Economic History Case Studies: Weimar Germany (1923)

“[E]ntering into debt distress is often a painful process, which may threaten macro-economic stability and set back a country’s development for years. Supporting member countries in managing debt risks and resolving debt distress is therefore at the heart of the IMF’s work. This work takes multiple forms.”

“Countries with high debt vulnerabilities need to tackle them through a combination of adjustment and measures to restore growth. An IMF-supported program can facilitate that adjustment, but the IMF can only lend to a member if its debt is sustainable. There are cases where debt is unsustainable, even taking the adjustment efforts into account. If a member country enters into debt distress, only the country’s government can decide whether to solve this by negotiating a debt restructuring with its creditors.”

-Summarized International Monetary Fund (IMF) Description of Sovereign Debt Restructuring

There is an American idiom in the English language which reads:

“Politics makes strange bedfellows.”

While the origin of this term is actually Jeffersonian, its significance remains relevant to Hamiltonian Federalist Socialism. The meaning of the idiom claims that people from different political ideologies are incapable of finding Solidarity on the basis of common interests. The so-called “Political Left” is said to be against the so-called “Political Right,” the Political Right apparently meant to be against the Political Left. The Left and the Right are radicals, while the so-called “Political Center” are moderates, the ones allegedly claiming to be the most reasonable.   

One probably knows how this Left-Right Political Spectrum works. The “Left” has Communism, Socialism, Anarchism, Statism, and Environmentalism. The “Right” has Fascism, Traditionalism, Ultramontanism, Nationalism, and Conservativism. The “Center” has Liberal Capitalism, Monarchism, Authoritarianism, and Militarism. If one wanted to deter Hamiltonianism, what better way than to frame everyone as “Leftists,” “Rightists,” or “Centrists?”

Jeffersonianism has factions devoted to Social Liberalism (“Progressivism”), Economic Liberalism, Liberal Conservatism, and Classical Liberalism (“Libertarianism”), followed by “Liberal Socialism” (Read: Welfare Capitalists) and “National Capitalism” (Read: Liberal Nationalists). Parliamentary Democracy suits them as a Democratic-Republican Party split into two parties, “Democratic” and “Republican,” up to and including Federal government shutdowns.

Hamiltonianism needs comradeship forged by a United Front of nine ideologies to form a tenth.

  • Its Nationalism relies on Socialism to fully express Nationalism in the economic sense, its Socialism relying on Nationalism to fully express Socialism in the political sense.  
  • Its Traditionalism needs Environmentalism to promote more traditional ways of living just as its Environmentalism needs Traditionalism to promote more natural ways of living.
  • Its Statism needs Ultramontanism to recognize distinctions between the Catholic Church and the Federal government, its Ultramontanism employing Statism to recognize distinctions between the Federal and State governments.   
  • Its Anarchism professes the sovereign individual unbeholden to Monarchists and its Authoritarianism professes the sovereign individual unbeholden to Anarchists.
  • And its Conservatism stresses revolutionary innovations and cultural rejuvenations, rebalancing the other eight to create “Hamiltonian Federalist Socialism” while promoting strong families, tight-knit communities, fiscal discipline, national defense, law and order.

Rather than fall for the Democratic-Republican propaganda that proclaims “Democracy makes strange bedfellows,” Hamiltonian Federalist Socialism professes:

“Democracy never turns bedfellows into complete strangers.”

Even the unlikeliest of alliances are often forged on the basis of common interests. Such alliances will remain valid so long as the common interests remain mutual between opposing political orientations. Practically anything can unite people of differing political views in the pursuit of a United Front. All one has to do is reject the Left-Right Political Spectrum and know where to look. And if one is still unsure, always remember that the Left-Right Political Spectrum ends with the sudden realization that every nation is united by its own Currency, regardless of time or place.

This was precisely the case for a Blog Post entitled “Wanderers into the Void.” The Blog where I found it, ARPLAN, takes its name from the Soviet “Arbeitsgemeinschaft zum Stadium der Sowjetrussischen Planwirtschaft” (Working-Community on the Study of the Soviet Russian Planned Economy). It offers a window into understanding why there were German Communists from the KPD pursuing questionable decisions to align themselves with “German Fascists,” up to and including the Pan-Germanic Socialists from the infamous NSDAP. I say “Pan-Germanic Socialists” instead of ‘National Socialists’ (or even ‘Nazis’ for that matter) because they do not deserve that title anymore after what Adolf Hitler had done to Germany for twelve years. One does not have to live in Weimar Germany to realize why Hitlerism must be condemned; some critical and creative thinking is required to grasp the meaning of this Post, however.   

