THE extremely complex structure of National Socialist business organization can be much more easily understood if it is placed in an adequate historical context. By doing so, we shall at the same time find that National Socialism added little that is new to the already existing pattern of organization.
Ownership of the means of production exercises its function in a number of spheres,* especially in the labor market, the commodity market, and in the state. In the labor market, it operates as a hostile or friendly partner of labor organizations, either as an individual employer or as an employers’ organization set up for the purpose of collective bargaining. In the commodity market, it operates as an individual entrepreneur, as a cartel, as a combine, or as a trust for fixing prices, sales, and purchasing conditions. In the state, business is organized in trade associations or estate associations for influencing the state’s economic or financial policies. Business is in that case a political pressure group, which also elaborates machinery for advising and protecting its members and making their life within the increasing complexities of state regimentation more bearable than would otherwise be the case.
Corresponding to these three spheres of power are three different organizations, the prototypes of which are the employers’ organization for the labor market, the cartel for the commodity market, and the Fachverband (trade association) for the political organization of business. In spite of the rather rigid distinction in the organizational set up, the three types are intertwined in personnel through interlocking management. In the small and medium-sized organizations, the cartel manager is, as a rule, at the same time manager of the employers’ association and of the local or provincial Fachverband.
This political organization of business was developed on a dual basis, territorial and functional. The territorial units were the chambers of industry and commerce (the chambers of handicraft), which were organizations under public law, in which membership was compulsory and the dues were collected like taxes. They possessed a considerable amount of self-government, and were supervised like any corporation under the public law, by the relevant state ministry. The officials of the chambers were elected by the members. The chambers represented the business in a particular territory, the president usually playing a considerable role in municipal life and in the organization of the stock exchange. The chambers were united in regional associations, which, however, had no public character, but were entirely private organizations—with the exception of the association of the handicraft chambers. The central organization of the chambers of industry and commerce in Germany was called the Diet of German Industry and Commerce. It was thus a so-called Spitzenverband,1 that is, a top or holding organization, composed not of individual members, but of other, lower-ranking organizations.
The territorial organizations, were, therefore, the concern of every businessman. Whatever the size of his plant, he was accepted in the chambers, formally at least, on a basis of equality. His voting power was not in proportion to the size of his enterprise, and he could even play some role in the chamber, in some committee, as a publicly recognized expert before courts or administrative tribunals, and so on.
The real power of the political business organization did not, however, lie in the territorial, but rather in the functional division. Handicraft, agriculture, industry, trade, banking, and insurance were each organized in so-called Spitzenverbänden, composed of many affiliated associations. The most powerful among them was the Reichsverband der Deutschen Industrie, the Federal Union of German Industry, which, like most other Spitzenverbände, was founded in 1919 (3 February) as an attempt to safeguard business interests in what appeared to be a world torn by social revolution. The charter states that the Federal Union of German Industry is ‘the representative of German industry in all questions of business and economic policy, and that it is in close collaboration with the federal union of German employers’ organizations which is the representative of German industry in all social and socio-political questions.’ It arose from the fusion of two industrial organizations, the Central Union of German Industry, founded in 1876, representing heavy industry, and the very ably led League of Industrialists, founded in 1895 and more or less identified with the light or processing industries. During the First World War, these two organizations came together in the war committee of German industry which, from 1918, was supported by the German industrial council. The composition of the Reichsverband was a mixture of functional and regional principles, but its largest affiliates were the so-called Fachverbände, amounting to 1,500 in 1931, which were embraced in 28 functional groups. But the union also incorporated individual entrepreneurs (1,400 in 1931) and very powerful territorial pressure groups such as the Bavarian union of industrialists, the association of Saxon industrialists, and, above all, the association for safeguarding the common economic interests of the Rhineland and Westphalia, popularly known as the ‘long-name association.’* The Fachverbände, representing the kernel of the Spitzenverbände, were, in turn, the composite of many lower and smaller units. Each of them was, in fact, a network of many lower functional units. The size and significance of the Federal Union of German Industry may be gathered from the diversity and size of its organs. Besides the members’ assembly, there was a Hauptausschuss or main committee, composed of 200 members, a directorate of between 205 and 220 persons with a presidency consisting of between 30 and 36, and a senate. The presidents were successively Dr. Sorge of the Krupp directorate, Dr. Duisberg of the dyestuff trust, and finally, Dr. Krupp von Bohlen and Halbach. The Reichsverband provided a number of services for its members, dealing with questions of economic policy, tariffs, imports, exports, money, finances, and reparations. One of the most important services was offered by the Kartellstelle, or cartel department, which functioned as an advisory and co-ordinating agency for all cartels, furnishing them legal and economic advice, working out master cartel agreements, and perpetually gearing the propaganda machine to the policy of the marketing organizations. The political organization of German business under the Weimar Republic was thus an imposing edifice, extending into almost every economic activity.
