Confronted with increasing British exactions one hundred and fifty years earlier, the American colonists did not decide to beef up their lobby in the English court; they heralded the rights of man and decided to throw off the yoke. There were no such ideas in Weimar Germany. The Germans did not question the code of sacrifice or the principle of statism. These ideas, they had been taught by every side and sect within their culture, specify how man ought to live and the only way man can live. They define the moral and the practical.
The Germans, therefore, practiced them. In order not to be eaten alive by the next round of legislation, virtually everyone joined or identified himself with a group (since an isolated individual had no chance against large, vocal blocs). And every group knew only one policy: to demand new economic benefits from the government and/or new legislative sanctions against the other groups.
The hostile forces included big business versus small business, importers versus domestic producers, employers’ associations versus labor unions, blue-collar workers versus white-collar, the employed versus the unemployed, industrialists versus Junkers, Junkers versus peasants, farmers versus city dwellers, creditors versus debtors, the lower classes versus the middle, the lower middle versus the upper middle, the middle versus the upper. The plea which all these groups addressed to the Reichstag was a cacophony of contradictions, such as: higher tariffs/freer trade; more subsidies to business/less government intervention; tight money/easy credit; longer hours/shorter; higher prices/lower; bigger profits/ smaller; more competition/less; more public works/fewer; more public ownership/no more; higher wages/give us jobs; more social benefits/stop the inflation; what about us?/cut the taxes.
The authors of the Weimar Constitution had believed that a controlled economy in the hands of a democratic government would foster peaceful cooperation among men, as against the “ruthless competition” and “war of all against all” which they held to be inherent in a free market. What the mixed economy produced instead was a ruthless competition among groups, a collectivist “war of all against all.”
It was not his own selfish advantage that he sought—said the laborer, the businessman, the farmer, as he fought to impose legal restrictions or hardships on the others—but the welfare of his group: the livelihood of the workers, the progress of industry, the preservation of agriculture. His group, he said, was deserving, because of the services it had rendered to an overriding entity: the nation as a whole. The Germans were marching into the future under the same banner while vying for its possession. The banner was inscribed: sacrifice for the Volk—or for the Fatherland, or for the public interest, or for the common weal.
The political parties, which had formally mandated this kind of approach in 1919, survived by cashing in on it. They handed out economic favors to their constituencies in exchange for votes at the next election.
Neither the warring groups nor the parties which courted them had any means to know what favors to insist on, when, or at whose expense, or when to yield to the demands of their antagonists, who also had to survive. By the nature of the system there was no principle to follow: no one could devise a rational way to divide a nation into mutually devouring segments, or an equitable way to conduct the devouring. Every group, therefore, swung at random from the role of beneficiary to that of victim and back again, according to the passions, the tears, the fears, the alliances, the front-page propaganda, the back-room deals, and the expediency of the moment.
Life, Spengler said, has “no system, no program, no reason.” It is not necessarily true of life as such. It was true of life in Germany’s mixed economy.
That kind of life has consequences. In 1923 the Germans discovered one of them.
Since 1914, Germany’s governments had needed vast sums of money—far more than the nation’s leadership dared try to raise by taxation—for two reasons: in part, to pay for the state’s growing socioeconomic programs; in part, to pay for war or war-related expenditures. (In the Weimar years, this last included but was not restricted to the payment of reparations.) To deal with its financial needs, the imperial cabinet at the onset of the war had inaugurated certain novel monetary and fiscal policies. The same policies were continued after the war by the republicans.
Both regimes amassed huge deficits. They sought to finance them, in essence, by means of borrowing and, ultimately, by reliance on the printing press.
Imperial and republican ministers alike refused to consider the possibility of reducing their outlays. The government’s programs, they said repeatedly, cannot be significantly curtailed; the programs are necessary to save the poor or help the workers or protect industry or glorify the Fatherland; they are mandated by Christian compassion, or a progressive conscience, or German tradition, or love of country.
The ministers felt that their ends were noble, they felt that the pursuit of these ends was essential to their own political survival, and they felt that no other considerations had to be considered. Ultimate ends, they had long been taught, are matters to be decided not by reason or logic, but by instinct and feeling.
And as to means, they had been taught, there are no absolutes. The imperial leadership, more old-fashioned in this regard, had doubts about the ability of a government to spend with impunity what it did not have; these men expected to balance the books someday by winning the war. The republicans did not have even this chimerical hope. Many of them, in fact, had no desire to see the books balanced. They believed that a permanent policy of deficit financing and monetary expansion would work to their own advantage. Like the modem artists and educators, they, too, were eager to “experiment with the nonobjective”—in this case, by flooding the country with flat currency unbacked by any objective value or tangible commodity.
In July 1914, the German mark had been trading at 4.2 to the dollar. In July 1920, the rate was 39.5 to the dollar. In July 1922, the rate was 493.2 to the dollar.
