The Vampire Economy

Chapter II

DESTRUCTION OF THE SANCTITY OF PRIVATE PROPERTY

“The government of a totalitarian State would not be ‘authoritarian’ if the courts still functioned independently.”

HERR V. is one of the largest landowners in Eastern Prussia. He is a conservative old landowner who was once proud of being the free and independent master of a huge domain and who boasted of his patriarchal relations with his employees. As an ardent German nationalist he felt certain, when Hitler came to power, that the country had been “saved from the Bolshevists and the Jews.” He never dreamed that the new regime would dare interfere with his God-given rights far more than had the Social-Democratic government he had hated. Unable to grasp quickly enough the changes that were occurring, he did not conform to the ever-mounting requirements of the ruling Party. Soon he was on bad terms with the provincial Party secretary, whom he despised as an upstart. The Party leader tried to break his stubborn spirit by all manner of petty decrees and regulations, as, for instance, by ordering him to give lodging to S.A. men (Brownshirts) and members of the Hitler Youth League, who annoyed him endlessly.

There was no longer a Hindenburg, who as President of the Reich and Supreme Commander of the Army, would listen to the complaints of his agrarian friends and intervene with the government on their behalf. Herr V. learned only through bitter experience that there was no longer any court or official to protect him, and he began to fear that his estates might be expropriated. He visited his former banker, Herr Z., to whom he confessed:

I want to invest my liquid funds in a way which is safe, where they can’t be touched by the State or the Party. In the old days I always refused to speculate, to buy stocks. Now I would not mind. However, I would like best to buy a farm in South-West Africa. Perhaps my next crop will be a failure and I will be blamed, accused of “sabotage,” and replaced in the management of my estates by a Party administrator. I want to be prepared for such a contingency and have a place to go should the Party decide to take away my property.

The banker was compelled to inform his landowner friend that there was no such way out. The State would not allow him to leave Germany with more than ten marks. South-West Africa was closed to him; he would have to stay where he was.

Formerly numbered among the most independent and largest landed proprietors in Germany, with estates that had been in his family for generations, Herr V. today shares the despair of numerous German capitalists, none of whom can be sure that their property rights will be regarded as sacred by the State.

Manufacturers in Germany were panic-stricken when they heard of the experiences of some industrialists who were more or less expropriated by the State. These industrialists were visited by State auditors who had strict orders to “examine” the balance sheets and all bookkeeping entries of the company (or individual businessman) for the preceding two, three, or more years until some error or false entry was found. The slightest formal mistake was punished with tremendous penalties. A fine of millions of marks was imposed for a single bookkeeping error. Obviously, the examination of the books was simply a pretext for partial expropriation of the private capitalist with a view to complete expropriation and seizure of the desired property later. The owner of the property was helpless, since under fascism there is no longer an independent judiciary that protects the property rights of private citizens against the State. The authoritarian State has made it a principle that private property is no longer sacred.

The decree of February 28, 1933, nullified article 153 of the Weimar Constitution which guaranteed private property and restricted interference with private property in accordance with certain legally defined conditions … The conception of property has experienced a fundamental change. The individualistic conception of the State—a result of the liberal spirit—must give way to the concept that communal welfare precedes individual welfare. (Gemeinnutz geht vor Eigennutz).1

The government of a totalitarian State would not be “authoritarian” if the courts still functioned independently, as they do under liberal capitalism.

The division of power between the executive or legislative branch on the one hand and the judicial branch on the other was formerly a guarantee to the owner of private property that his property rights would be protected even against his own government. The totalitarian State, in abolishing this separation of power, abolishes the sanctity of private property, which thereupon ceases to be a basic principle of society fundamental to State morality.

Constitutionally the businessman still enjoys guarantees of property rights. But what is the value of such constitutional guarantees without courts that dare to defy the omnipotent bureaucracy or to enforce laws that are “out of date”? The judge who had the temerity to attempt this would land not in a concentration camp but in a lunatic asylum. A totalitarian State does not tolerate any “second government,” any challenge to the power of the all-wise dictator.

“Within the constitution of the Third Reich any position independent of the will of the Fuehrer no longer exisits. The principle of separation of power is a thing of the past. Only the Party has a privileged position.”2

Fritz Nonnenbruch, the financial editor of the Voelkischer Beobachter, states: “There exists no law which binds the State. The State can do what it regards as necessary, because it has the authority.”3

“The next stage of National-Socialist economic policy consists of replacing capitalist laws by policy.”4

This Nazi doctrine has nothing to do with Communism or Socialism. It is offered as a new justification for the State’s use of private capital and it is a means of placing drastic limitations upon private property rights in the “national interest.”

