The Vampire Economy

Chapter VIII

THE “FACTORY LEADER” AND HIS FOLLOWERS

“I urgently need some mechanics, but I am not allowed to engage anyone unless he can show me his ‘labor book’ and a permit from the Labor Exchange to change his job.”

IN ONE of the uncensored letters a German industrialist wrote to a friend of his, he described industrial labor relations in Germany today. His views are commonly held by many other German industrialists.

My dear Mr.…

I really wonder why the Nazis have not succeeded in winning over the workers. After all, there are more jobs than workers now and we find it very difficult to find the workers we need. In general, we have to be more polite now than formerly to our workers.

This is especially true of office workers, whose position both economically and insofar as prestige is concerned has improved. These workers now have an opportunity to make occasional trips to the seaside in conformity with the “Strength through Joy” movement. Sometimes they accompany a member of the management when they go on these trips. There is always plenty of beer, and in general the outings are well organized.

In our factory, we are on excellent terms with the “confidential man” [Vertrauensrat]. He has a job with good pay and little work, and with him we can discuss in complete confidence all the difficulties we may have with our workers. Sometimes the Party instructs him to make certain demands “against the firm,” demands that are designed largely to bolster the prestige of the Party. He comes to us and together we discuss the best way of handling this demand.

The workers celebrate the new Nazi festivals, and on their “community evenings” get all they want to drink. Yet they do not believe in the stability of the regime, and they oppose going to war. They often talk about the impending collapse of the regime.

I spoke to one of our chauffeurs, for example. He has quite a good income and should have no cause for complaint. When I talked with him, he must have believed that I was a 100 per cent Nazi. Yet he was not afraid to say quite openly:

“Hitler was lucky that war did not break out when he took Czecho-Slovakia.” I answered: “But militarily we are very strong.”

“Wait and see … when we [the workers] get arms in our hands, many things might happen … Everybody is dissatisfied and grumbles. I am not surprised that there is so much grumbling.”

“But don’t forget Ostmark [former Austria] and the new protectorate of Bohemia. After all, these are real successes,” I replied.

“These conquests will not help us either. These countries are industrial countries, too, and nobody knows at present what we still have to pay for those conquests.”

I became a little ironical and said:

“Well, we won quite a lot, in particular supplies of arms and of workers. Of course, these workers were formerly better fed and got higher wages. But as recompense, we have given them the new National conception: ‘communal welfare precedes individual welfare’ [Gemeinnutz geht vor Eigennutz]. What I would like to know is: do all the workers in my factory think as you do?”

“No, not in our shop. There are still at least 25 per cent Nazis.”

You should know that we engage a relatively large number of office workers, and you find more Nazis among these groups than among factory workers. Wages have not been changed, but prices have gone up considerably. Cheap goods tend increasingly to disappear from the market. The government has a name for this—“steering of consumption” [Verbrauchslenkung].

Recently I gave a job to a worker who came from a small provincial town. He was a 150 per cent Nazi when he arrived. But he rapidly conformed. Shortly thereafter I asked him what had made the greatest impression on him since his arrival. He said: “I was amazed to hear so much grumbling, and I was also amazed that I didn’t find one single informer. One evening I was drinking beer with some fellow workers. One of them who had drunk a little too much shouted: ‘Hitler should be choked!’ A policeman was standing near the bar drinking beer, too. But he looked the other way, pretending not to hear.”

The new gigantic and luxurious buildings of the Party, in particular those belonging to Goering and to Hitler, are really provocative for the people. My general impression: only a relatively small number of fanatics and very young people, and perhaps also a certain percentage of office workers, really believe in the stability of the regime.

At the beginning of this year I was conscripted to a regiment in order to refresh my military knowledge. I lost some of the illusions I had had about the efficiency of our anti-air raid measures. The military machine appears to be excellent. Anti-air raid guns can shoot with accuracy at great distances. But after a short while (I think after half an hour) the instruments which are to spot the enemy’s planes no longer function with accuracy. Something goes wrong. I heard about similar experiences with anti-air raid cannons in foreign armies.

The next war will be decided by the relative industrial capacity of the contestants and by their relative command of raw materials. I agree with what I heard from high army officers: “Does Hitler really think he can risk a war with the materials we have at our disposal?” Don’t believe everything you hear about the effectiveness of the German Army. When I had finished my military service (two months), our major told me: “We have to appeal to the soldiers to be very careful with the only uniform we can give them. In 1914 every soldier had two uniforms, and three others were in reserve. Today, there is only one uniform for each soldier.”

