KONRAD HEIDEN says that National Socialism is a union of causes rather than aims,[i] and certainly the present form of government in Germany is unimaginable without the history of the last twenty years. The Great War immensely furthered the popular sense of unity, and augmented German national consciousness. Versailles created in the midst of Europe a nation with an acute sense of grievance. The early attempts to enforce the Treaty without modification resulted in the inflation, which had serious social and eventually political consequences, for it impoverished the middle classes and accelerated the concentration of capital. The second period of attempted fulfillment, plus rapid industrial reconstruction with borrowed money, resulted in a huge public and private indebtedness, largely to outside banks, and eventually slumped into the depression.

All of these things together created a revolutionary situation which in 1929 was obvious to the blindest observers. Furthermore, the revolution was ripe along many fronts. The German Republic had occurred, historically, about sixty years too late. It set up a parliamentary democracy at a time when liberal democracy was being challenged in its historic strongholds, and the new state was without élan from the beginning. To no single group in Germany -- unless for a time to some of the industrialists -- did it unqualifiedly represent a desirable ultimate form of state. The largest single party, the Social Democrats, who represented the organized workers and part of the intellectuals, and were the Republic's strongest supporters, looked forward to a socialist commonwealth, and realized that they were continually compromising; while the old feudal classes sabotaged the Republic from the beginning. Saddled at the outset with crushing defeat at Versailles, it was associated in the popular mind with misery and humiliation. From being a result of the lost war, it came to be regarded as the cause of the lost war. Liberalism became synonymous with defeatism, and parliamentarism with weakness and disorganization.

The German Republic, too, was forced -- or so it thought -- to present a mien of misery for the benefit of the outside world as long as there were reparations to pay. Objective foreign observers were always convinced that these complaints were exaggerated. The progress in rebuilding Germany under the Republic was prodigious. Professor Angell[ii] has called it one of the miracles of history. But reconstruction was not propagandized. The Europa was not launched with demonstrations of joy; the remarkable civil aviation service was not sold to the German people as evidence of recovery. Any foreign journalist who reported that Germany was rapidly overtaking the rest of Europe in technical development was regarded as anti-German.

Long after the rest of the world, under the influence of such dispassionate historians as Professor Gooch and Professor Fay, had concluded that responsibility for the war was pretty generally distributed, Germans themselves were still buried in morose broodings over the War Guilt Lie. A genuine national grievance gradually was exaggerated beyond all reality into an idée fixe, and became the outstanding characteristic of the German mind. It tended eventually to encompass all other grievances. To bring this about all parties coöperated, even the communists, who were amongst the first to call Germany a coolie of foreign imperialism. Hitler took over this argument bodily and urged his audiences: "Free yourselves from International Finance! Only when Germany is strong again will you be free!"

The German capitalists, of course, were not averse to having anti-capitalistic tendencies diverted abroad, especially as internal tensions were increasing. Wartime economic development plus the inflation had accelerated the natural tendency of capitalism towards concentration of ownership and control, and the workers, most of whom were Social Democrats, accepting the Marxian doctrine of historic inevitability, did not use their power to hamper this tendency. Meanwhile they protected themselves against it by strong trades union organizations, and a mighty political party. It thus came about that German economic life was run largely by a combination of big business and trades unions, between which upper and nether millstones the unorganized workers, small business men, white collar men, the rentier class and later the unemployed, were gradually choked. The inflation accelerated the process by destroying the savings of the small business man and leaving him without resources of credit, and the rapid rationalization of big industry, while it brought about a phenomenal rebuilding of the production machinery, created technological unemployment and put industry itself in debt to the banks, domestic and foreign. The depression gave the coup to the whole development. A great new class had been created: the class of the unemployed worker, whose social insurances gradually depreciated into a miserable dole, the broken small capitalist, the civil servant who was taking one pay cut after another, the indebted peasants, and finally, the whole youth for whom no future was in sight. It was this group, of diverse elements, which the Nazi movement was to make the fulcrum of its revolution.

This class looked for salvation, not to the power of ownership nor yet to the power of economic pressure through organization, but directly to the state.

