The Coming of the Third Reich (23 page)

Mergers and cartels were designed not only to achieve market dominance but also to cut costs and increase efficiency. The new enterprises set great store by rationalizing their production along the lines of the super-efficient Ford Motor Company in the United States. ‘Fordism’, as it was known, automated and mechanized production wherever possible in the interests of efficiency. It was accompanied by a drive to reorganize work in accordance with new American time-and-motion studies, known as ‘Taylorism’, much debated in Germany during the second half of the 1920s.
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Changes along these lines were achieved to a spectacular degree in the coal-mining industry in the Ruhr, where 98 per cent of coal was extracted by manual labour before the war, but only 13 per cent by 1929. The use of pneumatic drills to dig out the coal, and of mechanized conveyor belts to take it to the loading point, combined with a reorganization of working practices to bring about an increase of the annual output of coal per miner from 255 tons in 1925 to 386 tons by 1932. Such efficiency gains enabled the mining companies to reduce the size of their labour force very quickly, from 545,000 in 1922 to 409,000 in 1925 and 353,000 in 1929. Similar processes of rationalization and mechanization happened in other areas of the economy, notably in the rapidly growing automobile industry.
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Yet in other areas, such as iron and steel production, efficiency gains were achieved not so much by mechanization and modernization as by mergers and monopolies. For all the discussions and debates about ‘Fordism’, ‘Taylorism’ and the like, much of German industry still had a very traditional look to it at the end of the 1920s.
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Adjusting to the new economic situation after stabilization in any case meant retrenchment, cost-cutting and job losses. The situation was made worse by the fact that the relatively large birth-cohorts born in the prewar years were now coming onto the job market, more than replacing those killed in the war or by the devastating influenza epidemic that swept the world immediately afterwards. The labour census of 1925 revealed that there were five million more people in the available workforce than in 1907; the next census, held in 1931, showed an additional million or more. By the end of 1925, under the twin impacts of rationalization and generational population growth, unemployment had reached a million; in March 1926, it topped three million.
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In the new circumstances, business lost its willingness to compromise with the labour unions. Stabilization meant that employers were no longer able to pass on the costs of wage raises by raising their prices. The organized structure of collective bargaining that had been agreed between employers and unions during the First World War fell apart. It was replaced by increasingly acrimonious relations between business and labour, in which labour’s room for manoeuvre became ever more restricted. Yet employers continued to feel frustrated in their drive to cut costs and improve productivity by the strength of the unions and the legal and institutional obstacles placed in their way by the state. The system of arbitration put in place by the Weimar Republic loaded the dice in favour of the unions during labour disputes, or so the employers felt. When a bitter dispute over wages in the iron and steel industry in the Ruhr was settled by compulsory arbitration in 1928, the employers refused to pay the small wage increase that had been awarded, and locked over 200,000 metalworkers out of their plants for four weeks. The workers were not only backed by the Reich government, led by the Social Democrats in a Grand Coalition formed earlier in the year, but also got paid relief by the state. To the employers it began to seem as if the whole structure of the Weimar Republic was ranged against them.
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Things were made worse from their point of view by the financial obligations that the state placed on them. In order to try and alleviate the worst consequences of the stabilization for workers, and to prevent the recurrence of the near-collapse of welfare provision that had occurred during the hyperinflation, the government introduced an elaborate scheme of unemployment insurance in stages in the years 1926 and 1927. Designed to cushion some 17 million workers against the effects of job losses, the most substantial of these laws, passed in 1927, required the same contributions from employers as employees, and set up a state fund to cope with major crises when the number of unemployed exceeded the figure with which it was designed to cope. Since this was only 800,000, it was obvious that the scheme would get into serious trouble should numbers go any higher. In fact, they had exceeded the limit even before the scheme came into effect.
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Not surprisingly, this welfare system represented a growing state intervention in the economy which business disliked. It piled on extra costs by enforcing employers’ contributions to workers’ benefit schemes, and it imposed an increasing tax burden on business enterprise and indeed on well-off businessmen themselves. Most hostile of all were the heavy industrialists of the Ruhr. Legal restrictions on hours of work prevented them in many cases from utilizing their plant round the clock. Contributions to the unemployment benefit scheme launched in 1927 were seen as crippling. In 1929 the industrialists’ national organization announced its view that the country could no longer afford this kind of thing and called for swingeing cuts in state expenditure accompanied by the formal ending of the bargain with labour that had preserved big business at the time of the 1918 Revolution. Claims that it was the welfare system rather than the state of the international economy that was causing their problems were exaggerated, to say the least; but the new mood of hostility towards the unions and the Social Democrats among many employers in the second half of the 1920s was unmistakeable none the less.
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Big business was thus already disillusioned with the Weimar Republic by the late 1920s. The influence it had enjoyed before 1914, still more during the war and the postwar era of inflation, now seemed to be drastically diminished. Moreover, its public standing, once so high, had suffered badly as a result of financial and other scandals that had surfaced during the inflation. People who lost their fortunes in dubious investments searched for someone to blame. Such scapegoating focused in 1924-5 on the figure of Julius Barmat, a Russian-Jewish entrepreneur who had collaborated with leading Social Democrats in importing food supplies immediately after the war, then invested the credits he obtained from the Prussian State Bank and the Post Office in financial speculation during the inflation. When his business collapsed towards the end of 1924, leaving 10 million Reichsmarks of debts, the far right took the opportunity to run a scurrilous press campaign accusing leading Social Democrats such as the former Chancellor Gustav Bauer of taking bribes. Financial scandals of this kind were exploited more generally by the far right to back up claims that Jewish corruption was exerting undue influence on the Weimar state and causing financial ruin to many ordinary middle-class Germans.
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What could business do to remedy this situation? Its room for political manoeuvre was limited. From the beginning of the Republic, business sought both to insulate industry from political interference, and to secure political influence, or at least good will, through financial donations to the ‘bourgeois’ parties, notably the Nationalists and the People’s Party. Large concerns often had a financial hold on major newspapers through their investments, but this seldom translated into a direct political input. Where the owner did intervene frequently in editorial policy, as in the case of Alfred Hugenberg (whose press and media empire expanded rapidly during the Weimar Republic), this often had little to do with the specific interests of business itself. By the early 1930s, indeed, leading businessmen were so irritated by Hugenberg’s right-wing radicalism that they were plotting to oust him from the leadership of the Nationalist Party. Far from speaking with one voice on the issues that affected it, business was split from top to bottom not only by politics, as the example of Hugenberg suggests, but by economic interest, too. Thus, while the Ruhr iron, steel and mining companies were furiously opposed to the Weimar welfare state and the Weimar system of collective bargaining, companies like Siemens or I.G. Farben, the giants of the more modern sectors of the economy, were more willing to compromise. Some conflict of interest also existed between export-oriented industries, which did relatively well during the years of stabilization and retrenchment, and industries producing mainly for the home market, which included, once again, the Ruhr iron and steel magnates. Even among the latter, however, there were serious differences of opinion, with Krupp actually opposing the hard-line stance taken by the employers in the 1928 lock-out.
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By the end of the 1920s, business was divided in its politics and hemmed in by the restrictions placed on it by the Weimar state. It had lost much of the political influence it had enjoyed during the inflation. Its frustration with the Republic was soon to erupt into open hostility on the part of some of its most influential representatives.