Workers grumble a great deal about the time they have to spend in the Army (two years) and in the labor service (one year). I don’t dare to think how another war will end for us.

All the best,

Signature

The totalitarian State seems to hold out the promise of a paradise to the industrialist who hates the interference of trade unions in his business. Yet capitalists who are fully satisfied with the social peace which fascism provides for them are rare in Germany. The real picture of labor relations does not conform either to that painted by Nazi propagandists nor to that imagined by those who see only the destruction of the labor movement.

The amazing experiences of a Berlin industrialist illustrate the new position of the “boss” under fascism.

Herr A.Z. is an extremely efficient and skillful executive. He was one of the managers of the I.G. Farbenindustrie A. G. (Germany’s largest chemical trust) and could have had a lifetime position with it. He was esteemed because he never indulged in superfluous talk and his instructions were given without any unnecessary show of authority; instead, he impressed his subordinates with the correctness and objectivity of his decisions.

When a certain Berlin concern got into financial difficulties, Herr A.Z. was asked to become chairman of its board of directors. Having had dealings with the firm as representative of the chemical trust, Herr A.Z. had so impressed the firm’s board members that they regarded him as the one man who could save the business from bankruptcy.

Success meant brilliant possibilities for advancement; failure, the end of his career. Herr A.Z. took the chance. Within a short time he had reorganized the firm, closed one plant which was unprofitable and modernized another.

But real success depended largely on the firm’s highly skilled workers who were well-organized in a trade union and who refused to sanction the dismissal of any fellow worker. Herr A.Z. succeeded in doing what all the other board members had regarded as impossible. He came to an understanding with Herr R., the trade-union secretary. As time went on, Herr R. had many opportunities of meeting Herr A. Z. They often clashed over matters of labor policy, but they grew to respect each other’s frankness and ideas.

At the time Hitler came to power, the enterprise was on firm financial ground once more and for the first time was showing a profit. During the first year of the new regime nothing changed, except that a few highly skilled workers disappeared—and also Herr R., the tradeunion secretary. Some unemployed S.A. men had to be given jobs, which increased expenses and decreased efficiency. Yet this was a minor change. Herr A. Z. remained the “boss.” He was a conservative rather than a Nazi, although he was quite willing to accept the new regime as an improvement in comparison with the former liberal or radical governments. He felt that under the old regime Germany could never have prospered again and he welcomed the re-establishment of the German Reich as a world power.

However, this did not prevent him from gradually becoming more and more dissatisfied. He received orders to supply certain munitions factories, but difficulties in obtaining raw materials compelled him to deal with dozens of bureaucrats and State institutions. Official demands overwhelmed him. He had to establish a new department in order to deal with them. When, in spite of all his efforts, he was unable to fulfill his contract, a representative of the Four-Year Plan Commission appeared. This representative was followed by an army officer, who took full charge of the plant. The latter received the highest salary of any director or employee. He had access to all correspondence; Herr A. Z. had to ask his permission before making any important decisions, although it was well known that the army officer knew practically nothing of business management. Knowing that insurmountable obstacles and fruitless disputes would result if he tried to increase efficiency, Herr A. Z. naturally lost interest in making the attempt. Difficulties increased and the bureaucracy grew. Party representatives, who interfered with his management, assumed more and more authority. Never a talkative man, Herr A. Z. now lapsed into complete silence.

When the Nazis came to power, Herr R., the former trade-union secretary, had gone to live as an émigré in a small town in a neighboring country. By accident, Herr A. Z. learned from a friend, who knew a member of the Gestapo, the whereabouts of the former trade-union secretary. One Sunday morning, some six years later, Herr R. was surprised by a visit from Herr A. Z., who had come from Germany over the week end for the specific purpose of seeing him. He had six hours before the train which he must take back to Germany would leave. During the entire time, Herr A. Z. talked, almost without interruption, as if he had to make up for five years of silence. The burden of his conversation went something like this:

“I must talk once more to someone whom I can esteem as a person and to whom I can speak frankly. I cannot stand it any more, always keeping silent when young Party men who are completely ignorant interfere with my management and issue instructions which I must follow without comment.

