The Swamp of Corporate Socialism | Something for Nothing

Antony Sutton (1975) - Old John D. Rockefeller and his 19th century fellow-capitalists were convinced of one absolute truth: that no great monetary wealth could be accumulated under the impartial rules of a competitive laissez faire society. The only sure road to the acquisition of massive wealth was monopoly: drive out your competitors, reduce competition, eliminate laissez-faire, and above all get state protection for your industry through compliant politicians and government regulation. This last avenue yields a legal monopoly, and a legal monopoly always leads to wealth.

This robber baron schema is also, under different labels, the socialist plan. The difference between a corporate state monopoly and a socialist state monopoly is essentially only the identity of the group controlling the power structure. The essence of socialism is monopoly control by the state using hired planners and academic sponges. On the other hand, Rockefeller, Morgan, and their corporate friends aimed to acquire and control their monopoly and to maximize its profits through influence in the state political apparatus; this, while it still needs hired planners and academic sponges, is a discreet and far more subtle process than outright state ownership under socialism. Success for the Rockefeller gambit has depended particularly upon focusing public attention upon largely irrelevant and superficial historical creations, such as the myth of a struggle between capitalists and communists, and careful cultivation of political forces by big business. We call this phenomenon of corporate legal monopoly — market control acquired by using political influence — by the name of corporate socialism.The most lucid and frank description of corporate socialism and its mores and objectives is to be found in a 1906 booklet by Frederic Clemson Howe, Confessions of a Monopolist [...]:

"This is the story of something for nothing — of making the other fellow pay. This making the other fellow pay, of getting something for nothing, explains the lust for franchises, mining rights, tariff privileges, railway control, tax evasions. All these things mean monopoly, and all monopoly is bottomed on legislation. And monopoly laws are born in corruption. The commercialism of the press, or education, even of sweet charity, is part of the price we pay for the special privileges created by law. The desire of something for nothing, of making the other fellow pay, of monopoly in some form or other, is the cause of corruption. Monopoly and corruption are cause and effect. Together, they work in Congress, in our Commonwealths, in our municipalities. It is always so. It always has been so. Privilege gives birth to corruption, just as the poisonous sewer breeds disease. Equal chance, a fair field and no favors, the "square deal" are never corrupt. They do not appear in legislative halls nor in Council Chambers. For these things mean labor for labor, value for value, something for something. This is why the little business man, the retail and wholesale dealer, the jobber, and the manufacturer are not the business men whose business corrupts politics."

Howe's opposite to this system of corrupt monopoly is described as "labor for labor, value for value, something for something." But these values are also the essential hall marks of a market system, that is, a purely competitive system, where market clearing prices are established by impartial interaction of supply and demand in the market place. Such an impartial system cannot, of course, be influenced or corrupted by politics. The monopoly economic system based on corruption and privilege described by Howe is a politically run economy. It is at the same time also a system of disguised forced labor, called by Ludwig von Mises the Zwangswirtschaft, a system of compulsion. It is this element of compulsion that is common to all politically run economies: Hitler's New Order, Mussolini's corporate state, Kennedy's New Frontier, Johnson's Great Society, and Nixon's Creative Federalism. Compulsion was also an element in Herbert Hoover's reaction to the depression and much more obviously in Franklin D. Roosevelt's New Deal and the National Recovery Administration.

[...] In modern America the most significant illustration of society as a whole working for the few is the 1913 Federal Reserve Act. The Federal Reserve System is, in effect, a private banking monopoly, not answerable to Congress or the public, but with legal monopoly control over money supply without let or hindrance or even audit by the General Accounting Office. More HERE

Law of the Market and Stock Market Forecast (1933-1948) | George Marechal

In 1933, incoming US President Franklin D. Roosevelt reached out to Roger Ward Babson for a long-range stock market forecast. Babson—a highly successful entrepreneur, economist, investor, and philanthropist—had become a household name after his prophetic warning on September 5, 1929: "A crash is coming, and it may be terrific." Later that same day, Wall Street declined by 3% in an event known as the "Babson Break." The catastrophic losses of the Great Crash followed shortly after on October 24 and 29, 1929 (Black Thursday and Black Tuesday). By the height of the Great Depression in 1932, the market had hit an all-time low; 75% of its value had been wiped out, rendering shares in many companies virtually worthless. As thousands were ruined and people lost their jobs, savings, and homes, soup kitchens became a staple on street corners.  