“On January 11th, 1923, massed ranks of French and Belgian troops marched through the demilitarized Rhineland into the Ruhr Valley. “We are fetching coal,” announced the French Prime Minister Poincaré, and that, at least on the surface, provided the official justification for the aggressive occupation of the Ruhr. Germany had repeatedly defaulted on the reparations payments demanded of it by the Treaty of Versailles; France was due 200,000 metres of telegraph poles and several million Gold Marks worth of coal; and so 70,000 foreign soldiers trooped into Germany’s industrial heartland.

The German people, however, suspected that more cynical motives were driving the Gallic engineers and administrators who were now, under military protection, seizing German resources for forcible export to the West. Poincaré’s loathing for the German nation was infamous, as were French territorial ambitions on the Rhineland; in the eyes of many Germans the true purpose of the Franco-Belgian action was not to ‘fetch coal’ but to permanently cripple and dismember the wounded body of the German nation.

Ironically, the attempt by France and Belgium to weaken the nascent German Republic instead created a united front of resistance through stoking the fires of German nationalism. There is no more effective means of inflaming a wave of patriotism than a foreign invasion, particularly in a nation already suffering from the humiliating wounds of surrender, war debt, political instability, and mounting hyperinflation. The immediate consequence of the occupation was the rallying together of those segments of German society which, up until the noise of French and Belgian boots tramping along Rhenish roads reached their ears, had been at one another’s throats.

Centre-right Reichschancellor Wilhelm Cuno declared his support for a campaign of local passive resistance. German industrialists refused to deliver demanded consignments of coal. Social-Democrats organized strikes and demonstrations. Unions joined with employers’ associations to raise funds for workers engaged in industrial actions. And the radical nationalists – Freikorps veterans, völkisch activists, and patriotic Verbänden, often supported clandestinely by the army – engaged in acts of violent reprisal, retaliating against massacres, arrests, and house searches conducted by French occupation forces with their own acts of sabotage, assassination, and terrorism.”

What compelled the “Communists” to briefly align themselves with the “Fascists?” Was it really just the death of one man or was it something that affects all of humanity? 

“On May 9th, 1923, one of these nationalist radicals was sentenced to death by a French military court for his part in blowing up a railroad bridge. The execution on May 26th of this Ruhrkampf saboteur, Albert Leo Schlageter, resulted in his ascension to martyrdom status, becoming a symbolic hero of German resistance – not only for nationalists and the broader right, but, in a strange twist, also for the communist movement. Schlageter’s death and his subsequent celebration by the Communist International ushered in a brief, but vibrant and bizarre, period in the history of German communism – one characterized by open, unapologetic nationalist-communist collaboration and the Communist Party of Germany’s (KPD) official adoption for the first time of an openly National Bolshevist stance.

Schlageter was an unusual figure to receive the acclaim of the international Marxist movement. A decorated WWI soldier, a veteran of the Kapp Putsch and the Freikorps campaigns in the Baltic and Upper Silesia, a participant in the crushing of the ‘March uprising’ workers’ revolt, a clandestine arms trader, and a National Socialist political organizer – Schlageter, on the face of things, was the personification of everything the communists claimed to be fighting against.”

This United Front of theirs, however brief it was, came into being because of the perceived threats of Sovereign Default caused by Sovereign Debt and Currency Devaluation caused by Currency Depreciation. Nobody enjoys a Sovereign Default and Currency Devaluation, not even the Liberal Capitalists. People got desperate, which is exactly what happened in Weimar Germany:

“The ‘Schlageter line’, as this new course came to be known, was not the first instance of German communists pursuing a National Bolshevist strategy – nor would it be the last. It was the first, however, to have the official sanction of the Communist International. The Rote Fahne (‘Red Flag’), the KPD’s central party organ, had only a month earlier declared in its pages that “every single worker must be summoned to fight against fascism, against the united front of the exploiters”. Now, in a remarkable about-face, its editorial stance was transformed. Radek’s speech was published by the paper with glowing praise, and Radek himself was given the opportunity to write multiple articles defending and advocating for his position. After some initial murmurings of resistance the Schlageter line was soon picked up by almost the entirety of the Party leadership, with the Politburo presenting a united front in their backing of the radical new strategy. These prominent figures of German Bolshevism joined Radek in urging the proletariat to “concentrate the fire of propaganda on the Schlageter line” through embracing and converting those fellow Germans of “honest national enthusiasm.”

