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Talking 'Gangsters of Capitalism' with Jonathan Katz: podcast and transcript

Chris Hayes speaks with award-winning author Jonathan Katz about the life of decorated war hero Smedley Butler, a self-proclaimed "racketeer for capitalism."

Smedley Butler was one of the most decorated war heroes in history. From an early age, “The Fighting Quaker” played a pivotal role in America’s path to global power. Yet in retirement, Butler turned into a warrior against war, imperialism and big business, declaring that he was a “racketeer for capitalism." Award-winning author Jonathan Katz writes about his life in a new book, “Gangsters of Capitalism: Smedley Butler, the Marines, and the Making and Breaking of America's Empire.” Katz joins to discuss efforts throughout history to establish a fascist dictatorship, parallels between the January 6th insurrection and an attempted coup in 1934 and the role of globalism in capitalism.

Note: This is a rough transcript — please excuse any typos.

Jonathan Katz: When you've got a lot of money and a capital in this country and that money is influential like you use it, that's what happened, unless somebody stops you or unless there's a law passed.

Chris Hayes: Hello and welcome to Why Is This Happening with me, your host, Chris Hayes.

Recently we had Jamie Raskin, the Congress member, on the podcast. If you haven't heard that episode, I really recommend it. One of the things that's striking about talking to Congressman Raskin, who's serving on the January 6 Committee is that he refers to what happened on January 6th as a fascist coup or a would-be fascist coup sometimes. That's very powerful, powerful language.

I think it's powerful language, because it's the kind of language we don't normally think of in an American context and that's, I think, part of the power of that phrase and the effect of it. I think it's probably also true about insurrection. All these linguistic terms we've grappled with to describe what happened to American democracy tend to have these associations with foreign countries.

But there's actually a fascinating footnote on that about a fascist coup plot in the United States, at least one that was alleged. In 1934, one of the most decorated Marines, Gen. Smedley Butler, testified before a House congressional inquiry, and then subsequently made that public, that he had been recruited by a Wall Street bond salesman and another high ranking military official to essentially be the figurehead for a fascist coup against FDR, that a combination of right-wing business interests who hated the new president and thought he was a communist and thought he was extinguishing American liberty and was going to destroy American capitalism, along with veterans and active duty members who are sympathetic to that cause would unite and march an army of, Butler said that he was promised 500,000 troops on the Capitol under the false pretense that FDR was sick and declare Butler and maybe someone else as the kind of reigning dictator of the country.

This was front page news in The New York Times and I think The Philadelphia Inquirer and other places. Subsequently, it's unclear if such a coup plot existed. We'll get into that a little bit. I think the judgment of history is that it certainly was nowhere near as developed as maybe Butler made it out to seem.

But Butler would then go on to spend the next years of his life as this kind of fascinating leftist gadfly voice against the predations of American capitalism and American imperialism. In fact, he gave a speech, which later became a book called War Is a Racket, in which he basically said that he spent the duration of his career as a U.S. Marine operating in all sorts of fronts of American empire as a hired gunman, a racketeer for capitalism, as he put it, that basically the army provided the force and the guns, the extortionary thuggery for the machinations of big business.

Butler was a fascinating character. I had encountered that sort of allegation of the coup plot, at one point. There's a book, I think, written on it. It might have even been a movie at one point, I think about the coup plot. But there is this incredible new biography out of Smedley Butler. It's the product of many years of work and it ends up being this prism through which to view essentially the establishment of the American empire.

We talk about American empire in the late 20th century sense or in the 21st century sense when we talk about American projections of force abroad or the use of drones in various countries and theaters or combat. The American empire constructed in, basically, from the 1890s to the 1930s, particularly 1880s to 1930s is just a literal one, like '30s in that we have American Samoa or Puerto Rico or Guam or various different territories, because we just straight up went and took these places and made them part of America in traditional empire fashion.

Butler is there as a kind of zealing character throughout the creation of this and this book serves as this incredible window into this period and the construction of American empire. It's called the Gangsters of Capitalism: Smedley Butler, the Marines, and the Making and Breaking of America's Empire and the author is a journalist, Jonathan Katz, who's the publisher and writer of The Racket newsletter on Substack.

I've known Jonathan for a long time. His reporting on Haiti and the earthquake in Haiti received numerous awards. It's great to have you Jonathan on program.

Jonathan Katz: Hey, Chris. Good to see you again.

Chris Hayes: This is such a fascinating topic for a book, so tell me first how you got into Smedley Butler. How did you discover him?

Jonathan Katz: I mean, in the word Haiti. It was when I was working on my first book about the earthquake in Haiti, the big truck that went by, I dug back into patient history to explain how things had gotten so precarious that the 7.0 earthquake became the deadliest earthquake ever recorded in the western hemisphere. That requires talking about American influence and especially the U.S. occupation of Haiti, which most Americans don't know about. But that started in 1915 and lasted 19 years until 1934.

Smedley Butler was hugely important in that and when I was looking for more information about Butler in case I was going to make him into a character in that book, which he didn't end up being, that was when I encountered this stuff about War Is a Racket and the business plot. It just set me on this question of how did this guy who did all of these horrible things in Haiti and then I find out he also did things like this all over the world, how did he then become an anti-fascist, an anti-imperialist and an anti-war activist. That's what set me on the path.

Chris Hayes: Yes. The occupation of Haiti is something that I think most Americans, A, don't know about and, B, even those who do know about it don't quite realize how long it was that, that it was under direct American control, which Butler was up near the very top of, I'm not mistaken. He was sort of running the island at certain point.

Jonathan Katz: Yes, pretty much. He was part of the initial invasion force in 1915. It actually starts with a bank robbery, the Marines rob the Central Bank of Haiti in December of 1914. That sets Haitian politics into a tailspin and that results in what was the last assassination of a Haitian President until the summer of 2021.

