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Rob Knight on the financial links between fascism and capitalism in Germany and Britain

Banking on Hitler

  • The Bundesbank: The Bank that Rules Europe, David Marsh, Heinemann £18.99 hbk
The British establishment has an obsession with Germany - one which says as much about British problems as it does about German ones. There is a fast-growing disparity between Britain as a declining power and Germany as an ascendent one, and the British establishment's feelings are very definitely mixed.

On the one hand, the British authorities will take every opportunity to mention the war, as they attempt to cover up their present decline by reviving past Kraut-bashing victories. But, at the same time, Germany is now the most powerful nation in Europe, and as such must be treated with respect. Add to this the international power of the Deutschmark and the German central bank, the Bundesbank, and the British dilemma starts to shape up. Typically, in recent months the British have blamed the Germans for everything from the decline of the British economy to a supposed resurgence of fascism in Europe.

As a Financial Times correspondent, David Marsh is a seasoned observer of Germany. His previous book, The New Germany: At the Crossroads, was an entertaining and measured introduction to Germany for the outsider. His latest book, The Bundesbank: The Bank that Rules Europe, communicates a more open fear of German power by connecting the present and the past in a not very subtle way. Marsh himself neatly sums up the revised argument in his introduction: 'The Bundesbank has replaced the Wehrmacht [German army] as Germany's best known and best feared institution.' (p10) The difference in tone between the two books can perhaps be accounted for by the fact that they were written, respectively, before and after German reunification.

The Bundesbank is very much part of the anti-German literary diet so beloved of the British establishment. But it also has an extra dimension of interest. In the act of affirming the British belief that 'they are all Nazis under the skin', Marsh stumbles across some of the problems that resurrecting the past raises for the British establishment. As any serious examination of the Nazi experience must do, his study reveals two truths that are unpalatable to the powers that be in both Germany and Britain. One is the integral relationship between German capitalism and Nazism; the other is the cordial relations which key figures in the British establishment had with the Nazis and their backers both before and after the war.

Although Marsh's latest book is nominally about the modern role of the Bundesbank in Europe, a very large section of it is really about the Bundesbank's predecessor, the Reichsbank. This, Marsh reveals, was the bank that liked to say yes to Hitler. From the Nazis' accession to power in 1933 to their downfall in 1945, the Reichsbank played a central role in Hitler's regime. Not only did it organise the financing of the Nazi economy and German rearmament, it also carried out the seizure of Jewish financial assets. The Reichsbank's vice-president, Emil Puhl, liaised with Himmler in the depositing of gold teeth and spectacles from the concentration camps in the bank's vaults.

Marsh also points out how easily the bankers who served Hitler so faithfully were able to resurrect their careers in the 'new' Bundesbank after the war. He reveals the striking statistic that as late as 1968, nearly 25 years after the war's end, 50 per cent of the Bundesbank's top personnel were ex-Nazis. The president of the bank in the 1960s, Karl Blessing, had been the main organiser of the appropriation of Jewish money in 1938.

The book makes clear that there was a continuity between the Reichsbank and the Bundesbank which went further than its personnel. In fact Germany's central bank has been a source of continuity throughout the country's modern history. While governments, from Bismarck through the Weimar Republic to Hitler, came and went, the central bank carried on, sanctioning whatever political arrangement best suited capitalist interests at the time.

The Reichsbank came into existence as one of the central institutions of the new German state in the 1870s. It rapidly became a central part of the world financial system then in operation, the gold standard, largely on the basis of gold reparations extracted from France after the war of 1870-71. From then on the Reichsbank, and after the Second World War, the Bundesbank, were at the centre of the German economy.

From the start the relationship between German industry, banking capital and the state was even more integrated than in other leading capitalist nations. German capitalism developed relatively late, and by the time it formed a unified national economy the first 'free market' period of capitalism was already drawing to a close. Since the late nineteenth century, developed capitalist countries have relied increasingly on state intervention to combat economic decay. From the creation of the German state in the 1870s the German economy has been characterised by a high level of state intervention. Consequently there has always been a very close relationship between the state, the banks and industry.

Marsh's survey of the German central banks reveals just how close this relationship has been. Irrespective of what kind of government has been in power, democratic or dictatorial, as the needs of German capitalism have evolved so have the interventionist policies of the state and the central bankers. For example, in the period of relative stability at the end of the nineteenth century the Reichsbank pursued a policy of sound money, very much as the Bundesbank is doing today. But when it was necessary to finance the war effort in 1914 sound money was abandoned, paving the way for the currency instability in the interwar years.

