Posted on 06/03/2010 3:04:31 PM PDT by highlander_UW
Business Under Nazis by Ralph R. Reiland
In 1944, Ludwig von Mises published one of his least-known masterworks: Omnipotent Government: The Rise of the Total State and Total War. Drawing on his prewar experience in Vienna, watching the rise of the National Socialists in Germany (the Nazis), who would eventually take over his own homeland, he set out to draw parallels between the Russian and German experience with socialism.
It was common in those days, as it is in ours, to identify the Communists as leftist and the Nazis as rightists, as if they stood on opposite ends of the ideological spectrum. But Mises knew differently. They both sported the same ideological pedigree of socialism. "The German and Russian systems of socialism have in common the fact that the government has full control of the means of production. It decides what shall be produced and how. It allots to each individual a share of consumer's goods for his consumption."
The difference between the systems, wrote Mises, is that the German pattern "maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets." But in fact the government directs production decisions, curbs entrepreneurship and the labor market, and determines wages and interest rates by central authority. "Market exchange," says Mises, "is only a sham."
Mises's account is confirmed by a remarkable book that appeared in 1939, published by Vanguard Press in New York City (and unfortunately out of print today). It is The Vampire Economy: Doing Business Under Fascism by Guenter Reimann, then a 35-year-old German writer. Through contacts with German business owners, Reimann documented how the "monster machine" of the Nazis crushed the autonomy of the private sector through onerous regulations, harsh inspections, and the threat of confiscatory fines for petty offenses.
"Industrialists were visited by state auditors who had strict orders to examine the balance sheets and all bookkeeping entries of the company or individual businessmen for the preceding two, three, or more years until some error or false entry was found," explains Reimann. "The slightest formal mistake was punished with tremendous penalties. A fine of millions of marks was imposed for a single bookkeeping error."
Reimann quotes from a businessman's letter: "You have no idea how far state control goes and how much power the Nazi representatives have over our work. The worst of it is that they are so ignorant. These Nazi radicals think of nothing except 'distributing the wealth.' Some businessmen have even started studying Marxist theories, so that they will have a better understanding of the present economic system.
"While state representatives are busily engaged in investigating and interfering, our agents and salesmen are handicapped because they never know whether or not a sale at a higher price will mean denunciation as a 'profiteer' or 'saboteur,' followed by a prison sentence. You cannot imagine how taxation has increased. Yet everyone is afraid to complain. Everywhere there is a growing undercurrent of bitterness. Everyone has his doubts about the system, unless he is very young, very stupid, or is bound to it by the privileges he enjoys.
"There are terrible times coming. If only I had succeeded in smuggling out $10,000 or even $5,000, I would leave Germany with my family. Business friends of mine are convinced that it will be the turn of the 'white Jews' (which means us, Aryan businessmen) after the Jews have been expropriated. The difference between this and the Russian system is much less than you think, despite the fact that we are still independent businessmen."
As Mises says, we are "independent" only in a decorous sense. Under fascism, explains this businessman, the capitalist "must be servile to the representatives of the state" and "must not insist on rights, and must not behave as if his private property rights were still sacred." It's the businessman, characteristically independent, who is "most likely to get into trouble with the Gestapo for having grumbled incautiously."
"Of all businessmen, the small shopkeeper is the one most under control and most at the mercy of the party," recounts Reimann. "The party man, whose goodwill he must have, does not live in faraway Berlin; he lives right next door or right around the corner. This local Hitler gets a report every day on what is discussed in Herr Schultz's bakery and Herr Schmidt's butcher shop. He would regard these men as 'enemies of the state' if they complained too much. That would mean, at the very least, the cutting of their quota of scarce and hence highly desirable goods, and it might mean the loss of their business licenses. Small shopkeepers and artisans are not to grumble."
"Officials, trained only to obey orders, have neither the desire, the equipment, nor the vision to modify rules to suit individual situations," Reimann explains. "The state bureaucrats, therefore, apply these laws rigidly and mechanically, without regard for the vital interests of essential parts of the national economy. Their only incentive to modify the letter of the law is in bribes from businessmen, who for their part use bribery as their only means of obtaining relief from a rigidity which they find crippling."
Says another businessman: "Each business move has become very complicated and is full of legal traps which the average businessman cannot determine because there are so many new decrees. All of us in business are constantly in fear of being penalized for the violation of some decree or law."
Business owners, explains another entrepreneur, cannot exist without a "collaborator," i.e., a "lawyer" with good contacts in the Nazi bureaucracy, one who "knows exactly how far you can circumvent the law." Nazi officials, explains Reimann, "obtain money for themselves by merely taking it from capitalists who have funds available with which to purchase influence and protection," paying for their protection "as did the helpless peasants of feudal days."
"It has gotten to the point where I cannot talk even in my own factory," laments a factory owner. "Accidentally, one of the workers overheard me grumbling about some new bureaucratic regulation and he immediately denounced me to the party and the Labor Front office."
