The Social Economy

“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

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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.

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The League of Communists

Heinrich Laufenberg’s and Fritz Wolffheim’s 1921 appeal to the German proletariat on behalf of their national-bolshevist ‘League of Communists’

Heinrich Laufenberg and Fritz Wolffheim (whose work has been featured on this blog before) were two of the earliest advocates of a ‘National Bolshevik’ policy in German politics. Both men played prominent roles in the workers’ and soldiers’ councils which sprang up in the wake of the 1918 November Revolution, distinguishing themselves as leaders within the ultra-left ‘syndicalist’ wing of Hamburg’s communist scene. Their national-bolshevist sympathies developed gradually, spurred into being largely as a consequence of the Treaty of Versailles, which piqued their sense of nationalism and which was interpreted by them as an act of imperialist exploitation from the ‘plutocratic’ Entente. Laufenberg and Wolffheim saw the solution to Germany’s misery in a revolutionary socialist state, based on a system of grassroots councils, in which the working-class would take a leading role and would be supported by ‘productive’ members of the bourgeois middle-classes, who could be won over to socialism by appealing to their nationalism. In April 1920 the two friends took this worldview into the newly-formed Communist Workers’ Party of Germany (KAPD), a council-communist party. Although the KAPD’s Hamburg branch saw considerable success under their leadership, their “nationalist tendencies” were controversial, and the party-leadership expelled them in August 1920.  The two men subsequently formed the ‘League of Communists’ to continue propagating their national-bolshevist line. This small organization’s main focus was the production and dissemination of propaganda, but it was not without its successes; its ideas had a decent following among Hamburg’s sailors and dockworkers, and the League’s related ‘Free Association for the Study of German-Communism’ developed influential ties within military and völkisch-intellectual circles. The short leaflet below, put out by the League in July 1921, represents most of the core themes in Laufenberg’s and Wolffheim’s thought during this period: nationalist-inspired support for the German uprising against the Poles in Silesia; strong opposition to Versailles and to French and British commercial-imperial interests; Marxist anti-capitalism; anti-parliamentarism; and the need to develop joint workers’ organs transcending the existing socialist/communist parties. Most of these ideas remained central to Wolffheim’s ideology (Laufenberg retired from politics in 1922) even as his nationalism in following years became more explicitly völkisch; his League, always small in size, ended up an appendage of Paetel’s ‘Group of Social-Revolutionary Nationalists’ in the early 1930s. 

Appeal from the League of Communists
to the German Proletariat!

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The cowardly gunshots to which the socialist deputy Gareis1 fell victim after being ambushed in Munich; the organized incitement of murderous violence against leading personalities of the workers’ movement; the rallying of the Orgesch2 in Bavaria and Silesia; the monarchist demonstrations which are growing more brazen by the day – these are all symptoms of the fact that the monarchist counter-revolution sees the time drawing near when it can re-establish the old monarchy and the old military dictatorship through the suppression of the German working-class. In this situation – which gravely threatens the entire German working-class and, at the same time, the world proletariat – the League of Communists considers itself obligated

to call upon the entirety of the German working-class

to transcend the dividing lines of the existing parties in order to

seek a common line of orientation and a common route of action.

At the center of the domestic and foreign political dangers threatening the German Revolution is the incursion of bands of Polish insurgents into Upper Silesia. The German working-class has widely recognized, notwithstanding the trivial phraseology coming from the KAPD,3 that the threatened population there cannot be denied the right to self-defence and to safeguard their native soil. Furthermore, the entirety of the German Revolution categorically and unequivocally recognizes the duty of national defence. When it comes to an economic region which belongs to Germany both culturally and according to the will of the vast majority of its population, there the participation of the working-class in Silesia’s self-defence is a matter of course. In their desire to exploit a national imperative for certain nationalist purposes, however, the monarchist cliques and the chauvinist thugs within the Orgesch have used the legitimate self-defence efforts going on in Silesia as an excuse to bring together a battalion of mercenaries4 there whose duty has nothing to do with national defence. The threat to the Republic which this concentration of mercenary forces poses is amplified by the Orgesch-backed authoritarian regime in Bavaria,5 whose government emerged out of the Kapp Putsch and which is openly preparing for monarchist restoration throughout Germany. Continue reading

The Hugenberg Memorandum

The infamous ‘Hugenberg Memorandum’, presented by nationalist politician Alfred Hugenberg at the 1933 World Economic Conference, London

