The Great Depression, Hitler, and other stories
The Great DepressionCapitalism has been around since about the time of Queen Elizabeth and over the course of the centuries a persistent pattern emerged. Capitalism follows a boom and bust cycle. There would be a great economic boom, followed by a bust and a great economic depression followed by another boom and then followed by another depression. The most well known of those Great Depressions was the depression and bust which occurred during the 1930s, but that was just one of a long sequence of repeating bust cycles. What causes capitalism to constantly repeat this pattern?
It is obvious that there is some systemic flaw in the capitalist system that causes these recurring cycles. What is the source of the problem?
Think of it this way. Let us assume that a widget goes onto the market at a price of two hundred dollars. Through the 'miracle of competition' various strategies will be tried which will eventually result in the price of a widget dropping to 29.99. Now when a widget sells for two hundred dollars, it is a very profitable widget, but once many capitalists pile into that widget market and the miracle of competition works its wonderful magic, causing the price of that widget to drop to 29.99, the profits that can be earned from each widget also drops.
Now it is possible to compete and wring some more profits out of that low priced widget. For example, NAFTA could be passed, and that widget could be manufactured over the border for five bucks and hour, and then, to remain very competitive, and gain more of that widget market, while at the same time wringing some more profits out of that low priced widget, that widget could next be manufactured in China, at a rate of 35 cents per hour or a buck an hour. This will require that someone such as an American no longer be found making widgets, for as you can see by the looming bankruptcy of the shattered remains of the American auto industry, sooner or later the long ongoing process of the miracle of competition will end with high priced Americans either accepting low wages and no pensions or not working in the auto business at all.
Sooner or later capitalism must reach a crisis of competition, and at this time there no longer remains a strategy whereby some kind of a profit can be wrung out of a widget, and it is at this time that capitalism must crash and go through a bust cycle and a great depression. Under capitalism, the function of a crash and a great depression is to cause that level of ruinous bankruptcy and economic destruction that is required to weed the garden of capitalism and get rid of all that excess competition.
So, therefore, we can see that capitalism is like a forest, and every so often the place must burn right to the ground, so as to sow the earth with the charred cinders of those bankrupt trees, which then provides the required fertilizer for that next inevitably following capitalist boom cycle, for suddenly there will be business opportunities once again, once there is no more competition, for the competition had their house burn to the ground during the Great Depression, getting rid of them once and for all, and thus leaving the way open to make widgets and charge a higher price, and earn a profit for a change, at least for a time, until the competition once again drives down the price of that widget to unprofitable levels, and it becomes time again for another one of those burn downs of Yellowstone park to clear out all that weedy underbrush.
Smoky, the (Liberal) BearGreat Depressions occur when the capitalist system pushes itself into bankruptcy, for the crisis of capitalism is the crisis of competition which leads to a crisis of profits which then leads to a crisis of going flat broke.
Now given the perpetually repeating ruination of that capitalist system, based upon the anarchy of competition as it is, onto the stage appears Smoky the regulating liberal bear, with that message of Smokey the bear for the voters, which is that 'only you can prevent forest fires'.
According to Smokey the Bear, Yellowstone park need never burn down in a fire ever again, for by enforcing the fire fighting regulations Smokey will be stomping out any trace of fire, any small burning ember that might threaten Yellowstone park.
So, then you can understand that according to Smokey the Liberal Bear, Great Depressions are caused by a lack of liberals.
If you study history you will notice that usually in the decades leading up to the Great Depression that Smokey the Liberal Bear will be nowhere to be found, having been exiled to a spot out behind the wood shed. One by one those liberal regulations get tossed over board by that sinking capitalist system as it slides towards its bust cycle. That liberal gets tossed overboard in the times preceding the crash in the same way that someone might toss a lead anchor overboard from a sinking raft. Why go down for the last time any sooner than you must?
Now according to the Liberal view of the world, the fact that there is no liberal to be found in the decades preceding a capitalist market crash is proof positive that capitalist depressions are caused by a lack of liberals. This leads one to wonder how it could be the case that the liberals always seem to go down to ruinous defeat just before a great depression, for, as liberals are reminding everyone right now, that has always happened before. The answer would appear to be that for some inexplicable reason, liberals seem unable to get anything going in the time preceding a capitalist crash, and instead a bunch of hawks show up and gut every regulation one at a time. Therefore it becomes apparent, that in the world view of a liberal, the root cause of capitalist depressions must be Karl Rove, or someone just like him, for due to the conniving of Karl Rove type characters the liberals always wind up losing power in the years leading up to a capitalist crash. This happens all the time, so you can see that when you have a lack of liberals and instead you have Karl Rove you get a crash and a Great Depression as your reward.