Then, in response to that assassination, Woodrow Wilson orders a full invasion of Haiti and the ground forces are Marines. So Butler, he was the head of one of the battalions, who was the tip of the spear of that invasion and then he stays for three years and ends up, actually, becoming the head of the client military, the Gendarmerie d'Haïti, and that's Butler's idea.

The Gendarmerie d'Haïti sets the model for sort of U.S. trained client local constabularies that gets repeated in Nicaragua and the Dominican Republic. Ultimately, we see it in Vietnam, Iraq and most recently with the ANA, the Afghan National Army.

Chris Hayes: Let's talk about who Butler was, where he came from, how he became a Marine.

Jonathan Katz: He was from Philadelphia. Specifically, he was from the mainline. He was born in a town called West Chester. He was from a rich Quaker family on the Main Line. His father was a congressman. His grandfather, Smedley Darlington, who he is named for, his mother's father was also a congressman and they were just a wealthy, very well-connected family on the Main Line.

Actually, first of all, because he was a Quaker, but second of all, because his father thought that it was sort of beneath their class and station, he didn't want him to go into the military in 1898 as the war drums are beating against Spain over Cuba, and then the USS Maine explodes, famously.

Butler gets caught up in that 9/11-like moment and lies about his age. He's 16 years old and joins the Marines, but against his father's wishes. His mother was about as militant as he was, so she went with him to Washington to sit by as he lied about his age and they took him.

His father thought he was going to go to college, that he would be a lawyer and a politician like he was. But instead, Smedley goes on this other path and he joins the Marines and stays in it, basically, for 33 years going from Second Lieutenant because he sort of buys his way into a pretty boy junior officer rank, all the way up to Major General, which was the highest rank available to Marines at the time.

Chris Hayes: Yes. It's funny, in the book, for people that don't know this, and I suspect a lot of people do, but like the Main Line Philadelphia Quaker establishment is like a part of an original American establishment but is distinct in its own way. It's a very interesting thing. It's a very rich, long legged deep kind of thing to come out of, even to this day. Like those families and those people are still there and that's like a real thing. It's a real kind of hothouse subculture, I think it's fair to say.

Jonathan Katz: Yes. One of the things that drew me to Butler as a character, as a historical figure, is that he embodies all of these contradictions that are contradictions of America. Like a lot of that comes from his upbringing, because the Quakers are a pacifist sect. Their one thing is don't serve in the military.

Both of his grandfathers served in the Union Army during the Civil War, but that was kind of a special case because--

Chris Hayes: They were also abolitionist, right?

Jonathan Katz: --exactly. In 1898, there are a lot of Quakers who are like, this is an illegal war. This is a terrible thing like we're going to be imperialist. We can't do this. His mother is Maud Darlington, who's like an incredible character in her own right and I tried to bring her through in the book.

Chris Hayes: It comes through.

Jonathan Katz: She goes to their meeting in West Chester and says basically like, either Smedley joins the Marines or he leaves and the Darlington family fortune goes with him and they relented. They're deeply held opposition to war. To a certain extent, that kind of Quakerism, he was never really a practicing Quaker, but that kind of Quaker philosophy, egalitarianism and anti-war pacifism is, in some ways, as close as an explanation as you can get for why a guy who ends up being twice the recipient of the Medal of Honor and this legendary Marine who's still celebrated in the corps then ends up being this anti-war activist at the end of his life.

Chris Hayes: Yes. We should note that the last Quaker president we have and maybe only Quaker president was Richard Nixon, the guy that bombed the hell out of Cambodia illegally.

Jonathan Katz: Exactly. I can tell you there was another one, because it was Herbert Hoover, and I know that because Hoover leads Butler into battle in China and gets him shot.

Chris Hayes: Let's go back to that late 1890s era, the Spanish-American War, which is I think 9/11 is useful for modern audiences that haven't studied this period. If you have studied this period, you may have encountered the sort of yellow press and the Hearst Newspapers and these incredibly lurid stories of the insanely disgusting and vile depravations of the Spanish forces on Cuba, much of which was completely fabricated or wildly embellished that produced this war fervor in the United States.

Take us back a little bit to that moment since that's so key in propelling him both into that conflict and then that conflict is a beginning point of this period of American empire.

Jonathan Katz: Yes. Cuba famously or if you look at a map is very close to the United States, very close to Florida and Americans had their eye on Cuba since the beginning. Jefferson wanted to annex it. There were plots annex it under Franklin Pierce, Jefferson Davis was a big proponent of annexing Cuba before our Civil War. Cuba had been a Spanish colony for 300 years, basically, since Christopher Columbus dropped anchor in Guantanamo Bay in 1494.

The Cubans have been fighting for their independence for 30 years by 1898 and they were fairly close to winning it. But there was just a concerted effort by what you would call like a war caucus. They're often referred to as the jingoes, where the idea of jingoism comes from. The biggest, loudest and most powerful of the jingoes was Theodore Roosevelt who at that time, at the beginning of this war, was the assistant secretary of the Navy, but obviously would be very highly promoted shortly thereafter.

This war caucus was beating the drums really loudly because they wanted the United States to come and intervene on behalf of the Cuban Mambises, the Cuban independence fighters against the Spanish Empire. Everybody sort of have their own, just like with Iraq, there's sort of shades of Ahmed Chalabi. Everybody sort of have their own idea of how this would go, like the Cubans who were asking for American involvement are like, yo, come in, you'll help us beat the Spanish. We'll be independent and viva Cuba.

Teddy Roosevelt is like, we'll get a colony. We're going to become an empire. This is great, perfect. I'm going to quit Assistant Secretary of the Navy and form an army in it.

Chris Hayes: Ride around on horseback.

Jonathan Katz: Yes. We'll name them the Rough Riders after Buffalo Bills' Wild West Show. That's kind of the moment that that gets Butler involved. The headline moment that people learn about in high school is the destruction of the USS Maine. The question that should follow is why was the U.S. battleship in Havana Harbor blow up in the first place.