PROPERTY OPERATES IN THE:
LABOR MARKET
COMMODITY MARKET
(Marktregulierende organizations)
STATE
(Standes organizations)
There was a very clear-cut division of labor between the political organizations and the employers’ organizations. The employers’ organizations were also organized in Spitzenverbände, five important ones, their leadership being vested in the industrial Spitzenverband of the employers’ organizations, namely, Die Vereinigung der deutschen Arbeitergeberverbände (the union of German employers’ organizations). The employers’ ‘peak’ associations were not bargaining associations as such, since according to German law only labor-market organizations, composed of individual members, had the right to bargain collectively.2 The union of German employers’ organizations was thus a co-ordinating agency for all employers’ associations in industry, advising them, working toward a common policy against the trade unions, and even offering the members financial protection against strikes by a strike-insurance corporation. The charter of the Federal Union of German Industry, which we have already mentioned, makes it clear that the two industrial peak organizations, one concerning the labor market and the other political, worked harmoniously with each other.
But even that centralization of associations did not go far enough. In 1920, all the peak organizations in agriculture, industry, trade, banking, insurance, and handicrafts, with the peak employers’ organizations and some other industrial pressure groups, founded the central committee of entrepreneurial organizations (Zentralausschuss der Unternehmerverbände) in order to weld together all industrial activity in the face of the threat from the trade unions. The preceding picture will clarify the structure of German business organization.
The National Socialist structure of German business organization does not differ very much from that of the Weimar Republic. The provisional economic council, which had in reality ceased to operate long before, was formally dissolved on 23 March 1934, after a general council of economics (Generalrat der Wirtschaft) had been called together on 15 July 1933. It was a small body, having as its sole labor representative the leader of the German labor front, Dr. Robert Ley. It met several times and listened to speeches, but did not develop any activity. The council soon became obsolete because of the new political organization of business.
This new form adhered to the already existing twofold division in territorial and functional units, streamlined the existing organization, expanded it, made it compulsory throughout, and introduced the leadership principle.3 The structure of the National Socialist economic organization again rests on two pillars: a territorial and a functional one. The territorial units are once more the chambers of industry and commerce, and the chambers of handicraft, unchanged in composition. The functional units are, as before, the old Spitzenverbände, raised to the rank of compulsory bodies. The only exception is the organization of agricultural and food production, which has now a separate existence as the so-called food estate.
The basic law is that of 27 February 1934, for ‘preparing an organic structure of the German economy,’ authorizing the ministry of economics to dissolve and merge trade associations, to change their charters, to introduce the leadership principle, to take outsiders into the organizations, and to recognize the associations as the exclusive legitimate representatives of the relevant branches of trade and industry.
