How The Mob and Deep State Make Technological Marvels Happen

J.P. Morgan, Edison, and Ford and not at all Elon Musk

Gee what did Henry Ford, Thomas Alva Edison and Harvey Firestone discuss on their annual road trips?

There are so many things I want to say about American history but I fear I’m not quite there yet. I have found it safer to talk about the 18th and 19th centuries and early 20th centuries. You might imagine me with chalk in hand and I’m writing, Bart Simpson style, “We are not allowed to talk about World War II. We are not allowed to talk about the Fall of the Berlin Wall and the companies it began” over and over again.

I’ve been naughty, though, and so my writing too openly may well have cost me a lot of money. If you work on building technologies you will learn rather quickly that a number of venture funds are, in fact, fronts, and a number of “investors” are, in fact, frauds. Being neither a front nor a fraud I am perhaps one of the more dangerous men to those who are. I plead guilty to thinking for myself. It’s the most dangerous thing you can do.

Political cartoon from Puck magazine by Udo Keppler, titled “The Helping Hand.” The painting, depicts J. P. Morgan’s shall we say, managerial involvement with the U.S. government…

Some time ago I was strongly encouraged to listen to a podcast about American founders called Founders by David Senra which details the lives of titans of industry.

Seeking, perhaps definitely naively, to be such a titan myself, I did the next best thing to reading all the books. I listened to the podcasts about the book. After all, Elon Musk, who absolutely would never lie about any subject ever, claims to read two books a day. Pay you no attention whatsoever to his longstanding relationship with the mob-connected Soft Bank.

(For the unsophisticated I recommend the Founders podcast but its founder — Senra — left a bad taste in my mouth when he promised that if we paid him the podcast would forever be free and then turned around and charged again.)

I think it’s quite alright for young men (and women!) to read about the Greats with the hope that, maybe, some of that Greatness will rub off on you. Or so the thinking of the “Great Books” curricula goes. I was subjected to just such an education formally and later through those late-night reading sessions after college, after work when my real education began.

Reading or listening to podcasts is not enough, however. No! You must think about what you’re reading and listening to. You must try to figure out what’s actually going on—or you’ll fall for the propaganda. Most good citizens fall for propaganda but if you’re reading this Substack my sense is that you are not a good citizen. No! You are too curious and curiosity, if not managed correctly, will get you in some serious trouble. Fortunately it will also make you richer beyond your wildest dreams. You can think your way out of poverty and misery. Many of us have. You will then have new problems but that’s a topic for another time.

There are quite a number of good reasons to read about these Great People but what I find most interesting is how people suspend their thinking when they read about some herculean feat or implausible deed done be a historical figure. The heuristic I use is, “How likely is it that this story is true? Do I know someone like this? What’s the likelihood?”

Let me tell you something you should know already. Every memoir lies. Autobiography is the highest form of fiction. Every official biographer is in cahoots with his subject. And after the crime the cover up.

There are quite a number of origin stories of companies which are altogether made up. I should know having been party to some of them. What, you don’t believe the Clearview.AI origin story? You shouldn’t! In fact you should believe nothing anyone tells you, myself included. You should believe only what you can prove and then you should check to see if you’re insane.

With all that said, here are some things I believe to be true, based upon a mixture of experience, observation, and reading —

1). That nearly every American technological marvel is a byproduct of both the deep state and the mafia working together. To the extent that a company thrives it is because both the underworld and the deep state want it — and need it — to exist in the world. Oftentimes they work together.

For the mobster this mutual beneficial relationship is easy enough to see. Mobsters have a hard time getting their money into the banking system and they will tolerate high cash conversion fees. Estimates vary as to how much money is globally laundered but its typically pegged at between 2% and 5% of global GDP, or $800B to $2 trillion. For what it’s worth I suspect that that figure is very low. If you think that none of that cash ends up in Silicon Valley or biotech deals, well…

If a mobster gets caught doing mob stuff later he can always leverage the time he did Uncle Sam a solid by investing, in say, hypothetically, a rocket company or electric car company. You might even see a mobster back a deep state candidate for office — as a form of tribute.

For the deep state officer, facing as he is budget shortfalls, he gets to take some of that sweet mob money and make it do some good things in the world. After he leaves he can even go work for the mobster.

2). Companies and the individuals who run them can — and do — lose the Mandate of Heaven either through bad behavior, persecution or death. Secession is always challenging. To the extent that the Mandate is kept, it’s because the company did whatever the Deep State wanted. We look past the mob origins of businesses that serve the Deep State particularly when there is no other alternative. To pick an example totally at random we tolerate Elon Musk because thus far he’s the only one who can get us into space reliably. For now.

3). Many of the most successful investors and inventors of all time are often plugged into intelligence services, foreign and domestic, as well as organized crime, both foreign and domestic. If you read their memoirs or official biographies you should have Talmudic — or is it Straussian? — attention to detail. The truth is often hidden in plain sight.

Companies on the frontier have great needs for capital and they are — shall we say agnostic? — about where it comes from. Money, after all, doesn’t know who has it. It’s not the money’s fault.

You can test this proposition for yourself by taking any business figure you’re curious about and typing their name and then mafia or gangster into Google. You’ll usually find quite a lot. Did you know that Harry Bennett, Ford’s no. 2, had all kinds of mob ties?

Harry Bennett (left) & Henry Ford. Bennett had succeeded in building the Service Department into what H. L. Mencken’s American Mercury magazine called “the most powerful private police force in the world.”

I read quite a bit about Ford’s own mob ties in “The Arsenal of Democracy: FDR, Detroit, and an Epic Quest to Arm an America at War”. Allow me to quote at length.

