Brown Bolshevism

I

INSIDE Germany a revolution has been going on. It is a real revolution. Let no one dismiss it as a mere ‘collectivist tendency,’ or as ‘rearmament regimentation.’ For it displays various ‘red’ symptoms which alarm the capitalists just as much as they please the radical members of the brown shirts. Many of these members, significantly, are former Communists. Has Germany, by this process, reached the halfway house of socialism? Is Germany advancing towards the same goal as Soviet Russia, only by a different route? In short, how much real meaning has the word ‘socialism’ in ‘National Socialism’?

As a newspaper correspondent in Germany last summer, I had an opportunity to examine at close hand one of these ‘red’ symptoms. Sitting with a German workman in a deserted café, I listened to the varied complaints of a man who handled a shovel day in and day out on the construction of the great auto roads outside Berlin. He bewailed his low pay (about 23 marks a week), the short life of his ersatz clothing, and his inability to afford a KDF¹ ticket. He even showed reluctance to rejoice over the fact that he had work to-day whereas he was jobless before Hitler entered into power. But he was triumphant on one point.

‘One thing Hitler has done — he’s made the foremen treat us better. Years ago they could call me a swine and get away with it. Now it’s different. Let me tell you a story. Two months ago we had a tough foreman. He used us roughly. One day I was standing resting on the job when he yelled at me, “Trees don’t work!” I said I was tired and wasn’t a tree. Then he called me a swine for talking back and said he’d get me fired. I went to the Labor Front office and filed a complaint against him. A week later the Labor Front fired the foreman. Yes, the bosses speak softly and kindly to us. They ask us to do this or that, rather than order us.’

Any observer in Germany can multiply such stories a hundredfold. Moreover, the fact that the foreman was disciplined without recourse to one of the famous labor courts illustrates that the courts merely bring to the surface a few episodes of a constant ‘social justice’ process. The trend of figures on laborcourt cases certainly commands attention. In 1936, employees won 189 out of 251 (75.2 per cent) cases tried.

Reading reports on these cases, one gets a pretty good picture of how the Nazi revolution is affecting labor relations. A banker in the town of Lüneburg in lower Saxony received a fine of $125 and costs from a labor court because he paid salaries below the official rates, refused to pay overtime to which his employees were entitled, and had ‘shown himself hostile to his social duties in general.’ A Berlin court fined the daughter of a factory owner because she had ‘maliciously wounded the sense of honor’ of the ‘followers’ in her father’s plant. (Note the word ‘follower’ used instead of ‘worker.’) The girl had addressed them as ‘filthy workmen.’ A wholesale news dealer in Berlin was deprived of control of his business; he had, it appears, persistently paid wages and salaries below the officially fixed rates, had grossly insulted his workmen and employees, and had forced minors to work fifty-nine hours a week without overtime pay. Out of my own experience I have found cases which fit in with this leveling process — such as that of a small factory owner who told me how he had to attend a Schulungslager (camp of social education) where his bunkmate was one of his ‘followers.’

Recent developments in the army fill in this picture of ‘democratization’ of Germany. On January 22, Hitler officially destroyed as such the Reichswehr officer caste which had formerly held itself aloof from the Nazi revolution as a separate power in the state. He decreed that every German officer must become a member of the National Socialist Reich Warrior League, individually as an ordinary — not an honorary — member. ‘This means,’ says the correspondent of the New York Times, ‘they are placed on an equal footing with the men, and furthermore are incorporated into an organization that is completely under Nazi control.’ Trends have long forecast this. Last year a military attaché described to me a startling scene he had witnessed: a general’s daughter at a regimental function had to dance (by request of the Nazi officials) with the privates. Foreign correspondents who attend army manœuvres remark the fraternization — in some cases forced, in others quite natural — between officers and men. Where are the Prussian officers of yesteryear? They are gone, together with the old Prussian ‘swinecalling’ spirit.