Reports another factory owner: "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 raw materials I need. Then there are various tax problems to settle and I must have continual conferences and negotiations with the Price Commission. It sometimes seems as if I do nothing but that, and everywhere I go there are more leaders, party secretaries, and commissars to see." In this totalitarian paradigm, a businessman, declares a Nazi decree, "practices his functions primarily as a representative of the State, only secondarily for his own sake." Complain, warns a Nazi directive, and "we shall take away the freedom still left you."
In 1933, six years before Reimann's book, Victor Klemperer, a Jewish academic in Dresden, made the following entry in his diary on February 21: "It is a disgrace that gets worse with every day that passes. And there's not a sound from anyone. Everyone's keeping his head down."
It is impossible to escape the parallels between Guenter Reimann's account of doing business under the Nazis and the "compassionate," "responsible," and regulated "capitalism" of today's U.S. economy. At least the German government was frank enough to give the right name to its system of economic control.
* * * * *
Ralph R. Reiland, owner of Amel's Restaurant in Pittsburgh, is associate professor of economics at Robert Morris College. FURTHER READING: Ludwig von Mises, Omnipotent Government (Spring Mills, Penn.: Libertarian Press, [1944] 1985); Guenter Reimann, The Vampire Economy: Doing Business Under Fascism (New York: Vanguard Press, 1939); F.A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1947).
Here is a study of the actual workings of business under national socialism. Written in 1939, Reimann discusses the effects of heavy regulation, inflation, price controls, trade interference, national economic planning, and attacks on private property, and what consequences they had for human rights and economic development. This is a subject rarely discussed and for reasons that are discomforting,: as much as the left hated the social and cultural agenda of the Nazis, the economic agenda fit straight into a pattern of statism that had emerged in Europe and the United States, and in this area, the world has not be de-Nazified. This books makes for alarming reading, as one discovers the extent to which the Nazi economic agenda of totalitarian control--without finally abolishing private property--has become the norm. The author is by no means an Austrian but his study provides historical understanding and frightening look at the consequences of state economic management.
You can find copies of Reinemann’s book on Ebay. That is where I got mine.
Quite powerful. There are times when I have thought I was actually fudging by calling what Obama has been doing, Fascism. The thoughts of this writer explain in fairly good detail, why I was wrong to doubt myself.
Obama’s brand of Fascism is identical to Hitler’s. I just hadn’t realized how identical it is.
I need to find this book.
I was just struck by the parallels in how business is viewed under Obama. One of the left's arguing points is that Obama isn't a communist or socialist because businesses are still privately owned. But he is employing the Nazi model of control through regulations, and with mobs such as the SEIU intimidating businessmen.
What was your take on Reimann's book?
Very powerful.
I would suggest putting some healthy well dressed humans with smiles in the shape of the U.S. in a new first frame.
May have to get a copy myself.
I was just stunned by how similar this is to the current climate and the direction of demonizing and controlling business through regulations, and how you need connections for bailouts. This article is from 12 years ago, so it's not a response to Obama, but it describes what is going on to a "T". I searched the title but didn't see that it had been posted, so despite the article's age I felt it appropriate to post. I'm glad I'm not the only one to be shocked by the similarities.
“Accidentally, one of the workers overheard me grumbling about some new bureaucratic regulation and he immediately denounced me to the party and the Labor Front office.”
And the "labor front office" is the unions. SEIU thuggery anyone?
” This article is from 12 years ago, so it’s not a response to Obama, but it describes what is going on to a “T”. “
The roots of the current sorry situation can be traced back to, at least, the formation of the EEOC, or the EPA, or OSHA - perhaps even back to the enactment of the first “minimum wage” law....
A lot of noses of a lot of camels in an increasingly small and crowded tent....
ping
No kidding. I only catch him on occasion, but Glenn Beck has addressed the origins of the "progressive" movement, much of which took center stage under President Wilson and FDR.
One other thing Beck has right is, he explains a line with total government control at one end and no government control at the other. On this line the founding fathers created the Constitution close to the no government end and we've been moving toward the total government end for most of the history of the nation since.
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The modern left personified by the Democratic party are modern fascist and they are completely clueless of that fact.
The world is upside down.
There is going to be hell to pay.
Thanks, I agree with the need to post it. I looked on E-Bay and Amazon and couldn’t find a copy.
This would be a great opportunity for an electronic version on Amazon.
The rank and file are clueless to this, but then again, they are oblivious to just about everything except who won on American idol and the latest antics of Paris Hilton and whoever her BFF of the moment is.
The world is upside down.
Agree.
There is going to be hell to pay.
And I think it's going to be sooner than later. I used to think it was going to be gradual...I'm thinking it'll happen more suddenly now.
Bookmarked! Thanks.
That would be good, although I don't have a clue how to get Amazon to create or post one.
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