The answer was that the McKinley administration, on Roosevelt's urging, sent one of its first two steel battleships to Havana in a show of strength, because there was already a war going on. All the evidence, basically, the best guess is that it was an accident, but the yellow press, William Randolph Hearst, Joseph Pulitzer for whom the Pulitzer Prizes are named, they kind of take advantage of this moment.

There really were real abuses going on. I mean, the Spanish were horrible in Cuba. They invented concentration camps and all kinds of forms of torture to torture the Cuban independence fighters and civilians back into submission. By the way, the first place that the Americans take, the first place the Marines take--

Chris Hayes: The first place, this is amazing.

Jonathan Katz: --is Guantanamo Bay. So Butler in the summer of 1898 comes to Guantanamo and his career begins and the American overseas empire begins and the book begins, essentially.

Chris Hayes: Yes. Part of what's fascinating here is that it's always important to sort of reground yourself in American history because you realize how little was knew. But all the contradictions of kind of like liberal, hawkish, humanitarian war, American empire which is kind of a contradiction in terms because we threw off an empire, so we don't want conquest, they're in this episode. I mean, your point about like the Spanish really are awful and they were in the same way that Saddam Hussein genuinely was monstrous.

A lot of things are true, the Cubans really do want the Americans. They really do want to be independent. There's a lot of sort of like self-deception about what we're up to. There's also like straight up colonial imperatives. There's also a lot of racism about who these people are and like the white man's burden. All this stuff is mixed in this cocktail a hundred years before these debates around the war on terror in Iraq and all that stuff but it's all present there. It's really striking how much that's the case.

Jonathan Katz: Yes, it's all there. It's all there at the beginning.

Chris Hayes: The Spanish American War is the beginning of this period of a bunch of imperial skirmishes that Butler sort of move his way through. Let's talk about some of those maybe and I don't know what the best order to do them, if you want to do in chronological order. There's the Philippines, Nicaragua, Haiti, Dominican Republic, all of these happening around this period, all of which Butler is involved in.

Jonathan Katz: Yes. I would put them in a series of bucket maybe organized by chronology. In the war against Spain, crucially, when Congress declares war, we declare war on the entire Spanish empire, not just in Cuba. That includes all the Spanish colonies, which includes Puerto Rico, which remains a U.S. colony, we take it at that moment. We also use the cover of war to seize Hawaii, whose queen had been overthrown in a private white American coup of sugar growers a couple years before that and the Philippines, which is in a lot of ways, the big prize.

There's a big debate going into the war about whether to annex Cuba as like a fully owned colony. Actually, some Americans in Congress were so racist that they didn't want to annex Cuba, because they were like there all these black people, and they're Catholic, and they speak Spanish and we don't want them in our country. So they kind of they kind of write in this proviso in the declaration of war called the Teller Amendment, which says that we won't annex Cuba, but it says nothing about annexing the rest of Spain's colonies, so that's how we end up with--

Chris Hayes: It should be noted, just to further this point, which you bring out in the book and which is part of the history too, that it's the pro-annexation forces who are the less racist more egalitarian in this argument. Because they're like, well, let's just make them Americans, it'll be part of America and it's the it's the racist forces saying, no, no, no, we do not want those people Americans, on equal footing with American citizens.

Jonathan Katz: Exactly. The compromise and anybody who's listening in Puerto Rico will know exactly what I'm talking about immediately, are a series of Supreme Court cases called the Insular Cases, where essentially the Supreme Court decides that just because the United States flag is flying over your house and the United States military is controlling you doesn't mean that you have any rights as an American citizen or any protections under the Constitution.

In that moment, we do the same thing in the Philippines that we do in Cuba. We ally with the Filipinos against the Spanish and then betray them, but because there's no protection against annexing the Philippines outright, we then do that and that starts a war against the Filipinos. It's known as the Philippine-American War. Butler, he's immediately - he comes back from Cuba, hangs out in yellow fever quarantine for a little bit and then get sent to the Philippines, because, and this is important for understanding why it's the Marines specifically that do all these things, the Marines are troops, their ground infantry under direct control of the federal government.

At that moment, the Army is more under control of the States. You've got these sorts of state militia, state volunteer forces. While Congress is debating whether to expand the size of the standing army, the Marines are available because the Marines are the Marine infantry, they're the infantry of the Navy, which is under direct federal control. So McKinley is able to send them out and Butler goes to the Philippines and participates.

The first time he actually goes into battle, he leads his troops into an ambush actually. The first time he goes into battle is in the Philippines, the Battle of Noveleta.

Chris Hayes: That war is both brutal and an incredible ideological whiplash, because the entire causes belly of the Americans turns around in a matter of years. I mean, the ostensible story is that America doesn't take empires, doesn't seek conquest, we believe in independence and self determination, look at us the colonies and we go into boot out the bad Spanish, then take it over and find ourselves on the other end of basically the exact same independence forces we had beautifully been on the side of to liberate and our every bit is brutal I think arguably as the Spaniards were. Like we just literally take over the role of colonial overseer in a matter of a year or two in which we had justified our entrance as liberators.

Jonathan Katz: Yes. So we get into this war, the war against Spain, because of the policy of reconcentracion of concentration camps. We set up concentration camps in the Philippines. We learned this form of torture called the water cure from the Spanish and use it against the Filipinos. Simplistically, it is waterboarding but it's actually worse than waterboarding because you're actually pouring water into like the head.

One of the descriptions of it is that you swell up the belly of the victim until like they've swollen up like a toad. Yeah, and we're just doing the thing. At that moment, so Teddy Roosevelt, he does not come off looking very good in gangsters or in this period of history.

Chris Hayes: No. There's so many different parts of Roosevelt, but we get the full racist imperialist part in this chronicle.

Jonathan Katz: So he's quit the Navy, he's gone and served in the military in Cuba. He then becomes vice president and then during this war becomes president when William McKinley is assassinated. Roosevelt, he's really adamant about it. He's really out in front about it. I mean, it's sort of on the side later in life where he sort of remarks to a British friend, I am as I thought I would be a pretty good imperialist.