“National interests” are not determined by laws, courts, or any legislative body. The decision is made mainly by the Nazi party, or, rather, by its leaders, that is, by the State bureaucracy. It is a principle that only Party members shall occupy key positions in the government and in all organizations where the State influences the distribution of jobs. They must be engaged whenever there is a choice between a Party member and non-Party member. The carrying out of this essential part of the unwritten constitution is assured by the fact that Party members, devoted to the leader and to the maintenance of the Party’s authority, occupy all key positions and appoint all new officials.

In the early days of the Nazi regime, some of the conservatives holding economic key posts, such as Dr. Hjalmar Schacht, former president of the Reichsbank and former Minister of Economics, and Dr. Kurt Schmitt, director of the largest German insurance company and Dr. Schacht’s predecessor as Minister of Economics, sought to restrain the growth of bureaucracy. These men upheld the traditional position of conservative capitalists—economy in administration and efficiency in civil service—and they sought to win the leading Nazis to this point of view. In a speech to young bank clerks and students Schacht openly attacked Party careerists who sought a place in the new ruling caste and hoped to become a part of the privileged aristocracy, with nothing to recommend them except their record as loyal Party men. He declared:

The aim of National Socialism is an economic and social order where everybody, whoever he is and whatever he did before, can obtain the highest posts in the economy and in the State if he has the strength, the will and the ability to do his job. This principle has been fully applied by the Reichsbank. At the Reichsbank, in contrast to conditions in the State offices, any employee can rise from a low to a high position. He is not evaluated according to recommendations or good friends, nor according to other similar things which have nothing to do with his abilities, but he is judged merely by his fitness, his personal value, his knowledge and his performance.5

At the same time, however, the Party leaders asserted their right to continue in control of patronage, of the distribution of State jobs and special privileges to trusted old Party members personally devoted to the Fuehrer. Ministerialdirektor Sommer, as spokesman for Rudolph Hess, Hitler’s official representative, wrote in the Deutsche Juristenzeitung of May 21, 1936:

The influence of the Party cannot be seen in laws, but in practice, and personalities are the important factor. A large number of the ministers [at present all ministers] are Party members. Some of them are also Reich leaders of the Party, all Reichstatthaelter are Party members, and most are also provincial leaders of the Party. All Prussian Oberpraesidenten are district leaders in their area. Other personal connections exist through the office of landrat [governmental chief of a district administrative office] and the corresponding Party leader of the district, and finally, in general all jobs of political importance are held by old reliable Party members.*6

This does not mean that there are only Party members in the government. Even important branches have many non-Party members. But they are technical experts without freedom of decision rather than independent administrators. They must be particularly careful not to hurt the prestige of the Fuehrer in the application of any law or instruction. Because they are not subject to the rigid discipline of the Party, they are always suspected of being “unreliable.” Consequently they are inclined to be stricter than Party members in adhering to the letter of the law or in refusing personal favors to a businessman. They have no “Party friends” in other key positions of the administration who can do anything for them or for their friends.

To a great extent a person’s status depends upon the personal opinions and impressions of the Party secretary. It is exceedingly difficult to appeal from his authority; he can oust any person from his job and deprive him of his rights by simply declaring him “unreliable.” Hence it is very important to remain on friendly terms with the Party secretary, for his one word “reliable” has greater value than the highest honors any king may bestow on his favorites.

In the administrative apparatus and the State police force all key positions are occupied by individuals whose devotion has met the acid test.

The Party is the whip with which the leaders control the administration as well as the behavior of the citizen, be he the manager of the steel trust, a small shopkeeper or a worker. The Party has its own courts and judiciary because Party members are not bound by official laws in their activities; they are permitted and indeed required to violate the laws in order to defend the prestige and authority of the Party leaders.

The official Union of German Civil Servants has a membership of 1,200,000, of whom one-sixth—206,000—are Party members,7 but 81 per cent of the higher State officials in Prussia are members of the Nazi party—Nationalsozialistische Deutsche Arbeiter Partei, to give it its full name. In the national government, all leaders are in the Party and subject to its rigid discipline. Few exceptions are made to the rule that all important positions in the administrative apparatus must be held by Nazis. The majority of those holding State jobs are also leaders of the Nationalsozialistische Deutsche Arbeiter Partei (N.S.D.A.P.) in their districts or communities.

“No one is to be appointed unless in addition to the qualifications which fit him for his post he gives a guarantee that he will always defend the National Socialist State without reservation.”8 The equivalent of this German rule is common to all totalitarian countries.