This is strong medicine for employers (not to mention the Reichswehr), and it must be said that it has been sweetened. Hitler, on taking power, abolished the Socialist and Communist parties which the employers dreaded and hated. He wiped out the trade-unions and made strikes illegal. The average German employer, harassed by fifteen years of socialist experiments, strikes, sabotage, and fear of a Communist revolution, naturally offered up thanks ‘to our Führer.'

But the taste became bitter when the employer discovered that the Nazi Party and the Labor Front — which Hitler substituted for the unions and the radical parties — had much the same tendencies as the old organizations. To-day the German employer has no power over hiring and firing: the Labor Front takes care of that. He has to give seniority rights to Nazi Party members and often has to keep Nazis on the payroll whether they are useful to production or not. He must pay wages to employees who lose working time by participating in Nazi activities — such as the Nuremberg Congress or the hours listening to Hitler on the radio. During the Czechoslovakian crisis employers had to pay wages to workers who were rushed to finish the new Rhine fortifications. It is estimated that such practices have increased wage costs about 10 per cent. Yes, the sweetening of ‘no strikes’ has worn off by this time. Anyone traveling in Germany very soon discovers that the employer shows more discontent with the régime than the employed.

II

It is difficult to say whether these ‘Bolshevik’ (as he often calls them) tendencies disturb the employer more than the government’s restrictions on his profit-making activities. For I am sure the capitalist in Germany takes cold comfort from the fact so often stressed by orthodox Marxians — intent on proving the nonexistence of socialism in National Socialism — that, after all, the profit system remains.

True, the Nazis have not abolished the profit system. But they have so altered it that, while it may not be called socialist, it certainly isn’t capitalistic. Taxes, for one thing, have reached Himalaya-like proportions. Taxes on corporation profits run up to 60 per cent, and indications are that they will rise further. While many firms show large profits, these are largely bookkeeping profits. For firms cannot declare dividends above 6 per cent (in some exceptions 8 per cent), and the rest must be invested in low-paying government bonds. About the only thing many capitalists can do with their profits is to reinvest them in plant. I know one manufacturer who was repainting his whole plant, not because it needed painting, but because he couldn’t do anything else with his money.

Moreover, the way the employer is allowed to make this sterile sort of money is even more onerous. His raw materials are rationed and he has to pay a government-fixed price for them. To obtain raw materials he must fill out numerous forms and go through a lot of troublesome and costly red tape. If he does not produce munitions, he has to take what raw materials he can get after armament demands are met. (One radiator manufacturer told me that he had to cut his working force to 42 hours because of lack of iron, although demand for radiators justified working overtime to fill orders.)

When he sells his product, it is at a price fixed by the government, often a rather low price. In some commodities — for instance, shoes — the government has so drastically lowered prices that manufacturers’ costs have exceeded the selling price. The manufacturer often has to help subsidize erection of government-owned plants which will compete with his own product — surely one of the bitterest pills of all. Finally, if he is an exporter, he can accept orders from abroad only with permission of the government. Thus, if the orders come from some country which hasn’t been buying enough to make the barter system work, he will have to decline the orders.

All this is true. Yet the capitalist still has the title to the business of which he has so spectacularly lost control. Moreover, as is noted by hopeful capitalists, he is getting a clearer title as the years roll by. Capitalists in Germany have taken much satisfaction in ‘reprivatization ‘ — that is, the return of businesses and stock in businesses held by the government. During the last years of the Republic, the government acquired shares in many firms — in some cases controlling participations — in order to keep them afloat. But last year the government sold back to private interests the Dresdner Bank. Thus private ownership retrieved the last of the three biggest banks of the country which were bailed out by the government in the crisis of 1931. The similar surrender to private interests during the past few years of the Vereinigte Stahlwerke (United Steel Company), the Deschimag (largest ship building concern), the German-South American Line, and some smaller concerns has underlined this policy of reprivatization.