But he's very much adamant that he's an expansionist. He's adamant that he is growing the power of the United States using the Navy, using military force and using commerce. Like we're going to just sort of open new markets, we're going to force them open with the military, we're going to take them over and he puts it in white supremacist terms.

I mean, he talks about how the waste spaces of the world should be the inheritance of the white and optimally English speaking racist as he calls them and that's what we're doing. But we win that war, it's 1899 to 1902 and then actually fighting continues for another decade after that in the southern provinces of the Philippines, but it's at a great cost.

First of all, and this isn't the part that Americans care about, but as many as three quarters of a million Filipino civilians die in this war, thousands, I think it's like 6,000 American troops are killed, it costs millions of dollars. Even for the expansionists and there starts to be blowback, because Mark Twain, we read Huck Finn, at the end of Twain's life in this period, he is a huge anti-imperialist and a very poisoned pen one.

He's really, hilariously, but he's sort of like daily show style, but he's lampooning and really savaging what the Americans are doing in the Philippines and also in China where Smedley Butler goes with the Marines in response to the Boxer Rebellion, which is a whole other thing that we can talk about.

But these moments, they're starting to get blowback in the United States among the American population. So at that moment, we see this turn and we go to the next bucket and this is where Butler sort of ends up in Central America. Our ways of doing sort of imperialism a little bit more on the sly and a little bit farther out of public view and public celebration and so that's where first Teddy Roosevelt's big idea is that we're going to dig a canal, also an old idea, but we're going to dig a canal to connect the Atlantic to the Pacific Ocean and that ends up requiring the forced secession of the Departamento de Panama, the state of Panama from Columbia in order to get the full rights and the full sovereignty that the Americans want and the Marines go do that.

Then in order to sort of secure the sea lions to the Panama Canal and also provide entree to the fruit companies and to the banks, the Marines go and engage in a phrase that people may sort of dimly remember from high school history of dollar diplomacy, where instead of saying we're going to take Honduras, we're going to take Nicaragua as a colony like we did in the Philippines. We're going to sort of ally with local forces and instead of betraying them outright we're going to sort of fund them and also take over the economy by taking over the bank and taking over the currency by issuing a U.S. backed currency and create debt that there never going to be able to pay off. And in doing that sort of get these not disarray colonies, but de facto colonies that we then end up controlling throughout the 20th century.

Chris Hayes: Yes. Let's just talk about that transition, which is so fascinating from the sort of outright like conquest, because the Philippines really is a kind of high watermark of that sort of thing and also kind of an embarrassed. Again, it's always great because contemporary sources recognize that Boxer is like your point about Twain. It's like they knew back then that like the U.S. had done an absolute 180 honest feeling about self determination of the Filipino people like there were many contemporary critics pointing that out to Quakers, Twain, others.

The other thing that comes through in your writing about this and other sorts of others there is that like it's also this moment when American self conception of no foreign entanglements, George Washington, no standing army, that really is hitting up against this new imperial vision. The people that have a view that are anti-imperialist, like that's a powerful political force, it's not nowhere. It's particularly because the Philippines becomes a little bit of a cluster, those forces gained some strength and the result of it is this, essentially, more sophisticated, more hidden, harder to hold accountable version of it, where you're not actually conquering, you're not actually taking them as colonies, but you're effectively doing that, you're getting all the benefits, but you're keeping the political blowback far, far out of view that had come with the Philippines.

Jonathan Katz: Yes. It bears noting that throughout the 19th century, throughout America's first century, we are just violently expanding, seizing land--

Chris Hayes: Yes, of course.

Jonathan Katz: --killing people and putting them on reservations. A lot of the people in this story come directly out of that experience. I mean, people like--

Chris Hayes: That's how they learn to do what they do.

Jonathan Katz: --exactly. People like Adna Chaffee who's an army general, who's very important in the Philippines and commands American forces during the Boxer Rebellion, Howling Jake Smith, who is part of this horrific episode that Butler's mentor Littleton Waller is involved in where we basically - on orders of the Army, the Marines commit essentially a low level genocide on the Island of Samar.

They all learned their trade doing this against the natives on this continent and what's happening at this moment, and you see this happen over and over again, in American history, where we've done all these things to get to this point, some people are like, this works for me, this is good, let's keep going with this. Let's just do Manifest Destiny but do it in the Philippines. Let's do it in China. Let's just Manifest Destiny in the entire world.

Other people, some of whom come from traditions like the Quakers that have been ringing the alarm bell about this throughout and others like Twain who are sort of like - actually, I'm having different thoughts about this now and others like W. E. B. Du Bois, who have been on the receiving end of this as racial minorities. All of these people are coming together and they're all having these fights.

To a certain extent, what we do in Honduras, Nicaragua, Dominican Republic, in Haiti to a certain extent this happens a little bit more off the radar, specifically to keep away from this argument, which is raging in the United States. Part of the way that I wrote this book, it's sort of half biography of Smedley Butler, half travelogue, I go to the countries where these things happen and I can tell you from their point of view, they're not under any illusions about what's happening.

From the Nicaraguans point of view, they know exactly what's happening and they know exactly that it's the same thing that any empire is doing to any colony, but that plausible deniability is sort of built in for the benefit of Americans.

Chris Hayes: Yes. Just two points to sort of re-emphasize here that are important. First of all, the continuity between the war on indigenous peoples on the continent and what extent. In fact, there's this famous Frederick Turner thesis in the 1890s where the 1890 census where it says the frontier is closed and it's not a coincidence. There's imperial aspiration comes on the heels of that, like keep Manifest Destiny. Also just, which you write about in the book, the experience of what the U.S. military does between the Civil War and this period is fight and kill indigenous people. That it is its main calling card, it's how they come up through the ranks, it's the battles that they have fought.

