“Earn it if you would own it!” National Socialist economic theoretician Dr. Otto Wagener and the ‘third way’ between nationalization and socialization
A common misconception I see about National Socialism is that the movement “had no theory,” that it comprised at best a set of mindless slogans and aesthetics which had no solid intellectual footing. The swaggering remarks made by some NSDAP leaders admittedly have not helped allay this perception, as they were often overly keen to define their movement as one of “action” in order to set it apart from the staid, dogma-laden, bourgeois respectability of more mainstream competitors. Yet the claim that National Socialism was bereft of ideas or principles cannot have been particularly convincing to anyone alive when it was at its most active, at least to those with eyes. The movement in its heyday produced massive quantities of publications examining political, economic, scientific, and philosophical issues from the perspective of the “nationalsozialistische Weltanschauung,” including a number of theoretical journals. Particularly central to National Socialist ideology was its economic theory, which had deep roots by way of Social-Democracy and the Kathedersozialisten, and which the Party’s Economic Policy Department (Wirtschaftspolitische Abteilung, WPA) worked into a variety of draft policy proposals in the early 1930s. The head of the WPA was Dr. Otto Wagener (b.1888 – d.1971), a man who for several years was a senior figure in the NS leadership as well as the NSDAP’s chief economic theoretician. One of the potential models for a National Socialist economic order explored by Wagener was that of the “social economy” (Sozialwirtschaft), a system in which the principles of natural selection and worker participation would merge to form a new alternative to both nationalization and socialization. Property rights in Wagener’s “social economy” would not be absolute, with the system instead being characterized by a gradual and continuous transfer of business and industry ownership into the hands of the most capable workers. Wagener’s idea, like many of the draft proposals researched and debated by the WPA, never actually became official policy, but it nonetheless still serves as a perfect example of the theoretical credentials of a movement so often painted as crudely anti-intellectual. The text below is an excerpted chapter from Wagener’s post-War memoirs, in which the author gives an account of the informal economic policy conferences he held with Hitler in 1930 where the idea of the “social economy” was first discussed. The majority of the text is taken verbatim from Ruth Hein’s English translation of Wagener’s memoirs, although I have edited it slightly to add in several sections from the German original which Hein cut from her translation.
Plans for a “Social Economy”
An Informal Economic Policy Conference, Summer, 1930
From the memoirs of Dr. Otto Wagener
In the early summer of 1930, Hess asked me on behalf of Hitler whether I had time at a certain hour the next day for an economic policy conference. Strasser and Dr. Wagner,1 at that time Gauleiter of Munich, would be present.
The next day the four of us sat around the round table in Hitler’s office.
Hitler raised the issue of my position on the problem of nationalization and socialization. I had the feeling that he wanted to familiarize himself for the first time with my attitude towards economic policy.
I began by stating something like the following:
“Of course, I am naturally well-acquainted with what the points of the NSDAP programme say regarding this topic. But since you are asking how I feel about these problems, I shall now neither take these into account nor refer to them.”
In wide-ranging remarks on the problem between “capital and labor” in industry, Wagener in the following pages of his memoir then rejects as a solution both nationalization and a “direct socialization” through the takeover of enterprises by workers.2 A “direct socialization” is impractical in the long term, especially with regard to future investment. Nationalization merely replaces the private entrepreneur with the state, while leaving the worker in a service relationship with capital. This entangles the state in the conflict between capital and labor, a development which could have dangerous political consequences. Nationalization also leaves unanswered the question: Who is the state? Its final result would be domination by those groups which control the state, the consequence being the spread of the “spirit of the feeding-trough.” In addition, the “automatic self-healing mechanisms” inherent within “healthy competitive struggle” would also be lost. Wagener therefore warned against the nationalization of those enterprises which the state did not absolutely need to possess. “Completely different methods” would be necessary in order to achieve the transition from individualism to socialism.
All three had been listening attentively thus far. As Dr. Wagner evidently wanted to say something, Hitler requested that he speak.