But what does this really amount to? Adolf Hitler would not be the astute politician he is unless he threw a few crumbs of comfort to the capitalists from time to time, just to reawaken their zeal and their hopes. After all, the government’s control over these reprivatized concerns continues to be just as strong as over other firms. In the case of the banks, the government control over the entire banking system is so rigid that the reprivatization manœuvre — studied in connection with the general socialistic trends — appears as little more than a transferring of empty titles. What the Führer vouchsafes with one hand he takes away with the other.

Thus, while reprivatizing, he has created the government-controlled Göring Iron Trust to work low-grade ores — which hardly inspires enthusiasm among capitalists. Private business had balked at exploiting these ores because they would cost too much to extract. As an investment for its funds, this enterprise held no promise of paying off. But the rearmament program needed these ores, and accordingly the government proceeded to form the Iron Trust and to force the unwilling capitalists to take stock in it.

Again, Hitler wanted automobile manufacturers to produce a low-priced car for the masses. The manufacturers said it couldn’t be done on a profitable basis. Hitler defied the manufacturers and put the government in the automobile business. The Labor Front supplies funds for this Volkswagen (People’s Car) factory, although the government treasury coöperates. The Labor Front is already taking orders for cars. This enterprise, in short, has a semi-syndicalist character which must please the soul of Bakunin, the philosopher of Anarchism.

Other and even less pleasant developments loom. The propertied classes in Germany disapprove strongly of the expropriation of the Jews. They recognize that the anti-Semitic drive was aimed as much at property in general as at Jewish property. (They fear a drive against Catholic Church property for the same reasons.) What followed the latest pogroms has confirmed their worst fears. Das Schwarze Korps, organ of Hitler’s elite guard, opened a drive against elements which it called ‘white Jews’: ‘Aryans with the same lust for profits, the same cunning, the same unscrupulousness in choice of their means as black Jews. . . . We have not gone through years of struggle and endured pressure and war agitation to enable these evil vultures to sit down at the table which the Jews have just been forced to vacate.’

Another blow fell about the same time. Nazi leaders took steps to strengthen their party’s hold on business. It was announced that the Nazi authorities would enjoy the veto power over the appointment of principal executives and directors of commercial and industrial enterprises. The Pommersche Zeitung said, ‘The new measures constitute an important step toward the coördination of political and economic developments. They provide assurance that only those persons who will represent unreservedly the Nazi outlook will be called to leading positions in the German business world.’ German business men are wondering, in view of this development, if a purge of prominent non-Nazi business executives isn’t on the cards.

Business, in fact, has an even greater fear. It feels that it is sitting on a bomb. The bomb, it seems, was set under cover of the Czech crisis. A serious slump on the Berlin Bourse late in August led many foreign newspapers to suggest that ‘capital’ was going on strike. To those who know the real Germany nothing could have been further from the truth. The fact is that only the government could have actively promoted the slump. But why should the government desire a slump? The Financial News of London, expressing fears of German business men, showed why: ‘It is quite conceivable, for instance, that the State may decide to take over all equities from their present owners and replace these stocks and shares by some form of government securities. If that is so, it would be to the State’s advantage to buy out the public and the financial institutions at as low a price as possible.’ Will Hitler’s bomb one day blow business in Germany completely out of control of its stock and title?

III

A sad picture. Unable to hire and fire, price-fixing taken out of his hands, his output regulated by the government, his profits sternly regulated, the German capitalist looks less like a capitalist than like a government commissar administrating his business in the interest of the State. But is that so bad? Commissars in Russia live on the veritable fat of the land. After all, the German capitalist, it seems, must be able to nurse his wounds and console himself with a comparatively luxurious private life which generous salaries and a fair share of the profits should buy for him.

Alas, even this picture is false. The German capitalist can’t live in the state in which he was formerly accustomed to live before the advent of the Nazis.

