Part I
How the Nazis Came to Power
1
The Collapse of Weimar
David Abraham
It would be correct to see in my account and interpretation of the later years of the Weimar Republic the absence of a shared national project on the part of German industry, or German capitalism more generally, as a critical flaw, one which undermined both the social and political foundations of the democratic republic.[1] Indeed, that divergence of interests and of perceived instrumentalities for accomplishing those interests, affected not only industry, but also relations between industry and what was at the time a very significant rural sector. I would like in my remarks to return to that complex of problems. For all the ways in which the Weimar Republic was born under very inauspicious circumstances, and for all the various ways in which its first several years seemed to cast doubt on its very ability to survive, I think there is nevertheless much to be gained by thinking of the Republic institutionally and in its social composition and operation as a viable bourgeois or liberal parliamentary republic. For such a system to function for any length of time, it has to be guided by, or it has to exist in the context of, a shared national project, including some kind of elite consensus on basic national goals and means for their realization.
In addition to elite consensus, societies require the fulfillment of two further conditions for stability, conditions of equal import which should not go unmentioned here. All democratic polities face the question of popular consent. Elite consensus is not sufficient for a polity, or even for elites themselves, if that consensus is incapable of becoming a national project or national consensus. That critical feature, popular consent is not something that elites can somehow mandate on their own. It must be elicited and won in society and in politics. In Weimar it was not possible simply to coerce the assent of some substantial portion of the populace: unlike the Empire, Weimar was a real parliamentary system with a rather advanced electoral system. In such a system, fraud and force could play only minimal roles. I have argued and would continue to argue that for several years, certainly for those years that we consider the Republic's more stable years (1924-930), popular assent was provided basically by the Social Democratic Party and its affiliated trade unions. That cooperation was manifested both institutionally in labor's participation in a broad range of state mechanisms and arrangements, in the parliament through collaboration with the liberal parties, and in civil society as well as in the state. Yet, there was a serious problem, one brought about by the way in which the Social Democrats saw themselves. For years now, there has been a long debate about the nature and timing of the Social Democratic Party's transformation from class party to people's party. Whether that transformation started in 1875, with the Gotha Program, as some have argued, or as others would have it, really only in 1959, with the Bad Godesberg Program, or at some point in between, is an important matter. Either way, I think it is fair to say that during the Weimar period the Party was somewhere between a Klassenpartei and a Volkspartei but closer to being a workers' party. It was, for better or worse, a reformist but militant guardian of the daily interests of the organized working class.
What that means for this discussion is that the Party and the unions alike remained loyal to the proposition that their central social, economic, and political task was to obtain benefits for workers. Now, doing that would have been one thing if they had been able to define the national project, i.e., if labor had been in a position to make its project the project of the nation as a whole. That is something that social democracy after Godesberg, through the 1960s and 1970s, seemed to be able to do under the general rubric of growth through Keynesianism. In the Weimar period, however, it was not able to do that. Social democracy could, indeed, deliver or provide the popular support of a goodly portion of the working class for the democratic political and capitalist economic systems - although its readiness to compromise contributed at some points to the growth of a Communist opposition on its own left. But, be that as it may, such labor consent was costly precisely because the party still perceived itself as representing the interests of the workers. It pushed aggressively for workers' remunerative and social demands into 1930, and, in some respects, succeeded in protecting employed labor even in the Depression. Other social groups, especially the middle classes and business, certainly saw and resented what they took to be labor's undeserved and disproportionate success, and they rebelled against both labor and the political system that enabled labor to fare so well. Such pressures were too much for Weimar to withstand.
These pressures from labor played a part in the definition and redefinition of conflicts among German industrialists and between industrialists and agrarians. Among the issues that came to divide Germany's economic elites was the price to pay for popular assent, and the Social Democratic price remained high. This is not tantamount to blaming workers for Germany's economic crisis. Other factors, including dependency on American loan capital and the export economy (both of which were necessitated by various aspects of the Versailles settlement), were of greater importance. Yet I think it must be recognized that workers, organized through the Social Democratic Party and trade unions, refused, during the crisis, to give up the gains of the previous several years and to act like a model reserve army of the unemployed. That tenacity on the part of social democracy suggests the third element characteristic of any liberal democratic system, one that I would like now to put in the center light.