The conquest of the state was the more important because it was rapidly becoming the holding company for the whole economic system, due to the fact that economic losses were being socialized as rapidly as possible by all groups powerful enough to lever something out of the government. For the working classes, not the insurances but the budget became the chief source of social ameliorization as the insurance funds were exhausted by abnormal demands. By 1932 more than fifty percent of the German banks had been salvaged by the government. The state had been forced under political pressure to save the estates of the great landowners from their creditors. By 1933 a serious crisis had occurred amongst the heavy industrialists. The first outward sign had come earlier, under the Brüning government, in the case of Friedrich Flick. Flick was the actual owner of the largest heavy industry in western Germany (United Steel), and finding himself in difficulties had threatened to unload a huge block of shares to the French. To prevent this, the Brüning government, which by no stretch of imagination could be called socialistic, had intervened by government purchase, the state thus becoming the owner of one of the largest mining concerns in Germany, while the directors carried on as before. For exhausted capitalists this was a kind of socialism they could understand!


Although it was the economic situation which caused the growth of Hitler's movement, Hitler himself appears to have had little interest in economic factors. Ideologically, the National Socialist movement is the child of the Völkische Bewegung (literally, folk movement) and the Fatherland Societies, and it got its first real leg-up (and its last) from the German Reichswehr. The Reichswehr, like most armies, was divorced from economic life, and the Folk Movement did not think in economic terms. The most amazing thing about Hitler's "My Battle"[iii] is the almost total absence from its pages of any consideration of the economic structure of society.

Not Hitler, but the Munich engineer, Gottfried Feder, formulated the first economic platform of the National Socialist Party. Hitler's personal utterances often seem at variance with this program, which advocates limited state capitalism, whereas Hitler often expressed himself for laissez-faire.

Hitler's deficiency in economic analysis is doubtless largely due to his obsession with the Jewish question, which cut clear across his economic thinking. Very early in his political career he had come upon Rudolph Jung, leader of the Bohemian National Socialists, and it appears that it was largely from Jung -- who was otherwise more radical than Hitler -- that he got his conception of the economic rôle of the Jews. Jung insisted that the internationalism of socialism and capitalism were both due to Jewish leadership, and that the evils of both were in the Jewish cast of economic thinking, both of workers and employers. To Hitler the implications were apparently simple: get rid of the Jews, and you get rid of "bad" capitalism as well as "bad" socialism.

Feder did not see the matter quite so simply. He saw, at least, that Finance Capitalism could not be dismissed merely by calling it Jewish. He made a fine distinction between raffendes (exploitive) and schaffendes (creative) capital. Feder's attacks were launched against the German Wall Street. He it was who created a radical economic platform for the small business man, a sort of German version of American populism.

The clearest exposition of the economic aims of National Socialism is contained in a pamphlet issued as a speakers' manual for the July 1932 elections, and called "Immediate Economic Demands of the N.S.D.A.P." It deals with both general aims and specific plans, the latter largely confined to work-creation programs to combat unemployment. It asserts as a fundamental principle that labor, not capital, is the source of all wealth, demands the immediate nationalization of banks and all monopolistic industries and trusts, immediate departure from the gold standard, government credit expansion, dissolution of department and chain stores, the increase of small land-holdings, and an immense program of government housing. Minimum immediate demand: 400,000 workers' homes with sufficient land for agricultural production. It demands complete state control of foreign exchange, autarchy (except for basically necessary imports not obtainable at home), and the absorption of the export slack in a richer home market. It admits the impossibility of this except as the worker receives an "adequate wage for his toil."

This is state capitalism, which, as such, had few disinterested opponents in Germany. As we have seen, Junkers, bankers, industrialists and workers had all been pushed towards state capitalism by the necessities of their systems. The issue was not whether there would be state capitalism, but what social groups would control it and in whose interests it would be administered. The National Socialist program, although it repeatedly denounced the class struggle, clearly was concerned with the interests of the smaller business man and the German worker. It openly admitted a maldistribution of wealth, and proposed its redistribution. So much for Nazi economic theory.