“Yes, I am the ‘leader’ in my factory; my workers are my ‘followers.’ But I am no longer a manager. You will remember that we fought over the right to hire and fire workers. In principle I stuck to the rule that if a worker was efficient and knew his job he had a permanent position in my factory. Certainly I never asked what party he belonged to; that was his business. Today I cannot apply this rule.

“There are no longer factory councils elected by the workers, or trade-union secretaries who can interfere. I have to appoint my own ‘Confidential Board.’ The idea is not so bad, but I would like to be able to appoint workers who can influence their colleagues and with whom I can talk frankly, as I did with you. Unfortunately, all the workers who are efficient and who can readily influence their fellow workers are either former tradeunionists or otherwise not in good standing with the Party people.

“The secretary of the Party cell is a former clerk in my office. It was he who told me what men were ‘reliable’ from the Party point of view. These people were to become my ‘Confidential Board.’ Mostly they were workers with no special skill or ability to recommend them. Of course they had Party cards. I tried to appoint one other man. The Party secretary told me that he was a former socialist and made me understand that such an appointment would be regarded as secret support of ‘Marxist elements.’ He suggested that I might be on better terms with the Labor Front secretary if I appointed someone they trusted. Naturally, there was nothing for me to do except follow this advice. These Party people are very unpopular; they are feared as spies, and the workers feel that they are responsible for the dismissal of former trade-unionists.

“After our army marched into Prague, a member of the Hitler Youth, whom I employed as an apprentice, came to me and denounced several workers. He had listened to a conversation in which one of the workers had declared, ‘The Czechs will never become German. Hitler has broken his word and it can’t come to a good end.’ The other workers had agreed. I did not transmit the denunciation because I did not want to lose my best workers, but the boy spoke to a leader of his Youth League about the incident and he informed the Gestapo. A whole detachment arrived at the factory. The workers said that they remembered nothing of the matter. Finally the worker who had been denounced for making the remark was arrested. Obviously many workers must have thought that I was the one who had informed the Gestapo and I did not dare tell them the truth.

“Once I was told that I was not fulfilling my duty to the Party. I was not employing enough ‘old Party members.’ So they sent me twenty-five ‘old Party members’ and S.A. men. Without exception they had had no real training and were inefficient, but I was simply forced to take them. Accidentally one of them overheard me grumbling about some new bureaucratic regulation and he immediately denounced me to the Party and to the Labor Front office. Another Party member came and told me about it and warned me that I had better be careful in the future. So it has got to the point where I cannot talk even in my own factory. Incidentally, he added that the Party secretary did not really believe I was devoted to the Fuehrer. It seems that the Party secretary once heard me answer a ‘Good morning’ with ‘Good morning’ instead of emphatically replying ‘Heil Hitler.’

“Something had to be done, so I tried to compromise. The Party members who were on my ‘Confidential Board’ were given easy jobs with good pay. After that they agreed that I could dismiss some S.A. men who had ruined valuable machinery because they neither knew nor cared about learning the work.

“However, things are still bad. I cannot employ the workers I want. There are no trade-union secretaries insisting that I employ only union members, but the present situation is worse. Now I urgently need some mechanics, but I am not allowed to engage anyone unless he can show me his ‘labor book’ and a permit from the Labor Exchange to change his job. If I were to offer a worker a job at a higher wage, just because I regarded him as competent, I hate to think of the trouble I would have and the fines I would have to pay.

“On the other hand, when I need new workers and apply for them, the Labor Exchange is always sending me workers wanting jobs, all of them either S.A. men or Party members. I am really put to it to invent excuses for not hiring them. Naturally, I suspect them of being in the Party just because they are inefficient and need Party backing in order to make a living. They themselves know this, so, if I give them jobs, they will spend a great deal of their time making themselves indispensable to the Party secretary by sending him reports on gossip and grumblers. One of them is enough to poison the entire atmosphere in the factory. And I should have to be more careful than ever so that I won’t be denounced for an incautious remark.

“Although I am the ‘leader,’ I cannot decide what is allowed or forbidden in my own factory. Recently the Labor Trustees advised me to introduce ‘factory regulations’ corresponding to the ‘model rules’ now in force in the airplane factory at Dessau, which declare:

“ ‘Applicants are employed only if they are suitable for the work, irreproachable, racially sound, of Aryan origin, German and members of the Labor Front.… Reasons for immediate dismissal are … any obvious offense against the National-Socialist movement and its conceptions.… It is not permissible and a defamation of the work community to discuss matters which might damage the work community with outsiders.’