The transfer of power from the Weimar democracy to the Hitler regime similarly created few difficulties for Germany's top bankers, except for those who had Jewish wives. Indeed the German financial establishment, like other big capitalists, backed the Nazis as a desperate last throw to revive the economy. The German economy in the twenties and thirties was stagnant and beset by inflation. German business needed to force through a massive attack upon working class living standards, and break a powerful socialist and trade union movement, if it was to get capitalism back on its feet. After other options failed, big business turned to fascism as the political movement that could act as a razor gang against the German working class.

The conversion of capitalist interests to the Nazi cause can be seen in the career of one man, Hjalmar Schacht. Schacht was appointed president of the Reichsbank in 1923 under the Weimar regime. In the late twenties, as German society experienced deep shocks, he became convinced that only the Nazis could save Germany from communism. Schacht then became the key link between the Nazi Party and German capitalism. He was head of the Reichsbank under Hitler and played a central role in German militarisation in the thirties until he was sacked for opposing rearmament - on financial rather than political grounds.

Schacht served at the Reichsbank under governments of all hues, from Social Democrat to Nazi. No doubt he would have been quite prepared to serve under the postwar Adenauer government had he not been too old. He typifies the way in which Germany's top capitalists shifted their political allegiances according to what they saw as being necessary for the survival of their system. Or as one later German economics minister put it, 'stability is not everything, but without stability everything is nothing'.

Marsh's book shows how the German establishment was complicit in Nazism. But it also lets slip how little the British establishment was concerned about the character of the Nazi regime. The governor of the bank of England in the thirties, Montagu Norman, had no problem with dealing with Schacht, to the extent that he became the godfather of Schacht's grandson. Norman's representative in Berlin, Charles Gunston, was an admirer of Hitler who spent his summer holidays at a German labour camp. This is symptomatic of the cordial relations that existed between the British and German ruling classes during the thirties, when 'appeasement' was the favoured policy of the British establishment.

The British and American authorities were also instrumental in enabling so many top Nazis to resurrect their careers after the war. Both Washington and Whitehall were far more concerned to bring stability to Germany than they were about bringing Nazis to justice. Today it might suit the British and American authorities to pursue a few ageing Nazis, as a way of reminding the public about Germany's past. But ex-Nazis were the human material out of which America and Britain rebuilt the German ruling class and economy after the war.

In the light of all this, and given the British preoccupation with Kraut-bashing today, how should we look at Germany and its history? I think we should remember that the horrors of Nazism were the product, not of some backward state, but of one of the most advanced capitalist societies in the world, with a long tradition of culture and learning. It should act as a constant reminder to us, not of some alleged flaw in the 'German character', but of the fact that capitalism in extremis is capable of anything.

I think we should also recall that the Nazis were not an alien excrescence on Western society. They were backed and bankrolled by the German ruling class, and enjoyed cordial relations with some of the pillars of British society among others. Currently, the media is focusing on a few German skinheads and claiming that they are the main link with the Nazi past. In fact, the real continuity comes from the polite and civilised men who glide into the Bundesbank offices every morning, and their counterparts in the Bank of England, who still believe that 'without stability, everything is nothing'.
  • Escape Attempts: The Theory and Practice of Resistance to Everyday Life (second edition), Stanley Cohen and Laurie Taylor, Routledge £10.99 pbk
While Malcolm McLaren was putting together the Sex Pistols, two young-ish academics were also taking pot-shots at 'the counterculture'. In Escape Attempts (1976), Stanley Cohen and Laurie Taylor wrote: 'the slogan of getting it together advanced by communes and the cultural revolution is illusory.' These were escapees from traditional left-wing politics, who went on to question the kaleidoscopic mish-mash of Herbert Marcuse, Timothy Leary and Norman O Brown. Somewhat unwillingly, they retreated towards 'the search for identity', the Self and its 'struggle to rise above social destiny'.