But the fundamental ideology of National Socialism was not economic at all. The folk movement, out of which it grew, had its conscious origins in the latter part of the nineteenth century, and among its spiritual fathers were Nietzsche, Paul Lagarde, Houston Stewart Chamberlain, Gobineau, and Richard Wagner. The teachings of these men had had a considerable influence in the high schools and universities just before the war, and were reflected in numerous political movements and societies. The folk movement put the main emphasis upon race. If for Napoleon politics were Destiny, and for Walter Rathenau economics were Destiny, for the adherents of the folk movement race was Destiny.

This movement set itself clearly against the economic interpretation of history, which according to its theorists is a biological process, emerging from the struggle between races, and civilizations have been built by the conquest of inferior by superior peoples. The decline of western power, they taught, was due to biological degeneration, due to intermarriage between superior and inferior peoples (Jews!); to humanitarianism, which kept alive the unfit; to untrammeled industrialism, which had drawn the race away from the source of all its strength, the soil; and to the enfeebling effects of pacifism. These theorists divided the peoples of Europe into various races and took account of their physical and mental characteristics. The aristocrats amongst Alpines, Mediterraneans, Dinarics, East Baltics, and Jews (who according to Nazi anthropology are not a race at all but a parasite nation) were the Nordics. The original Teutons had been Nordics; the stock had declined, and with it the characteristic Nordic mentality and genius. Finally, most of the world had become enslaved to social forms designed by an alien people -- the Jews. To free the Germans from alien domination and forms, to rehabilitate the German race, and to make a society expressive of essential historic racial characteristics was the aim of the folk movement and is still the avowed aim of the Nazi Party. It has expressed itself in rules for certain classes (S.S. men, for instance) who are forbidden to marry Jews and whose brides are subject to eugenic inspection; and in laws for the sterilization of criminals and the congenitally unfit.

The folk movement was anti-Semitic, anti-industrial, unworldly, anti-clerical, anti-cosmopolitan, and strongly nationalistic. In its more idealistic form it influenced the Youth movement, with its anti-industrialism and a picture of the coming superman; in its more common form it was the primitive anti-Semitism of the peasant toward the Jewish village storekeeper, to whom he was often in debt. It always had its mass following chiefly amongst students and among the less urban, but it was the half-instinctive background of a great deal of hundred-percent Germanism. Its leaders denounced both liberal democracy and Marxianism on the ground that they represented "Jewish" materialism; but actually the Folk movement is in itself -- as the Christian church was quick to observe -- highly materialistic, since it makes Geist, mind and spirit, purely biological by-products.

In the chaos immediately following the war numerous political groups dominated by the Folk idea emerged. Most important amongst them were many semi-military free-booters' organizations, subsidized in part, and secretly, by the Reichswehr. It was Hitler's first great political strategy to obtain the leadership of these groups and fuse them into a single movement, and eventually into a powerful political party. The process took him years.


If the engineer, Gottfried Feder, was the parent of Nazi economics, Hitler himself, Alfred Rosenberg, the Baltic journalist, and Professor Hans F. K. Guenther, the anthropologist, were the chief apologists of Nazi racialism. Rosenberg's rôle was portentous, because he built Folk ideas into a substructure for Nazi foreign policy. Today he is the Party's "director for German Intellectual and Philosophical Enlightenment," leader of the Party's foreign office and editor of the most powerful party journal, the Völkische Beobachter. He was known to be Hitler's choice for Foreign Minister.

Rosenberg, who comes from Estonia, and was officially Russian during the war, is in his foreign policy rather more White Russian than German. He was chiefly responsible for seizing on the racist idea as another basis for an anti-Russian policy. According to Rosenberg and Hitler,[iv] Russian communism represents the conquest of Europe by Asia. The elements of population destroyed by Russian communism -- bourgeoisie and aristocracy -- were the European, or Germanic, elements. Communism is the triumph of Jew, Mongol, and Tartar. The destruction of Bolshevism is therefore a mission not in behalf of capitalism, believed by the Nazis to be in its dotage, but for the whole White Race. Inside his premise Rosenberg argues quite logically. If history is a struggle between races, with destiny on the side of the Nordics, then Germany must seek allies amongst those countries which most closely approximate the race ideal, and Rosenberg envisages a great German-Scandinavian-Dutch-British alliance, in a movement which will eventually drive Russia back into Asia and "liberate" the Ukraine to become a granary for Germany. Neither Rosenberg nor Hitler ever proposed an "aggressive" war against Russia. Their wish-dream is that Russia will become involved either in international difficulties (war with Japan) or internal troubles, which will furnish an excuse for "intervention" in the manner of the United States in Central America or of Japan in China.