“Your explanations,” he said to me, “are the explanations of a capitalist and an economic liberal, one who attempts to lead socialist necessities ad absurdum via cunning dialectics. In the Party programme we have committed ourselves to the nationalization of incorporated enterprises.3 That is our goal. That is what we are fighting for. I do not think it appropriate for you to permit yourself to encroach upon these principles, which have already become the content of the faith and the hope of an entire popular movement [Volksbewegung].”
Hitler thereupon calmly interrupted him: “Wagner, if our programme contains ideas that seemed correct to us in the year 1920, at a time when our thinking was influenced by the thought of the socialist revolution, that fact does not prevent our reexamining their present correctness if we are to prepare ourselves for translating these thoughts into actions. Strasser, what comments do you have on the Chief of Staff’s4 remarks so far?”
Strasser spoke. “Finally, here is a man who has an opinion of his own and is prepared to state it. I have nothing to add to what he has said so far. It accords with my own views. But now I am curious to hear what Herr Wagener will present next. The solution, the solution – that is what matters.”
“What seems to me incontestable first of all,” Hitler then began, “is the fact that collectivist solutions cannot lead us to our goal. Everywhere in life only a process of selection can prevail. Among the animals, among plants, wherever observations have been made, basically the stronger, the better survives. The simpler life forms have no written constitution. Selection therefore runs a natural course. As Darwin correctly proved: the choice is not made by some agency – nature chooses. That is election. But the animals and other forms of life have a further process of self-selection. Weaklings, runts, sick individuals are cast out of their communities by the healthy ones; some of them are even killed, disposed of.
“That is the will of nature. What is healthy abhors that which is sick, the productive abhors the life of the drone, purposeful striving abhors indifferent depravity.
“By now we humans, whether we want to or not, have long since degenerated to the point where we can no longer rouse ourselves to self-selection. Just look at the institutions for the wayward, for the insane, for the incurable epileptics, kept in handsomely furnished buildings resembling hotels and palaces, with central heating and hot and cold running water, surrounded by the most splendid gardens. That’s where these people are cared for and cherished. Dozens of saintly nurses look after them, to make sure that their sick lives are preserved, to make sure that they will be a burden to others for the longest possible time. Meanwhile, outside, hale and hearty men and women, who can and want to be productive, stand idle, unable to obtain work and not knowing where to turn for even the most meager nourishment for themselves and their poor children. Even the prisons and penitentiaries are day nurseries for criminality and subhumanity. Once it was even suggested in the Reichstag that musical performances, lectures, and movies be brought to the prisons, to entertain the convicts. And on the outside, hundreds of thousands – and soon it will be millions – of decent workers are starving, without pay, without work, without prospects, innocent – but without films and concerts!
“In antiquity, the Spartan constitution was the only one that required and enforced a healthy selection. And today there are still a few states in the USA which also, at least to a certain extent, support human self-selection.
“When I examine the concept of collectivism, it occurs to me that it entails egalitarianism, which it cannot help but bring about. For a whole Volk that means nothing other than what is being practiced in the insane asylums and prisons.
“To that extent the whole idea of socialization in the form in which it has been attempted and proposed until now seems to me wrong. I arrive at the same conclusion as Herr Wagener.
“A process of selection must be introduced in some way if one wishes to arrive at a natural, healthy, and satisfactory solution to the problem – a selection process for those who have or should have a claim and right to ownership and proprietorship of any business.”
As he spoke, Hitler looked at me and made a sign for me to continue. But first I had to think about the thought he had tossed out, which I was now compelled to deal with. But unprepared as I was, it was not so easy to give lucid and comprehensible expression to this line of reasoning – which was, after all, quite difficult. I repeat my thoughts here more or less as I stated them then. At the time I would dearly have loved to light a cigar. But as a matter of principle, Hitler had requested that there be no smoking in his room, and if possible, in his presence anywhere.
