their digestion, and to maintain a diet rich in all minerals and vitamins - especially vitamin B17.

Opposition to the nutritional concept of cancer is strong and vocal. This concept has been branded as fraud and quackery by the Food and Drug Administration, the American Cancer Society, and the American Medical Association.

It is important to stress again, however, that the average physician is not part of this opposition - except, perhaps, to the extent to which he trustingly accepts the official pronouncements of these prestigious bodies. Most doctors, however, would be more inclined to give Laetrile a try before passing final judgment.


As a result, an increasing number of physicians all around the world now are testing and proving the value of vitamin therapy in their own clinics. Doctors in the United States, however, are forbidden both by law and by the pressure of peer review from experimenting with unorthodox therapies. Consequently, they are not able to find out if Laetrile works, only if it is said to work.

Meanwhile, with the evidence continuing to mount in favor of vitamin therapy, the opposition and the controversy also continue to grow. The reason is both simple and unpleasant. Cancer, in the United States at least, has become a multi-billion dollar business. Not only are fortunes made in the fields of research, drugs, and X-ray, but political careers are enhanced by promising ever larger tax-supported programs and government grants.

It is an ominous fact that, each year, there are more people making a living from cancer than are dying from it. If the riddle were to be solved by a simple vitamin found abundantly and inexpensively in nature, this gigantic commercial and political industry could be wiped out overnight. It is not unexpected, therefore, that vested interest should play an important role in clouding the scientific facts.

This does not mean that the surgeons, the radiologists, the druggists, the researchers, or the thousands of people who supply and support them would consciously withhold a control for cancer. They are, for the most part, highly motivated and conscientious individuals who would like nothing better than to put an end to human suffering.


Furthermore, they and their families succumb to cancer the same as the rest of the population. Obviously, they are not keeping any secret cures to themselves.

But does it necessarily follow that all opposition is innocent? Are we to believe that personal gain or vested interest is not a factor anywhere along the line?


The purpose of the second half of this presentation is to provide the answers to those questions. It will be demonstrated that, at the top of the economic and political pyramid of power there is a grouping of financial, industrial, and political interests that, by the nature of their goals, are the natural enemies of the nutritional approach to health. It will be shown that they have created a climate of bias that makes scientific objectivity almost an impossibility, and that they, themselves, often become the victims of their own bias.

It will be shown that these forces wield tremendous influence over the medical profession, the medical schools, and the medical journals; and that the average doctor is the last to suspect that much of his knowledge and outlook have been shaped subtly by these non-medical interests.

It will be shown, also, that this elite group can move long levers of political power that activate government agencies in their behalf; and that these agencies, which supposedly are the servants and protectors of the people, have become the mechanism of vested interest.

These are serious indictments. They are not made lightly, nor should they be accepted without challenge. So let us turn now to the record to see what evidence there is to support them.

The information that follows is taken primarily from government hearings and reports published by various Senate and House committees from 1928 to 1946. Principal among these are the House Subcommittee to Investigate Nazi Propaganda in 1934, the Special Senate Committee Investigating the Munitions Industry in 1935, the report on cartels released by the House Temporary National Economic Committee in 1941, the Senate Special Committee Investigating the National Defense Program in 1942, the report of the Senate Patents Committee in 1942, and the Senate Subcommittee on War Mobilization in 1946.

Other sources include the Senate Lobby Investigating Committee, the Senate Committee on Banking and Currency, court records of the Nuremberg trials, and dozens of volumes found as standard references in any large library. In other words, although the story that follows is not widely known, it is, nevertheless, part of the public record and can be verified by anyone. This is that story.

In the years prior to World War II, there came into existence an international cartel, centered in Germany, that dominated the world's chemical and drug industries. It had spread its operations to ninety-three countries and was a powerful economic and political force on all continents.


It was known as I.G. Farben.

I.G. stands for Interssen Gemeinschaft, which means "community of interests" or, more simply, "cartel."


Farben means "dyes," which, because the modern chemical industry had its origin in the development of dyestuffs, now is a deceptively innocent sounding category that, in reality, encompasses the entire field of chemistry, including munitions and drugs.

Munitions and drugs can be powerful human motivators. One offers the promise of health and prolonged life, while the other can be the carrier of death and destruction. There can be no greater earthly desire for men than to have the first but to avoid the second. He who controls munitions and drugs, therefore, holds the ultimate carrot and stick.