The first executive decree of 27 November 1934 created two new bodies. The first is the national economic chamber, the duty of which is to co-ordinate the territorial and the functional set-up. The same decree also created the working community of the chambers of industry and commerce as a peak association of the individual chambers. The chambers themselves were subjected to scarcely any change in this structure. The decree of 20 August 1934 merely laid down the leadership principle, and transferred the supervision of the chambers of industry and commerce to the federal ministry of economics.4 The 7 July 1936 reform edict of the federal minister of economics streamlined the political organizations of business that had been created in the interval, and the 20 January 1937 ruling of the ministry instituted disciplinary courts within these organizations.* These edicts and decrees provide the basic legal structure for the autonomous political organization of business. The organization is now complete.
Every businessman must be a member of the national group (functional division) and of a chamber of industry (or handicraft) (territorial division). Even public enterprises, though in Prussia these do not belong to the chambers of industry, must join relevant groups, so that some groups such as those of the banks and public-insurance corporations consist entirely of public enterprises. Only the co-operatives are exempt. We should not, at this point, neglect to observe that the cartels, as organs of the commodity market, are not incorporated into this political structure of business. The relation between the cartel and the political organization will be discussed later.
The functional division rests on seven national groups that roughly correspond to the old Spitzenverbände. These groups are: (1) industry, (2) trade, (3) banking, (4) insurance, (5) power, (6) tourist industry, and (7) handicrafts. The six national transportation groups are separately organized. The national groups are divided into economic groups, 31 in industry, 4 in trade, 6 in banking, 2 in insurance, 2 in power, 1 in the tourist industry, while the handicrafts group is subdivided into 50 national guild organizations. While the national groups correspond roughly to the Spitzenverbände, the economic groups correspond to the Fachverbände within the federal union of German industry, or within the other peak associations. This identity and continuity is never hidden; on the contrary, it is stressed in the administrative pronouncements. Following is a sample of a decree of recognition issued by the federal minister of economics.5
Decree of the federal minister of economics for the recognition of the economic group of the wholesale import and export trade, 18 September 1934.
On the basis of paragraph 1 of the act of 27 February 1934 for preparing the organic structure of the German economy, I order: (1) the economic group of the wholesale import and export trade Berlin, W. 30, Mackensen Street 10 [national association of the German wholesale import and export trade; formerly national association of German wholesale and overseas trade] is to be recognized as the sole representative of its economic branch.
The recognition decree, therefore, simply takes over the existing trade association and recognizes it as the official representative of the whole branch.
The economic groups are further subdivided into branch groups (Fachgruppen), 327 now being in existence; and these, in turn, into sub-branch groups (Unter-Fachgruppen).
The organizational principle, as can readily be seen, is horizontal, and not vertical as in the food estate. The vertical principle combines everybody who is active in the production and distribution of certain commodities, down to the smallest retailer. By the recognition of the national trade group, therefore, the old horizontal principle is maintained. While the national and economic groups are constituted by statute of the federal ministry of economics, the branch and sub-branch groups are set up at the discretion of the national group. However, since the reform ruling of 1936, it is necessary to obtain permission from the federal minister of economics for the establishment of new branches and sub-branch groups and their provincial units.
The kernel of the whole structure is the economic group within the national group. The economic groups levy the contributions and finance the national groups on the one side and the branch and sub-branch groups on the other side. The differences in size and importance among the groups are, of course, considerable. While the economic group, which covers mining (within the national group embracing industry), has only 50 members, that covering the retail trade (within the national group embracing trade) comprises about 500,000 members.
This dual structure is now organized in three strata: an upper, a middle, and a lower.
At the top there is the national economic chamber, the successor, so to speak, to the provisional federal economic council. It is composed of the 7 national groups, 23 economic chambers, the 100 chambers of industry and commerce, and the 70 chambers of handicrafts.