CULTURE WARS

I

The conflicts that rent Weimar were more than merely political or economic. Their visceral quality derived much from the fact that they were not just fought out in parliaments and elections, but permeated every aspect of life. Indifference to politics was hardly a characteristic of the German population.in the years leading up to the Third Reich. People arguably suffered from an excess of political engagement and political commitment. One indication of this could be found in the extremely high turnout rates at elections - no less than 80 per cent of the electorate in most contests.
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Elections met with none of the indifference that is allegedly the sign of a mature democracy. On the contrary, during election campaigns in many parts of Germany every spare inch of outside walls and advertising columns seemed to be covered with posters, every window hung with banners, every building festooned with the colours of one political party or another. This went far beyond the sense of duty that was said by some to have driven voters to the polls in prewar years. There seemed to be no area of society or politics that was immune from politicization.

Nowhere was this more obvious than in the press. No fewer than 4,700 newspapers appeared in Germany in the year 1932, 70 per cent of them on a daily basis. Many of them were local, with a small circulation, but some of them, like the liberal
Frankfurt Newspaper (Frankfurter Zeitung),
were major broadsheets with an international reputation. Such organs formed only a small part of the politically oriented press, which together made up about a quarter of all newspapers. Nearly three-quarters of the politically oriented papers owed their allegiance to the Centre Party or its equivalent in the south, the Bavarian People’s Party, or to the Social Democrats.
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The political parties set great store by their daily papers. Forwards
(Vorwärts)
for the Social Democrats, and the Red Flag (Rote
Fahne)
for the Communists were key parts of their respective parties’ propaganda apparatus, and headed up an elaborate structure of weekly magazines, local newspapers, glossy illustrated periodicals and specialist publications. A newspaper propaganda organizer like the Communist press chief Willi Münzenberg could win an almost mythical reputation as a creator and manipulator of the media.
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At the opposite end of the political spectrum, an equally legendary status was occupied by Alfred Hugenberg, who as chairman of the board of the arms manufacturer Krupps had purchased the Scherl newspaper firm in 1916. Two years later, he also acquired a major news agency through which he supplied large sections of the press with stories and leading articles during the Weimar years. By the late 1920s Hugenberg had in addition become owner of the mammoth film production company, the UFA. Hugenberg used his media empire to propagate his own, virulently German nationalist ideas across the land, and to spread the message that it was time for a restoration of the monarchy. Such was his reputation that by the end of the 1920s he was being referred to as the ‘uncrowned king’ of Germany and ‘one of the most powerful men’ in the land.
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Yet, whatever people thought, media power of this kind did not translate directly into political power. Hugenberg’s domination of the media had absolutely no effect in stopping the relentless decline of the Nationalists after 1914. Political papers in general had small circulations: in 1929, for instance, the
Red Flag
sold 28,000 copies a day,
Forwards
74,000 a day, and Hugenberg’s
The Day
(Der Tag) just over 70,000. These were not impressive figures by any stretch of the imagination. Moreover, sales of the
Red Flag
dropped to 15,000 just as the Communist vote was beginning to increase in the early 1930s. Overall, the circulation of the overtly political press fell by nearly a third between 1925 and 1932. The up-market liberal quality dailies also lost circulation.
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The
Frankfurt Newspaper,
probably the most prestigious of the liberal quality dailies, slipped from 100,000 in 1915 to 71,000 in 1928. As newspaper editors realized only too well, many readers of the pro-Weimar liberal press voted for parties that were opposed to Weimar. The political power of editors and proprietors seemed limited here, too.
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