… is from pages 16-17 of Ludwig von Mises’s 1932 essay “The Myth of the Failure of Capitalism,” as translated from the original German by Jane E. Sanders and reprinted in Ludwig von Mises, The Clash of Group Interests and Other Essays (Richard Ebeling, ed., 1978):
In the interventionist state it is no longer of crucial importance for the success of an enterprise that operations be run in such a way that the needs of the consumer are satisfied in the best and least expensive way; it is much more important that one has “good relations” with the controlling political factions, that the interventions redound to the advantage and not the disadvantage of the enterprise. A few more Marks worth of tariff-protection for the output of the enterprise, a few Marks less tariff-protection for the inputs in the manufacturing process can help the enterprise more than the greatest prudence in the conduct of operations. An enterprise may be well run, but it will go under if it does not know how to protect its interests in the arrangement of tariff rates, in the wage negotiations before arbitration boards, and in governing bodies of cartels. It is much more important to have “connections” than to produce well and cheaply. Consequently the men who reach the top of such enterprises are not those who know how to organize operations and give production a direction which the market situation demands, but rather men who are in good standing both “above” and “below,” men who know how to get along with the press and with all political parties, especially with the radicals, such that their dealings cause no offense. This is that class of general directors who deal more with federal dignitaries and party leaders than with those from whom they buy or to whom they sell.