Closely connected with the national economic chamber is the ‘working community of the chambers of industry and commerce,’ the successor, as can readily be seen, to the diet of German industry and commerce. This working community is, in fact, inactive, but it furnishes the personnel of the national economic chamber, and the leadership of the two top organizations is identical (the president of both is Pietzsch).*
The differences between the national economic chamber and the provisional economic council are, however, considerable. Labor and the consumers, the free professions, and the independent experts are completely excluded from the economic chamber, which is now exclusively a representative of business and handicrafts and is undisturbed by any alien influence. It is true that under the Leipzig agreement6 of 1936,† concluded between the federal minister of economics, the federal minister of labor, and the leader of the German labor front, the national economic chamber entered the labor front as a corporate body, but, as we shall see later, this agreement was made merely to exclude labor from any voice in business control and regulation. In addition, the national economic chamber has been given what the federal economic council never had: executive machinery in the middle and lower strata. The most important members of the national economic chambers are the seven national groups.
The middle stratum, which is completely new, consists of the 23 economic chambers. They are composed of the chambers of industry and commerce in their province, of the chambers of handicrafts, and of the provincial economic groups. The economic chambers, therefore, also combine the functional and territorial principles. They represent all business in one province, creating a united front of business in relation to the provincial executive machinery of the state. In many cases the economic chambers are headed by the president of the largest chamber of industry in this province, and have become the decisive organs of industrial self-government since the decree of 27 October 1936. They are composed of six departments: (1) the department ‘chambers of industry,’ the co-ordinating agency for the chambers in the region; (2) the department ‘industry,’ which is the co-ordinating agency of the economic branch and sub-branch groups in the national group covering industry on the provincial level; (3) the department ‘trade,’ where the four subdivisions, retail, wholesale, import and export trade, agents and peddling trade, are of greater significance than the department itself; (4) the department ‘tourist industry’; (5) the department ‘handicrafts chambers,’ acting as the coordinating agency of the chambers of handicrafts in that province; (6) and finally, the provincial clearing office, which has assumed major significance, and which has a decisive influence on the distribution of public contracts among the members of the economic chambers. As a rule these clearing offices are directed by the president of the economic chamber and supervised by governmental commissioners. Each of the departments is presided over by a director, who is assisted by a council and acts through a manager; this manager is generally an industrialist who is the leader of the provincial group.
Side by side with the economic chambers are the provincial organizations of the economic groups (220), the branch groups (180), the sub-branch groups (270), the handicrafts, and the provincial guild organizations.
At the bottom are the chambers of industry and commerce (100), the chambers of handicrafts (70), the local bodies of the groups when such exist, and the guilds for handicraft.
The following chart clarifies this organizational set-up.
This whole structure is run in accordance with the leadership principle.* The leaders of the national economic chamber, of the economic chambers, of the chambers of industry, of the national groups and of the economic groups are proposed by the national group and appointed by the federal minister of economics, while the leaders of the branch and sub-branch groups are proposed by the leader of the economic groups and appointed by the leaders of their national groups. The members of the groups have to obey the orders of their leaders, and the leader of the economic group, as the central agency, can mete out disciplinary punishment to members breaking the law.
As in the political sphere, so in this economic activity the leadership principle is merely a euphemistic way of describing a centralized bureaucratic body, run on authoritarian principles. The leaders, mostly important businessmen, as we shall have occasion to see later,† do not, of course, manage the whole business; the groups are run by managers who often are, in fact, the actual directors. Each of the leaders is surrounded by an advisory council composed of the group leaders, the presidents of the chambers of industry, representatives of the food estate, of the municipalities, and of the transport organization. Members’ meetings no longer play any role, since the decree of 4 March 1935 permitted the leaders of the superior group to dispense with such meetings if the advisory council thought it appropriate.
THE AUTONOMOUS POLITICAL ORGANIZATION OF GERMAN BUSINESS
(Groups and Chambers—Except the Food Estate)
UPPER
MIDDLE
LOWER
This, in brief outline, is the autonomous political organization of German business as it had been shaped prior to the outbreak of the present war. From a juristic point of view, the organizations have a twofold task, as does every self-governing body in German law. They carry out genuine functions of self-government and they also carry out state functions that are delegated to them by the public authorities. Whether it is a municipality or a chamber of industry or a group, each operates in a twofold capacity: as a self-governing body and as an organ of the state.