In a totalitarian land where the “will of the Party” is in effect the unwritten constitution, the membership rolls are well guarded. Not everyone who declares himself a loyal supporter of Hitler can join. It is no ordinary party. Nor is it a party wherein members can help to formulate policy and criticize the leader, or choose the leader. The authoritarian Nazi party makes the will of the leader the supreme law.

“The Elite Guards [S.S. men] and the Brownshirts [S.A. men] do no productive work. They do not work for the State. They work solely and exclusively for the leader.”9

The existence of the Party machine and its control of the government render hopeless any attempt of an industrialist or banker—though he may be the most important financial figure in the country—to get control of the executive power and to supersede the authority of the Party leaders.

The Party secretaries and those in leading positions jealously guard their authority, so that no businessman, large or small, can gain in influence at their expense. The Party machine, as the vehicle of absolute power, was and is too valuable an asset to let slip into other hands. At all costs, the vested power of the leadership must be preserved.

The existence of a state within the State—the Party and the bureaucracy—is a phenomenon of the post-War world.

The Party and the government bureaucracy are above the law, but it must be pointed out that this special status of being above the law is reserved chiefly for the leadership. To create stability on which the leadership relies, there are strict laws regulating relationships among private businessmen. It is even conceivable that a businessman or concern might be successful in an appeal to the courts against some regulation of an over-zealous Nazi official, provided such a regulation were a gratuitous interference with private property and had no bearing on the defense of the Nazi regime. However, court action has been very rare because most businessmen fear arousing the anger of Nazi officials who on some later occasion might have opportunity to take revenge.

As a rule, the relations between businessmen are still regulated by laws and customs. But customs have changed and modified law, and law has, in turn, been largely replaced by a vague conception of “honor.” It is easier for a businessman to win a case in the German courts by appealing to “National-Socialist honor” than by referring to the exact text of the law.

This would lead to complete anarchy in business affairs unless a businessman knew when the “honor” of a National Socialist required payment of a debt or the execution of a commercial transaction. Consequently chambers of commerce and group or ‘’estate” organizations in the various trades have instituted “Courts of Honor.” A businessman who objects to another firm’s conception of “honor” can apply to these “Courts” which settle commercial disputes. Officially they are only maintaining “national” or “group discipline.” In reality, however, “Courts of Honor” are a kind of self-help organization for businessmen. The Party-controlled official courts are replaced by courts made up of businessmen. No businessman is officially compelled to submit his case to the “Court of Honor” or to accept its judgment, but the official trade organization urges its members to stick to certain rules which the group organization has established, except in cases where members have close relations with influential Party functionaries who show little respect for the businessmen’s courts. On the whole, there is a definite trend toward substituting for the centralized State jurisdiction courts composed of businessmen representing different trades.

Businessmen feel the need of maintaining certain business rules and respect for property rights. Their self-help organizations are similar to the guild organizations of medieval times, which had their own courts for disciplining members. But at that time the State power was weak, while today the authoritarian State is strong in its maintenance of a gigantic bureaucratic and military machine. The “Courts of Honor,” therefore, will always have to consider Party interests so as not to arouse the anger of important figures in the Party.

Employers have been badly shocked by their new legal status, especially the “conservatives” who have held their property for generations and to whom the sanctity of private property has been a part of their religion. They might have excused previous violations of property rights as exceptional emergency measures, but they hoped that the buttressing of the State power through fascism would also bring about a strengthening of the sanctity of private property. They were independent and individualistic businessmen, not only economically, but politically and psychologically. For this very reason they are the most disappointed and unhappy over the new state of affairs and are likely to get into trouble with a Party secretary or the Gestapo (the Secret State Police) for having grumbled incautiously or for not having shown enough devotion to the Fuehrer.

The capitalist under fascism has to be not merely a law-abiding citizen, he must be servile to the representatives of the State. He must not insist on “rights” and must not behave as if his private property rights were still sacred. He should be grateful to the Fuehrer that he still has private property.

This state of affairs must lead to the final collapse of business morale, and sound the death knell of the self-respect and self-reliance which marked the independent businessman under liberal capitalism.

* The general meaning of this paragraph will be clear to the reader despite the obscurity of the manner in which the thought is phrased. The original German is written in the Nazi idioms that have become characteristic of German official documents; in their eagerness to demonstrate that there has been a complete break with the past, the present rulers of Germany have almost invented a new tongue.

Similar difficulty has been encountered in rendering into English other Nazi documents.