THE MARXIST REVIEW OF BOOKS
Rob Knight on the financial links between fascism and
capitalism in Germany and Britain
Banking on Hitler
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
- The Bundesbank: The Bank that Rules Europe, David
Marsh, Heinemann £18.99 hbk
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
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
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
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'.
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: The Theory and Practice of
Resistance to Everyday Life (second edition), Stanley Cohen and
Laurie Taylor, Routledge £10.99 pbk
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.
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
- The Porcupine, Julian Barnes, Jonathan
Cape, £9.99 hbk
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.
Reproduced from Living Marxism issue 52, February 1993