“If I were to put such regulations into effect in my factory, it would mean that I would have to fire all my best workers. So I didn’t change my ‘factory instructions.’ Other factory leaders also ignored the reforms suggested by the Labor Front. Thereupon the Labor Trustee sent us a circular:

“ ‘The general picture of factory regulations is not pleasant; it reveals little initiative, much copying of what someone else is doing, much formality, too much similarity with previous work regulations, nice phrases on occasion, but little real National-Socialist spirit within the work community.’

“In August, 1938, before the ‘Munich crisis,’ the Labor Exchange informed me that 10 per cent of my workers must be released for work on the fortifications in western Germany. Simultaneously I got urgent requests from the Junkers aircraft people at Dessau and from various military authorities that the delivery of articles previously ordered must be made without any further delay. The workers resented the idea of having to work on the fortifications and I was opposed to it, too, because I could not replace them. Consequently I did what most businessmen do today. I paid no attention to the communication from the Labor Exchange. Suddenly a delegation from the Labor Exchange appeared, accompanied by an army officer. These people ordered me to take them through the factory. It was the first time they had seen my factory, but they picked out a number of workers and said to me: ‘Prepare their papers. They will leave for western Germany tomorrow morning.’ None of them even thought to ask me whether I could spare these workers and what effect it would have on the work.

“Recently I was delayed in filling urgent army orders because I did not have enough mechanics. I was afraid to apply at the Labor Exchange. Anyway, there is such a scarcity of skilled workers that I would probably have had to wait at least a year before I could obtain any. I explained the situation to the army representative in the factory when he insisted that I speed up production. So he arranged that I should get some mechanics who are held as political prisoners by the Gestapo. Every morning a patrol wagon arrives with twenty prisoner-mechanics. They work in a special place in the factory under the guard of S.S. men. In the evening they are taken back to prison. Do you think that this situation helps to create the right atmosphere in a ‘work community?

“A year or so ago I was ordered to spend social evenings with my ‘followers’ and to celebrate with them by providing free beer and sausages. The free beer and sausages were welcome enough, but the ‘work community’ parties have not been successful. Drunken workers, or workers who pretended drunkenness, would start a fight with some unpopular Nazis. One worker, who had had somewhat more than one glass of beer, told me that beer parties were a poor substitute for a wage increase. Fortunately the whole idea of such compulsory beer parties has been dropped.

“The Labor Front secretary tries to increase his popularity, and I have to pay for it. Last year he compelled me to spend over a hundred thousand marks for a new lunchroom in our factory. This year he wants me to build a new gymnasium and athletic field which will cost about 120,000 marks. Now, I have nothing against sports. But, as a matter of fact, the workers nowadays don’t care much for sports or things of that kind. They work ten, eleven or twelve hours daily—at least sixty hours a week—and they complain that they never get enough rest. More often than not they take a nap during their lunch hour. Really, no worker is interested in the gymnasium and athletic field. Yet I shall have to build it in order to satisfy the Labor Front secretary.

“I am opposed to mass meetings artificially staged to show how harmonious things are in the ‘work community.’ Neither do I care for all the demonstrations my workers and I must attend, where we must march for hours, shouting ‘Heil Hitler.’ I was an officer in the German Army during the World War, and I am in favor of discipline, efficiency and social distinctions. After all, I am supposed to be the ‘factory leader.’ But at such a demonstration I am likely to be ordered to shout and sing by some Party member who doesn’t know the meaning of decent work. I must behave as though I were his orderly. Next morning, however, I am again supposed to be an ‘authoritarian leader.’

“Most of the workers try to avoid going to these demonstrations and quite often they are successful. This is distinctly embarrassing for me because I have to appear as the ‘leader’ of a ‘work community’ with only a small fraction of my ‘followers’ present. The next day work will be slowed down and the workers will complain that they are still tired from all the marching the day before and that they have not had enough sleep.