Escape Attempts (first edition) was written on the cusp between the revolutionary fervour of 1968 and the disaffection of 1977. Cohen and Taylor were painfully aware of their diminishing aspirations, but felt that this shrinking world 'is the only world we seem to know'. In the 16 years since their book originally appeared, many have first followed and then overtaken them on the way to tunnel vision. In writing a new, lengthy introduction to the 1992 edition of Escape Attempts, Cohen and Taylor are trying to pull the postmodernists back towards some notion of intervening in 'paramount reality'. They are advocates of the Self, with a social conscience but without 'the pointlessness of metanarratives'. Instead of pomo apathy, they want a kind of minimalist re-enchantment. Where 20 years ago they were precursors of postmodernism, now they come across as post-postmodernists.

But our authors have conceded the 'pointlessness' of any attempt to understand 'paramount reality' as a whole. This means there can be no sustainable logic behind their argument against apathy. Indeed Cohen and Taylor can only offer their (understandable) moral objection to Baudrillard's notion of the couch potato as hero, together with their own nostalgia for the Get-It-On days of seventies campus-life.

Criticising the postmodernists, Cohen and Taylor point out that the pomo notion of 'hyperreality' is a re-working of the Situationists' 'spectacle', minus the attempt at subversion. Agreeing with the postmodernists, they recognise that 'paramount reality' has absorbed and neutralised devices such as irony and parody which 20 years ago were held up as oppositional. But if 'to dissolve meta-theory is to open rather than close the discourse of resistance', where will such resistance come from? Cohen and Taylor can only hope that 'the imaginative purchase upon the world provided by Utopian visions' will re-energise the Self and its capacity for 'identity work'.

They want world-visions, but deny the possibility of a rational worldview. Aware of the narrowness of identity politics, nevertheless they end by arguing for 'more recognition of folk wisdom'. In taking up Baudrillard for his praise of apathy, they share his celebration of irrationalism and backwardness.

In some parts of their new introduction, it's hard to tell whether Cohen and Taylor are agreeing or disagreeing with the postmodernists. They hop between systems of thought, trying to pick'n'mix the best of each. But this is an imitation of postmodernism, not a challenge to it.

Cohen and Taylor would argue that their work shows a healthy ambivalence. I call it two-faced. If I feel the need for a mixture of insight and idiocy on the subject of 'everyday life', I'll stick to Baudrillard. At least he has faith in his own cynicism.

Andrew Calcutt
  • The Porcupine, Julian Barnes, Jonathan Cape, £9.99 hbk
Julian Barnes' latest novel, The Porcupine is set after the overthrow of the Stalinist regime of an anonymous East European state. The trial of Stoyo Petkanov, former 'helmsman' of his country, is the occasion for the new government to set its seal on the process of reform. The tale's cynical laughs betray a pessimistic and insular reaction to the failure of both Stalinism and capitalism in the East that is all too characteristic of Western intellectuals today.

In the ensuing court drama, relayed on TV to an expectant population, issues of justice and revenge are secondary. This modern breed of show-trial deals instead with questions of self-definition, setting the new order off against the old and proclaiming the right of the new authorities to judge the past. But it is another show-trial nonetheless: 'the President of the Court, the Prosecutor General, the defence counsel and the accused - most of all the accused - knew that anything other than a verdict of guilty was unacceptable to higher authority.' (p58)

The more that Prosecutor General Solinsky seeks to expose the old government, the more he echoes its past excuses. His own justifications about the 'difficulties', 'readjustments' and 'realities' involved in the transition to a market economy are hard to distinguish from the old dictator's talk about inevitable hardships and sacrifices along the road to socialism.

For Barnes' characters, the idea that history has a human purpose is hard to sustain, so arbitrary are its upheavals.

'Look what happened throughout history: Reformation, Counter-Reformation, Revolution, Counter-Revolution, Fascism, Anti-Fascism, Communism, Anti-Communism. Great movements, as by some law of physics, seem to provoke an equal and opposite force. So people talk cautiously of the Changes, and this slight evasion made them feel a little safer: it was difficult to imagine something called the Counter-Changes or the Anti-Changes, and therefore such a reality might be avoidable too.' (p42)

Barnes work is imbued with scepticism about the possibility of his characters' engagement with society. Fiction is about preserving the solitary individual from the depersonalising currents of history. In his earlier book
A History of the World in 101/2 Chapters, he writes 'love won't change the history of the world...but it will do something much more important: teach us to stand up to history, to ignore its chin-out strut' (p240). Eastern Europe's impasse provides a ready backdrop for Barnes' introspection.

Alasdair Ward
Reproduced from Living Marxism issue 52, February 1993

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