The basic ingredient for almost all chemicals - including those that wound as well as those that heal - is coal tar or crude oil.


With the advent of the internal combustion engine, the value of these raw materials as the precursor of gasoline has given those who control their chemical conversions a degree of power over the affairs of the world that is frightening to contemplate. In other words, the present movement of civilization is driven by the engine of chemistry. But the fuel of chemistry is oil. Whereas gold once was the key to world power, now it is oil. And it has come to pass that it is the same men who now control both.

Howard Ambruster, author of Treason's Peace, summarizes:

I.G. Farben is usually discussed as a huge German cartel which controls chemical industries throughout the world and from which profits flow back to the headquarters in Frankfurt. Farben, however, is no mere industrial enterprise conducted by Germans for the extraction of profits at home and abroad. Rather, it is and must be recognized as a cabalistic organization which, through foreign subsidiaries and by secret tie-ups, operates a far-flung and highly efficient espionage machine - the ultimate purpose being world conquest - and a world superstate directed by Farben.(1)

1. Howard Ambruster, Treason's Peace, (New York: Beechhurst Press, 1947), p. vii.


Much of the earlier scientific knowledge that made it possible for German industry to assume world leadership in the field of organic chemistry was the result of the pioneering genius of the well known chemist, Justus von Leibig.


It is an interesting coincidence that Leibig, shortly after he completed his university training in 1824, first attracted attention within the scientific community by publishing a paper on the chemical properties of the bitter almond, a substance rich in vitamin B17. He identified the presence of benzaldehyde, an ingredient that acts against cancer cells, but there is no indication that he ever followed up these studies with particular application to cancer therapy.(1)

I.G. Farben was created in 1926 by the dual genius of a German industrialist by the name of Hermann Schmitz and a Swiss banker by the name of Eduard Greutert.(2) Greutert's stock in trade was keeping "loose books" and creating financial mazes to conceal Farben ownership of companies. Schmitz was a director of the great Deutsche Reichsbank and of the Bank of International Settlements headquartered in Switzerland.


And so, from the beginning, the leaders of I.G. Farben had been a part of the international banking structure.

By the beginning of World War II, I.G. Farben had become the largest industrial enterprise in Europe, the largest chemical company in the world, and part of the most powerful cartel in history.(3) It would take over an hour just to read aloud the names of the companies around the world with which it had interlocking cartel agreements. There were, in fact, over 2,000 of them.(4)


1. Richard Sasuly, I.G. Farben, (New York: Boni & Gaer, 1947), p. 21.
2. Greutert was a German national also. His bank was located in Basel and was known as Greutert & Cie.
3. This was the opinion of the U.S. Department of Justice as expressed in U.S. vs. Allied Chemical & Dye Corp. et. ah, U.S. District Court of New Jersey, May 14, 1942.
4. General Eisenhower, as Supreme Commander in the American Zone of Occupation, reported that I.G. had stock interests in 613 corporations, including 173 in foreign countries, piled up assets of 6 billion Reichsmarks, and "operated with varying degrees of power in more than 2,000 cartels." See New York Times, Oct. 21, 1945, Sec. 1, pp. 1,12.


When the list is narrowed to include just those companies which it owned or controlled outright, it still would fill many pages in a book. Here are just a few of the better known.


Inside Germany, the cartel included the top six chemical firms and extended to virtually all of heavy industry as well, especially the steel industry. Hermann Schmitz was a dominant figure in the Krupp Steel Works and was on its board of directors as well as on the board of the major steel combine, Vereinigte Stahlwerke.

All-in-all, more than 380 German firms were controlled by the cartel.

Elsewhere in Europe, I.G. Farben dominated such industrial giants as Imperial Chemical in Great Britain, Kuhlmann in France, and Allied Chemical in Belgium.