“A couple of months ago work in one of my key departments suddenly slowed up and the filling of urgent orders for the Junkers plant at Dessau became impossible. I got into considerable trouble trying to settle this affair. Obviously there was some resentment among the workers over the wages they were receiving. Not long before higher wages had been granted in a nearby factory, so I was told. I consulted the ‘Confidential Board,’ but their only suggestion was to call in the Labor Trustee. Naturally, I didn’t want to do that. From experience, I knew that his interference would do nothing to improve the situation. He would merely come and make a speech to the workers, and if they were not sufficiently ‘convinced’ by his words, he would send for the Gestapo. And in any case he would insist on my giving the names of the ‘hostile elements’ responsible for the trouble. Then I would be faced with another worry—are my most efficient workers going to be arrested? A few weeks later I might very well have the same trouble all over again. After all, the work is complicated and the slightest misstep may ruin valuable machinery. I certainly can’t take that risk. Consequently, I tried to have a private talk with one of the workers in the department where the work had slowed down, so that we could arrive at some sort of understanding. I could tell that he was annoyed, because he told me I ought to know that he could not act as spokesman for his fellow workers and that I should consult my ‘Confidential Board.’ Obviously he did not trust me, and I could not make it clear to him that I wanted a frank talk with him about the demands of the workers.

“Sometimes I am really afraid of what might happen if new rush orders should arrive. My ‘followers’ would be forced to work faster and it would really be disastrous if this should happen to coincide with a decline in their living conditions. Everyone knows about things that have happened in other factories. In the Siemens glass factory at Dresden, sixteen workers recently shut down four furnaces. Similar incidents occurred in two large print shops in Leipzig, in the Linke Hofmann Works at Breslau and in a Silesian steel mill. I have often heard that foremen in the coal mines, attempting to execute an order to speed up production, have had fatal accidents underground. In the M.A.N. Works [one of the leading machine-tool plants in Bavaria], an engineer who was very unpopular with the workers charged a metal turner with unsatisfactory work. The latter defended himself against the charge and the engineer threatened to fire him and make it impossible for him to find another job. He thereupon hit the engineer with an iron bar, injuring him seriously. During the fight, none of the bystanders came to the aid of the engineer.

“Really, I would prefer to grant a wage increase—certainly rather than get into such difficulties. After all, the cost of living has gone up. And besides, it does not matter. I need efficient workers and can’t keep them in the long run unless I make some concessions. In all probability I could get higher prices from the Army authorities if I had to pay higher wages. Once I tried to attract efficient workmen by offering them higher wages. The Labor Trustee sent me a threatening letter which read:

Without my special permission it is forbidden to pay wages to newly-employed followers which are higher than wage rates for other workers doing similar work … The reason for this decision is that it is impossible to agree on higher wages (and salaries) with newly employed workers …

“I had to reduce the wages again. The following month there was another collection for the Winter Help. The workers refused to give an hour’s pay to the fund and most of them contributed only a few pfennigs. I did not dare to send in such a small amount to the authorities on whose recommendations I depend in order to obtain State orders or raw materials. Obviously I cannot afford to be regarded as the ‘leader’ of workers who are not enthusiastic about National Socialism. Consequently, I myself made the greater part of the contribution, reporting to the authorities and to the Labor Front that every worker had given a full hour’s wage.

“As difficulties mount, the activities and organizations of the Labor Front multiply. In every German factory there are Labor Front secretaries, committees, and auxiliaries, sections of a huge, top-heavy, bureaucratic machine. We, the factory leaders, are responsible for the following committees, deputies, etc:

“The Council of Trusted Men, appointed by the factory leader; the National-Socialist Party cell with a secretary and a representative in each department; a Hitler Youth committee; special boards for National-Socialist education, for sports, women, ‘Strength through Joy’ activities, and professional training; a ‘work guard’ which is armed for emergency situations; and several other committees. The Labor Front had instructed me to see that all the young men starting work join a special ‘work guard.’ A great many refused to do so, claiming that they could not afford seventy-eight marks for the uniform. The same thing happened in other factories. Nothing is heard any more about the ‘work guard.’

“Don’t think that the Labor Front and the ‘work community’ are my main worries. The greater part of the week I don’t see my factory at all. All this time I spend in visiting dozens of government commissions and offices in order to get the raw materials I need. Then there are various tax problems to settle and I must have continual conferences and negotiations with the Price Commissar. Besides which, I have considerable traveling to do; in fact, it sometimes seems as if I do nothing but that, and everywhere I go there are more leaders, Party secretaries and commissars to see. All of this just to settle day-to-day problems.