“This idea,” I began, “would mean that not all the people who work in a business can acquire a claim to ownership of it, but only the best of them, the most productive. On the other hand, a business proprietor can, in the long run, keep his property only if he continually reacquires, as it were, his claim to it through skill and achievement.
“Thus there would be no socialization, but a permanent, gradual, continuous transfer of ownership of any business into the hands of the most capable, the best – under certain circumstances, if need be, into the hands of the single best individual.
“This idea, which is without a doubt completely novel, seems to me in fact workable. I even have the impression that it is fully congruent with ideas I have been systematically developing for some time concerning the overall financial and capital structure. I would ask you to let me present those ideas at some other time.
“But for the moment, one ought to try to determine which businesses are suitable for shifting ownership and which are not. The criterion is, on the one hand, the divisibility of ownership in any particular enterprise and, on the other hand, the economic feasibility of distribution. A joint-stock corporation, for example, is a business whose ownership is already divided. The thought might arise that the distribution of ownership and the shift of ownership I have in mind can therefore be undertaken in the case of all businesses that can be turned into joint-stock companies. But that is not really the essential principle.
“There is undoubtedly a lower limit on businesses below which division is completely out of the question. This includes in the main artisanal enterprises, as well as butchers, bakeries, etc. In other words, all those enterprises which are in the hands of a single Meister who has a limited number of journeymen and apprentices.
“In the case of such indivisible businesses, an automatic transfer of ownership would therefore not be an option. The employees or journeymen in such an enterprise would in exchange have to be afforded certain regulatory standards which it would be simplest for the guilds and professional associations to draw up. I request that I be given the opportunity to speak about this topic on another occasion.
“In the case of businesses with a divisible ownership, the following considerations must now be resolved:
“1.) By what method such a transfer of ownership is feasible.
“2.) To what extent, in terms of duration and effectiveness, it should occur.
“3.) How the selection of the best and most capable should take place.
“Regarding point no. 1.): The fundamental principle which conclusively emerges from the overall reasoning is that a business can belong only to someone who works in it. Until now, it has been possible for someone to own a business and to allow a manager or director to run it, while he himself spent his time in Berlin or Monte Carlo, living on the earnings of his business, which are sent to him once a month. If we carry out the idea of transfer of property, we must see to it that such a case cannot occur.”
“Very good!” Hitler interrupted. “That means the abolition of income without work or effort.”5
“For every business,” I continued, “– for the moment I will only consider industrial enterprises – a certain percentage would have to be set aside each year – that is, expropriated from its present owner. Let’s take as an example – but, let me make it quite clear, only as an example – a yearly reduction in ownership of five percent. If, then, a factory has a book value of a hundred thousand marks, at the end of the year five thousand would have to be credited to a special account, leaving the owner only ninety-five thousand marks.
“Now, to keep to the terms we have been using, the most capable and best workers in this factory – which, of course, may also include the owner, to the extent that he participates in the work of the factory – must have the opportunity to acquire this ownership share of five thousand marks. They are not to be given shares for nothing. Goethe said, ‘Earn it if you would own it.’ This rule alone already leads to a selection – a self-selection. The man who is not interested, the man who does not want to regard the factory as his life’s meaning, the man who is frivolous, the man who is lazy – all these will not have saved up anything, or they will be unwilling to invest their savings in a share of the concern in which they work. Only the industrious man, the enterprising fellow, the purposeful, the proficient, will systematically lay aside what he needs to acquire shares.
“Even the present owner can take part in the acquisition – in his case, reacquisition. But only if he actually holds a leading position in the business or is one of the more capable workers. If he does not work, in our example of a five-percent annual contraction of ownership, he will have lost his property completely after twenty years, and it will be in the hands of the staff and workers who were hard-working, competent, and thrifty.
“The contraction continues with each new owner. So, in our example, anyone who does not continually acquire or reacquire forfeits his share in twenty years, and it will always be the single-minded and proficient who continue to increase their holdings.
“Very good,” Hitler interjected. “That is not collectivism. That is the process of selection.”