Despite such figures, the moderates running the Weimar government did not question their ends or means. They did not seem to be concerned about the results of their policies, or about cause and effect. They did not cease their orgy of spending. They merely created money faster and faster. By 1923, “150 printing firms had 2,000 presses running day and night to print the Reichsbank notes.”18
If the politicians were ignoring causality and defying reality on a giant scale, evidently they expected to get away with it. Causality and reality—Germany’s teacher had assured his compatriots—are only subjective human ideas or “categories.” Reality, added one of his disciples (a fashionable Expressionist) disdainfully at the time, is merely a capitalistic concept.19
Kant to the contrary notwithstanding, however, reality in 1923 remained real. The German mark continued to fall—hour by hour, across the course of a single day.
By the middle of 1923 [writes one commentator], the whole of Germany had become delirious. Whoever had a job got paid every day, usually at noon, and then ran to the nearest store, with a sack full of banknotes, to buy anything he could get, at any price. In their frenzy, people paid millions and even billions of marks for cuckoo clocks, shoes that didn’t fit, anything that could be traded for something else.20
In November 1923, Germany’s Great Inflation reached its climax. The mark sank to its final level: 4,200,000,000,000 to the dollar. Everyone counting on monetary assets or fixed incomes—on savings, insurance, bonds, mortgages, pensions, and the like—was wiped out. “The intellectual and productive middle class, which was traditionally the backbone of the country,” said one German leader at the time (Gustav Stresemann of the People’s party), “has been paid for the utter sacrifice of itself to the state during the war by being deprived of all its property and by being proletarianized.”21
The Germans could hardly believe that it was happening. Many seemed to become disoriented or even unhinged, and never fully believed in sanity again.
All values were changed, and ... Berlin was transformed into the Babylon of the world [said Stefan Zweig, a Weimar
writer].... Even the Rome of Suetonius had never known such orgies as the pervert balls of Berlin. . . . In the collapse of all values a kind of madness gained hold particularly in the bourgeois circles which until then had been unshakeable in their probity.
“Barbarism prevailed,” said the painter George Grosz. “The streets became dangerous.... We kept ducking in and out of doorways because restless people, unable to remain in their houses, would go up on the rooftops and shoot indiscriminately at anything they saw.”22
The German intellectuals had no cause any longer to curse “the whore of the Enlightenment.” Its last vestiges were gone. The ideal they had sought instead—the passage, in Kandinsky’s words, “from the logical to the illogical”—was all around them. Now they could meditate on Dadaism in economics, along with its corollary: a rain of bullets.
The Great Inflation was not the product merely of a practical miscalculation. Its fundamental cause did not lie in the realm of finance, but of philosophy—especially, epistemology. In essence, the inflation was an expression in the economic sphere of the basic spirit of Weimar German culture. There is a limit to how long a nation’s thinkers can extol the contradictory, the irrational, the defiantly absurd; one day, in every field, they achieve it.
In November 1923, the German government was finally forced to act. It introduced a new currency, the Rentenmark, which was redeemable in dollars, and refrained thereafter from papering the country with it.
This kind of response, however, though economically appropriate, was too little and too late. The basic cause of the disaster, untouched, continued to act. And the signs for the nation’s political future were already growing ominous.
One sign came from the nation’s moderates. On October 13, 1923, by a vote of 316 to 24, the members of the Reichstag passed a bill designed to deal with the inflationary crisis. The bill did not strip the government of the power to engage in deficit financing or currency debasement. Instead, the new law “authorized the government to take any and all measures it deemed necessary in the financial, economic and social sphere. It might even, if it saw fit, disregard the fundamental rights of citizens laid down in the Weimar constitution.” The bill did, however, prohibit the cabinet from tampering with certain items, including the eight-hour day and the welfare-state programs.23
Freedom, the German democrats were announcing to the country, is dispensable, but “social legislation” is an absolute.
Several weeks later, at the height of the inflation, another group of Germans was heard from. They, too, believed in the supremacy of “society,” though not of a republican form of government: “[This is a] robbers’ state! ... [W]e will no longer submit to a State which is built on the swindling idea of the majority. We want a dictatorship. . . .”24
On the morning of November 9, 1923, in the city of Munich, the leader of this group decided to act. Adolf Hitler staged the Beer Hall Putsch.
It was too little and too soon.
9
The Nazi Synthesis
The German right characteristically denounced socialism, while supporting the welfare state, demanding government supervision of the economy, and preaching the duty of property-owners to serve their country. The German left characteristically denounced nationalism, while extolling the feats of imperial Germany, cursing the Allied victors of the war, and urging the rebirth of a powerful Fatherland. (Even the Communists soon began to substitute “nation” for “proletariat” in their manifestos.)
The nationalists, at heart, were socialists. The socialists, at heart, were nationalists.
The Nazis took over the essence of each side in the German debate and proudly offered the synthesis as one unified viewpoint. The synthesis is: national socialism.
Nationalism, said Hitler—echoing German thinkers from Fichte through Spengler—means the power of the nation over the individual in every realm, including economics; i.e., it means socialism. Socialism, he said, means rule by the whole, by the greatest of all wholes, Germany.