Leslie Waller, in his The Swiss Bank Connection, provides this modest description:

Through the Basel connection, I.G. Farben spread out across the face of the globe widening its grasp of the chemical business by establishing thoroughly concealed interests in companies in Belgium, England, France, Greece, Holland, Hungary, Norway, Poland, Romania, various nations of South America, Sweden and the United States.(1)

1. Leslie Waller, The Swiss Bank Connection, (New York: Signet Books, New American Library, Inc., 1972), p. 162.


In the United States the cartel had established important agreements with a wide spectrum of American industry including

  • Abbott Laboratories

  • Alcoa

  • Anaconda

  • Atlantic Oil

  • Bell and Howell

  • the Borden Company

  • the Carnation Company

  • Ciba-Geigy

  • Dow Chemical

  • DuPont

  • Eastman Kodak

  • Firestone Rubber

  • Ford Motor

  • General Drug Company

  • General Electric

  • General Mills

  • General Motors

  • General Tire

  • Glidden Paint

  • Goodyear Rubber

  • Gulf Oil

  • the M.W. Kellogg Company

  • Monsanto Chemical

  • National Lead

  • Nestle's

  • Owl Drug Company

  • Parke-Davis and Company

  • Pet Milk

  • Pittsburgh Glass

  • Proctor and Gamble

  • Pure Oil

  • Remington Arms

  • Richfield Oil

  • Shell Oil

  • Sinclair Oil

  • Socony Oil

  • Standard Oil

  • Texaco

  • Union Oil

  • U.S. Rubber,

...and hundreds more.

The list of companies which it owned outright or in which it had (or eventually would have) a dominant financial interest is equally impressive.


It includes:

  • the Bayer Co. (makers of aspirin)

  • American I.G. Chemical Corporation (manufacturers of photographic film and supplies)

  • Lederle Laboratories

  • the Sterling Drug Company

  • the J.T. Baker Chemical Company

  • Winthrop Chemical

  • Metz Laboratories

  • Hoffman-LaRoche Laboratories Whitehall Laboratories

  • Frederick Stearns and Company

  • the Nyal Company

  • Dern and Mitchell Laboratories

  • Chef-BoyAr-Dee Foods

  • Breck Inc.

  • Heyden Anti-biotics

  • MacGregor Instrument Company

  • Antrol Laboratories

  • the International Vitamin Corp.

  • Cardinal Laboratories

  • Van Ess Laboratories

  • the William S. Merrill Company

  • the Jensen Salsberry Laboratories

  • Loesser Laboratories

  • Taylor Chemical

  • the Ozalid Corporation

  • Alba Pharmaceutical

  • Bristol Meyers

  • Drug, Inc.

  • Vegex, Inc.

  • Squibb and Sons Pharmaceutical,

...and scores of others, many of which were large enough to be holding companies which, in turn, owned numerous smaller companies - and some not-sosmall - as well.(1)


1. The listing of these firms does not imply illegality or impropriety. It is merely to establish the historical facts of either cartel contractual interlock or outright control. These facts can be verified by consulting back issues of standard business references such as Standard and Poor's Corporation Records and Moody's Industrial Manual. See also the findings of previous researchers in this field such as Cartels in Action, by Stocking and Watkins; Treason's Peace, by Ambruster; and The Devil's Chemist, by DuBois; all mentioned elsewhere in this study.

By 1929, I.G. Farben had concluded a series of limited cartel agreements with its largest American competitor, the DuPont Company.


DuPont was a major power in itself and it always had been reluctant to enter into cooperative ventures with Farben which usually insisted on being the dominant partner. Consequently, many of the agreements were made indirectly through Farben's subsidiary, Winthrop Chemical, through Imperial Chemical (its cartel partner in Great Britain), and through Mitsui, its cartel partner in Japan.


By 1937, American I.G. had substantial stock holdings in both DuPont and Eastman Kodak. The Olin Corporation, a Farben holding, entered into the manufacture of cellophane under a DuPont license.

The primary reason that such an industrial giant as DuPont finally relented and entered into cartel agreements with I.G. is that Standard Oil of New Jersey had just done so. The combination of these two Goliaths presented DuPont with a serious potential of domestic competition.


DuPont might have been able to stand firmly against I.G. alone, but it could not hope to take on both I.G. and the great Rockefeller empire as well. Standard Oil, therefore, was the decisive factor that brought together the ultimate "community of interest" - I.G., Standard Oil, Imperial Chemical, DuPont, and as we shall see, Shell Oil.

The agreement between I.G., Standard, and Shell was consummated in 1929. How it came about is a fascinating story and sheds considerable light on the behind-the-scenes maneuvers of companies that, in the public eye, are perceived as competitors.