“Not long ago the Labor Trustee warned me that I did not spend enough time in ‘work community’ meetings and that evidently I didn’t really care for National-Socialist principles since I never spent any time teaching them to my workers. There have been cases where managers were removed by the Party or Labor Trustees and replaced by ‘commissars.’ At present I am considering whether I should appoint a ‘representative’ as factory ‘leader.’ He could deal with the Labor Front and Party secretaries. But I still hesitate. I do not know anybody whom I would trust completely …”

The final words of Herr A. Z. were:

“I do not know what will happen. But things cannot come to a good end.”

The Nazis could never duplicate the labor policy of Mussolini during the early period of his regime. At that time, fascist labor policy did two things: first, it deprived the worker of his means of self-defense, and then it offered him fascist labor organizations as a weapon against excessive exploitation. But Mussolini later had to follow the example of Hitler’s labor policy—against any kind of trade-union. The Nazi Labor Front was never able to play the role of self-appointed mediator between workers and manufacturers. The bureaucracy would have preferred to blame private manufacturers for the excessively bad labor and wage conditions and to preserve its role of a neutral third party. But the system needs increased production so badly and has made economic conditions so much worse that the State itself has to urge manufacturers to speed up production and to economize on wage expenditure.

Few German manufacturers have much respect for the Labor Front bureaucracy and its work. Like their workers, they are compelled to make large contributions to the Labor Front and its auxiliary organizations. They feel that this money is wasted. Neither the workers nor their employers dare protest, however. A strange situation has arisen in which the majority of the workers as well as many, if not most, employers regard the Labor Front as a parasitic bureaucracy. It must be endured silently because it is backed by the Nazi party and its orders reinforced by the Secret State Police. Certainly the Labor Front has failed in its promise to create an ideal “work community” of social peace and happy collaboration among all classes.

The factory leader is compelled to be an agent and propagandist of the Party in his own factory. The State makes it a rule that those factory leaders who excel in work for the Party shall be privileged in the distribution of State orders and subsidies. Therefore many factory leaders regard it as good business policy to obtain Party badges as a means of getting good results from Party organizations.

The Party organizes yearly “efficiency competitions” in order to select the best factories. Some of the official rules of this “efficiency competition” are:

“A positive attitude toward the National-Socialist movement … will be demonstrated by promoting the aims of the N.S.D.A.P., of its sections and subsidiary organizations, propaganda and education work.… Therefore it must be asked: ‘Does the factory leader participate in collective educational work?’ ‘Does he make participation of his followers easy by compensating them for wage losses [on account of Party work], payment of fares [to Party meetings] and similar measures?’ The factory which wants the prize has to prove by its unfailing support of National Socialism that it has identified itself with the aims of the Fuehrer and his movement…”

The position of the manager or “factory leader” is contradictory in theory and in practice. On one hand, he has more authority than before within his factory; he can rule his business by issuing orders which must be obeyed by all his “followers.” On the other hand, he himself is only an infinitesimal part of a gigantic State and military machine. Party and military authorities will interfere with his management, while at the same time making him responsible for difficulties in fulfilling his production program and for dealing with labor troubles, should they arise. He may even be declared unfit for “leadership” if he is not on good terms with Party authorities.

“The manager has been promoted … to the rank of leader by the racial State order which has equipped him with a power previously attributed only to State institutions.… The State leadership leaves it to the leader of the factory to establish discipline among the workers … He is no longer merely the business leader and responsible for the technical process of production, but is, to a great extent, the representative of the State.”1

“The manager practices his functions primarily as a representative of the State, only secondarily for his own sake.”2

In principle, Party authorities, especially those in the Labor Front, can insist on removing a manager because he does not have a suitable “leader personality”; they may replace him by a “reliable” Party man. In practice, this right of the Party is not applied against factory leaders who are in good standing with Party authorities and who are protected by supreme Party leaders in case of a conflict with minor Party people.

The contradictory position of the factory leader is aggravated by circumstances which are a result of State policies, but it remains the private affair of the factory leader to deal with them and manage his work in spite of an insufficient supply of skilled labor, dissatisfaction of the workers with rising prices and general conditions, numerous anti-air raid exercises and Party or Labor Front activities which interfere with work. Under such conditions, the manager will try to deal with his management difficulties by establishing strict military discipline. But in that case, he will need the closest collaboration with Party and Labor Front authorities. He will become more dependent on their support and interference, the more authoritarian his behavior toward his workers. If, on the other hand, he tries to create a better atmosphere among his workers and improve relations with them, he will have to grant wage increases which are forbidden, and be on good terms with workers who are trusted by their fellow workers and who are not Nazis. This is still more dangerous, for he might easily be accused of sheltering anti-Nazi elements and might be made responsible for any trouble in his factory or for a stoppage of production.