That is what those 20 or 30 years largely of the U.S. military experience is between the Civil War and the imperial period. The training ground for all of this is quite literally these wars.

Jonathan Katz: Yes, exactly. Right.

Chris Hayes: How does Butler feel about all this? As he's doing this, I mean, he's very good, he finds it, he's very good, very, very good at this, which is a little surprising, given his background or whatever that he's a good leader of men, he's a good commander and he is rising up to the ranks. What does he contemporaneously feel about what his mission is? What is the ideology or the self justification or mission that these men are telling themselves about what they're doing in these places?

Jonathan Katz: Well, when he joins the Marines, the way he describes it in a memoir that he writes in the early 1930s, before the business plot, before War is a Racket, before for all that. He talks about how he wanted to shoulder a rifle to free little Cuba is the way he puts it, and sort of like it's a paternalistic and there's like an implicit racism there. The idea that what the Cuban Mambises who are like these battle-hardened fighters who've been fighting for 30 years, but what they were really waiting for was like a 16-year-old from West Chester, Pennsylvania to like come in and--

Chris Hayes: Sixteen-year-old Rich Quaker to come to their aid.

Jonathan Katz: Exactly. But it has that small R republican, small D democratic ideal that he's going to be bringing the American way to these--

Chris Hayes: On the side of liberation and independence against occupiers and conquest.

Jonathan Katz: Exactly, and they will welcome us as liberators. For the first decade of his life about or first decade of his military career, which is (inaudible) the first decade of his life, like he's not really reflecting on it all that much. He's more concerned with impressing the Marines around him, impressing his commanding officers, showing that he belongs. I mean, his obsession is proving that he is not just Congressman Thomas Stalker Butler's son and he's not just a gilded second lieutenant who's ordering around these more experienced enlisted Marines around him and also becoming a man.

I write about it in the book like there are these gender politics involved, I believe her name is Kristin Hoganson wrote a book about specifically the Spanish-American war especially in the Philippines about masculinity. I mean, Teddy Roosevelt is just the strenuous life and he's just out there. If he could have, I think, made the U.S. flag just a giant phallus and use it like speak softly and carry a big stick, like he's talking about maybe a different big stick.

Chris Hayes: Well, and we should also note in a kind of like (Kendall Roy) fashion. Roosevelt, I mean, he's not a Quaker, but he's from this like totally cosseted wealthy affluent, connected establishment debutante ball attending New York City urban universe and he's small, and he invents tough guy virile outdoorsman for himself as an identity out of nothing. Like it's entirely constructed vision of masculinity and of his own toughness and he, as Butler does, puts his body where his mouth is, like they do actually go to war and risk their lives.

But there's a similarity there that's kind of interesting that these are people who are creating this identity for themselves.

Jonathan Katz: Yes. Butler is short. He's like, I don't know, 130 pounds wet. I mean, he's a little guy. As are a lot of these guys. A lot of them like the most legendary Marines and so that's kind of his focus. By the time he gets to Nicaragua, so he goes to Nicaragua three times, he's based out of the Panama Canal Zone, he's gone back, actually, to the Philippines again and now he's come back to Panama. He's living there with his wife, Ethel 'Bunny' Butler, and his kids in the Panama Canal Zone, which is a U.S. colony and will remain so until essentially 1999.

His battalion keeps getting sent to Nicaragua over and over again. Things aren't going well in Nicaragua for the Americans. There's kind of a Teddy Roosevelt-ish, President, almost dictator, who is mad at the Americans for not building the canal through Nicaragua and the Marines go and are sort of intervening on behalf of the United States. But Butler realizes, as he's there, that he's really intervening on behalf of the banks.

That essentially two banks, in particular, Brown Brothers, which is now Brown Brothers Harriman and (J.W. Solomon) and company, they found a new Central Bank of Nicaragua, which is incorporated in Connecticut. They create a new Nicaraguan currency and Nicaraguans don't particularly like this, a lot of Nicaraguans don't like this. Some do. Some elites are really into it, but a lot of them don't and they keep rising up and trying to sort of overthrow the American public president and the Marines have to keep coming back to defend him.

At that moment, and you see this, it's not just Butler, there are other people in the military, in the U.S. military. I mean, they're not dumb. They can see what's happening. Butler writing to his parents like, they're calling this a revolution but there's no revolution in this, like we are clearly just doing this because Brown Brothers has some money down here.

Now, that doesn't keep him from doing anything. In fact, one of the almost footnotes in the book is that Butler ends up overseeing this horrendous battle on a mountain called Coyotepe, which is just outside the City of Masaya. The revolutionary leader, Benjamín Zeledon, gets killed in this battle and his body ends up getting paraded through the streets of the towns at the base of this hill actually, the base of the Masaya Volcano.

There is a teenage Nicaraguan named Augusto Sandino who sees this grisly procession go by and at that moment is radicalized into a lifetime of revenge and war against the Americans. Sandino's followers are called the Sandinistas. The Sandinistas that empowered today Nicaragua under Daniel Ortega take their name from that moment where they were radicalized.

Chris Hayes: Amazing.

Jonathan Katz: So Butler doesn't keep himself from sort of creating these echoes of history, but you can see sort of he starts questioning it. As this goes on, we invade Mexico at the behest of the oil companies. The oil companies lawyer, a guy with the recognizable name of William F. Buckley Sr. calls on the Wilson administration and says like, there's this revolution going on in Mexico. We need some protection in the premises. The Marines and the Navy invade and ends up being an army occupation in which Douglas MacArthur is involved in Veracruz.

Butler then goes to Haiti which we ultimately invade at the behest of Citibank, because they say the Haitians owe them money to basically repay loans that the Haitians are using to pay back the French from the Haitian Revolution, these are all very long stories, and then the Dominican Republic. Then, by the way, Butler becomes the head of the Philadelphia police force and militarized the Philadelphia Police.