An alliance with Britain is the most important premise in Rosenberg's program. France is rejected on racist grounds, because she "had brought the negro to the Rhine." Imperialism in the usual sense of the word is also rejected, both because colonies abroad would probably endanger the future British alliance and because settlements of people in far-off lands dilute racial energies and pollute pure racial blood. Rosenberg's and Hitler's imperialism is of the Manchukuo variety. Hitler draws a distinction between "financial imperialism," for capitalistic exploitation, and "room expansion," the object of which is land colonization and to find a vent for creative energies. Nazi literature, like Japanese, is full of complaints at the injustice of a nation of sixty-five millions being bottled in a small territory, while Britain, France, and even Holland rule empires. This condition can, according to Hitler, be corrected only by some sort of expansion in contiguous territories, the first step being to unite all Germans within the Reich. This then immensely powerful nation, pressing out on all frontiers, can either conquer or dominate the rest of Central and Eastern Europe.

Hitler maintains, and not without some justice, that the domination of the small Eastern European countries by France amounts to financial vassalage and that it has no basis in the real economic interests of these countries, whose business and culture link them rather to Germany. Austrian independence, he is wont to assert, is a misnomer, because it rests upon French loans and Italian bayonets. Jugoslavia, Rumania and Hungary have more to expect from a powerful Germany than from France. About Czechoslovakia less is said publicly, but privately the Nazis predict its certain doom. A nation of 14,000,000, over 3,000,000 of them Germans, besides half a million Magyars and a large block of Ruthenians (Little Russians), could not hope to continue its existence surrounded by renaissant Germany linked to Hungary and allied to an independent Ukraine. Its fate would be Poland's under Frederick the Great.

The weapon with which Nazi theorists hoped to accomplish this end was revolution. In the smaller countries the Nazis envisaged German minorities, organized into powerful Nazi cells, springing open the state from within, under the revolutionary cry: "National Socialism and Freedom from International Financial Domination." The addition of Austria to Germany would bring the revolution to the doors of Hungary, whose present premier, Julius Gömbös, is a former leader of the Awakening Hungarians, and whose soil has been well prepared for Nazi ideas. The anti-French element is strong in Jugoslavia and was certainly one of the factors indirectly connected with the assassination of King Alexander. The Iron Guard organization in Rumania is strong and has all along been in touch with the Nazis.

Essential to the success of this program, however, would be a Germany militarily strong enough to risk warfare. She would call it defensive warfare -- that is to say, defense of what she considers a perfectly legitimate program to be achieved by revolutionary means. Germany's conception of equality is the power to secure domination in Central and Eastern Europe as France secured hers: by economic and financial pressure backed by military power, with the difference that in one case the military power was put at the disposal of the various governments concerned while in the other it would be used to force those governments into line.

This Nazi policy does not greatly differ from those of previous governments. Under the Nazis it becomes more immediate, because it is supported by a social-revolutionary program and open and speedy armament on a vast scale. Hitler does not consider it incompatible with peaceful protestations. Leave him alone, he thinks, and he can carry it out without war. That is all.


The two outstanding characteristics of the German mind since the war have been, first, a sense of national grievance, and second, a declining faith among all classes in liberal capitalism. National Socialism fused the two in the conception of Germany as a "coolie" nation, exploited like any colony, by foreign financial imperialism and military power. It made the liberation of the German nation synonymous with social liberation. Its historic rôle was to put German social radicalism behind German militarism, to hail German militarism as the means of achieving a new society.