 

Alan H. Andrews, Director — The Foundation for Economic Stabilization, Boston, Massachusetts, 1969.

To fulfill President Roosevelt’s request, Babson consulted George Marechal, a then-obscure Canadian mathematician who had recently discovered how the highs and lows of the Dow Jones Industrial Average repeated in predetermined sequences. Ultimately, it was Marechal who produced a 15-year Dow Jones Index Forecast Chart for the Roosevelt administration—a document that proved to be spectacularly accurate. So confident was Marechal in his work that he had the chart copyrighted. His friend Alan H. Andrews, inventor of "Andrews’ Pitchfork," later described it as a "chart no government economist [and] no college professor has enough knowledge to even approach or courage to try to duplicate."

 The top line of price fluctuations is an actual reproduction of a copyrighted fifteen-year market forecast, calculated and drawn in 1933 by George Marechal. The bottom line shows the actual Dow Jones Industrial Average from 1934 to 1948—the same fifteen years projected by Marechal. This comparison, extending through April 1951, was later published by Garfield A. Drew and Edward R. Dewey in Cycles Magazine (October 1962), presenting Marechal’s 1933 forecast alongside actual Dow Jones Index data.

 

In 1962, Edward R. Dewey confirmed that Marechal’s method remained largely unknown. Despite a fund manager’s offer of $20,000 for his secrets—or the alternative proposal to manage a five-million-dollar fund and share the profits—Marechal declined both. He ultimately died at the age of 90 without ever revealing how he calculated market movements with such uncanny accuracy. Nevertheless, it is clear that he utilized a version of Babson’s "Normal Line." Annotations later added to his chart by his friend Alan Andrews indicate that Marechal plotted market turns using what are now recognized as Median Lines. Dewey concluded:

"The important thing about this study [chart of Marechal] is not the exact precision by which it came true, or the amount of money you would or would not have made if you had followed it. The important thing is that it shows that the market has predictable patterns. In other words, that the seeming disorder of market fluctuations really is subject to law, and that this law is learnable."

In 1948, Garfield A. Drew, another friend of Marechal, reproduced the forecast in his book, "New Methods for Profit in the Stock Market." Drew stated that an original copy of the forecast had been in his possession since 1935. Since each year was divided into six parts, he included the actual fluctuations of the Dow Jones Industrial Average in his book by plotting the high and low for each two-month period. Drew commented on the famous chart:

"Clearly, the pattern of the forecast and the actual pattern of the market miss many times in detail and exact timing. Nevertheless, the broad picture of the trends from 1934 through 1947, at least, is remarkably similar. The basic downtrend from 1936-37 to 1942 is plain, and likewise the uptrend from 1942 to 1946, although the latter shows up as a much more zigzag pattern in the forecast than was actually the case. Thus, the year 1944 by itself, for example, appears as a down period, whereas it was really an up year. When the year 1947 ended, the Dow Jones Industrial Average had spent 16 months within a 16% price range. As far as the situation at the time the comparison in [the figure] ends is concerned, it is evident that, if the broad accuracy of the preceding 14 years is to be maintained, 1948 must, on the whole, witness a rising price level. A definite down trend going substantially into new low territory by the year-end would produce a greater discrepancy between the forecast pattern and the actual course of prices than at any other time in the record. The fact remains to be seen at this writing, but, in line with his original forecast made years before, Marechal always insisted that 1946-47 was not a "bear market" but an interruption in a long upward trend comparable to the break and market hesitancy during 1926 in the long upswing from 1921 to 1929.”

 "In this figure the Dow Jones Averages are plotted from 1897 through 1962. On this chart are a number of "resistance" lines. The original worksheets for Marechal's forecast look just about like this chart, except that there were a great many more lines and, thus, a great many more intersecting points. Marechal's secrets consist fundamentally of how to draw the resistance lines and how to select the significant intersections."

 Edward R. Dewey in Cycles Magazine, October 1962.

[George Marechal’s legacy rests entirely on his uncannily accurate 1933 copyrighted DJIA forecast chart, prepared privately for the US government via Babson during the Great Depression. No independent writings by him or official US government publications bearing his name have been found. All available information derives from reproductions and commentary by contemporaries such as Drew, Dewey, and Andrews. The original chart and its worksheets are not publicly available in digital form.]