“How, then, is the transfer of property to be carried out legally and according to proper accounting methods?” I continued my reflections. “If the new applicants to ownership are to buy the shares, it would seem practical to involve the state or a special agency established by the state – let us call it the managership – to which the amounts by which the capital holdings diminish yearly – in our example, five thousand marks – will be credited. So by the end of any year the managership becomes the owner of this share of the business. When it sells the shares to the applicants, it receives cash amounts, available to be passed on to the state treasury. I will refer here only briefly to the effects of such an arrangement on the country’s total tax-structure, but I can return to the topic on another occasion.”
Again, Hitler interrupted by speaking to Dr. Wagner, the Gauleiter. “You see, we will, after all, arrive at a nationalization of the corporations, if only temporarily.”
Wagner nodded, adding, “I am following these remarks with increasing interest and astonishment. The Chief of Staff turns out not to be a liberal and capitalist after all.”
“Legally,” I continued, “the managership – or, after the sale, the new purchaser – is a sort of limited partner in the business. Thus he participates in the profits according to his capital investment, and he is liable for the losses only to the extent of his share and percentage.
“Since it will usually be a number of people who will acquire shares, it would be simplest for them to form a cooperative represented by one of its members, who is elected. He or the cooperative is then the limited partner of the former sole owner.
“In the case of a joint-stock corporation, the diminution of ownership would be reflected in the stock. Each single share, in our example, would decrease by five percent yearly. Partial shares of, say, two hundred or five hundred marks could be issued, to facilitate acquisition by the workers. To prevent further subdivision, the contraction of these partial shares could subsequently be achieved through deductions from profits. These details will have to be researched and worked out. Today it is only a matter of thinking through and drawing conclusions from your idea, Herr Hitler, of applying the process of natural selection to the problem of socialization.
“Regarding point no. 2.): The second issue is to what extent, in terms of pace and effectiveness, the transfer of ownership should take place.
“By way of example, I had initially suggested a yearly rate of five percent as a way of giving a general presentation of the concept. It seems necessary, however, that this percentage should actually be dependent upon the specific nature of the business concerned. Very detailed studies would have to be undertaken first in order to be able to discern the principles relevant to this issue. A certain amount of the groundwork has in any case already been carried out for us by the taxation authorities. The rate at which depreciation takes place has been determined in quite considerable detail. For example: for house plots, one-and-a-half percent; for industrial premises, two-and-a-half to four percent; in fact, for every possible item – for machines, for motor-vehicles, for inventory holdings, and so forth – such specifications have already been determined, or usage rates have already been established. I believe that the answer to the central issue of the degree of ownership transfer also lies here. Before I discuss this issue and its consequences in further detail, however, it will be necessary for me to first present my thoughts on the overall system of money and capital. Otherwise I will not be able to make myself properly understood. But I believe that I can prove that this diminution of ownership is actually linked to natural depreciation. And we will see that in an agricultural enterprise – I am getting ahead of myself a little – it will amount to only half a percent; in a mining operation to maybe one to two percent; in an industrial plant, three to five percent; while in a commercial enterprise perhaps even up to ten percent. The reduction in ownership would thus occur in proportion to the opportunity for profit.
“Regarding point no. 3): Now we come to the question of how the selection of the best and most capable should take place.
“To some extent this question has already been answered, specifically insofar as self-selection is a wholly automatic occurrence. But this process places, for example, a father with many children at a disadvantage when compared to a bachelor. For the man with a large family may not so easily be able to put aside the savings that he would like, while this is something much easier for the bachelor to accomplish. Self-selection is thus in fact anti-social, by and large.
“That is why, in addition to selection, the principle of election – of organized selection – is also essential. I have already mentioned earlier that the guilds and professional organizations should be considered for the purpose of fulfilling a similar function. This form of selection should also be the task of panels drawn from the economy itself.
