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The ITT Affair

The Sovereign State of ITT, by Anthony Sampson. Stein and Day, 323 pages, $10.

By Seth M. Kupferberg

REMEMBER Milo Minderbinder, in Catch-22? His syndicate, M & M Enterprises, sold cork in New York, shoes in Toulouse, ham in Siam, nails in Wales, tangerines in New Orleans, and coals in Newcastle. And halfway through World War II, he contracted with the American military authorities to bomb the German-held highway bridge at Orvieto and with the German military authorities to defend the highway bridge at Orvieto with anti-aircraft fire against his own attack.

According to Anthony Sampson's The Sovereign State of ITT, it isn't absolutely certain that International Telephones and Telegraph allowed its Latin American telephone lines to be used to send information to German submarines during World War II, although the friendship towards Hitler of the company's founder, Colonel Sosthenes Behn, makes it seem highly probable. There is no doubt, however, that the company owned 28 per cent of Focke-Wulf Aircraft, whose planes bombed American ships, which ITT direction finders used to evade German torpedoes. Although Behn maintained good relations with the Naxis during the war, through the SS general who was his personal representative, he also arrived in Paris with the American army, as an expert on communications and as special adviser. In 1967 the American government paid ITT $5 million for damage to Rocke-Wulk plants inflicted during the war by American bombers. The plants were, after all, American property.

THE SOVEREIGN STATE OF ITT is an absorbing chronicle of the first half century of a firm whose exemplary pursuit of profits has spanned 70 countries and dozens of industries. It's a tribute to Sampson's research that the Watergate hearings have not made his book seem dated, with the exceptions of its bewilderment at Dita Beard's sudden appearance in a Denver hospital and one reference to "the President's counsel, James Dean" (the index gets it right). And it's a tribute to Sampson's writing that we find the accounting techniques which have made ITT's pursuit of profits so successful, unprecedently so, as engrossing as the diplomatic and political techniques which have made ITT a household word. With interest and perhaps amazement we read of ITT president Harold S. Geneen's management system of continuous expansion; of his reassuring observation (to an antitrust committee concerned at his attempted takeover of the American Broadcasting Company) that "the highest ingredient that a newsman has for sale is his professional integrity;" of his company's notorious attempts to finance the Republican convention and the Chilean counter-revolution; and of his public relations director Edward Gerrity's comment on the effect of these scandals on ITT's business: "The reservations for Sheraton hotels have been a record."

In his conclusion, Sampson confesses to bewilderment at the effects of ITT and other multinational corporations--a bewilderment apparent in his insistence that the company is both a "maverick" and an organization that "takes the capitalist system to its logical limits," so that "for any ambitious businessman, it is an anticlimax to retreat back from those limits." There is no obvious reason not to believe both these statements: few organizations carry anything to its logical limits. ITT offers us a chance to study the workings of the profit motive in as pure a form as they are likely to assume. Like Gerrity's remark, Sampson's book reminds us that a producer's success is based on belief, not in its goodness, but in its ability to deliver the goods--an activity at which ITT has achieved its share of success.

BY DELIVERING the goods, ITT and other multinationals have helped to bind the world into the single economic network social anaaysts have predicted for centuries--Sampson has a particularly good passage on the Americanization of ITT employees--and in so doing, these companies have helped bind the world in a tighter political network, as well. Chilean workers face the accumulated strength of American capital; at the same time, though Sampson doesn't stress this much, American capital faces the emerging strength of Chilean workers. For if it is true that ITT proposed to devote its American profits to defeating revolution in Chile, it is equally true that revolution in Chile inspired ITT to activities damaging to its strength in America.

At a time when this strength is so blatant and so blatantly used, its source is easily forgotten. But forgetting would be a mistake. ITT's accomplishments in helping to build the economy of Chile, detailed by a company spokesman on the August 8 New York Time's Op-Ed page and implicit in The Sovereign State, are as real as its efforts to help the CIA tear down that economy yesterday and today. American capital, applied by firms like ITT, has increased people's power--over nature, and over other people--to an extent unthinkable to the giants of the past.

Although it is excellent to have a giant's strength, it is tyrannous to use it like a giant, and a giant acting for himself can't use it any other way. By deepening our understanding of this truism, Sampson's book may hasten--in however slight a degree--the day when the people of the world assume the power their capital has built.

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