Skilled workers in ammunition factories are relatively well paid, but on one hand the buying power of money has considerably decreased as a result of price increases and the scarcity of cheap articles, and, on the other, they must work at terrific speed at least ten hours a day, and often much longer, so that they have neither time nor energy to participate in social life.

In modern industry, especially where technical skill is necessary, excessive length of working hours easily results in a decline in the quality of work and great waste of materials. Many factory leaders are already complaining that it does not pay to let the workers work more than eight hours a day. It is much more profitable to work with fresh labor forces than with workers who are worn out by overtime. The result is a considerable rise of accidents and of waste of materials.

Even the army opposed excessive overtime for workers who, it realized, were rapidly becoming exhausted and even ill. The army feared that they would not be able to man the complicated engines of war when the time came.

At the end of January, 1939, General Thomas made a speech to the N.S.D.A.P.’s Commission for Economic Policy in which he said that the sixty-hour week would lead, in the long run, to reduced production and that the eight-hour day, according to extensive scientific investigations, is the optimum working day. These members, who are most influential in formulating the economic policies of the Third Reich, had to learn this from a general in the army.

Even the Deutsche Wirtschaftszeitung, an organ of German business interests, wrote:

“It is obvious that working time can no longer be increased to any extent without exhausting the labor potentialities of German workers. In addition, there is the danger of a decline in the quality of the work.”3

The shortage of workers in Germany seems to be an achievement often admired in countries suffering from extensive unemployment. Shortage of labor is a phenomenon well known in wartime. The Third Reich is not yet engaged in war, but its system includes many features of a wartime economy. This also applies to the labor situation.

Modern industry needs labor discipline. Such discipline may be established by voluntary agreement, through workers’ trade-unions, or by compulsion. The Nazis attempted to create a new scheme of labor discipline by destroying trade-unions and substituting the Labor Front, a gigantic propaganda machine promising everything to all classes in the “work community.” This scheme could have been successful only if these promises had been fulfilled.

Under liberal capitalism the private owner of a factory can establish his authority over his workers either by voluntary agreement with the trade-unions, or by a system of strict supervision and enforced discipline. When State authorities interfere they generally appear as a “third party.” Under a fascist system, labor discipline and “social peace” in industry cannot be maintained without the eternal, overt interference of State authorities, to such an extent that they often supersede the manager. He himself is “authoritarian,” but he is rarely master in his own house. Increased taxation, scarcity of raw materials, and the use of expensive and inferior substitutes have added greatly to business expenses, especially in view of the fact that price increases are forbidden. Consequently many industrialists, especially in industries which profit less than others from the armament boom, seek to reduce production costs by wage cuts and the speed-up. Thus they become increasingly dependent on assistance from the Labor Front and the Gestapo. In such factories an atmosphere is created which makes the factory leader continually fear that labor troubles and sabotage will occur at the exact time when labor peace is most urgently needed.

The old type of conservative employer who tried to establish some kind of patriarchal relations with his workers and who could afford to pay a relatively high wage to those workers he needed most, cannot survive under fascism.

A new type of fascist entrepreneur is emerging and prospering—the capitalist who is a trusted Party member. He contributes generously to Party funds, carries out orders faithfully, and has an increased authority which his American or British colleague might envy. He has more power than the old German businessmen and bankers ever enjoyed. He is not the rather liberalminded, cultured businessman who believed in fair treatment for his employees or in paternalism, nor is he the conservative capitalist accustomed to give, not take, orders in the conduct of his business. He is more nearly like the old Prussian official, a man who likes to be part of a military, authoritarian regime, an officer who can take, and give, orders.

“The soldier at the front has grown in stature as compared with the entrepreneur type.… The entrepreneur has become small, while simultaneously the soldier has become big.”4

Some of the big corporations prefer to hire as managers or factory leaders men who were army officers, accustomed to manage men in the military manner. The military managers enjoy greater authority in relation to the Labor Front bureaucracy and cannot be accused of failing to behave as “leaders” should. But militarization of factories does not improve labor relations.