Posts Tagged ‘Hjalmar Schacht’

The Nazis’ Promotion of Private Business and Businessmen as the Elite

November 17, 2018

Robert A. Brady provides further evidence of the capitalist nature of Nazism in his book, The Spirit and Structure of German Fascism (London: Victor Gollancz 1937) by pointing out how the Nazis promoted private industry and businessmen as part of the biological elite, who were entitled to positions of leadership. They also embarked on a campaign of privatization of state enterprises, and promoted to positions of leadership in the economic direction of the state private businessmen, even when the majority of enterprises in that particular sector of the economy were state owned. And finally, the German law the Nazis used to promote their management of industry was that which recognized the management of private property for public use, as against proper socialized or nationalized industry.

Brady points out that the businessmen and functionaries who joined the Advisory Council of the National Economic Chamber had to take an oath to serve the Fuhrer and National Chancellor, which meant Hitler in the two offices he occupied, the goals of the National Socialist party, the Third Reich and the construction of the people’s community. (p. 265). But he also quotes Hitler’s economics minister, Hjalmar Schacht, who declared that businessmen were indispensable to the Nazi system, as was free competition.

“We cannot dispense with the economic willing of individual business leaders and workers,” Schacht said. To do so, he held, would be to destroy “the creative power” of the people. The function of business enterprise is to release this creative power on behalf of the nation. “Under no circumstances,” he continued, “shall we destroy the multifarious individual character of our economic system. For all time to come we shall need the independent employer who, for better or worse,, is connected with his enterprise.” In other words, businessmen in the new Germany are to be given free rein to function as before, except now they must be “honest” in the sense that they must not resort to “unfair” tactics to achieve corporate ends. (pp. 265-6).

He further quotes Schacht as saying, “We cannot get along without an honest struggle of competition”. (p. 266).

He makes it also clear that the German business community were also able to name the Nazi functionaries appointed to lead the various state planning organisations controlling private industry. He writes

Since the whole Nazi philosophy necessarily calls for this apotheosis of bourgeois and capitalistic virtues, it is only natural that when they were presented with an opportunity to shape organization more nearly after the pattern of their hearts’ desire the business men should also be able to name their controlling staff of “Leaders.” And such has been the case. In all the literature published by business organisations, and of all the dozens of businessmen personally interviewed in Germany, regardless of their industrial, trade, or financial origin, not a single criticism has been found of the type of “Leaders” placed in command. There is a great deal of complaint about individuals and policies, but there are uniformly the pleadings of minority groups who are being discriminated against, or else against the specific incidence of policies which economic facts compel them to endorse.

Further, the leadership has been entirely that of men enjoying the confidence of the business community. This holds for the Chambers of Industry and Commerce, the Provincial Economic Chambers, the various National, Economic, and Functional (or Trade) Groups, and the National Economic Chamber and its various subdivisions. The first Leader, Schmitt, was a well-known German business man, and thoroughly acceptable to the business community at large. The second Leader, Dr. Schacht, has been so completely acceptable, and his dicta so readily enforced throughout the country, that he is commonly known as the “economic dictator of Germany.” Under the leadership of these men, the appointment and removal of inferior “leaders” through the system has been, with minor exceptions, entirely to the satisfaction of the business communities affected. (p. 290).

He also describes how private industry, and privatization, were promoted against state industries.

The same picture holds for the relations between the National Economic Chamber and the organs of local government. As Frielinghaus has put it, “The new structure of economics recognizes no differences between public and private economic activity…” Not only are representatives of the various local governments to be found on both the national and regional organs of the National Economic Chamber, but it is even true that local government is co-ordinated to the end that economic activities pursued by them shall enjoy no non-economic advantages over private enterprise.

The literature on this point is perfectly explicit, being of a nature with which the general American public is familiar through numerous utterance of business leaders on the “dangers of government competition with private enterprise.” Under pressure of this sort the Reich government and many of its subsidiary bodies have begun to dispose of their properties to private enterprise, or to cease “competition” with private enterprise where no properties are at stake. Thus the Reich, the states, and the communes have already disposed of much of their holdings in the iron and steel industry notably the United Steel Works), coal, and electric power. Similarly, support is being withdrawn for loans to individuals wishing to construct private dwellings wherever private enterprise can possibly make any money out of the transactions. True, the government has been expanding its activities in some directions, but mainly where there is no talk of “competition with private enterprise,” and with an eye to providing business men with effective guarantees against losses. (pp. 191-2).

A little while ago I posted up a piece from Maoist Rebel News on YouTube, which also cited articles from economic history journals to show that both the Nazi and Italian Fascist regimes engaged in massive privatization programmes beyond those of other industrialised western nations at the time.