In the 1920s, Bennett began to amass a private security force called the Service Department—a group of ex-boxers and ballplayers, cons, bad cops kicked off the force, and characters from Detroit’s La Cosa Nostra, which during Prohibition ran a thriving booze trade, smuggling liquor over the Detroit River from Canada. Service Department men were noticeable for their size, rough language, and cauliflower ears, and for the fact that they hung around without doing any work.

“They’re a lot of tough bastards,” Bennett described his burgeoning Gestapo, “but every one of them is a goddamn gentleman.”

By the end of the 1920s, Bennett had become Henry Ford’s closest confidant. When asked by reporters one day who the greatest man in the world was, Henry smiled and pointed at the bow-tied brute. With Henry’s power behind him, Bennett’s star skyrocketed. Suddenly, if a reporter wanted to talk to someone at Ford Motor Company, he had to talk to Harry Bennett first. Nothing got done without Bennett’s approval.

…

Among the Service Men employed by Bennett: Norman Selby, an ex-pugilist who fought as “Kid McCoy,” married ten times, paroled to Bennett after serving twenty years for murdering his sweetheart. Joseph “Legs” Laman, admitted serial kidnapper, nicknamed for his ability to evade the law on foot. Joe Adonis, a mobster called by the New York Post “a gang punk” and “dope king.” Sicilian mob boss Chester LaMare, the “Al Capone of Detroit,” who controlled Detroit’s waterfront during Prohibition. Former journeyman pugilist Elmer “One Round” Hogan, Sicilian gangster Joe Tocco, Jack Dempsey’s former manager Leonard Saks. . . .

Makes you think about what was really going on in Ford v. Ferrari, doesn’t it? Was it a car race? An international mob fight? Or both?

No, they don’t want you looking at the books. They want you printing the legend. Or smearing the founder so you don’t look at all about what’s really going on.

Ford’s detractors tell us that Ford was an anti-Semite, you know, even though he had Proud American Jewish employees who loved him and who agreed with him about the International Jew problem.

Yes, it’s important that Henry Ford paid his workers what we might call a living wage but maybe he did that because he could afford to thanks to all that sweet, sweet moonshine money flowing from America through Detroit into Canada during Prohibition.

5.) Successful businesses cartelize talent — just like mob bosses do.

We all know the stories about the “Wizard of Menlo Park” who, in inviting young men of ambition and talent to his factory, built much of the modern age. Alexander Bell modeled Bell Labs on Edison’s laboratories. Monopoly profits, gifted by the state and the patent system, helped Edison and Bell usher in one of the most productive and innovative periods in world history.

My favorite of these encapsulations is a BBC Horizon documentary from 1972 called “The Wizard Who Spat On The Floor” which dispels the Horatio Alger story of Edison’s hardscrabble origins and goes on at some length on the sort of cult-like pull he had on the talent he recruited.

This documentary situates Edison as part of a larger American obsession with invention at the time. He had a chemistry lab in the basement when he was only 11. He was homeschooled. His mother, was a school teacher, and she was “the making of me” Edison once said. He was extremely practical. “I don’t think anything of Einstein’s theory because I can’t understand it,” he once said.

So how did young Edison — he was but 31 when he started his company — pay for it all? Through investors and one investor in particular — J. P. Morgan.

I see it as follows: I think J. P. Morgan was forced by the American Deep State to invest in Edison after Morgan got caught selling defective rifles to the Civil War effort during the Hall Carbine Affair.

There’s curiously little inquiry into why Morgan was selling the Union rifles he no doubt knew to be defective. Was he told to do that from his British paymasters? After all, J. P. Morgan was the leading market of American securities in Europe and the U.K.

Was Morgan’s money really British money moving in? The British notoriously chose the wrong side during the American Civil War. They needed allies in America against a rising Germany.

What if Morgan didn’t so much choose to have his home electrified by Edison but was forced to pay for it? What if this is how a lot of technological development and commercialization really occurs?

There’s another model of cartelizing — collusion. Indeed Apple’s Steve Jobs — peace be upon him — built a secret wage cartel with Google, Intel, and Adobe — before federal judge forced them to pay a pittance in settlement — $415M or so. Not bad for companies worth over $2 trillion in market cap…

The government captures talent, too. One way of looking at World War II was the global pressing of service of geniuses like William Shockley (founder of Silicon Valley) into the service of the state. Will similar conflicts press our greatest minds into the service of the state? Or are we going to be forced to automize ad placements for monopolistic companies? War has a way of concentrating the mind but also of giving us meaning.

Many geniuses often have more than a passing familiarity with law breaking and are often told by Uncle Sam that they can go to jail or they can be helpful. You’ll be shocked as to which one they often choose. We could point, of course, to Facebook’s Sean Parker or Clearview’s Hoan Ton-That but there are many such examples. As you know, I know nothing about that personally. No, not at all!

Tyler Cowen and Dan Gross’s new book, Talent: How to Identify Energizers, Creatives, and Winners Around the World seems to promote the same sort of libertarianism we might suspect from George Mason economics professor and an Israeli American venture capitalist but curiously there’s very little about building monopolies of talent.

This is perhaps because they get wrong the state of genetics. If you can’t identify personality and other traits through genetics, why do nations such as Gross’s native Israel or China collect that sort of data? Gross, at least, is aware of some of this because he and I have discussed it. There’s a simple enough way to test the proposition. Genetically sequence all the Pioneer candidates. Why I’d even offer to do it for free.

In any event, Cowen and Gross argue that we too bureaucratize talent. Perhaps.

Or perhaps we haven’t thought enough about how to build the sorts of bureaucracy which rely on mobster cash and brilliant minds, working in tandem, for a national imperative. We make believe that “talent” is global but the duties talent has is to country and family. We should stop delinking “talent” from duty.

Talent is a national resource. It needs to be husbanded and developed accordingly.