The United States is not a free-market or true “capitalist” society but rather a crony capitalist/welfare-state society. That is, many big businesses don’t compete to please the consumer but instead for coercive government privilege.
It is well documented that monopoly can’t exist in a free-market society; the forces of competition will always introduce new competitors to any particular field, especially when there is large amounts of money to be acquired. However, some astute businessmen notice that they can strangle their competition in the womb through government. They lobby for legislation that creates artificial barriers to entry, insane regulations for how productive processes must be run, subsidies, special taxes, or other inventive hurdles. It is far easier to “go political” and join the government in its parasitic extraction of wealth from the economy. A monopolist’s dream is to have a government grant it an exclusive monopoly over an industry.
There are many examples of crony capitalism in action. However, one historical example proves particularly interesting, for it shines a light on just how far monopolists are willing to go to acquire such government privilege. The event in question is the Bolshevik Revolution in Russia. Much evidence points to the fact that big business firms in the US—centered around the J. D. Rockefeller and J. P. Morgan conglomerates—helped bankroll the Bolsheviks using their massive funds and influence. While the jury is out whether the Bolsheviks would have succeeded in their takeover of Russia and the subsequent creation of the Soviet Union without this assistance, these big business firms absolutely played a part.
Why would these “capitalist” business firms help fund the Marxist Bolshevik revolutionaries? Were they secretly wooed by the false promises of communism? Most likely, no; some firms that aided the Bolsheviks also aided their enemies, presumably so they could have influence within whichever party was victorious. As monopoly capitalists, they realized that an inefficient economy run by totalitarian socialist central planning provided the perfect captive market for them, assuming they are on good terms with the socialist power-brokers. In this situation, the monopolists can easily achieve “protection” from the totalitarian government and take advantage of the consumers who are forced to buy from them because there is no alternative. This arrangement is especially advantageous when the captive market in question is as large as Russia. Therefore, the alliance between these two groups of seemingly enemies is actually not hard to imagine.
This situation is in the same line as the creation of the Federal Reserve System. As Murray Rothbard details in his history of the Federal Reserve, these same monopolist interests—centered largely around the Morgans and Rockefellers—pushed through the parasitic Federal Reserve System. This gave them a banking monopoly at home in the US similar, in principle, to the monopoly they worked to obtain in Russia. It is worth noting that monopoly “capitalists” are the enemies of laissez-faire capitalists who follow the tradition of Murray Rothbard, Ludwig von Mises, etc. The monopolists may run businesses, but they still owe their wealth to government power, not pleasing the consumer.
Wall Street Monopolists Support for the Bolsheviks
Much of the evidence supporting this fact is detailed in Antony Sutton’s work Wall Street and the Bolshevik Revolution. Sutton provides great evidence that the traditional idea of all communists and capitalists as bitter enemies is not true, at least when crony capitalists are involved. Sutton—largely using the US State Department Decimal File—reveals many interesting links between US big business and the Bolshevik revolutionaries.
For instance, just a few notable events Sutton documents are: Leon Trotsky, one of the pivotal Marxist revolutionaries, alongside Lenin, who helped topple the Russian government, was heavily aided by Wall Street monopolists in his return to Russia in May of 1917, just before the October Revolution. The American Red Cross was co-opted by Wall Street monopolists; they used the Red Cross mission to Russia in 1917 as a cover for financial and political maneuvering with the revolutionaries there. (Not only did the mission’s staff consist of around double the number of financiers and engineers compared to doctors and medical personnel, but all the doctors also abandoned the mission because they were disgusted with the political maneuvering of the other members).
A 1919 raid on the Soviet Bureau in New York revealed documents showing correspondence with the head of the bureau, Ludwig C. A. K. Martens, and many American big business firms. The documents show some of these firms even helped fund the Soviet Bureau. J. P. Morgan controlled Guaranty Trust Company—a major financial player on Wall Street—funneled illegal Bolshevik gold into the US so the Bolsheviks could make critically important purchases of foreign resources. Additionally, in 1922, Max May of Guaranty Trust became a director in the first Soviet State Bank, Ruskombank, further solidifying Guaranty Trust’s relationship with the Bolshevik government.