Brady also points that, while three quarters of the German electrical industry was state-owned, it was private businessmen who were placed in charge of it.

Nothing could show more clearly the intent of Nazi control in economic affairs than the make-up of the active management of this organization. Despite the fact that better than three-fourths of all German electric power is owned or controlled by public bodies, the directing heads of the National Electric Power Supply Federation are drawn almost exclusively from the ranks of private enterprise. Its first Board of Directors was presided over by two chairmen, both representative of private power companies: Hellmuth Otte, General Director of the Hamburg Electric Works, Inc. (controlled by the Siemens-Schuckjert combine, largest manufacturers of electric equipment and supplies in Germany), and Dr. Wilhelm Luhr, member of the Board of Directors of the Gesellschaft fur Elektrische Unternehmungen-Ludwig Lowe & Co. A.G. (the largest holding company in the private German electric-power industry, the company likewise controls several electrical supply manufacturing concerns).

This is very similar to the corporatist system in Britain and America, in which businesspeople have been appointed to government posts overseeing the economy. This has been done both by the Republicans and Democrats in America, and by the Tories and Blair’s New Labour over here. George Monbiot described the situation in Britain very thoroughly in his book, Captive State.

He also makes it very clear that Nazi economic planning is based very much on private enterprise, going back to a distinction made between private property for public use and socialized property in German law.

From what has been said above it is perfectly clear that “planned organization” should be understood not as social-economic planning in the socialist sense of the term, but as “business co-ordination” with a view to exercise of monopoly powers. There is nothing in the literature which permits a discerning reader any other interpretation. By the same token, the expression – interlarded through the endless stream of propaganda and explanatory newspapers, brochures, books, and reports-Gemeinnutz geht vor Eigennutz, requires transliteration into English patois in order to be understood properly. Gemein means “common,” or “public”, or “general”; nutz means “fruits,” or emoluments.” or “returns.” The expression Gemeinnutz as used by the Nazis, means “return to the community,” or, more precisely, “service to the community.’ Eigen on the other hand, means “individual” or “own.” Eignenutz thus means “returns to the individual,” or “profits”. The exact meaning of the whole expression is “services to the community before profits to the individual”; the American wording is “profits through service.”

This interpretation is in line with an old distinction, running back through several generations of German economic and business literature, between privatwirtschaft and Gemeinwirtschaft, on the one hand, and Gemeinwirtschaft and Sozialwirtschaft on the other. Privatwirtschaft has always been taken to mean an economy of private enterprise in the English, liberal, laissez-faire sense. Gemeinwirtschaft was used to mean a profits economy from the public point of view, or, in other words, a profit economy supplying a service tot he community. Sozialwirtschaft, on the contrary, has long meant socialization. All the Nazi literature emphasizes the present economic system as a Gemeinwirtschaft. (pp. 319-20).

It is thus very clear that the Nazi economy was very definitely capitalist. It celebrated the private businessman as a member of the economic and social elite, and promoted private enterprise and its leaders against state-owned industry, which it also privatized as far as possible. And it made very clear in law that the economy was a private enterprise supplying a public service and not a socialized economy.

Those who claim that Nazism was a form of socialism are wrong, and arguing so in order to try to discredit socialism and the Left through guilt by association. But the Nazis promotion of private enterprise, business interests and management also make it extremely similar to contemporary corporate capitalism, as advocated by the Republicans, Corporate Democrats, Tories and Blairite New Labour.

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Mussolini Vs. the Banksters

April 2, 2016

Mussolini was a thug and a mass murderer, who took a nation of poets, thinkers, writers, musicians, scientists and philosophers and tried to turn them into goose-stepping butchers like himself, and their country into a cross between a vast open-air prison and an army camp. Ultimately he failed, and the best thing that happened to his regime was that it more or less completely evaporated after he was overthrown by his own Fascist Grand Council.

But he knew how to handle the banks. After the Great Crash of 1929, he nationalised them. New Labour bailed them out, and then both New Labour and the Tories have allowed the bankers to go on as before, making the same kind of dodgy financial deals and awarding themselves massive pay rises and bonuses far beyond the percentages given to ordinary workers. When these workers are given pay rises at all, thanks to the government’s austerity programme and the repeated insistence on fiscal responsibility, combatting inflation and all the other rubbish.

This is a post that would shock American Republicans. Glen Beck, one of the loonier characters in right-wing broadcasting, cried on his show about Obama’s totalitarian Nazi oppression of the banksters. He really did carry on as if he believed that the heads of Lehmann Brothers, Goldman Sachs and the like had been carried off to some gulag in the wilds of Alaska or somewhere. He made a speech in which he paraphrased, yet again, the Martin Niemoller poem, ‘First they came for…’. He altered it to, ‘First the came for the bankers’. Tears and histrionics followed.