One of the factors leading to Germany's defeat in World War I was its lack of petroleum. German leaders resolved never again to be dependent upon the outside world for gasoline. Germany may not have had oil deposits within its territory, but it did have abundant reserves of coal. One of the first goals of German chemists after the war, therefore, was to find a way to convert coal into gasoline.

By 1920, Dr. Bergius had discovered ways to make large quantities of hydrogen and to force it, under great pressure, at high temperatures, and in the presence of specific catalysts, into liquid coal products. The final steps into refined gasoline were then assured. It was only a matter of perfecting the hydrogenation process. I.G. suddenly was in the oil business.

One might assume that the cartel would have eagerly gone into production. But the plan, instead, was to interest existing oil producers in their process and to use their patents as leverage to gain concessions and business advantages in other areas. This was to be the bait to ensnare Standard Oil which, in turn, would bring in DuPont. And it worked exactly as planned.

Frank Howard of Standard Oil was invited to visit the great Baldische plant at Ludwigshafen in March of 1926.


What he saw was astounding - gasoline from coal! In a near state of shock, he wrote to Walter Teagle, president of Standard Oil:

Based upon my observations and discussions today, I think that this matter is the most important which has ever faced the company...

The Baldische can make high-grade motor oil fuel from lignite and other low-quality coals in amounts up to half the weight of the coal. This means absolutely the independence of Europe on the matter of gasoline supply. Straight price competition is all that is left... I shall not attempt to cover any details, but I think this will be evidence of my state of mind.(1)

1. Sasuly, I.G. Farben, op. cit., pp. 144-145.


The following three years were devoted to negotiation.


The cartel agreement was signed on November 9, 1929 and it accomplished several important objectives: First, it granted Standard Oil one-half of all rights to the hydrogenation process in all countries of the world except Germany. This assured Standard that it would control, or at least profit from, its own competition in this field. In return, Standard gave I.G. 546,000 shares of its stock valued at more than $30,000,000.


The two parties also agreed not to compete with each other in the fields of chemistry and petroleum products. In the future, if Standard Oil wished to enter the field of industrial chemicals or drugs, it would do so only as a partner of Farben.


Farben, in turn, agreed not to enter the field of petroleum except as a joint venture with Standard. Each party disavowed,

"any plan or policy" of "expanding its existing business in the direction of the other party's industry as to become a serious competitor of that other party."(1)

As Frank Howard of Standard Oil phrased it:

The I.G. may be said to be our general partner in the chemical business... The desire and intention of both parties is to avoid competing with one another.(2)

To facilitate the implementation of this agreement, several jointly owned companies were formed.


One of these was the International Hydrogenation Patents Company (I.H.P.). Shell Oil also became a partner in this venture. Its purpose was not to promote the international use of the hydrogenation process, but to keep the lid on it as much as possible. An official Standard memorandum declared:

I.H.P. should keep in close touch with developments in all countries where it has patents, and should be fully informed with regard to the interest being shown in hydrogenation and the prospect of its introduction... It should not, however, attempt to stir up interest in countries where none exists.(3)


1. George Stocking and Myron Watkins, Cartels in Action, (New York: The Twentieth Century Fund, 1946), p. 93.
2. As quoted by Ambruster, Treason's Peace, op. cit., p. 52.
3. Ibid., pp. 492, 493.

The other jointly-owned company was created in 1930 and was known as Jasco, Inc. Its purpose was to allow each company to share in any future new chemical developments of the other. Under the agreement, whenever I.G. or Standard developed a new chemical process, it would offer to the other party an option to obtain one-third interest in the patent.


Jasco then would exploit the marketing of that process throughout the world.

Here, then, was a perfect example of how two giant industrial empires came together, a step at a time, until eventually, in large areas of their activity, they were moving in unison as one. The goal of each simply was to remove all marketplace competition between themselves and assure that each had a secure guarantee of future growth and profit.


Dr. Carl Bosch, head of I.G. at the time, was not merely being picturesque when he said that I.G. and Standard had "married." He was describing quite accurately the philosophical essence of all major cartel agreements.

Space does not permit a detailed chronicle of all of I.G. Farben's polygamous marriages with other major U.S. firms, but at least two more should be mentioned in passing. On October 23, 1931, I.G. and Alcoa signed an accord, known as the Alig Agreement, in which the two companies pooled all their patents and technical knowledge on the production of magnesium. The other industrial giant that became part of the international web was none other than the Ford Motor Company.