“With the transition from the liberal economy to the social economy, as I prefer to call this new economic system, we will often find it necessary to entrust the economy and its professional and economic associations with tasks that require administration by a special self-governing organizational structure, roughly similar to how political self-administration can and must be established from the municipal administrative level on upwards – from the district through to the province, state [Land], and Reich. And entrepreneurs, workers, and white-collar employees must all be represented within this structure, and each in such scope and proportion that none can out-vote or suppress the others, so that this very structure becomes the advocate and guarantor of our economic and social peace.”
When I ended my speech, all three of my listeners remained silent. Strasser and Wagner looked at Hitler. And Hitler, who had been staring steadily at me as I spoke, now lowered his eyes.
Finally he spoke. “Wagener, what you have told us is full of much that is new and original, that I did not absorb all of it sufficiently to be able to take a clear position. Please, come to see me again tomorrow morning at eleven o’clock, and give me the same report again, if possible in the same words you used just now.
“And you, gentlemen,” – he turned to the other two – “think about the subject also. We’ll continue the group discussion in two or three days.
“Prepare yourself,” he said, turning back to me, “to discuss with us in detail, one after the other, all the problems you have only touched on today, until the picture is complete. If my feelings are right, today is the birth date of a completely new economic theory, which will be capable of explaining and resolving the enormous problems of the conversion to socialism. The significance of this moment is so enormous, however, that it would be frivolous to desecrate it with petty arguments.”
We took our leave, and when we shook hands, Hitler held on to mine a little longer than usual.
* * *
I immediately jotted down the necessary notes about this conversation, not only for myself, but also for the following day, so that I would really be able to repeat for Hitler exactly what I had just told him.
And it happened. Hitler listened to me without interrupting and without taking his eyes from me. When I had finished, he said, “I am not an economist. I have never involved myself in detailed economic questions, and I realize that I used to conceive of even the major aspects of economics differently in some measure than I do now, as I follow your presentation.
“I could ask many questions. But I believe I will wait until I have heard all you have to say. Otherwise, we will only waste time talking about matters that may be cleared up anyway. If it’s all right with you, we will continue tomorrow afternoon at three. I will get a message to Wagner and Strasser. What will you talk about tomorrow?”
“I think I should begin with the concept of money and capital,” I answered.
“Have you studied the subject?” Hitler asked.
“Studied may be putting it too strongly. I’ve attended lectures on it and read a number of things. And I gave some lectures on aspects of economic policy. But what I want to present is something which, if it is correct and realizable, will profoundly shake the present bases of economic policy.”
“Wagener, there is no way we can avoid such shocks. That is precisely the most profound secret of the entire revolution we are living through and whose leadership it is our mission to seize: that there has to be overthrow, demolition, destruction by force! The destruction must be meaningful, not senseless, as under Bolshevism. And it can only become meaningful if we have understood the goal, the purpose, the necessity.
“Science, economics, and traditional practice – but also the entire concept of law, all the way to universal human rights – all are erected on the individualistic approach of the thousand-year-old past – erected and contrived by men of this ideology. It has colored all the feelings, perceptions, even the ethics and religious beliefs of these people.
“They will not understand our logic; they will condemn our thinking; they will convict our new ethics; and they will shower and persecute us with all the hatred of which an ideology doomed to destruction is capable in order to fight off, to suppress, to strangle an awakening ideology that will overthrow everything that existed previously. The execution of this great transformation must be left to youth. And if the old should succeed in restraining us and hindering our work, then there is no help for them, then Bolshevism will descend on them – the Bolshevism which it is our sacred goal to save the world from. With brutal ruthlessness it will crush underfoot and stamp out everything their incompetent egotism attempts to defend. A Sodom and Gomorrah will rise, such as we have already seen in Russia! Only after decades of suffering will the new come into being and rise from the ruins of that collapsed ideology and world – the new of which we have a presentiment and which it is our hope to see more clearly.”
He fell silent, visibly agitated. Then he briefly shook hands with me, saying, “Tomorrow, then, we shall continue.”