But Obama didn’t imprison or even punish the bankers. He bailed them out, and the world has effectively continued to bail them out, and has been subsidising their profligacy and lavish lifestyle ever since.

This attitude comes from the deliberate Republican and Conservative conflation of Fascism with Socialism, in which any criticisms of financial capitalism are automatically equated with Hitler’s attacks on Jewish bankers. Hitler did indeed make speeches attacking Jewish capitalists and bankers, including one in which he said that when he came to power, he would throw their coffers into the street. It’s vile stuff, and Hitler did carry out his threat. Jewish shops and businesses were smashed during Kristallnacht, and signs were put up ordering gentiles to boycott their businesses. They were watched, and any gentile going into one was photographed. And then during the Holocaust they seized the property of the people they murdered, though they continued to exploit skilled Jewish artisans to produce luxury items in a grotesque merchandising operation in the concentration camps. The SS even produced a catalogue of goods available from them, which were made by the Jewish artisans they had imprisoned and were working to death.

But Hitler wasn’t against capitalism or the banks per se. Indeed, in the next part of his speech he went on to declare how he would not treat good gentile German capitalists and employers the same way, as they treated their German employees well and worked for the good of Germany as true members of the Volksgemeinschaft – the racial community. The head of the Nazi big business organisation was the head of Allianz Insurance, and Hitler himself was very careful when on the verge of power to win over big business. And Hjalmar Schacht, a banker, who was at one time the Nazis’ economics minister, told Hitler to tone the rhetoric down about attacking big business and the capitalists.

Mussolini was also a vile anti-Semite. He wasn’t originally. When he started his career on the Right, he was merely ultra-nationalist. This was bad enough. It led the Italians to commit terrible atrocities in Africa, where they gassed and bombed civilians in Libya and Ethiopia. In Libya they also used massacres of the civilian population and mass rapes to terrorise the population. My guess is that memories of these war-time atrocities were responsible for Gaddafi’s expulsion of the Italian population after he seized power. I don’t know, but I strongly suspect that they’re still being used by the Islamists to whip up hatred against Europe. But it was only after the rise of Hitler that he became anti-Semitic. In 1937 he passed anti-Semitic legislation that was modelled on, but rather weaker, than those in Nazi Germany. At the end of his career, when he was ostensibly keep to introduce a quasi-Socialist regime in the Nazi puppet republic of Salo, he still insisted on keeping anti-Semitism as a key component of Fascist ideology. Because the Italian anti-Semitic legislation was weaker than that of Germany, however, 80 per cent of Italian Jews were able to survive, though this should not detract from the fact that 20 per cent were still murdered, along with all the other Italians the regime butchered.

Mussolini’s nationalisation of the Italian banks, however, wasn’t based on racial theory. It was based on the same entirely practically considerations that also led the Labour government to nationalise the Royal Bank of Scotland. This, however, has since been privatised in what I think was another deal that left the tax-payer out of pocket.

Musso was a tyrant and butcher, but in this instance, he was right. Unlike the New Labour and the Tories, who prefer to bail the banks out, let them continue as before, and then punish the country’s working people for their failings, under the guise of necessary financial restructuring, and the idiotic mantra ‘we’re all in this together’. They fact that the bankers and big businessmen are still giving themselves massive bonuses makes it very clear that we aren’t.

The Nazis and Industrial Autonomy

March 31, 2016

Nazi Germany was a centrally planned economy. This meant that, as in the Soviet Union, business served the state. There was a central planning bureaucracy, which organised and directed industrial production, right down to dictating to employers how many employees they should take from the labour exchanges. Unlike the Soviet Union, this was all done through private, not state-owned, industry. The Nazis furthermore claimed to value private enterprise and initiative amongst business leaders, and Nazi rhetoric attacked state bureaucracy in a manner very similar to the denunciation of state planning and bureaucracy by Thatcherite Neo-liberal free-marketeers.

Robert A. Brady also tackles this in his The Spirit and Structure of German Fascism. He writes

Similar to the ideas of Gerard Swope-one of the spiritual fathers of the N.R.A.- the United States Chamber of Commerce, and other similar spokesmen for “self-government in industry,” “the ideal held up to us by The Leader is a new system of self-administration with the emphasis laid on the responsibility of every individual.” In this theory, business men must be allowed so to organise themselves as to avoid the “bureaucracy” assumed to be inherent in state control and to give free play to “ethical” private initiative in business.