I cannot forget the dinner I had with a prominent Prussian industrialist. It included almost inedible bread (and no butter), tough meat, and a pathetic pièce de résistance proudly served — a dish of California canned tomatoes which the host had obtained through some friend in a foreign legation. I was so deeply affected that I had him to lunch at the second-class hotel where I was stopping, and he enjoyed himself hugely. (For to maintain the tourist trade — and an impressive appearance of well-being — hotels are permitted to serve tourists and their guests good and ample food.)

Nor can the German capitalist leave the country to enjoy a brief vacation and the fleshpots of non-totalitarian countries. Few Germans can obtain the foreign exchange necessary for such pleasure jaunts. A German business man described to me with sober relish a vacation trip he took each year. He goes to the border opposite Basle, Switzerland. From there ho crosses every day to Basle, walks in the streets of a free bourgeois republic, and dines voraciously on the few marks which the State permits him to take across the border. The mother of an industrialist I know bewails the fact that she cannot go to the Riviera every winter as she was wont to do in years past. She is old and would very much like to recuperate in Cannes. But she cannot get foreign exchange. Another son, however, who is a functionary in the Nazi Party, tours widely in Europe, has a big car, and lives like a sybarite. Better to raise your son, evidently, as a member of the National Socialist Party than as an up-and-coming business man.

A German-American business man who lives in the Rhineland described to me the pitiful plight in which he and his colleagues find themselves.

‘Why, they can’t call their souls their own, much less their money. This club I belong to receives Göring every now and then. He comes down from Berlin and lays down the law to them — particularly after some of the big industrialists have been letting off steam. After Göring leaves, they — and I with them — get together and hold a post-mortem — and very much mortem it is.

‘Listen to this. One of the biggest industrialists in the Ruhr [he mentioned a name as prominent in Germany as Charles Schwab in the United States] does not dare occupy his beautiful castle on the Rhine. Why? He’s afraid the Labor Front would take note of his magnificence and ask him for some munificence, with “suggestions” that he contribute 50,000 marks to their fund. So he lives in the castle’s lodge.

‘He’s got a half-dozen big cars there, — Hispanos, and so forth, — but he doesn’t dare show himself in them. He rides in the company car — and so does his wife when she wants to go shopping. Nazi Party people might notice the big private cars, and further “suggestions” would roll in for bigger restrooms in his plant, more contributions to the FourYear Plan, and so forth.’

IV

Let us be careful. Is Hitler really an anti-capitalistic fanatic, consecrated to the task of bringing about Communism by subtler methods than Lenin and Stalin? And is the Nazi Party truly an undercover branch of the Moscow International?

It would be a gross mistake to suppose this. The picture of ‘ brown Bolshevism ‘ as deliberately planned and executed for a Communist end is too simple. Hitler, in fact, is more against ‘capitalists’ than against ‘ capitalism.’ There are many devoted (and perhaps deluded) profiteers of industry in the ranks of the party. The truth is that the economic framework of this strange uncapitalistic state has arisen as a direct outgrowth of measures taken long before Hitler appeared on the scene.

German capitalism from its very start was a different thing from British, French, and American capitalism. The kings and nobles who ruled the various little German states which later came together to form the first Reich each subsidized and nourished the local capitalist industry and finance. German capitalism was created —from the top. British, French, and American capitalism grew from the bottom: no paternalism built it up in the West. In Germany, moreover, even after it was a going concern, Bismarck and his successors introduced all sorts of socialistic trends in their policies.

The World War thrust this process further along the way towards socialization. The organizer of German war economy and industrial mobilization was Walter Rathenau, son of a famous German industrialist. While believing in the maintenance of capitalism, he entertained very advanced ideas. Over twenty years ago, when such ideas were rare among business men, he said, ‘A more equal distribution of possession and income is a commandment of ethics and economy. Only one in the State is allowed to be immeasurably rich: that is the State itself. Through its means it has to provide for the abolition of the distress of all. The present sources of wealth are monopolies, speculation, and inheritance. The monopolist, the speculator, and the millionaire heir have no longer a place in the new order of economy.’ Rathenau regimented Germany’s economy for war purposes as it had never been regimented before. He and his semi-socialistic ideas left their mark on the system.