The ideologies of the non-Nazi parties limited each to a specific constituency while alienating the rest of the country. The Marxist parties could appeal effectively only to the workers; Marx’s version of socialism was feared and hated by the country’s property-owners. The standard conservative groups could count only on the supporters of the imperial regime; the conservatives’ cry for “German tradition” was regarded, especially by the young and the poor, as nothing but an attempt by the former establishment to regain its special privileges. The Center party by its nature could have only a sectarian (Catholic) appeal. And, as to the middle-of-the-road liberal groups, they had trouble holding on to any constituency at all. By 1920, for instance, the Democrats had already shrunk to the status of a splinter party; middle-class voters opposed to Marxism had decided on the evidence that the Democrats were indistinguishable in practice from the Social Democrats.
The Nazis’ ideological synthesis, however, stressed the basic principles common to all groups and thus served as entrée to every major segment of the population, reactionary and radical alike. By appropriate shifts in emphasis, such an ideology could be used to placate the devout and intrigue the pagan, soothe the old and intoxicate the young, reassure the “haves” and offer a new day to the “have nots.”
Class warfare, inherited from Germany’s long feudal-authoritarian past, was an essential fact of the country’s life. When the lower classes looked upward, they saw what they hated as rapacious barons of privilege oblivious to justice. When the upper classes looked downward, they saw what they despised as rapacious malcontents eager to overthrow the proper social hierarchy. The bottom wanted the top cut down; the top wanted the bottom put down; the middle were capable of both feelings, depending on the direction in which they were looking.
The Nazis promised everything to everybody.
As to any contradictions that might be involved in this kind of campaign, Hitler was unconcerned about them.
During the 1920s, the middle class in Germany, especially its lower rungs, was the constituency most ready to be taken over. This group—white-collar workers, small tradesmen, bureaucrats, academics, and the like—had been ravaged by the war, then hit hardest by the inflation. Millions felt themselves crushed between the powerful, government-protected cartels above and the powerful, government-supported unions below. The middle class, too, wanted government protection and government support, but it had no powerful champion in the political process and no effective organization. Hitler began his climb by leaping to fill this void.
In February 1920, the Nazi party, making its first bid for public support, issued the manifesto that was to become one of its most publicized documents, the “Twenty-Five Points.” Although the document was aimed at the country as a whole and demanded special state action in behalf of virtually every group, the middle class was its most obvious target.
We demand that the State shall make it its first duty to promote the industry and livelihood of citizens ... (Point 7). We demand extensive development of provision for old age (Point 15). We demand creation and maintenance of a healthy middle class, immediate communalization of department stores, and their lease at a cheap rate to small traders ... (Point 16). We demand development of the gifted children of poor parents, whatever their class or occupation, at the expense of the State (Point 20). The state must see to raising the standard of health in the nation ... (Point 21).1
The middle class in Germany feared communism—and, like the rest of the country, resented big business. Steeped in anticapitalist slogans, the Germans made no distinction between men who had grown rich by means of productive achievement and men who had grown rich by means of political pull. The country saw millions going hungry, while certain firms were making fortunes by the help of government war contracts, inflation profiteering, politically dictated wages, prices, subsidies. The Germans did not conclude that government intervention was the cause of the injustice. The rich, they said bitterly, the rich as such, are the enemy.
Hitler daily denounced communism as subversive and un-German. He assured middle-class audiences that he rejected the policy of expropriation, at least in regard to small property-owners. In regard to large property-owners, however, he gave voice to the country’s bitterness. We demand “an end to the power of the financial interests” (Point 11). “We demand therefore ruthless confiscation of all war gains” (Point 12). “We demand nationalization of all ... trusts” (Point 13).
The Nazi party, said Hitler, “is convinced that our nation can only achieve permanent health from within on the principle: The Common Interest Before Self” (Point 24). But businessmen, he said, obey the opposite principle; capitalism appeals to selfish, “materialistic” interests, such as industrial production, economic success, the accumulation of wealth. “Gold or Blood,” said the Nazis, “Hucksters or Heroes”—this is the choice Germany must make.2
When the time was ripe, the middle class was to become the avant-garde of the Nazi mass base. The rest of the count ry, however, would not be far behind. Most of the other groups were ready for the same kinds of promises and diatribes, appropriately adapted.
To the debt-laden peasants, who were eager to become independent landowners, the Nazis promised among other things “land reform ... confiscation without compensation of land for common purposes; abolition of interest on and loans, and prevention of all speculation in land” (Point 17)—while inveighing against the Junker magnates, the big stock and grain dealers, the “urban exploiters.”
To the factory workers in the cities, who were the stronghold of the Marxist parties, the Nazis promised profit-sharing in industry (Point 14), employee participation in management, and (in the thirties) an end to unemployment—while unleashing furious denunciations of “greedy finance capital,” the “slavery of interest,” “international bankers,” and the “selfish scoundrel” who “conducts his business in an inhuman, exploiting way, misuses the national labor force and makes millions out of its sweat.”3
Ominous Parallels Page 20