Now considering all this, we must ask ourselves why it is always true, throughout history, in a repeating pattern, that liberals always wind up getting screwed over really good by Karl Rove just before a Great Depression, and indeed one of the signal indicators that capitalism is sliding towards a bust cycle and a great depression is always deregulation and a lack of liberals. Why can those liberals never seem to get it together long enough to save the country from the catastrophe caused by a lack of liberals?
Let us consider just one example which should clarify the matter. Let us suppose that we have banks, yes, we have banks, and given that capitalism is once again sliding towards a bust cycle, which is no big surprise, since this is capitalism we are talking about - boom, bust, boom, bust, nothing new here. Further let us suppose that we have banks and that those banks need to report profits every quarter, but given the lack of good profits that results inevitably in a bust cycle, let us assume that banks cannot find a profit to report. Well it would be at a time like this that banks would be demanding deregulation so that they could make profits lending money in what are called 'financials', which means lending money to those speculative gamblers in the derivative markets, and banks would also like to perhaps get involved in that sub-prime mortgage scam, for that might be one more way to keep the wolf away from the door and report profits for a few years.
Now if we learn from history we can see that the banks are like the canary in the coal mine of that capitalist system, and when the banks go bankrupt that is one of the things that happens just before the Great Depression begins. The canary has died, and a dead canary would be something you would be watching out for if you wanted to know just where in the capitalist boom bust cycle you might be at any given time.
Now according to Smokey the Liberal Bear when you have banks heading towards bankruptcy and thus you are about the have a dead canary in the capitalist coal mine, the solution is strict regulations. So for example you would not allow banks to try to drag the process out a little longer by lending money for reckless scams, but rather you would force banks to go bankrupt five or ten years earlier than would have otherwise have been the case by enforcing regulations on those hard banks. We can see then that while Smokey the Liberal Bear claims to be fighting forest fires, the truth of the matter is that when it comes to those banks the true message of Smokey is 'burn, baby, burn', since apparently by enforcing a regulation on those banks Smokey would also be forcing some hard up bank to go bankrupt a lot sooner than would have otherwise been the case.
When we understand this we can then understand why it would be the case that just as a bankrupt bank is like a canary in the coal mine, so too is a lack of liberals just one more of those canaries, for when you see liberals kicked out of the capitalist system and all their regulations being dumped over board like a lead weight, one by one, as the years go by, you can predict that a great depression is coming sooner of later, for liberals get dumped, not because they got taken to the cleaners by Karl Rove, but rather because no one wants to go bankrupt any sooner than they have to go bankrupt, and so while it might be true that Smokey the Liberal Bear can go around regulating things during the boom phase of capitalism, that liberal bear will be sent packing and exiled out behind the wood shed during the decades leading up to a bust for obvious reasons.
The Invisible HandIt would seem that the capitalist system has a diety, an invisible god like being who reigns over that system, and the purpose of that god of capitalism would be to bring order our of the chaos of the right wing anarchy of capitalism. This diety is known as the 'Invisible Hand'.
The Invisible Hand works in mysterious ways. For example, you could speak to that Hand, saying, 'Mr. Hand, why are you not funding pure research in science, because you know that could pay off in twenty or thirty years in some new, unforseen product', and the Hand would reply, 'look, I have to get something going here in the next quarter, and I also have to project my earnings for the next 3 or 4 quarters. I need a quick fix, and I need it now, something like the invention of the self washing spoon, that will allow me to corner the silverware market while at the same time trashing the market share of the dishwasher market, and here you are expecting me to allocate some resources for something that isn't going to happen for twenty or thirty years?' Or you could say, 'Mr. Hand, I notice that you have now decreed that we should first have that NAFTA and then next we should be shifting our jobs to China, and while I know that this would be profitable in the coming quarters, it does leave me wondering just who is supposed to be buying all those products you were planning to import back into the country, what with no one having a job.' And the Hand would reply, 'look, we'll cross that bridge when we come to it. Once that becomes a problem in the immediately coming quarters I will pull a rabbit out of a hat for you people. That is why you people keep me around, isn't it, to take care of that kind of thing for you. How I wish you people would just get out of my way and let me do my job."
The American Hitler: History's Greatest MonsterWhenever people wish to recall history's greatest monster it is typical for them to refer to Adolph Hitler, who, everyone seems to think, was from day one the most monstrous dictator the planet has ever seen. However if you were to watch old films of glassy eyed Germans in ecstasy before the presence of the Glorious Leader, you can begin to see that, certainly for a time, Hitler was not regarded as a monster, but rather was accepted as a Messiah.