* * *
The next day, as agreed, we all sat together in Hitler’s office: Hitler, Strasser, Gauleiter Dr. Wagner, and myself. Wagner had several questions stemming from the first conference which were entirely warranted but which would find their answer in my intended remarks.
Dr. Wagner had originally studied political economy before going into industry. For several years he was managing director of the state mines and ironworks near Amberg, in Bavaria. He had extensive knowledge of and great experience in economic and socio-political matters. But he did not have the necessary ability to be adaptable, to be able to accommodate himself to specific circumstances, hence why it was not possible for him to remain in the civil service for the long term. He had placed himself at the disposal of Hitler and was one of his closest advisors. Furthermore, as already mentioned, he was Gauleiter for Upper Bavaria, headquartered in Munich.
I now put forward the following lines of thought:
Wagener then attacked the “intrinsic value of money” on the basis that it leads to “interest slavery.” Since money was merely a token to facilitate the exchange of goods constantly depreciating in value, it therefore also perpetually lost value, he contended. Thus, no grounds existed for fixed interest charges on capital and loans. Invested or loaned money was entitled only to participate in the profits or losses of enterprises in which it was invested or to which it was loaned. Similarly, he also argued that the requirement for the repayment of the total amount of a home mortgage loan was also unjustified, since buildings can depreciate in value. Yet under the existing laws, he observed, even heirs were liable for the full amount of a mortgage, although the building may have fallen greatly in value.
“The justification of our programmatic commitment to break the serfdom of interest payments has never been clearer to me,” Hitler called out at this point.
Dr. Wagner objected. “But the heirs can refuse the legacy.”
“That they can.” Hitler grew heated. “Yes, they can! And with it, give up everything they hold dear and valuable, the last memento, the last ring, the chair where as children they played on their old grandfather’s lap, the chest where mother, in careful work, cared for and kept the homespun linens, the memories, all of them, of childhood, of the family home – and how much these little things mean to a person who owns nothing besides such memories! They have to renounce all of it, for no other reason than that otherwise, as a result of the entirely erroneous capitalist attitude of the official world, they will fall victim to the serfdom of interest payments, under which they may have to languish to the end of their days.
“Oh, I foresee the costly struggle to persuade the pigheaded and stubborn world, to break the power of this swindle perpetrated upon the working man, which has become law, and to awaken the conviction that it is just as easy to do things right! However, it is essential to jettison that which is old and traditional and no longer suited to the changing times.”
Then Hitler looked at me, waiting, and after a few moments I continued.
Here Wagener tells of having to set forth his plans for implementation of a “just profit.” To provide the foundation for it, a unified system of bookkeeping would establish the “appropriate capital” for productive units of the same or related types. Then an “appropriate profit percentage” would be determined for the various branches of the economy. Bu applying that standard, it would become clear where more than normal profits were being realized. Once the principle of “appropriate profit” went into effect, such above-normal profits could be attributed only to labor – not to capital. These would thus become subject to profit-sharing among the workers. The whole process would be administered by a corporatist system of self-administration, which Wagener promised to describe later.
I fell silent. And for the moment, the others also remained silent. Finally, Hitler spoke. “What do the other gentlemen have to say about these arguments?”
Strasser responded first. “When you listen to this, everything sounds so simple and natural. But then, one asks oneself how it could happen that no one has come upon these ideas before now. I, at least, have never heard of them before.
“And besides, I have the feeling that the execution of these ideas also contains the solution to so many other problems – economic and social problems – that this fact makes the ideas seem even more correct.
“I am thinking, for example, of the problem of subsidiary plants. Anyone who does not work in a business gradually loses it to those who are competent and can do work in it. In the Reichstag, we are constantly running into the problem of how to deal with subsidiaries. This proposal solves it.
“Or: Lending money stops being a sine cura and becomes a participation, with a higher chance of profit, but also with a risk of loss. We’ve racked our brains how to do away with income not based on work and effort. This puts an end to it.
“And then again: Agriculture will once more be granted loans because it poses the least risk. Mortgages on agricultural property will be practically gilt-edged. Until now, the reverse has been the case.