This political organization of business faces in three directions: toward the commodity market, that is, the business activities carried out by individual enterprises, cartels, concerns, and trusts; toward the labor market; and toward the state.
The chief organ of the war economy is Göring. The two most important agencies are the Four Year Plan Office and the General Commissioner for Economics (Funk), who controls the whole economic life, except the armament industry. Funk, therefore, is not only minister of economics but at the same time is the chief of the ministers of labor, finance, food, and forestry. Prior to the outbreak of this war, the ministry of economics had no provincial and local executive machinery of its own. This defect has been remedied by the ‘decree on the administration of the economy’ of 27 August and 28 November 1939. It creates regional and executive machinery of the ministry of economics.
The general commissioner for economics has created Führungsstäbe der Wirtschaft, leadership staffs for the economy, which are attached to the provincial presidents in Prussia and to the federal regents and state ministries in the other states. These leadership staffs co-ordinate all activities in the realm of economics (outside the armament industries proper) and are made superior to the regional organizations of the ministries of labor, food, forestry, to the economic chambers, to all regional bodies of the groups and handicraft associations, and to the chambers of industry and handicraft. While the Führungsstäbe are mere co-ordinating agencies, the very same decree now creates a regional and local set-up for the ministry of economics in the eighteen Bezirkswirtschaftsämter (regional economic offices) and the local Wirtschaftsämter, primarily concerned with the rationing of consumers’ goods.
The leadership of these eighteen offices has been entrusted to various officials, such as the Prussian provincial presidents, federal regents, or sub-provincial presidents. These provincial economic chiefs, who also head the Führungsstäbe, are subordinates of the minister of economics, may issue orders to all public authorities belonging to the middle stratum, to the groups, and to the chambers of industry and of handicrafts. The provincial economic offices form a part of the office in which they have been established. Thus no new organization has been set up, but the old machinery is utilized. The eighteen provincial economic offices can direct the whole economic activity in their province. This authoritarian trend has been facilitated by the creation of federal commissioners for each chamber of industry and commerce, and by the power of the minister of economics to delegate to the chambers any activity that he thinks suitable. Federal commissioners are subject to the commands of the provincial economic chiefs. Legally, therefore, there is now a complete centralization of the whole economic administration. The federal commissioner for economics is superior to the ministers of economics, finance, labor, food, forestry. He operates in the eighteen districts through the provincial economic offices, as well as locally through the federal commissioners of the chambers of industry and commerce.
But the decree goes still further. It creates, in addition, provincial food offices (Landes- or Provinzernährungsämter), set up in the offices of the supreme organs of the various states (in Prussia, in the office of the provincial presidents), and also subjects the whole food estate to the commands of the federal minister for food and agriculture. The same authoritarian organization is carried out in forestry by means of provincial forest and timber offices.
At the bottom, the same process is repeated.
The first executive decree (27 August, 22 September 1939) defines and clarifies the extent of power vested in the new organizations, the eighteen economic offices. They are made subject to various federal organs and may give orders to the following organizations: the state mining agencies; the economic chambers, including their clearing* departments; the chambers of industry; the chambers of handicrafts; the provincial groups (national, economic, branch, and sub-branch groups); the federal offices for foreign trade; and the currency offices. They are called upon to secure production, to protect indispensable trades and handicrafts, to co-operate in safeguarding the supply of electric power, to execute measures concerning the consumption of coal, oil, rubber, textile materials, and soap, and to organize the collection of used materials. The same decree makes the presidents of the chambers of industry and commerce federal commissioners for the chambers, which are thus transformed into executive agents for the whole field within the jurisdiction of the provincial economic offices.