“We cannot dispense with the economic willing of individual business leaders and workers,” Schacht said. To do so, he held, would be to destroy the “creative power” of the people. The function of business enterprise is to release this creative power on behalf of the nation.” Under no circumstances,” he continued, “shall we destroy the multifarious individual character of our economic system. For all time to come we shall need the independent employer who for better or worse, is connected with his enterprise.” In other words, business men in the new Germany are to be given free reign to function as before, except now they must be “honest” in the sense that they must not resort to “unfair” tactics to achieve corporate ends. (pp. 265-6).

Likewise as with the N.R.A., the new German economic organisations are supposed not to engage themselves with “economic planning,” since, according to the Nazis, planning can only lead to “bureaucratisation.” “Free economy, private initiative, and personal responsibility are not demands of employers on us, but our demands on the employers,” as a Nazi party spokesman expressed it. But this is only to assert that the totalitarian powers of the new state can and will be used to see that no one escapes whatever the majority of the more powerful German businessmen decided to do. Membership is compulsory in the new “self-administered” organisations. Nobody is to be allowed to stay outside and spoil the game. All must follow where they are “led” by the state-recognised spokesmen for their respective groups. (pp. 266-7).

In fact, as I’ve blogged about before, German industry did form a kind of partnership with the Nazis, but it was always fragile and could be dissolved at any time, such as later in the 1930s when the party began a series of four-year plans. Nevertheless, in theory at least, the Nazis were not hostile to private industry, and claimed to protect personal responsibility and entrepreneurial initiative, which are still the cornerstones of the neo-liberal economic mindset.

Is Hjalmar Schacht Cameron’s Economist?

March 5, 2016

Yesterday, Mike did a piece on an article in The Canary about George Osborne’s response to the news that Paul Mason would be contributing to Jeremy Corbyn’s New Economics Series. Needless to say, coming from an old Etonian, whose only qualification for the job seems to be that his father is the Baronet of Ballymoney, this was another ad hominem insult. Mason, he claims, got the job because Mao was dead and Mickey Mouse was unavailable. Of this cheap gibe, Mason said:

“As for the Mao/Mickey Mouse jibe, I was tailed for hours in 2008 in Beijing by the secret police of Mr Osborne’s favourite Marxist government, after interviewing the victims of Mao’s Great Leap Forward. I am happy to state that Mao was a despot whose policies killed millions; I look forward to hearing Mr Osborne say that on his next trip to China.”

The parallels between Mao and this government are certainly there. During Mao’s Great Leap Forward, 60 million Chinese died in artificial famines. This government has similarly pushed up the death toll from poverty in this country, though on a rather smaller scale. Thank heaven. 590 people in the past few years have died of starvation, neglect or sheer despair thanks to aIDS’ benefit sanctions. Nearly a quarter of a million more have been plunged into mental illness. And the level of poverty is growing all the time. There are reports that by the 2020s, a quarter or more of UK citizens will be in poverty. And this is an artificial famine to keep people poor and desperate so they will accept just about every indignity their employer throws at them in order to make a quick buck for himself.

The parallel between Osborne, Cameron, aIDS and the others and Mao and the Gang of Four even extends to their hypocritical false egalitarianism. Before Mao came to power, it was claimed that everyone in his base in the Chinese north was equal, and had equal access to food, accommodation and so on. There were reports, however, of massive inequality, and the Gang of Four later on were extremely corrupt. Osborne, Cameron and Co make great play about how ‘we’re all in it together’, a claim that is manifestly untrue. They’re all immensely rich, and the rich are getting much richer, thank you very much, due to the austerity they’ve inflicted.

But if they think Corbyn’s favourite economist would be Chairman Mao, then I wonder if theirs would be Hjalmar Schacht. Schacht was the Nazi economist who put the Germany economy to rights after the massive inflation of the Weimar Period and the Wall Street Crash. He did this through the creation of the Mefo bill. These were a type of share or bond, which formed an investment in a variety of industries, rather than just a single company. It was through these that Schacht stimulated the Germany economy and aided the Nazi rearmament programme. After the War he turned up in the 1970s advising Nasser’s government in Egypt.

Actually, I don’t think Schacht is the Tory’s favourite economist. It’s not that they’re not a highly authoritarian clique with a hatred of organised labour, a desire to reduce the trade unions through ‘Francoist’ legislation, and rule through a system of secret courts and state surveillance. I think it’s simply because, unlike them, Schacht actually did something positive to revive the Germany economy and promote the expansion of the military machine. Cameron, Osborne and co are doing all they can to reduce our domestic industries. With the exception of the arms trade, of course. They’re like Schacht in that. Whatever happens, the merchants and manufacturers of death must be supported. the economy depends on it.

So we’re back once again to the Nazi adage: ‘Guns will make us powerful. Butter will make us fat’. It should be the motto of the Tory party.