This third is a question as to the institutional capacity of a political system, i.e., its adequacy for organizing social negotiation between elites and citizenry. The institutional political capacity of the Weimar Republic, particularly that of its party system, proved inadequate for an assortment of reasons. Some were inherited from the Empire; some were consequences of the way in which the Republic was born; some, I would say, were simply generic to democratic republics as such. (And some, like the place of the military, are more difficult to locate.) The Weimar Republic simply did not enjoy the benefit of the institutional capacity necessary for the kinds of political shifts we have come to expect of parliamentary republics. We have witnessed, and in bad economic times we have come to expect, an electoral swing from a party like the Social Democratic Party, a party of popular legitimacy and economic redistribution in favor of the lower social orders, to a more conservative but loyally republican party representing the interests of private investment and capital accumulation. In other words, what happened during 1982 in West Germany (a swing from the SPD to the CDU) could not happen either in 1928 or in 1930. The institutional and electoral incapacity of the Weimar Republic was bound up with a number of factors not entirely generalizable to all political systems. It had to do, for example, with the way conservative parties in Germany were organized, with a support base in the (Protestant) countryside and a leadership drawn heavily from the eastern estate owners; it had to do with the existence of very well organized industrialists, who did not care to settle for less retrenchment of the welfare state when more was in sight; and it had to do with the fragmentation and lack of independence afflicting the "middle," bourgeois parties. The problems of the middle parties were especially severe, as has been demonstrated most clearly in the work of L.E. Jones. These factors combined led to a radicalized elite rebellion against the consensus entered into in the mid-1920s, as well as to the absence of a real "middle-class" alternative.
In my own work, I have tended, perhaps more than others have, to separate the question of the Republic's demise from the question of the Nazi victory. But there is at least one sense in which they are of course inextricable, namely that the Nazis helped to accomplish one and were the beneficiaries of the other. Now, why the Social Democrats were unable to expand beyond the boundaries of their working-class constituency (plus or minus some other groups who supported them occasionally) and make the kind of headway within the Mittelstand that has been made since Bad Godesberg, is an important issue, but one which I cannot address here. Why the Nazi party proved to be the sole force capable of aggregating not only the insecure and potentially authoritarian Mittelstand (in the classic portrayal of Eric Fromm), but also many formerly liberal voters, remains an important question (see the older work of Rudolf Heberle as well as the new work by Thomas Childers and Richard Hamilton). That the Nazi party was able to use a distinct brand of authoritarian Populism to aggregate various groups, who from 1919 or 1920 on deserted the "liberal" middle-class parties, is indisputable. How liberal those parties or voters really were is a tougher question I cannot attempt to address here. But it is indisputable that a very considerable portion of the Mittelstand became politically homeless, abandoning the bĂŒrgerliche parties, moving to and through several protest parties and movements, but not joining social democracy. Ironically, the inability of social democracy to broaden its own base of popular support made it harder for the national project of the elites, or even for an elite consensus as such, to root itself in society, particularly in the absence of popular conservatism.
I think all of us at this table would have to agree that whatever else it might have been about, Nazism was about imperialism; it was about the conquest of Middle Europe, quite independent of the question as to what was to be done with the various populations living there and markets available there. Such a program of imperialism could, I have argued, appeal to all parts of the German elite, rural, military, and industrial - whether domestic-oriented and stagnant in the years 1925-1932 or more dynamic and export-oriented. Indeed, along with suppression of the labor movement and the restoration of order, imperialism became, under the Nazis, something of a "lowest common denominator" encompassing the various and sometimes conflicting political and economic needs and preferences of the divided economic elites. We also know that there was a price to be paid: the elites lost much of their autonomy and were exposed to considerable uncertainty. As uncomfortable and troubling as this may have been, most of the German elite was at least able to pave its "road to serfdom" - with gold, mixed by the Nazis with blood.
Before commenting on the relationship between business needs and the Nazis, I would like to return briefly to the question of what factors prevented greater unity among the pre-fascist industrial elites, greater unity of either a conservative or social-liberal sort. Leaving aside today the agrarian elite and rural questions, I would suggest, in extremely abbreviated form, that there were primarily three problem-complexes, whose problematic resolution impeded unity within the Weimar capitalist elite. One was the question of the reintegration of Germany into the western political and economic systems, something referred to as Reparations-politik (reparations policy) in the broadest sense. Onerous or not, the Dawes and Young reparations plans allowed some German industries to find the uses of general adversity quite sweet. In other words, certain kinds of industries could live with and even flourish paying reparations while others seemed to be strangled by them. The divergent positions adopted toward the Young Plan by different industrial organizations and politicians was but one symptom of this split. Another very divisive key issue was Handelspolitik (commercial policy) a very hotly debated and nasty issue within German business organizations throughout the Weimar years, especially after 1925. Over one-third of German industrial production was exported, and, as I have shown elsewhere, those exports were concentrated in a few key industries, while many others were nearly totally dependent on the domestic market. Most-favored-nation trade treaties threatened not just agriculture but also much of cartelized heavy industry, which feared losing its captive and high-priced home market. Commercial policy was also a dangerous issue politically, for it provided an arena for frequent cooperation with a consumer-oriented social democracy, perhaps at the expense of other kinds of businesses or businessmen. The third problem area was provided by Sozialpolitik (social-welfare policy) which ranked so high on the agenda of German social democracy. As is still the case today, different kinds of businesses and industries are affected to different degrees by wages and by social-welfare costs. Some can afford it?; some cannot. Wages as a proportion of total costs are less burdensome to capital-intensive industries than for artisanal industries and less burdensome, too, than is the case for other industries where price competition is most critical. Much the same held true for social costs collected by the state through direct and indirect taxation (various forms of social insurance, for example). Furthermore, labor made constant gains between 1925 and 1930, and German trade-union leaders were quite justified in proclaiming, as late as 1931, that German workers enjoyed the most extensive social-welfare in Europe, if not the world. Sozialpolitik had, in fact, become the virtual raison d'ĂȘtre for labor's politics. I think, without belaboring the point here, that the documentation is ample enough to demonstrate that such differences were very much on the minds of both German industrialists and German politicians. It is altogether clear that some German industrial associations were very upset with the stand taken on questions of Sozialpolitik by other industrial organizations and by sections of those bourgeois parties, for example of the Deutsche Volks Partei, which remained ready to compromise and compete with labor.