“Also: There is no longer any need of inheritance taxes. Real and capital property will contract as it is; and as Wagener already mentioned, the quotation from Goethe will be realized: ‘What you inherit from your fathers, earn it if you would own it.’
“But I’ll have to think the whole matter through in peace and quiet. I’d prefer to have it in writing, to be able to study it properly.”
Dr. Wagner declared, “The idea concerning appropriate capital and appropriate profit makes a great deal of sense to me. In determining appropriate capital, I also finally see a chance to create bases for the purchase prices of businesses. For actually, the appropriate capital would have to be the normal purchase price, even if the actual invested capital is greater or smaller.
“But I still have a number of questions and doubts about the contraction of capital and property, which cannot help but bring about a diminution of the entire money supply. How, for example, are the banks to work, to keep accounts and make settlements?”
Then Hitler said, “Wagener’s perceptions make us face up to realizations we have already almost instinctively utilized in our party program, before these matters were really clear to us.
“When, subsequently, I hear a logical explanation of something that I have instinctively felt in advance, an explanation that reveals to me a natural development and justification, the correctness of this explanation is a dead certainty for me personally.
“All of us must readily agree that these perceptions, as Wagener himself has pointed out, require the most thorough examination and discussion over a period of years by leading theoreticians and practitioners, whose skill and experience can guarantee that the result of their work is unquestionably correct and can be converted into actuality. When one is dealing with a thousand-year-old notion, which has become so firmly rooted in the heads and legal systems of all peoples and nations that no one any longer has the slightest thought that it might possibly be false and erroneous – then it would be reckless and irresponsible to try to demolish it without having tested a hundred times, without having deliberated, thought through, and even tried out in practice those new perceptions one wants to set in its place.
“That will be the task of the economic policy section,6 which we must establish within the national executive of the NSDAP. And at the proper time I shall ask you, Wagener, to heard this section.
“There is one thing I consider important and absolutely necessary – that is, not to mention for the present any of these trains of thought and problems outside a narrow group. Any distortion, any false presentation, even partially making public this entirely new set of problems, which is still being worked on, could only do harm to the cause of our plans.
“I therefore enjoin you, gentlemen, for the present, from letting a word of what we heard today and the day before yesterday reach anyone beyond our immediate circle. Even when the economic policy section has begun its work, you, Wagener, must see to it that no mischief can be made with these crucial subjects in the area of economic as well as social policy.
“I, too, am not yet entirely clear on some details. But in my mind I foresee the solution to all the problems Marxism and Communism have tried in vain to solve. The perceptions are so powerful, so subversive, so revolutionary, that the French Revolution seems child’s play by comparison to the upheaval that cannot help but be brought about by the introduction of the consequences of these perceptions.
“The implications of these ideas is enormous. Wars have broken out, internal battles have been fought, revolutions have turned the world upside down, in order to solve the one and only major problem of our time: to replace the ‘rule of capital over labor’ with the ‘rule of labor over capital.’
“Now I feel as if we are holding the philosopher’s stone. Let us make good use of it rather than throw it away. Today I realize even more clearly than usual that it must be the task of politics to prevent the leaping across to Germany and other nations of the world of Russian Bolshevism, that false and, in its own way, criminal solution of the problem, until we are in a position to sponsor the total program of a new social economy and to make a gift of it to our German Volk and to all mankind.”
After a brief silence, Hitler dismissed us with grave handshakes and pointed out that the further explanation of my perceptions would have to be postponed for one or two weeks, since he was about to take a trip to Berlin and Hamburg. We would hear from him again upon his return. As he said good-bye, he added to me, “Wagener. I have gained additional solid ground under my feet.”