When Henry Ford established a branch of his company in Germany, I.G. Farben immediately purchased most of the forty percent of the stock which was offered for sale.


The marriage was completed when Carl Bosch, I.G.'s president, and Carl Krauch, I.G.'s chairman of the board, both joined the board of directors of the German Ford Company. In the United States, Edsel Ford joined the board of directors of the American I.G. Chemical Company as did Walter Teagle, president of Standard Oil, Charles E. Mitchell, president of Rockefeller's National City Bank of New York, and Paul M. Warburg, brother of Max Warburg who was a director of the parent company in Germany.

Paul Warburg was one of the architects of the Federal Reserve System which placed control of the American monetary system into the hands of the same banking circles he represented.


According to the memoirs of Frank Vanderlip, this scheme was hatched at a secret meeting on Jekyll Island in Georgia attended by:

  • Vanderlip himself

  • Senator Aldrich (both representing Rockefeller)

  • Henry Davison, Charles Norton, and Benjamin Strong (representing J.P Morgan)

  • Abraham Piatt Andrew (from the Treasury)

  • Paul Warburg (representing the Rothschilds in England and France)

Warburg's brother, Felix, married Frieda Schiff, the daughter of Jacob Schiff who headed the banking firm of Kuhn, Loeb, and Company.(1) Years later, according to his grandson John, Jacob Schiff had given twenty million dollars to Trotsky for use in establishing a Soviet Dictatorship in Russia.(2)

1. For the complete story of how the Federal Reserve System operates as a banking cartel under the guise of a government agency, read G. Edward Griffin's The Creature from Jekyll Island; A Second Look at The Federal Reserve System (Westlake Village, CA: American Media, 1995)
2. The comments by John Schiff first appeared in the Charlie Knickerbocker column of the New York Journal American, Feb. 3, 1949. See also the exclusive interview with Alexander Kerensky, leader of the Russian revolution, U.S. News & World Report, Mar. 13,1967, p. 68.

There is much more of significance known about these men, but the bottom line is that they were more than mere businessmen looking for a means of expanding markets and securing profits.


They were part of that special breed whose vision extends far beyond profit-and-loss ledgers to the horizons of international intrigue and politics.

To fully understand that aspect of their careers, it is necessary first to understand the nature of cartels. A cartel is a grouping of companies that are bound together by contracts or agreements designed to promote inter-company cooperation and, thereby, reduce competition between them. Some of these agreements may deal with such harmless subjects as industry standards and nomenclature.


But most of them involve the exchange of patent rights, the dividing of regional markets, the setting of prices, and agreements not to enter into product competition within specific categories. Generally, a cartel is a means of escaping the rigors of competition in the open free-enterprise market. The result always is higher prices and fewer products from which to choose.


Cartels and monopolies, therefore, are not the result of free enterprise, but the escape from it.

The motivation for businessmen to make cartel agreements is similar to that which leads laborers and skilled workers into trade unions and professional associations. They reason that by lowering the price on their product or their labor they might be able to attract a greater share of the existing market. But that is only true if others do not follow their example.


It is reasonable to assume, however, that the competition will lower its prices also in order to avoid losing patronage. A price cut by one tends to lower the prices of all. A person is encouraged, therefore, to join with other firms or other workers and agree not to follow competitive policies that will impoverish all.

This does not mean that cartel members always succeeded in eliminating all conflict or competition. Occasionally a party to an agreement will decide that the terms of the agreement no longer are acceptable and it will break away and attempt to go it alone. Price wars and fierce contests for markets periodically erupt with all the overtones of military war itself.


But, just as in the case of war between nations, eventually they come to an end. One party either is vanquished or, as is more often the case in business wars, one party clearly emerges with the dominant position, and then a "truce" and a new negotiated cartel agreement is worked out on the basis of the new balance of power.


Stocking and Watkins, writing in Cartels in Action, describe this process succinctly:

"Price wars" broke out, were terminated by "armistices," recurrently flamed up again, and finally settled into a long siege...

Chemical companies usually decide who shall sell what, where, how much, and on what terms in foreign markets, by negotiation rather than by competition, because they believe that cooperation "pays." They reach their decisions by driving hard-headed bargains. Each party tries to obtain the best terms for itself.