It is evident that the most important agency in the state organization is the federal ministry of economics. Since February 1938, its chief has been Walther Funk, who is also president of the Reichsbank. The ministry is divided into five main departments.†
Parallel to the ministry, and in some ways still more important, is the office of the Four Year Plan, headed by the marshal of the grossdeutsche Reich, Hermann Göring, who, in this capacity, has the title of general deputy for the Four Year Plan. The Four Year Plan office carries out its functions partly within the ministry of economics, partly through general deputies (Generalbevollmächtigte) for specific branches of trade and industry, and partly through its own office.
This office was originally (in 1936) the central agency of a preparedness economy, a kind of planning organization. It has transferred most of its functions to other agencies and is now primarily concerned with two tasks: the rationalization of specific branches of German industry—which is mainly carried out through the general deputies—and the gaining of key economic positions for the party (such as the Hermann Göring works). Göring has appointed Funk as the supervising agent for the whole field of rationalization.
The general deputies are primarily organs for raising the efficiency of a specific trade, by recommending measures of rationalization, standardization, and reorganization. The most important are: the general deputies for power (at present Mayor Dillgardt of Essen, who is at the same time leader of the national power group No. 5); for motor vehicles (at present Colonel v. Schell); for machine production (at present Karl Lange, manager of the V.B.M.A. under the Weimar Republic and also manager of the economic group); for special functions in the chemical industry (at present Professor K. Krauch, member of the board of managers of the Dyetrust); and for iron and steel (Lieutenant General von Hanneken, also chief of the main department 11 of the ministry of economics).
There is also a special deputy for building construction, whose function is wider than those of the other deputies. As early as 9 December 1938 Göring appointed the inspector general for German roads, Dr. F. Todt, ‘general deputy for the regulation of building constructions.’7 (Dr. Todt is also munitions minister.)* His task was to adjust the civil building construction to military needs and to carry out such measures as were necessary to increase the efficiency of the building industry. He has very wide powers, and is also authorized to allocate building materials (iron, timber, cement) and to establish a system of priorities. The rationing of building materials has been simplified by making certain central offices quota offices. This means that the labor front, the labor ministry, the ministry of communications, and so on, are, as quota offices, entitled to receive supplies of building materials for their affiliated organizations and enterprises. If, for instance, a steel manufacturer wants to start building construction and needs building materials, he has to apply to his quota office, that is, in this case, the federal ministry of economics, main department number 11.
The general deputy for the building industry also operates through regional deputies (21), who, according to the decree of 30 December 1939, are entitled to demand information from all public and party authorities. The general deputy for the building industry also appoints confidential officials in certain lower-ranking territorial units.
The supply of raw materials and the establishment of priorities have been completely taken away from the Four Year Plan office and transferred to the ministry of economics, which, for this task, has set up Reichsstellen for specific branches, based on the decree on commodity exchange (Warenverkehr) of 18 August 1939, which in turn had originated in ‘supervisory boards’ for imports and exports, based on the decree of 4 September 1934. The Reichsstellen are federal agencies, with legal independence, financed by fees or permanent contributions that the industries concerned have to pay for specific activities. They are headed by a federal deputy (Reichsbeauftragter). They are, to repeat, solely concerned with rationing and thereby also with foreign trade.
Some examples may clarify the nature of their task.
By a decree of 13 August 1934, a ‘supervisory office for iron and steel’ was created, which is now a Reichsstelle.8 The ‘federal agency for iron and steel’ may issue orders for the registration of material. It may regulate production and issue a number of restrictions. The orders of the Reichsstellen are numbered. They fall into four categories, the most important of which are the so-called ‘directives,’ which establish quota systems. The directive number 25 of 25 January 1940 contains a codification of this quota system creating various types of quotas, and defining the bodies that act as quota agents. In this case, it is primarily the economic groups that are the quota agents. A steel industrialist who needs iron or steel or any other material has to submit his demand to his economic group, which then decides whether or not he is to receive the supply.