At the end of Butler's military career, he goes back to China one more time and this is during sort of China's warlord period, the Qing Dynasty has been overthrown. Largely, they weren't helped by the fact that this invasion of which Butler took part in 1900 against the Boxer Rebellion happened, but the Ching Dynasty has fallen. There's fighting going on over control of China and this is the beginning of the Chinese Civil War, which is between the communists and the nationalists under Chiang Kai-shek.

It's that one moment Butler has gone back as a general. He becomes a general during the First World War and also his experience in World War I sort of overseeing a disembarkation, re-embarkation camp, where he sees the horrors of the soldiers who are coming back from the Western Front. He is now in China and he sees sort of he can tell that he's seeing the first stirrings of what is going to be the Second World War in the Pacific.

It's that one moment, he's a general now, he's in charge of American troops and is really to a large extent, the senior military official of all of the foreign forces that are stationed in China again at this moment. That's the one point where he starts kind of insofar as a Marine can act as a pacifist, you see him keeping his troops out of fights and actively trying to avoid sparking a war between essentially the Chinese Nationalists and the Japanese.

That's the only thing that I can say where he's still a Marine, he's still walking around with a spider stick. It's the only moment where I can say that he's in uniform and is kind of starting to think about anti-imperialism and think about activism against war and then the rest of it (inaudible).

Chris Hayes: Let's talk about the business plot, the fascist coup against FDR and then where's Iraq at after we take this quick break.

By 1933, FDR has just won. It's the depths of the Great Depression. The country, obviously, is in terrible shape. Butler makes this incredibly astounding claim. Gives a context for what Butler is doing at that point and then talk a little bit about what really did happen here, because I think that's the source of some historical debate.

Jonathan Katz: Butler, essentially, at this moment, he's left the Marine Corps. He leaves in 1931. His last hurrah was that he's court martialed for insulting Benito Mussolini.

Chris Hayes: That's amazing.

Jonathan Katz: That's in the book, you can read about that. But he's essentially on the speaking circuit, which is something that he started doing right before he retired. He's a popular speaker. He's a really charismatic guy. He's funny, he curses a lot and people really like him and he's kind of made his stock-in-trade at that moment sort of telling stories about his adventures overseas which scandalize a lot of Americans, because he's talking about like, well, this is what we actually did in Nicaragua where we fixed these elections, this is how I dissolved the parliament in Haiti at gunpoint.

He's sort of entertaining and also starting to scandalize crowds, and he's also starting to attract the attention of people on the margins of American debate who are either themselves anti-fascist or critics of the American government or whatever. What happens in 1933 and we know this because he testifies to this effect in front of Congress. He comes of his own volition and gets the attention of two congressmen in particular, John W. McCormack, who ends up becoming Speaker of the House, long serving Speaker of the House, and a guy named Samuel Dickstein, who's a Democrat from New York and an immigrant to the United States. He was born in the Russian Empire.

Butler comes to them and says, this bond salesman named Gerald C. MacGuire has been bothering me for two years. Over the last couple months, it's got really disturbing, he's asking me to lead a coup against Franklin Roosevelt. Butler comes and he testifies. He enlists the aid of a journalist named Paul Comly French, who is a reporter for the Philadelphia record in the New York Post. He kind of does his own independent investigation, but Butler is obviously his star source, but he interviews independently MacGuire, who tells him, essentially the same thing this whole on Butler.

MacGuire has been traveling through Europe. He's gone to all the hot spots of 1934. He's in Rome where Mussolini is in power. He's in Berlin where Hitler is now a chancellor and he goes to Paris, which is actually the place where he finds the model that he wants Butler to use. It was an anti-parliamentary riot, that really, I mean, if you want to talk about things that resemble January 6th.

Chris Hayes: January 6th.

Jonathan Katz: Yes.

Chris Hayes: It's the closest historical analogue.

Jonathan Katz: Absolutely. We could talk about that in more detail, but he comes to Butler and he's like, I want you to do that. I want you to do that in Washington.

Chris Hayes: We should just note, it's a bunch of right-wing mob that marches on the Capitol. Basically puts it under siege to stop the transfer of power to the new government that they oppose.

Jonathan Katz: Yeah. Animated, in large part, by an anti-semitic conspiracy theory, which is based on - there was a real guy named Alexandre Stavisky who actually was involved in corruption and then he kills himself in 1934. But this meme basically starts in France that Stavisky didn't kill himself and that it was a plot done by powerful members of the French Parliament to keep the heat off, that they were being controlled from behind the scenes by this sort of like Jewish cabal.

Yes, so this group of veterans, they're mostly veterans groups, and students, and some communists, and they all kind of get together and they do this sort of loosely organized kind of crazy riot, in which the people who end up getting killed, just like on January 6th, are almost entirely the rioters.

Chris Hayes: The rioters.

Jonathan Katz: But they do succeed in putting the fear of God in the Assemblee Nationale of France and because of the parliamentary system, the center left Prime Minister resigns in favor of--

Chris Hayes: Resign. The government falls.

Jonathan Katz: Yes. A kind of a conservative, but somebody who's going to be more accessible, so the fascists takes power. This both ends up setting the stage for the Popular Front in France, which is something that Americans could learn from where liberals, and socialists, and people on the left kind of work together to stave off fascist control, but it also ends up setting the stage for the Vichy regime and the puppet fascist regime that takes power over much of France when Hitler invades in 1940.

So Gerald C. MacGuire, he says like he meets with one of these groups, the Croix-de-Feu, the Fiery Cross, and he comes to Butler and he's like, this is the kind of organization that I want you to lead. In terms of what we know, we know that all of that happened because MacGuire, under oath, as he's busy perjuring himself left and right about a bunch of other things, he says, yes, I met with the Croix-de-Feu, but it was at a mass at Notre Dame like I just like went on a Sunday morning. They just happened to be there and we hung out for a little while. Yes, I thought they're pretty cool guys.