Thus these decisions reflect the relative bargaining power of the parties involved. This depends on many factors including the efficiency of their processes, strength of their patent positions, quality of their products, extent of their financial resources, and support of their governments. In the final analysis, the issue turns on the comparative readiness of the several parties for a competitive "war" if negotiations break down.

This kind of business rivalry differs from effective competition in that the bulk of its benefits are likely to go to the cartel members rather than to the consumers.(1)

This is an accurate description of the hidden reality behind most of the world's major products today.


Stocking and Watkins made extensive calculations of pre-war trade and proved quite convincingly that, in the United States, in the year 1939, cartels controlled eighty-seven percent of the mineral products sold, sixty percent of agricultural products, and forty-two percent of all manufactured products. Needless to say, the trend has greatly accelerated since 1939, so one can well imagine what the situation is like today. The chemical industry - and that includes pharmaceuticals - is completely cartelized.


Even as far back as 1937, this fact was so obvious that Fortune magazine editorialized:

The chemical industry, despite its slowly lowering curve of real prices, is an "orderly" industry. It was practicing "cooperation" long before General Johnson invented it in 1933. It has seldom been bedeviled by over production, has had no private depression of its own, and has not often involved itself in long or bloody price wars... By and large, the chemical industry has regulated itself in a manner that would please even a Soviet Commissar... The industry ... is ... the practitioner of one definite sort of planned economy.(2)

1. Watkins, op. cit., pp. 398, 420.
2. "Chemical Industry," Fortune, Dec, 1937, pp. 157,162.

This is reminiscent of the sentiments expressed in 1973 by the United States Tariff Commission.


In its report to the Senate, it said:

In the largest and most sophisticated multinational corporations, planning and subsequent monitoring of plan fulfillment have reached a scope and level of detail that, ironically, resemble more than superficially the national planning procedures of Communist countries.(1)

1. Report entitled Implications of Multinational Firms for World Trade and Investment for U.S. Trade and Labor, Feb. 1973, p. 159.


The comments about resembling the planned economy of a Soviet Commissar in a Communist country are quite "on target."


They shed a great deal of light on the inherent philosophy of cartels. If it is true that cartels and monopolies are not the result of free enterprise but the escape from it, then it follows that the best way to escape free enterprise is to destroy it altogether. This is why cartels and collectivist governments inevitably work together as a team. They have a common enemy and share a common objective: the destruction of free enterprise.

A million dollars put into politics to bring about the passage of a protective tariff law, a so-called fair-trade law, or an anti-quackery law, is a tremendous bargain for those who benefit. Even though these laws are masqueraded as being for the benefit of the people, in reality they are a means of putting the machinery of government into motion against cartel competitors.


They produce a return on the original investment many times over. Big government, therefore, with its capacity to regulate every facet of economic life, is the natural friend and ally of cartels and monopolies.

Cartels and monopolies, without the help of government, would be hard-pressed to exist, at least at the level they do now.


Look at any of the major world markets - in sugar, tea, chocolate, rubber, steel, petroleum, automobiles, food - any of them, and one will find a mountain of government restrictions, quotas, and price supports. And scampering all over this mountain, there is an army of lobbyists, representing special interests, applying pressures on politicians who, in turn, endorse the laws that, supposedly, are designed to protect the people.

Cartels are not alone in this racket. Organized labor sought the escape from free-market competition when it demanded government-enforced minimum wage laws and the closed shop. Farmers did the same with price supports and subsidies.


It seems that, increasingly of late, almost everyone wants the government to step in and "protect" him from the rigors of open and honest competition. The cartels are no different in this except that they were ahead of most of the others, have more money to spend, and have perfected the art to its ultimate state.

It is not merely a question of prestige, therefore, but a matter of pure necessity that large multinational corporations often have prominent political figures on their boards. ITT, for example, has displayed on its main board in New York such significant names as Eugene Black, former head of the World Bank, and John McCone, former director of the Central Intelligence Agency.


In Europe it has had such figures as Trygve Lie, first Secretary-General of the United Nations, Paul-Henri Spock of Belgium, and Lord Caccia of Britain. There was even an attempt to recruit Prime Minister Harold McMillan.(1)

1. Anthony Sampson, The Sovereign State of ITT, (New York: Stein & Day, 1973), pp. 113,114.


It is no coincidence that all of the above-named individuals are self-classified either as socialists or, at the very least, political liberals. None of them would be caught dead advocating the free enterprise system. They know that the road to wealth now is traveled, not by the carriage of industrial expertise, but by the sport car of political influence. Government is where the action is.