After the war two new factors deepened and extended the work of Rathenau: (1) The famous currency inflation wiped out the savings of the middle classes and placed economic power in the hands of a relatively few industrial and financial families. These interests created combinations, monopolies, and cartels, thus preparing the way for the even more drastic regimentation of Hitler. (2) Germany was for the most part ruled by Socialist governments in the twenties. These governments introduced more public ownership and control, and the spread of their Socialist ideas laid the foundation for the ‘equalitarian,’ ‘red’ tendencies described above. As a matter of fact, even in 1931, two years before Hitler ascended to power, many German industrialists hesitated to appear in luxurious private cars or display other signs of wealth. They feared the effect of these on the morale of the then desperate and starving unemployed.

By the time Hitler took over, the following socialistic accomplishments stood on the books. About 20 per cent of all economic activity (except agriculture) was publicly owned. Labor employed on public ownership undertakings amounted to about 16 per cent of all employed. Public ownership covered the following: all railroads, telephones, telegraphs, and postal systems; between 65 and 80 per cent of all electric power; about 80 per cent of all gas; practically all water and sewage systems; the whole of the elaborate canal and waterways networks; about 50 per cent of all banking activity; and large operating units in coal, potash, mining, street railway enterprises, and other fields of industrial activity.

From such a base, then, Hitler started to operate. To socialize Germany further? Not officially, at least. He did, of course, from the first champion the rights of workers (but not of trade-unions). He did set up the Labor Front. But he firmly proclaimed the rights of private property and attacked Bolshevism. In his first two years of power, Hitler leaned more to the Right than to the Left.

Maybe he was sincere in trying to straddle two stools. But two forces were pushing him away from the Right: (1) the requirements of rearmament, and (2) the mass membership of the Nazi Party, filled with many former Communists and Socialists. Under the propulsion of the first, he set out — he had to — to regiment German economy in the interests of rearming; Germany, with a large foreign debt and a serious lack of raw materials, had to be regimented to obtain the materials and organization necessary to produce guns and airplanes. Under the pressure of the second, he began to show the ‘red’ symptoms I have mentioned. The radical Nazis were thrown more and more crumbs — crumbs taken from the loaf of the capitalists.

This vast process has proceeded, has been winding its way in and out of the complications of domestic and foreign politics, in a manner well calculated to deceive everyone. Calculated? Well, perhaps it’s merely a biological process, with all sorts of factors conflicting, joining forces, parting and coming together again to produce what is the present system. But perhaps it is also, to a large extent, a calculated deception. In Mein Kampf Hitler frequently advocates throwing dust in the eyes of friends and enemies alike to attain his ends. If we look at the matter from this angle, a monster drama of deception unrolls. The capitalists were deceived by Hitlerian screaming against Bolshevism and for rights of property. The masses were deceived by oratory against capitalists. The capitalists got insurance against strikes by abdicating their control of business. The masses got such matters as protection against brutal foremen in return for accepting a low standard of living.

Meanwhile an interplay between the generals who wanted rearmament at all costs and the capitalists who disliked government control proceeded. Hitler would say to the generals, ‘You can’t have that factory — at least yet. Capital must be satisfied if the economic system which feeds rearmament is to work.’ To the capitalists he would say, ‘The army demands such and such a piece of regimentation. It’s absolutely necessary.’ And so on —— a strenuous, uninterrupted performance of political legerdemain.