Chris Hayes: Just to recap here, so you got this bond salesman, he actually did meet with Butler, he actually did travel through all the fascist hotspots of Europe in 1934, which is a raging set of fascist hotspots from Mussolini's Rome, Hitler, Chancellor of Germany, this sort of riot at the National Assembly in France by essentially fascist forces.

Jonathan Katz: Which happens six weeks before MacGuire gets to Paris, like it's all very fresh.

Chris Hayes: So he comes before the same committee and he testifies. We know that he was in all those places and he met with Butler. Butler and he both say that he basically said to Butler, I want you to do something like that.

Jonathan Katz: Essentially, yes. He's all over the place with this testimony. One point, he was like that butler came to him and propose a coup, which makes no sense.

Chris Hayes: My understanding, I mean, again, is that how much this was like weird fantasizing cosplay and how much this was a real plot is basically the debate.

Jonathan Katz: Okay. So here's what I can tell you about that, so MacGuire tells Butler at this sort of meeting where he spills the beans, this should be a movie, right? Like it's at the back of abandoned cafe that's been shuttered because of the depression in a Philadelphia hotel and he tells Butler about his trip to Paris and about the Croix-de-Feu and about his plans for Butler to lead a column of half a million World War veterans, armed with rifles from the Remington rifle company into Washington.

He makes a couple of predictions. One prediction is that this guy, Hugh S. Johnson, who is an army general who Franklin Roosevelt had pick to head his National Recovery agency. He says, we've been meeting with Johnson, we've been talking to him, he's going to get fired in the next couple of weeks and he gets fired in the next couple of weeks, so that prediction comes true.

That speaks to some amount of inside information, because that wasn't something that--

Chris Hayes: Right.

Jonathan Katz: --I mean, maybe it was a lucky guess, but it wouldn't have been very easily predictable from the outside. Johnson was sort of looked at as kind of the conservative in the New Deal. He was kind of the right-wing. A lot of people sort of looked at him as like, if you were into the right, he was kind of the stabilizing influence in the New Deal, so that gives some credence to that.

Then he says, in the next couple of weeks, there's also going to be an organization that appears and he calls him the (villagers in the opera). They're going to be the people who are behind the scenes, funding this effort making this thing go and it's called the Liberty League. It ends up being a thing that comes into formation, a couple of weeks later on the front page of The New York Times.

What the Liberty League is basically a group of very wealthy and very well-connected individuals, including the Du Pont corporation, Alfred P. Sloan of General Motors. It's got two former Democratic presidential candidates, John W. Davis and Al Smith are involved, the McCann Erickson ad agency, like all of these people.

They make no bones about at least their public facing goal is to stop the New Deal.

Chris Hayes: People may know about this, because they know the history. But like the Koch brothers Americans for Prosperity like right-wing billionaire industrialists who don't like this Democratic left liberal president and what he's doing and think it's going to strangle American prosperity and want to end it quite forthrightly and are funding people with reactionary politics like theirs to do so. It's amazing how consistent that story is in multiple points of American history.

Literally it's kind of the model. I mean, sort of foundational for this kind of sort of capitalist conservative business political activism.

Jonathan Katz: Yes. Well, when you've got a lot of money in a capitalist country and that money is influential like you use it, that's what happened. Unless somebody stops you or unless there's a law passed or something like that.

We know that the Liberty League wanted the New Deal undone. What we don't know is the extent to which the big names in the Liberty League were on board with this plan. The one piece of evidence that we have, that suggests that there was a plausible connection is Gerald MacGuire's boss, Grayson Mallet Prevost Murphy.

Murphy, he was a Wall Street financier, a big deal at the time and as I write in the book, and this was stuff that I hadn't read this laid out like this anywhere else, I kind of learned it sort of late as I was trying to figure out like how real was the business plot and this is what kind of moves me to the - I think Butler was onto something here.

Murphy was kind of the Bizarro world version of Smedley Butler. Butler was kind of the zealot, the Forrest Gump of American empire from the marine point of view. Murphy was that from the intelligence point of view. Butler went to the Haverford College Grammar School. They even start out in the same spot in Philly.

Murphy goes to West Point. He joins military intelligence. He then goes to - he's in the Philippines, he's in Panama, he's involved in the conspiracy to sever Panama from Colombia for the purposes of building the canal. He then sort of after doing the rounds as a formal spy, I mean, he's called back to Washington to debrief Teddy Roosevelt about the Panama conspiracy in the middle of it happening in October 1903.

He then goes into finance. His uncle, a Mexican financier named (Severo) Mallet Prevost is the guy who tells Brown Brothers to get involved in Nicaragua. He's like, there's going to be an opening to do dollar diplomacy there. Grayson Mallet Prevost Murphy, Grayson MP Murphy, then gets involved with JPMorgan and he oversees a loan to the Dominican Republic, controlling loan there and he's also involved in other elements of their overseas operations. Because, of course, he's in military intelligence like he literally speaks the language.

He then goes to Europe, oversees the American Red Cross during the First World War while Butler is running his embarkation camp and then barnstorms across Europe with Murphy's buddy, Wild Bill Donovan, setting up a private intelligence network. Donovan ends up running the OSS during the Second World War, if you're familiar with those initials, the OSS. It is what becomes the CIA.

Murphy is both Jerry MacGuire's boss, his name is Jerry MacGuire, by the way.

Chris Hayes: Right.

Jonathan Katz: But Murphy is both Jerry MacGuire's boss and the treasurer of the Liberty League. I mean, that to me, it suggests that first of all I'm sure Murphy knew what was going on. I can't remember if it's McCormack or Dickstein, I think it's McCormack, says like, I found this like an insane thing to say. But he's like, the only reason we didn't call Murphy to testify is because we already had them called and we didn't want to give him a chance to like - it makes no sense.

But like even they knew like Murphy was behind this, the question that I don't know is had Murphy gone to the Du Ponts and been like, "We're going to do this coup. You own the Remington arms company, do you want to get involved?" Had he gone to Douglas MacArthur or Hugh Johnson and been like, "This is happening. Are you in or out?" We don't know.