There is a similar agency for paper,9 created in September 1934 as a supervisory agency, now simply a Reichsstelle. This federal agency began as an office for restricting the import of cellulose, but of necessity it soon became an agency for the complete control of imports and of production. It issues regulations for purchasing, processing, packing, and for the collection and utilization of old paper and packing material. It has, since the outbreak of the war, attached all paper stocks. It has finally caused the whole paper industry to organize into eight cartels. With the consent of the federal minister of economics, two ‘war deputies for packing and paper material’ have been appointed.
There are at present 31 Reichsstellen, 25 of them in industry proper.
Since the scarcity of raw materials was the most important problem of the German economy prior to this war, and, is especially so during the war itself, the function of the Reichsstellen has assumed paramount significance. They are the most influential federal offices for organizing specific branches of industry, and for war needs, especially for rationing of raw materials and for establishing a priorities system. But the Reichsstellen have no executive organs of their own, and they could not cope with the enormous amount of work involved. Since the fall of 1939, they have therefore begun to set up the so-called Verteilungsstellen or distributing agencies. The task of the agencies is to carry out the rationing system within each specific industrial branch—that is, to allocate to the various industrial enterprises such raw materials as may be needed and are at hand.
In the fall of 1939, the Reichsstelle for the coal industry created twelve such distributing agencies, corresponding to and having the same personnel as the twelve coal syndicates. The coal syndicates thereby became the distributing offices, determining how much coal is to be allocated to each consumer.10
In the paper industry, the Reichsstelle operates, as we have seen, through two war deputies, but also through the numerous distributing agencies, which are here, too, identical with the cartels,11 so that we have a complete identity between the business organization of the paper industry (the cartels), the political organization of the paper industry (the branch groups), and the state agency for allocating paper (the distributing offices).
The set-up in the textile industry is somewhat different. In this industry there are six such Reichsstellen, which, however, are coordinated by a ‘special deputy for yarn.’ The six Reichsstellen have also set up distributing offices, but in this case the Reichsstellen could not fall back upon the cartels, since there are practically no price cartels. Because of this, the branch and sub-branch groups have been made distributing agencies.12
WAR ORGANIZATION OF THE GERMAN ECONOMY
Decree 27 Aug./28 Nov. 1939
In the battery industry, too, the battery cartel has simply been made the distributing office.
Preceding is a chart of the rather complicated war-time organization of German economic life.*
In this section, we have been concerned solely with the autonomous organization of business in its political aspects and with the structure of the state organs for the regulation of economic life. We have rigidly excluded the structure of German business in its business activity.
The autonomous organization of German business rests, as we saw, on two pillars, territorial and functional, both of which are united at the top in the national economic chamber and in the middle in the 23 economic chambers. The controlling influence of the state is vested in the general commissioner of economics, the ministry of economics, the Four Year Plan office, the new provincial, and local economic and food offices.
This structural analysis tells us little about the actual functioning of the economic machinery. Nor does it reveal whether markets still operate, how extensive is the actual influence of the state, and in whose interest the machinery operates. All these questions are basic.
In theory, the state has unlimited power. It could legally do almost anything; it could expropriate anybody. If we take such legal pronouncements at their face value we shall indeed gain the impression that Germany is a state-capitalist country, in spite of the fact that we have not yet even mentioned the control of labor, of investments, and of the currency. But law, like language, does not always express reality; it often hides it. The more obvious the contradictions in a society, the more the productivity of labor increases, the more the monopolization of society progresses—the more it is the function of law to veil and hide the antagonisms until it becomes almost impossible to pierce through the mass of words. Yet this is exactly what must be done.
* See also p. 403.
* See also p. 49.
* See below, p. 425.
* See below, p. 390.
† See below, p. 416.
* See also p. 83.
† See below, p. 388.
* See p. 245.
† See below, p. 371, on its composition.
* Now also minister for electric power.
* On price control see p. 305; on profit control see p. 316; on control of foreign trade and exchange see p. 327.