The form of state bound to emerge under these circumstances was precisely what has emerged, a war-time economy. The German social revolution has become crystallized in full swing at a certain point: it is held in suspension by a program directed outwards. Internal economic revolution has not been achieved but postponed, and the German people are being prepared to fight for it before it exists.

The form which the revolution took is the key to what its essence really is. The Nazi revolutionaries fought for complete control of the state. Many of them looked forward to genuine revolution -- to quote John Chamberlain's excellent definition, change in structure and aim. Actually what has been built up by Hitler is not a Nazi revolutionary state but the totalitarian state, which is not the same thing. The most consistent Nazi revolutionaries knew this, hence all the talk of the second revolution and the actual Thermidor of June 30, 1934, when the idea was scotched by a preventive massacre. The technique used by Hitler has not been re-organization but gleichschaltung: coördination, the switching of everything into line, with change in direction and control determined, not according to any revolutionary principle, but entirely personally and pragmatically. In fact, the form of social and economic organization prevailing in Germany under the name of National Socialism is one so familiar that only the incongruity of the absence of actual armed hostilities prevents its being recognized immediately for what it is: the characteristic organization of a country in a state of war. It has complete centralization of authority. This extends to control over economic life and public opinion; strictures on capital and labor inside an enforced social truce; cultivation of like-mindedness by propaganda, and enforcement of it by ruthless terror; elimination of "questionable" elements; internal espionage and death sentences for forms of espionage usually treated lightly in peace times; glorification of sacrifice and heroism as prime virtues; relegation of culture to a secondary place; mass worship of youth; militarization of religion; organized inspirationalism; conception of world mission; civil dictatorship in the interests of a military machine. These are the characteristics of any social economy in time of war, and these are the characteristics of National Socialism in practice.

That a prodigious social effort of this sort, directed outwards, is accompanied by an intensification of national emotion and sense of purpose, and releases not only disgusting brutality but also reserves of personal heroism and social idealism, is also characteristic of all nations at war. Psychologically speaking, war is the intensification of the erotic instinct in the service of death, and perhaps this is what Hermann Roechling, the Saar industrialist, meant when he said: "National Socialism is founded on love."

Although it seems natural that Nazi policy, by its emphasis upon subjection to outside imperialism, and consequently upon militarism as the clue to the internal social problem, should have taken this line of development, this dénouement was certainly not foreseen by the masses of people who supported it. If they had, they would have realized that the "immediate economic aims" were unrealizable. A nation preparing to throw off a foreign yoke does not begin by disorganizing its key industries by revolutionary measures. The chief concern of the National Socialist state is not, to be sure, production for profit, but neither is it production to raise the living standard of the masses. Its chief concern is production for war.

The great monopolies, trusts, and banks, whose nationalization was a fundamental of the Nazi program, have not been nationalized. On the other hand, complete state control of foreign exchange, and therefore of foreign trade, has been put into effect and profoundly affects the conduct of industry. But this kind of nationalization has changed neither the ownership or direction of trusts; it has merely become the control exercised by the chief customer, the state, or better said, the army. As chief customer, the state does to a degree dictate prices, but that it permits profits is illustrated not only by the rise in the quotations of the shares of heavy industry, but by a new law whereby trustified industries are compelled to invest all profits over six percent in government bonds. By this process the state, having refinanced the corporations as creditor and customer, will eventually become their debtor. What the tax-payers are getting for their money and credit is neither increased buying power in the form of higher wages, nor cheaper kitchen stoves, bathtubs and houses, but airplanes, tanks, and artillery. They are, to be sure, getting cheaper automobiles -- and every man who buys one is immediately enrolled in a motor transport corps.

Immense state interference in industry has occurred. Some solvent businesses have become indebted because of state decrees that they must change from the producing of this to the producing of that.[v] Export industries have suffered a shortage of raw materials because available foreign exchange has been accredited chiefly to the industries producing munitions. But this interference has occurred, not for social but for military considerations. The tendency has not been to dissolve the trusts but to increase their range; and in view of the lack of a real social guiding principle, those concerns and individuals have come off best which have been able to bring pressure on the government, either through personal connections or party contributions.