A Great Depression is not something that happens in one single day. Monday a crash, Tuesday a Great Depression. This is not what happens. Rather a Great Depression is unfolding process and if we take the last Great Depression as a case in point, the process resembles sliding slowly downed an iced and slippery slope, and the ruinous depths of that economic depression is not reached for four or five years, with a sequence of deeper and deeper stock market crashes spaced out over a period of years.
Hitler came to power at the time when the Great Depression had finally hit rock bottom (about four years after the downward slide down that slippery slope first began in 1929). Hitler used the burning of the Reichstag as an excuse to suspend the German constitution and to declare the beginning of the German 'war against terrorism' declaring that acts of 'communist terrorism' would not be tolerated. As is typical of dictators and fascism in general, Hitler then suspended all other political movements and parties, creating a one party state, which also resulted in the Nazi party seizing a monopoly on the media, for dictators do not tolerate contradiction of the airing of opposing points of view.
Once this stage was complete Hitler was free to begin the process of manipulating public opinion so as to create those brainwashed zombies you can see when you watch old newsreel footage showing glazed eyed Germans with their arms stretched out adoring their Fuhrer. The way that Hitler accomplished this interesting feat was that with the press firmly muzzled and the access to information of the German people now strictly controlled by Goebbels, Hitler was free to borrow huge amounts of money from the international money markets. Hitler then used the enormous sums he had borrowed to bring full employment to Germany, ending the Great Depression with what seemed at the time, to the average German, to be miraculous suddenness. The propaganda churned out by Joe Goebbels showed the Fuhrer ending the Great Depression simply through the issuance of a Fuhrer order and the flipping of a light switch so as to turn the economy 'On'. This was then peddled as proof positive that fascism was a much more efficient form of government than democracy, for it was the partisan political feuding of democracy which caused the Depression, while it was the firm, one man rule of a totalitarian fascist which then instantly ended the Great Depression.
The Germans was bedazzled by Hitler, and at the time Hitler became the most fantastically popular political figure in world history. You never see politicians taking the stage to be greeted by the rapturous roar of a crowd of glassy eyed arm jerking slack jawed brainwashed yokels. This Messianic gift was granted to Hitler alone, for while the rest of the planet wallowed in the Great Depression for the entire decade of the 1930s, only Germany alone in the world had their economy come roaring back to life with no unemployment and no social misery. The German people were subjected to one of history's most successful and most interesting brain washing operations. This was achieved through potent emotional manipulation, and not just mere words, when with incredible speed the Great Depression suddenly came to a grinding halt when their Messiah, their beloved Fuhrer, came to power and issued a Fuhrer order demanding the immediate salvation of the suffering German people he loved so much, thus causing the Great Depression to suddenly end through the 'triumph of the Fuhrer's will'. It was this powerful psychological shock which the Nazis skillfully delivered to the German people which then created that nation of hero worshipping slack jawed arm jerking yokels you see on those old newsreels, since this experience created a powerful emotional bond between the German people and Adolph Hitler and also convinced the Germans that fascism was much better than Democracy.
Hitler had it easy. He did not need to terrorize the Germans. He was free to carry out his plans with no interference for he had become the most popular politician in history, and even the liberals and the ex-communists were supporting Hitler in those days because they could see the results with their own eyes and decided that even though Hitler was a fascist he was obviously good for the Germans and exactly what Germany needed in those days. Hitler was not history's greatest monster. He was history's most cunning dictator, and for that reason he did not need to crush the Germans. The Germans had it good, and so did their dictator.
The problems only began when the money ran out as Hitler maxed out the German credit line and the whole house of cards was about to collapse, thus exposing Hitler and the Nazi regime as a devious fraud. As Hitler told his Generals the evening before the attack on Poland began the second world war, the economists had told him that he might not even have one year left before the house of cards collapsed. Even though his Generals were telling Hitler that they needed to wait until at least 1943 before Germany would be sufficiently armed to be able to win the war, political needs triumphed over military strategy, and Hitler forced the war upon his under-prepared Generals in 1939, for you see Hitler needed to plunder and sack Russia if he was to have any hope of raising enough extra cash to carry on his scamming of the Germans.
So then we can see that Adolph Hitler was not 'history's greatest monster', at least not for those first six years, but rather he was the history's most beloved politician because he was also the world's very first Keynesian. until the credit card maxed out. Even FDR was unable to achieve the astonishing 'miracle' that Hitler had seemed to achieve in Germany, but then Hitler was pulling a short term scam on the German people and it was always Hitler's intention right from day one to eventually plunder Russia.