The reason we don't know is because there's not really an investigation. The House American Activities Committee, the special committee, they're overseeing a bunch of different cases at that time, including a totally separate case which is what involves Prescott Bush's bank which is how Prescott Bush sometimes gets mistaken for having been involved in the business plan, but that's sort of a side story.

But Butler testifies, the journalist testifies, MacGuire testifies and the lawyer for another sort of low level businessman who was sort of maybe involved with this at the beginning testifies and that's it, there's no further investigation. So without the Du Ponts coming in and being sworn in and said, did you know, what did you know and when did you know it, there's no real way to know.

I spent five years going all over the world trying to tell all these stories and I tried to do as complete a job as I could, investigating the business plot. Someone else or maybe for my next project or something, I could go and see if there are papers that somehow weren't destroyed floating around or something, where there's like some kind of paper trail between Alfred P. Sloan, and Murphy and Butler or something like that.

But it may also be that Butler blew the whistle on this thing before it could really gel and that's part of the reason why it's been very hard to prove ever since.

Chris Hayes: After that, the big thing in the sort of closing chapter of his career is the War Is a Racket speech and the book and then the sort of speaking tour around it. What produces this full turn into anti sort of capitalist interest, anti-imperialist figure in the last, say, 10 years of his life?

Jonathan Katz: I think he becomes, if not a socialist, he becomes a social Democrat. The last vote that he ever makes in a presidential election is in 1936, he votes for Norman Thomas, who was the socialist candidate for president. I think he had had it. I think he had just become completely fed up.

If there was a decade that was going to radicalize the person, it was the 1930s. Maybe the 2020, I don't know, we'll see, but certainly in his lifetime the 1930s. I mean, you've got the Great Depression, capitalism in all of its gross predation has just left people starving and destitute. You've got the experience of the First World War. You've got very, very clear signs that another world war that is going to be even worse is in the offing.

Butler goes through the beginning of this decade like he's very inspired by the New Deal. He actually runs for Senate. The man is everywhere. He runs for Senate 1932. He gets the living F beat out of him. But he runs like as an independent Republican, but kind of on a New Deal, proto New Deal ticket. He's calling for sort of a jobs guarantee, and old age insurance, and also continued prohibition, which is what I think loses in the race.

He's a big supporter of Franklin Roosevelt, which is a reason why the business plotters however many they were really stupid to approach him, but maybe they wouldn't have realized that. So he's a supporter of the New Deal, he's a supporter of social democracy, he's a supporter of government coming in and helping people. He's also radicalized by yet another event that's talked about in the book called the Bonus March, which ends with the Army attacking veterans who've assembled in Washington, D.C. asking for promised help from the government.

He goes through the business plot and he sees that Congress is going to do nothing to hold the people who he believes are definitely responsible and he's dealing with moral injury, and he's dealing with PTSD and he's dealing with having spent a lifetime seeing the horrors of war and he comes up with an answer. His answer is essentially what ends up being called the military-industrial complex.

He puts it in this book called War Is a Racket, which is a very oversimplified, there are errors in it. I mean, it's a blunt book written for a mass audience. The argument that he's making in War Is a Racket is an argument borrowed from or it's a metaphor borrowed from his time running the Philadelphia Police Department during Prohibition where he's fighting against these gangsters like Max "Boo Boo" Hoff and Mickey Duffy, these guys were connected to Al Capone and they were racketeers.

In War Is a Racket, he's saying, well, the real racketeers are the munitions industry. The real racketeers are the capitalists who used soldiers to defend their turf. Then later in 1935, he writes a series of articles that I think often get confused with War Is a Racket in a magazine called Common Sense. It was a socialist magazine, although it identified itself as a non-Marxist socialist magazine.

He writes these series of radical articles, where he decries basically each part of the military in a different article each one. It's in the second article called In The Time of Peace, the Army, where he recounts this famous among (Butlerites) confession of crimes where he says, I helped in the raping of half a dozen Central American republics. I made Cuba and Haiti good places for the Citibank boys to collect revenues. I made China safe for Standard Oil. I was a racketeer for capitalism. Looking back on it, we Marines could have given Al Capone a few hints. The best he did was operate in three city districts. We Marines operated on three continents.

At that point, as a Marine, he knows all about building bridges and he knows all about burning bridges. He burns that hell out of every bridge that he's had in his life. He even burns his bridges with FDR, who he had risked his reputation to protect from this coup and doesn't even vote for him in 1936, because he sees that FDR is moving toward getting the United States involved in a war and what he's really afraid of is war with Japan.

He's no friend to the America First Committee. He's not an anti-Semite. He's, at least, not more of an anti-Semite than anybody from the Main Line would have been in the 1930s. But he is terrified of seeing another generation of Americans get sent through the sausage maker like they did in the First World War and he spends his last gasp of life in the late 1930s, he dies in 1940, trying to decry the military-industrial complex as it gets called and try to keep the United States from getting involved in another war.

Chris Hayes: The book is called the Gangsters of Capitalism: Smedley Butler, the Marines, and the Making and Breaking of America's Empire. It's by Jonathan Katz who also has a great newsletter called The Racket. The book is phenomenal. I'm making my way through it. It is sprawling. It's incredibly well-written. It's a product of a shocking and astounding amount of reporting and research. I can only imagine how long this took. I think it was like seven years you work on this book.

You and I had spoken throughout the trajectory of it, but it's a really, really phenomenal piece of work. Jonathan, thanks so much.

Jonathan Katz: Thank you. This is great.

Chris Hayes: Why Is This Happening is presented by MSNBC and NBC News produced by the All In team, features music by Edie Cooper. You can see more of our work including links to things we mentioned here by going

Tweet us with the hashtag #WITHpod, email “Why Is This Happening?” is presented by MSNBC and NBC News, produced by the “All In” team and features music by Eddie Cooper. You can see more of our work, including links to things we mentioned here, by going to