Internationally, the deception was no less clever. From behind the high capitalistic collar of Dr. Schacht (many consider him actually a Nazi within the capitalists rather than a capitalist ambassador within the Nazis) went forth soothing words to foreign debtors and customers. The words certainly did not sound like those of a Bolshevik. The Bolsheviks, at the start of their Russian Revolution, quite candidly expropriated foreign and domestic capital. That was frankly a part of their program. As a result, they have had international capital down on them ever since. The Nazis, however, proclaimed that they respected the rights of capital. But — they demanded sacrifices from capital so that the Nazi fight against Bolshevism in Germany might go on. The trick succeeded. Dr. Schacht played one foreign debtor off against another in a succession of scaling-down agreements, with the result that to-day most of Germany’s foreign debt has been in reality expropriated. Yet foreign capitalists, although stiff and sore as a result of playing with Schacht, preferred him to Stalin. To-day Schacht stands demoted in the governmental hierarchy, his place taken by the socialistic Walther Funk, who was a friend of Rathenau and strongly influenced by Rathenau’s socialistic ideas. It remains to be seen whether foreign capitalists will like Funk better than Stalin.

V

It remains to be seen, also, whether this leftward tendency can continue without bringing about a breakdown of the whole German system. Can the Nazis deceive economics itself? Some observers look for the approach of a situation in which German economy, too vigorously and rapidly pulled away from capitalism, will, biologically as it were, revolt against the socializing tide, and a backswing will loom as necessary. Various reports indicate that private initiative is being sapped. It is said that the quality and thereby the markets of German goods have suffered; that this cannot be entirely attributed to poor raw materials; that technical and managerial inefficiency has played a large part. Also debt is mounting dangerously (it is now unofficially reported at 25 billion dollars), foreign trade is dropping, and foreign exchange is more difficult to obtain. Will Germany have to follow the example of Russia? Soviet Russia, in order to make its economy function, has had to stop its course towards Communism, if not actually reverse this course. Will this occur in Germany?

Hitler in the past has been able to swing the pendulum back a little in difficult times. He has succeeded in keeping capital in line by playing one group of capitalists off against another. But the point may soon be reached when, in exchange for a rightward swing, he may be unable to find concessions strong enough to satisfy the Left. In that case he may find himself balanced on a dangerous knife edge. Will he then take a plunge into the arms of his ‘ red ‘ comrades? One ominous fact provides a clue — it is notable that the pendulum in the past few years has swung in smaller arcs on the Right than on the Left.

But no class has been deluded as badly by all this as the theorists — especially the Marxists. To read Communist papers, one might suppose that Germany was one vast concentration camp with the capitalists mounting guard quite successfully over their property and interests. National Socialism, the Marxists claim, is merely a smoke screen for benefiting finance capital. The Marxists’ deception springs from two factors: (1) as Communists in the vise of Stalinist dogma, they have been blinded by the propaganda of Moscow; (2) dogmatic or not, Moscow must combat Germany, since Germany threatens war on Russia — ergo workers throughout the world must be told that Germany is a tool of capitalism.

This is not the first time in history that such a deception has occurred. In the seventeenth century, the middle classes in Britain carried out a revolution against the feudal classes. Cromwell, King Charles’s head, and King James featured the rise to power of the British commercial classes. A hundred years later the French in their great revolution did the same. But did the British middle classes help the French middle classes? Not at all. The British middle classes, scared by the excesses of the French Jacobins, scared too by the rising power of France which was to flower in Napoleon, the Hitler of that time, fought their brothers in the revolution against feudalism. To-day the Communists fight their real brothers, the Nazis.

But how long will this fight last? Won’t the Nazis and Communists one day compose their quarrel and make an open alliance? Last fall I got a clue to what may come in a talk with a dissident Communist agitator in England — a ‘Trotskyite.’ I told him of the extraordinary things I had seen and heard in Czechoslovakia and Germany. In the Sudetenland, a few months before the crisis, I discovered that the Communists had gone over in large numbers to the Nazis — to Henlein’s Sudeten party. In Germany I was told by a factory superintendent that the former Communists among the workmen made the best Nazis. The Trotskyite laughed cynically: ‘That shows you, doesn’t it, that there isn’t much difference between the two? However, in spite of my opposition to Stalinism, I must admit that there’s a method in their madness. If England went Fascist to-morrow, I myself would join the Fascist Party, bore from within, and work for the proletarian revolution.’