In the State Department Decimal File a copy of a 1919 Scotland Yard Intelligence report details that governments were aware of Guaranty Trust’s connection with the Bolsheviks,
Martens is very much in the limelight. There appears to be no doubt about his connection with the Guarantee [sic] Trust Company, Though it is surprising that so large and influential an enterprise should have dealings with a Bolshevik concern.
Of all the events, Leon Trotsky’s return to Russia in 1917 is rather interesting because he was a central figure in the Bolshevik Revolution. Trotsky was deported from Europe for essentially “revolutionary activities,” and he subsequently ended up in New York. He proceeded to obtain a US passport at a time when the State Department was universally trying to tighten up passport procedures. According to Jennings C. Wise, in Woodrow Wilson: Disciple of Revolution, he asserts that Woodrow Wilson used his influence to ensure Trotsky received an American passport, which he used to enter Russia.
After Trotsky used his American passport to leave New York, Imperial British officials removed him and his associates from the S.S. Kristianiafjord and detained them at Halifax, Nova Scotia on April 3, 1917. They were detained because they were suspected as Russia/German socialists with aims to overthrow the standing government in Russia, which, as history proves, was not wrong. Now the story gets interesting; it is entirely possible that Trotsky could not have succeeded in returning to Russia if his release from Halifax wasn’t expedited by a few influential individuals.
In the Canadian government’s records, there is a telegram regarding Trotsky from a New York attorney, Nicholas Aleinikoff, to the deputy postmaster general of Canada, R. M. Coulter. Aleinikoff asks Coulter to investigate the reason for Trotsky’s detention, and requests he intercede on their behalf. Arthur Wolf of 134 East Broadway, New York, also sent a telegram to Coulter similar to Aleinikoff’s. The deputy postmaster general had no responsibilities within the military. Regardless of this fact, Coulter—after confirming he received the telegrams—did intercede on Trotsky’s behalf by writing to Major General Willoughby Gwatkin of the Department of Militia and Defense in Ottawa. In his letter, Coulter reproduces the Aleinikoff and Wolf telegrams and essentially vouches for their credibility as responsible men who care for the situation in Russia. He further suggests that if Gwatkin deems it wise, he could use his influence with the English authorities to assist Trotsky.
Gwatkin was a man of significant influence in the Canadian military. He sent multiple memorandums to his connections in the Canadian military—one on April 14, 1917 and another on April 20, 1917—suggesting that the detainment of Trotsky was potentially high-handed injustice, and requesting a decision regarding Trotsky’s disposal be hastened. This pressure by Gwatkin appears to have played a large role in Trotsky’s release. He confirmed in a letter to Coulter on April 21 that their “friends the Russian socialists are to be released; and arrangements are being made for their passage to Europe.” Only using the Canadian government files, the reasons why Coulter and Gwatkin assisted Trotsky are unknown according to Sutton. Regardless, it is interesting how the personal intervention of two New York citizens, not Canadians, led to a chain of events that allowed Trotsky to continue his journey to Russia in a timely manner.
Conclusion
There is much more detailed documentation of the Wall Street monopolists’ assistance to the Bolsheviks in Sutton’s book, and undoubtedly much evidence of this connection remains hidden behind private company records and classified government files. Clearly, it would not be beneficial for the monopolists if knowledge of their scheme to leverage the government became easily discoverable. Monopolies are the result of government action, and it is amazing what some monopolists will do to lobby for that action. The immense loss of life, violence, and atrocities that the Soviet Union was responsible for should come into account when examining these monopolists. To put it lightly, these Wall Street monopolists appear to have a faulty moral compass if they are willing to fund such men for monetary gain.