One need only examine the history of the attempts to "coördinate" the employers' organizations and compare them with the fate of the middle class and workers' organizations to see where the real power lies. In the days immediately following the Nazi election success in March 1933, some attempt was made by the Nazis to usher in the corporate state. Dr. Robert Ley conceived of the new state as resting upon labor and attempted to capture the trades unions. Dr. Rentelen, a former Youth Leader, wished to assure chief power to the Chambers of Commerce, once he had captured them from within for the Nazi middle-class organization called the "Fighting Front of Industrial Middle Classes." At the same time Dr. Otto Wagener, who had become Hitler's chief economic adviser, set about coördinating the Employers' Organizations, and putting them under Nazi control. Whereas Rentelen and Ley both succeeded in dominating the groups they set out to subject, Wagener's endeavors ended in such fiasco that he was removed from his post and several of his collaborators were removed to concentration camps.

Originally both the Trades Unions and the employers' organizations reserved their attitudes towards the new government until they could see what it intended to do. Dr. Wagener replied to the coolness of the employers' organizations by demanding the resignation of many members of the boards, these to be replaced by loyal Nazis of his own choosing. Protests to the government were immediate, energetic and successful. The employers' associations did, to be sure, switch into line, but they switched in their own way, under their own leadership, and according to their own interpretation of what the line was. The first government movement against the great trusts ended with one of the great industrialists as dictator of the whole of Western German industry.

The Nazi organization, "Fighting Front of Industrial Middle Classes," organized in 1932 as the instrument to effect middle class liberation, did capture control of the Chambers of Commerce, but Hitler promptly abandoned the idea of the corporate state, and later Dr. Ley of the Labor Front dissolved the organization.

The capture of the Trades Unions was the single bold revolutionary movement launched by the Party against a powerful economic group. The action of the Storm Troopers in occupying the Trades Union headquarters, in confiscating their funds and dissolving their executives, was pure revolution undertaken after attempts to capture the leadership, by the medium of Nazi cells within the various unions, had failed. But the unions originally promised exactly as much coöperation with the Nazi state as the employers had offered. They were prepared to coöperate with the government on the same terms which the employers actually obtained.[vi] Nevertheless, they were taken over, completely reorganized, castrated, and made, not a function of government, but an appendage of the Nazi Party.

Actually, many of the more enterprising Nazi cell leaders in the unions were sent to concentration camps; Ley's dreams of making the unions the base for a state edifice failed; and the real power passed to "Trustees of Labor" appointed by the Chancellor to "protect" the interests of the workers according to standards determined by the state in collaboration with Big Industry. What this amounts to is industrial feudalism as benevolent as is compatible with the aim of building a huge army, supporting a tremendous bureaucracy,[vii] and protecting the profit system. What conquests of capitalistic enterprises have been made -- for instance, of the great Jewish publishing houses, Ullstein and Mosse -- have not been made for the benefit of German workers. And it needed only the threat of liquidation from the strongest Jewish banking house in Germany to obtain a hands-off policy.


In the reorganization of agriculture there is perhaps less disparity between Nazi theory and practice. At any rate, agriculture has come under a far more rigorous state control than industry. The "Immediate Aims" asserted that the small-holding was the basis of Nazi agricultural economy and demanded that it be favored at the expense, if necessary, of the great estates. Agriculture was to be protected by import prohibitions, and the industrial worker, too, was to become part of the productive system by settling him in state-constructed homes with large gardens. There was to be a radical reduction of interest rates to farm borrowers, and land was to be confiscated without compensation for communal purposes.