Wherever one draws the line between fractions or sectors of Weimar industry, one must, on the basis of the evidence, come to the conclusion that the virtual absence of vision, the difficulty in formulating a national project, which so plagued the industrial elite and reduced its political efficacy, was grounded in a conflicting diversity of economic interests. Real interests were at stake, and the sole apparently stable way to serve those interests - a Grand Coalition type of government with corporatist social and economic understandings embracing representatives of labor, capital, and the state - simply allowed the Social Democratic Party and trade unions too much influence. Particularly once the Depression cut off American capital and dealt such a severe blow to the export economy, the ability and willingness of German industry to gain popular legitimacy through cooperation with labor declined while the imperatives of capital accumulation became more pressing. And the balance of power within German industry shifted accordingly.
In pursuit of their fragmented interests, often riven in their organizations and needs, and now in opposition to a parliamentary democracy that divided them but allowed a laborist Social Democratic Party and its affiliated trade unions to tend to the interests of their followers relatively effectively even in a period of depression, leaders and representatives of agriculture and industry, especially mining and heavy industry, found themselves attracted to what the Nazis could offer. Especially after 1930, industrialists and agrarians found it increasingly difficult and undesirable to defend their varied and often conflicting interests within the framework and rules of the Republic. Nor did they any longer care to. The majority of them were clearly of authoritarian persuasion but unable to realize their own authoritarian schemes. The bĂŒrgerliche political parties both shrank and became increasingly rancorous and incompetent vehicles for the realization of capitalist interests, despite all the measures taken by industrialists to steer and reorganize them. The BrĂŒning government was unable to break fully with the SPD, despite the Chancellor's severe, liberal-deflationary policies. The Papen regime, with its nearly total lack of popular support and strangling commitment to tariff protectionism at the expense even of Germany's export industries and commerce, and the Schleicher interlude, with its interventionist economic plans, political opening to the unions, and abandonment of estate agriculture, all disappointed, politically or economically, one or another or all fractions of German agriculture and industry.
After contributing decisively to undermining the Republic, German industrialists, agrarians, and their representatives found it necessary to attempt to harness the Nazi potential. The ultimate goal of the elites' offensive was the certainty that the state would cultivate their economic needs and do so in a manner comprehensive enough to incorporate their own divergent interests. Yet, the political alternatives industrialists came to face were not directly of their own making, and the Nazi groundswell was something they had to face. Before 1933 there were probably not very many industrialists who supported or followed the Nazis out of conviction, even among the most socially reactionary Ruhr magnates. What is critical is that after a certain point, a different point for different individuals and groups of industrialists - some as early as BrĂŒning, others as late as the appearance or failure of Schleicher's experiment - there was simply no acceptable and feasible alternative to the Nazis. A government of pure coercion, military or otherwise, was impossible; that is why the army refused to enforce a Papen regime and why Schleicher dickered with both the socialist trade unionists and the Nazi "left." A presidential dictatorship under the senescent Hindenburg could not last, and various anti-parliamentary, quasi-corporatist schemes (such as that of the League for Renewal of the Reich, which enjoyed substantial moral and financial support from industrialists) never got off the ground. No force other than the Nazis could claim real popular support, and support not limited to one class, while also demonstrating a commitment to eliminating Weimar's fragmented political democracy and generous social-welfare system. The German business elite wanted class peace, a "free" economy, and a reascendant Germany. Given the stubbornness, strength and commitment of social democracy to the Republic, Germany's elites, in order to protec...