The Great Depression caused the rise of fascists to power as the capitalist system required firm measures to be used to control the unruly and rebellious hordes, and could there be a more belligerent and unruly horde than the American people? One only needs to put a glass up against the wall and listen to the echoes of the voice of the American people (easy enough to do with the internet today) and what you can hear is the voice of a rebellious and undisciplined horde. We also see the United States sliding towards fascism with the ongoing erosion of the constitution and various eerie parallels with Nazism appearing in the land as the economy tanks. It becomes obvious that the American people will need to be ruled over by Hitler for this will be the only way to manage such an increasingly rebellious horde.
Now Hitler was lofted undemocratically into power by the German elites (Hitler never could get more than one third of the Germans convinced to vote for him when he was forced to rely only upon his silver tongue). Hitler was given the job of Fuhrer for he was expected to discipline the unruly mobs of Germans for the remainder of the Great Depression, thus helping the capitalist system to escape from the jaws of revolution and survive to pick things up again during the next boom cycle that inevitably followed every capitalistic crash and depression in history.
Now we can see by observing the turning of the American political system that the way is being prepared for the rise of the American Hitler. We can also see that the cupboard is bare, for America is already deep in debt, and so we must assume that the American Hitler will not be able to borrow the trillions and trillions of dollars that would be required to pull a short term scam and brainwash the American people, thus turning them into easily manageable slack jawed glassy eyed arm jerking yokels. No, the American Hitler will inherit an unmanageable and very stubborn herd, and so we can then predict that the American Hitler will have no choice but to boot the living daylights out of the American people and terrorize them day and night. Therefore we would expect that it is the American Hitler, and not that relatively benign German Hitler, who will be long remembered as history's greatest monster, for the American Hitler has no choice but to become a mix of Attila the Hun, Ivan the Terrible and Vlad the Impaler, for he cannot create those sheep like brainwashed yokels because that would cost trillions and trillions of dollars, and then the American Hitler would have to follow this up with a global rampage of plunder and pillage in the nuclear age, which could prove to be a challenge. No, I think the American people are going to be getting their faces ground into the dirt under the steel toed jackboot of history's greatest monster, the American Hitler, for the simple reason that the American Hitler doesn't have much in the way of options. He cannot become FDR for the cupboards bare. He cannot become Adolph Hitler, because the credit card is maxed out already, and the cupboard is bare, so therefore he must become Vlad, the Impaler of Americans, history's greatest monster.
The Age of the DinosaursThroughout history Capitalism has only had one solution available to address the problem of a crisis of competition and the resulting collapse of profits and that has been the bankruptcy of the entire capitalist system and that weed whacking operation known as a Great Depression which clears out the competition by means of the most ferocious stage of competition in the capitalist system, enforced bankruptcy.
In the past this has been the end result, over and over and over again, in a constantly repeating pattern, and there might be those who assume that once again the capitalist system must burn to the ground.
However this is not the 1930s. This is the 21st century. This is not the age of the 'medium bourgeoisie'. This is the age of the 'great big bourgeoisie'. For this reason we might expect that history will not simply repeat itself, but rather that the crisis of competition will be resolved in new and previously unheard of ways.
We know that the 'medium bourgeoisie' are a washed up and spent political force, for when Ross Perot ran for president and attempted to stop the 'really big bourgeoisie' from putting through NAFTA the result was a failure. It would appear that the political strategy of the 'medium bourgeoisie' was to deny victory to the Republicans and bring in the Democrats, only to have Bill Clinton sign NAFTA into law. In times past the 'medium bourgeoisie' was a powerful political force, and thus we could see such things as Teddy Roosevelt being a trust buster and busting up those big monopolies of the 'great big bourgeoisie' for in those days it was the 'medium bourgeoisie' who were the most powerful political force in the land while the 'really big bourgeoisie' were marginalized.
Things are different today in that enormous mergers have taken place in modern times, creating enormous corporations. There are only two possible solutions to a crisis of competition in the capitalist system. One is the burn down of the entire capitalist system followed by the ruthless weed whacking of a Great Depression, and the other solution is the formation of truly gigantic, centralized, corporate monopolies.
Therefore it seems quite likely to me that there will be no Great Depression, but rather this crisis of the capitalist system will usher in the Age of the Dinosaurs, and we will see gigantic Brontosaurus roaming the earth. This is the only way that the failing collapsing capitalist system can dodge a bullet and resolve the crisis of competition without bringing ruinous destruction to the many billions of people who live on this planet. If it can be done, it will be done, the process of gigantic mergers driven forward by the current historical situation.
contribute to this article
add comment to discussion