In 1928 Hitler had added a footnote to the paragraph in the Nazi program recommending confiscation of land, and defined it as legal measures to be taken for the recovery of land unjustly acquired or administered in a manner incompatible with the welfare of the people. The measure, he added, was chiefly directed against speculative Jewish real estate corporations. This drew the teeth in the original program, but it was considered necessary before Hitler came into power, and under governments theoretically less peasant-minded than Hitler's (those of Brüning and Schleicher), to cease holding intact the great estates of Eastern Germany through government subsidies. Under Hitler, the estates have not been broken up, but have been supplied with Nazi youths in the place of former Polish laborers. The attempts of Walter Darré as head of the Nazi Agricultural Association to reduce rates of interest on farm loans to two percent encountered opposition from Reichsbank President Dr. Schacht, and from the first Minister for Economics under Hitler, Dr. Schmitt. Dr. Hugenberg, who was the first Minister for Agriculture under Hitler, tried to increase agricultural prices but found it more difficult than he expected. When he was succeeded by the more radical Walter Darré, the government moved towards complete dictatorship of prices, acreage, and crops. Darré hoped that the great estates would release land for settlement; but, salvaged by Hugenberg, they took a new lease on life, and actually there has been very little land on the market.

Darré's chief interests are not economic but racial. He is a leading Nazi eugenist and author of the idea that all German women should be divided into categories for breeding purposes. He finds the land to be the chief source of racial strength and believes peasants must stay on the soil whether they want to or not. He is the author of the most radical measure which Germany has yet taken: the so-called Hereditary Farms Act, under which old established peasant holdings are entailed to the oldest son for ever and ever, and cannot be mortgaged, sold or transferred. This, of course, breaks the servitude to interest of the peasant, by destroying his credit. In 1934 Gottfried Feder, the original Nazi economist, who was soon to be removed from the Ministry of Economics, where his ideas were considered too radical, was put in charge of the German colonization program, to carry out the promised settlement of industrial workers in homes and upon land of their own. In the 1935 edition of the National Socialist Annual he is still rosy in prediction but empty of accomplishment. The 400,000 homes seen as an "immediate" undertaking have not been begun.

The reason is implicit in Hitler's philosophy. It is a basis of his whole theory that Germany does not possess sufficient land and soil for the needs of her population. She must acquire it. The army comes first.


For those who believe that the economic motive alone moves masses of men, it would apparently follow that discontent would be widespread and disillusionment profound. But on the contrary, one is forced to admit that Hitler enjoys phenomenal mass support. There is disillusionment, deep, bitter, and by no means confined to socialists, communists, and Jews, the treatment of whom has been a world scandal. There is many a Nazi who today nurses an outraged heart, and such opposition as there is has come most vigorously from conservatives. It is true that the régime operates by propaganda and is backed by ruthless terror. It is true that there is discontent amongst the workers. It is true that the various plebiscites with their ninety-percent majorities do not fairly gauge public opinion. Even the great victory in the Saar does not prove all that the Nazis claim. It merely proves that Saar Germans wished to join Germany -- even Nazi Germany. Nevertheless, it is equally true that the enthusiasm is only partially forced; that the conditions are on the whole accepted, the propaganda believed, and the terror -- except when it hits close home -- ignored. The reasons are not economic. They are emotional and psychological.

Actually, the standard of living of the average employed individual is falling in Nazi Germany, as it has fallen in Fascist Italy. The Nazi work program, in practice, substitutes for the right to support the duty to work, and divides what work there is. Industries employ two men where one would do, and the two divide the former wage of one. That this is true is borne out by a comparison of re-employment figures with the total increase in the wage bill. The process does not add to industrial efficiency and it does not add to total buying power. The thousands in concentration camps, the other thousands ousted from jobs for political or racial reasons, the thousands who have left Germany, and the thousands of women sent home, are not counted as unemployed. The Voluntary Work Service (no longer voluntary) is not conceived essentially as a re-employment program, but rather as a regular service of youth to the state, but it has taken up thousands formerly on the dole. The German worker today is building roads and draining swamps, drilling as a soldier, adding to the means of production as well as to the actual production of the nation, but his share in the profits of the whole business is relatively small. The boom in consumption is in the upper categories of incomes.