1. Besides Hitler and Otto Wagener, Gregor Strasser (b.1892 – d.1934) and Dr. Adolf Wagner (b.1890 – d.1944) made up the other attendees at the informal economic conference Wagener describes here (Rudolf Hess helped organize the event but did not attend). Dr. Adolf Wagner, today the least well-known of these four, was a long-time Party member; he had participated in the 1923 ‘Beer Hall Putsch’, was elected to the Bavarian Landtag in 1924, and in 1929 was appointed Gauleiter of Greater Munich (enlarged to Munich-Upper Bavaria from 1930 onwards). In 1933 he was elected to the Reichstag and became Minister of the Interior in Bavaria. His attendance at the conferences is interesting; while he was a staunchly loyal Hitler ally, Wagner was also close to Gregor Strasser and had a reputation in the Party as a pro-worker economic and cultural radical.
2. In both the original German publication of Otto Wagener’s memoirs and the subsequent English translation, there are occasional italicized sections like this one where the editors have chosen to summarize part of the text as an “editorial note” rather than to fully transcribe it. This choice was apparently taken for reasons of brevity. Wagener’s memoirs were originally handwritten in 1946 while he was interned in a British prison camp; in total he ended up filling thirty-six notebooks (over 2,000 pages) with writing. The full document, unfortunately, has never been published in its entirety. The German edition comprises about half of the complete, handwritten manuscript, a decision the editor/compiler, Henry Ashby Turner Jr., justifies as follows: “Repetitious passages, those of peripheral significance, some of Wagener’s long explanations of his economic schemes, and portions dealing only with his personal life were not included or were summarized in editorial notes.” The English translation by Ruth Hein was slimmed down even further, eliminating several chapters and shortening others. I have restored all of the text cut from this chapter in Hein’s English translation, but there are still three “editorial notes” the chapter like this one where readers have no choice but to accept Turner Jr.’s summation of Wagener’s opinions.
4. Otto Wagener at the time of this conference was the SA’s Chief of Staff. He was the first to hold this title, serving from October 1929 to December 1930; the SA was in fact the reason why he had initially joined the Party. Wagener had originally served in both WWI and in the post-War Freikorps, fighting with the latter in campaigns in Upper Silesia, Saxony, and the Ruhr. He was also jailed for participation in the 1920 Kapp Putsch, and during 1920-21 had briefly headed the Baden branch of the Orgesch, a conservative-traditionalist paramilitary. Wagener ended up in the NSDAP after accepting a chance invitation to attend the 1929 Nuremberg Party Rally. There he ran into Franz Pfeffer von Salomon, an old Freikorps comrade and at that time Supreme Commander of the SA. The SA’s increasingly rapid growth had made management and funding of the Brownshirts difficult for Pfeffer, who consequently was looking to establish a staff for the SA high command. Wagener, who had served as a captain in the General Staff of the German Army during WWI, seemed a perfect candidate to help reorganize the paramilitary’s leadership. Wagener agreed to Pfeffer’s offer to join the SA and was appointed Chief of Staff after an official interview with Hitler. This appointment was apparently intended to be a caretaker position rather than permanent; while in the role Wagener made several recommendations to Hitler on who should replace him once his work was complete, and Ernst Röhm returned from Bolivia and took over the position in January 1931. Wagener then moved over to heading the Economic Policy Department (see reference 6 below), and remained a leading business and economics expert within the NSDAP until his eventual removal in 1933-34 due to maneuverings by Goering.
5. The “abolition of unearned income” was a central proposal within National Socialist economic theory, and is specifically mentioned within the NSDAP’s 25-Point Programme: “11. We demand therefore: the abolition of all income unearned by work or effort…”
6. By 1930 Hitler and the rest of the Parteileitung had for some time been discussing the establishment of an “economic policy section” for the NSDAP. A Wirtschaftspolitische Abteilung (Economic Policy Department, or WPA) was founded in January 1931, several months after the discussions Wagener records here, with Hitler appointing Wagener as its head. The WPA’s task was to more thoroughly define the party’s economic objectives, as well as to produce research and draft proposals which would help translate the NSDAP’s ideology and the sentiments in its programme into concrete policies which could be taken to elections and implemented once the Party was in power.