The consequences can be seen everywhere - especially in the world of international finance.


The situation was aptly described in the January 1973 Monthly Review of the Bank of Hawaii:

There appears to be no ready answer to the complex interrelated domestic and international developments. Those standing to lose the most include the individuals who seek to establish their own business and those independent domestic firms seeking to compete in the traditional open market place. They face increasing regimentation through bureaucratic red tape and preempted markets by federally subsidized competition.

Virtually immune are the multi-national corporations whose massive investments abroad, and effective lobbying positions, and allegiance to a world market unobstructed by local government and competition, place them in a position to not only straddle these developments but to encourage them.

Ferdinand Lundberg, in his book, The Rich and the Super Rich, put aside his Leftist cliches about the "exploitation of the working class," and his outspoken apologies for the Soviet system long enough to recognize certain truths, or half-truths at least, about the American system.


He wrote, almost with glee:

The restriction of free enterprise has also come principally from businessmen who have constantly sought to increase government regulation in their own interest, as in the case of tariffs, subsidies, and prohibition of price-cutting on trademarked items.

In fact, the interests of businessmen have changed to a considerable extent from efficiency in production, to efficiency in public manipulation, including manipulation of the government for attainment of preferential advantages...

As everything thus far inquired into has obviously flowed under the benign providence of government, it is evident that, government and politics have more than a little to do with the gaudy blooms of extreme wealth and poverty in the feverish American realm.(1)

1. Ferdinand Lundberg, The Rich and the Super-Rich, (New York: Bantam, 1968), pp. 153,154, 584.


All of which is true; but it is not all that is true.


There are two traps that can ensnare the unwary observer of these trends. The first is the hasty conclusion that cartels and monopolies are an expression of capitalism or free enterprise, and that the solution to the problem lies in the replacement of capitalism with some other kind of system. As we have emphasized, however, cartels and monopolies are just the opposite of competitive capitalism and free enterprise.

The second trap is the conclusion that the solution for the abuses of cartels and monopolies is to be found in the increase of government regulations and controls. But that is precisely the problem already. It simply is not humanly possible to draw up a new law or combination of laws granting increased power to government, supposedly to regulate commerce and to prevent monopoly and their political puppets, without accomplishing just the opposite of its stated objective.

Current anti-trust laws are a perfect example. More often than not, they end up merely being the instruments whereby one business group uses the power of government to suppress or hinder its less politically influential competitors.


Bigger and stronger government is not the solution, it is the problem!

Lundberg, like many other writers in this field, fell victim to both traps. He recognized that monopoly was not free enterprise. He even saw that government was the inseparable partner of monopoly.


But, having done so, he then turned around and opened the door for a move into bigger government, and even a "forward" step into Communism itself:

We cannot go back to competition. We must go forward to some new system, perhaps Communism, perhaps cooperativism, perhaps much more complete governmental regulation than we now have. I don't know what lies ahead and I am not particularly concerned...(1)

1. Ibid., p. 154.


There, in a nutshell, is the likely reason that Mr. Lundberg's amazingly dull and oversized book (1009 pages) has been pushed into the bestseller list by the very Establishment which, on the surface at least, he supposedly condemns.


If men like Lundberg would only stop to wonder why they are hired to teach at Establishment universities, and why their books are eagerly sought by Establishment publishers, and why they are in demand for TV and radio appearances on Establishment networks, and why they receive generous financial grants from Establishment foundations, they might begin to catch on.


The "super-rich" do not particularly care if their vast wealth and power is exposed so long as nothing practical is done to weaken that power.

If anyone has to be publicly recognized as a crusader against them, how much better it is to have someone like Lundberg, rather than an individual who also is a foe of big government.


There is a phalanx of government-worshipping intellectuals now leading the American people in their struggle against the increasingly oppressive Establishment. Yet, the Establishment calmly tolerates them and even sponsors them in their efforts. As long as they can view "much more complete government regulation" or even Communism as a step "forward," they are no threat.


To the contrary, the continued concentration of government power into the hands of a few - until it is total power - is exactly what the world's "super-rich" are determined to achieve.

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