The untitled document below, commonly known as the ‘Hugenberg Memorandum’, was first disseminated by German-National politician Alfred Hugenberg on 16 June, 1933, at the World Economic Conference in London. Hugenberg, with his solidly middle-class Prussian background, his massive media empire, and his web of financial ties to German heavy industry, might seem an unlikely candidate for inclusion on this blog. As an old Pan-German and a leading figure within the bourgeois-nationalist German National People’s Party (DNVP), Hugenberg was typically viewed by communists, socialists, and national-revolutionaries alike as an ossified, backwards-looking reactionary. Yet despite his stolid conservatism, Hugenberg in many respects still represented a particularly radical tendency in German economic thought. Like many Pan-Germans, Hugenberg was an advocate of autarchy as a solution to Germany’s economic woes, promoting vigorous protectionism for German produce, a strict quota system on agricultural imports, wide-ranging debt relief for farmers, and a gigantic expansion of domestic markets by retaking Germany’s African colonies and by ‘clearing’ Slavic land to the east for ‘settlement’. Through Franz von Papen’s influence, Hugenberg in 1933 had been awarded multiple influential positions within the new Hitler Government, finally affording him the opportunity to fulfill his dream as Germany’s “savior from economic misery.” It was for this reason that he insisted on presenting the below memorandum on his personal economic vision to the Economic Conference, despite horrified protestations from other members of the German delegation. The result was disastrous. The Hitler Government at the time was still only months old, and was desperately trying to present a picture of moderation and conciliation to other nations, who viewed the still poorly-armed ‘New Germany’ with deep suspicion. Hugenberg’s memorandum criticizing foreign investment and claiming that the world’s recovery from the Great Depression could only come about through Germany being granted colonial territories in Africa and a free hand to seize land to the east was deeply embarrassing to the government, who were forced to declare that Hugenberg’s statements did not represent official policy. Hugenberg, alienated among his colleagues and with his political reputation in tatters, was left with little choice but to resign from the Hitler cabinet, and by the end of the month the DNVP too ended up being pressured to dissolve itself and to merge into the NSDAP. The text of Hugenberg’s memorandum is reproduced in full below, in part because it represents an excellent example of the radical economic worldview embodied in Pan-German ideology, and in part because of its historical value: histories of the Third Reich and the DNVP commonly reference the document, but very rarely provide substantial quotes from it to inform their readers, much less reproduce it in full. 

The ‘Hugenberg Memorandum’
Alfred Hugenberg,
Reichsminister for Economics, Reichsminister for Food and Agriculture
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LONDON, June 14, 1933

In my homeland the Westphalians and the Frisians are considered to be among the tribes which are least diplomatic and most rustic, blunt, and stubborn. I am a cross between these two tribes. You must therefore have the great kindness to overlook it as a hereditary fault of mind if you do not like everything I say.

Given the situation in which my country finds itself it is impossible for me to try to skip lightly over the gulf of deep problems which are agitating not only us Germans but to an increasing extent the entire Western world, including America. The philosopher1 who entitled a well-known book Decline of the West thereby pointed prophetically to a danger which appears as a dark storm cloud on the horizon of the world. The government of the country in which this book was written many years ago is today, under the leadership of Reichschancellor Adolf Hitler, fighting the battle against this decline of the West. The esteemed President of this Conference, Mr. MacDonald,2 has described this danger in other words but with all desirable clarity as follows: “The world is drifting toward a state in which life revolts against hardship and the gains of the past are swept away by forces of despair.”3 In the sense of this struggle there is a family of nations. Those that belong to it are basically permeated with this feeling: We do not want to lose the courage and the spirit of our forefathers; nor do we want to let ourselves be exterminated by the subhumanity [Untermenschentum] growing up in our own nations.  Continue reading

Gregor Strasser on National Socialism

“We National Socialists are socialists, real, national, German socialists!” A 1925 article by Gregor Strasser on the meaning of Fatherland and National Socialism

NSDAP_Wir_Arbeiter_sind_erwachtThe following article by Gregor Strasser was first published on 4 September, 1925, roughly six months after the NSDAP’s refounding following Hitler’s release from Landsberg Prison. I am not sure in what publication it first appeared. Possibly it was in the Nationalsozialistische Briefe, of which Gregor was chief editor for several years and which was founded at roughly the same time this article was originally printed. Regardless of which platform the article first appeared in, it was considered significant enough to be reprinted in subsequent collections of Gregor’s writings – it shows up both in his 1928 booklet, Freiheit und Brot (‘Freedom and Bread’), and in his ‘collected works’ from 1932, Kampf um Deutschland (‘Struggle for Germany’). It is fairly typical of Gregor’s early writing in that it is heavy on sentiment and emotion but light on actual, concrete policy propositions. This was a deficiency which Gregor was apparently aware of and sought to address later on in his career, as in the early ’30s he began working quite closely with economic experts, business figures, and state officials in an attempt to develop workable programs for resolving the unemployment and housing crises (see his famous ‘Work and Bread!’ speech for one example of this). Despite its propagandist tone the article still makes for an interesting read from a number of angles. It is overtly anti-capitalist, espouses a commitment to radical economic restructuring and to concepts of social justice (the ‘community of bread’), and additionally includes a brief recollection from the author’s time as a junior officer in WWI. Like many in the national-revolutionary camp Gregor makes it clear – both in this piece and many others – that his experiences in the Great War are what led him to an awareness of the plight of the German worker, and are what turned him from an ordinary German nationalist into a National Socialist, the belief system of which he attempts to convey within this article.

National Socialism:
“What does ‘Fatherland’ mean?”
Gregor Strasser

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With the Dawes Plan, the intention of Jewish-influenced, American-English capital to use Germany’s national economy as a gigantic profit-extraction operation, to transform German industry into a colossal workshop for Wall Street capital, and to make an industrious Volk of 60 million people into an enormous army of defenseless wage-slaves, will be fully realized within the next few years.

In light of this development we must now and forever set our goals clearly, unambiguously, and openly.

Only in this way will our ideas gain an attractive power with respect to the yearning of a deceived, betrayed Volk.

We National Socialists are socialists, real, national, German socialists! We reject the vulgarization of this concept, the watering-down of the word from “socialism” into “social” – a word which, like no other, has become a hypocritical smokescreen behind which the all-too-visible inadequacy of the capitalist economic system is concealed, or which is, at best, the totally inadequate consolation for the kinds of honest men who believe that they can cure the festering wounds on the body of the economy and the Volk by placing a compassionate sticking-plaster over them. No, we are socialists, and we do not shy away from taking upon ourselves the stigma of this word, a word which Marxism has so terribly distorted. Continue reading