But the Nazi state has ameliorated the pains of poverty, as communism in Russia has ameliorated them, by removing from poverty the stigma of inferiority, by giving to it a sense of purpose, and by holding out the hope of a glorious future. Although it has not created the classless state, which is its claim, it has done much to create the appearance of the classless state, and in this has shown much more shrewdness and imagination than its democratic predecessors. It has abolished "entrances for gentry only," and lately proposed the prohibition of aristocratic titles. It has certainly elevated common boors to high positions. It has not democratized income but it has enormously democratized culture. It denies the ideal of "equality," but its standards of aristocracy are attainable by the masses, since to be one of the "élite" in the new state one needs only to possess health, what is supposed to be a typically German build and cast of countenance, and the virtues of the common soldier.

It has shut the masses out of control, but it has enormously increased their sense of participation. They do not vote -- except for Nazis -- but they parade. They are marshalled out as Peasants or Workmen or Owners of Garden Colonies, each group in its own uniform, with its own flags, singing its own songs, and upon each group it is impressed that the future of the nation rests in its collective hands. A special emotional value is attached to every walk of life. To be young is to belong to Youth; to be a girl is to be born into German Womanhood. National Socialism substitutes for Having the sense of Belonging -- the excitement of common participation in a unique experience, which is the single emotional compensation which war offers in exchange for its horrors.

It is a tremendous error to underestimate these psychological and emotional factors. The German Republic underestimated them. This was its greatest failure, that it did not create a national myth for a people peculiarly susceptible to myths and very much in need of one.

Under these conditions, and for the time being, it is not the German masses -- with the exception of the thinking ones -- that are finding Germany a hell. Those who suffer are the most highly individualized, the sensitive, the differentiated, the analytical, the discriminating, the fastidious, the spiritually heroic: those who are not of the herd. Precisely those who suffer in war.

If National Socialism is really a war-time economy, foreign policy becomes the Achilles heel of the whole system. For the building of the military machine no sacrifice has been too hard for the German people, suffering under a sense of national inferiority, national grievance, and fear. But what will happen when military inferiority quite plainly no longer exists? That moment is approaching. It is nearly here. Hitler counts that the acquisition of military power will be accompanied by diplomatic prestige and success. But suppose the opposite happens? Suppose a powerful Germany incites more fear than she attracts admiration? At present this seems to be the case. Does Hitler (is he not already a prisoner of the army?) intend to go on building up a huge military machine, at the price of cumulative impoverishment, until he can fight all Europe? How much strain can heroism stand? And how long will military morale hold if there is no enemy?

The whole system as it at present exists is built upon the presumption of an enemy. Yet there stands the plain fact: if Germany does not undertake territorial aggrandizement, she has no enemy in the whole world.

It remains to be seen whether a system of economy good for waging war is, in the long run, good for anything else, or whether heroic endurance can exist for its own sake. The present system will not, because it cannot, rehabilitate the middle class and the small entrepreneur. So far the result of National Socialism has been to carry forward the levelling process between the middle class and the workers, by blotting out the only difference which really remained -- a psychological one. It therefore seems likely that if war is indefinitely postponed, while German imperialism is stalemated by the collective (even though passive) resistance of a united Europe, and if National Socialism is forced to turn its chief attentions inward, its first serious crisis will then be at hand.

[i] Konrad Heiden: "A History of National Socialism," New York, Knopf, 1935.

[ii] James W. Angell: "The Recovery of Germany," Yale University Press, 1929.

[iii] "Mein Kampf" (Munich: Eher, 1925-1927, 2 v.) has been abridged and amended for the American market ("My Battle," Boston: Houghton, Mifflin, 1933).

[iv] See "My Battle."

[v] For instance, the well-organized brown coal industry, which was forced to reorganize and equip itself for making oil out of coal under the Bergius process and was then attached to the Leuna works of the powerful I. G. Farben Industry, the chemical trust.

[vi] Cf. speech of Theodor Leipart, President of the Independent Trades Unions, April 7, 1933, in which he offered collaboration with the Nazi government "in the great aim of setting the external and internal liberty of the German People upon the foundation of the nation's productive forces."

[vii] Note that in addition to the state bureaucracy Germany must support today "by voluntary contribution" a party machinery which duplicates the state system.

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  • DOROTHY THOMPSON, foreign correspondent for American newspapers, author of "The New Russia," "I Saw Hitler," and other works
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