The adoption of this new course prompted a vigorous response within the German communist movement. Instructions were passed down to Party branches to organize discussion circles with nationalists and Freikorps veterans, activities which were taken up with particular enthusiasm by members of the Young Communist League. Nationalists addressed communist gatherings. Communists addressed nationalist gatherings. Links were forged between communist and nationalist paramilitaries. Weapons were trafficked from Right to Left- and vice versa. Joint meetings between the competing camps were organized and advertised; for a while Germans were treated to the striking sight of posters emblazoned with both the Soviet star and the völkisch swastika. The KPD was determined to show the nationalists that it shared their struggle, that their revolt against the West and the Weimar Republic was best served through joining the revolutionary proletariat under the red banners of the hammer and sickle.

This situation led a number of communists into some remarkable situations. Radek, in his Schlageter oration, had described the martyred nationalist as a “wanderer into the void”. Yet in the chaos thrown up by the Schlageter line it was the communists who became the real wanderers into the void – sleepwalkers stumbling through a foreign land, lost in that foggy, liminal space where fascism and communism blur together indiscriminately. To call the völkisch to their side, to prove to them that Marxism truly did represent their best interests, the communists ended up taking positions that many would later find deeply embarrassing.”

Rather than cast doubt on the sincerity of the Blog’s author, one ought to question why Antisemitism in the German-speaking world took on economic undertones. One must understand that Sectarianism was a major social problem in the German-speaking world in those days. The Secularism of the Liberal Capitalists had only worsened the Sectarian sentiments, and the KPD knew that it had to find ways to deal with the social problems of Antisemitism.

“Yet in this period Hitler was not the undisputed Führer [t]hat he would later become. His movement still had little purchase outside of Bavaria, and in Germany’s völkisch camp he was merely one sectarian leader among many. Hitler would not bring his Parteigenossen into any movement of which he was not the leader or which he could not control – he had even forbidden National Socialists from participating in the nationalist-revolutionary terrorism in the Ruhr, although that had not discouraged members like Schlageter (nor did it discourage the NSDAP from later venerating Schlageter as a martyr). Some individual National Socialists did attend joint nationalist/communist meetings and collaborate with KPD activists, but they did so without official sanction.

Interest in the Schlageter line came not from the NSDAP but rather from other high-profile figures of German nationalism, such as long-time völkisch politician Count Ernst zu Reventlow. Reventlow, a nobleman with a background in the Imperial Navy, had a history of involvement in nationalist and anti-Semitic politics dating back to the late 1800s. By 1923 Reventlow was one of the leading lights of the German Völkisch Freedom Party (DVFP), which had originally splintered from the bourgeois-nationalist German-Nationals and was at that time the country’s largest and most prominent racial-nationalist political party. Reventlow’s strong anti-capitalist sympathies later led him to leave the stolid DVFP for the more overtly socialistic and dynamic NSDAP, and it was these instinctive National Bolshevist tendencies which drew his interest to the KPD’s new strategy of fascist-communist collaboration.

While there is an erroneous tendency nowadays to regard the socialism of National Socialism as either a hoax or an illusion, Reventlow’s convictions were passionately-held and taken as seriously by his enemies as by his admirers. Reventlow’s speeches and writings were primarily concerned with addressing the problems and conditions of industrial workers, and he made his name – whether as a member of the DVFP or NSDAP – with his distaste for capitalism, his advocacy for reform, and his support for a military alliance with Bolshevist Russia. According to those who knew him, he was one of the few völkisch speakers whose speeches would receive a universally friendly response from the working-classes. Reventlow too seemed to carry at least some level of respect from activists of the Left; meetings he held were rarely (if ever) disrupted by the Red Front or Reichsbanner, and as a member of the Reichstag he got along comfortably with communist and socialist deputies.

Reventlow’s social-revolutionary credentials ensured he was open to the idea of communist-völkisch collaboration, and he certainly agreed with communist assertions that German nationalists had far more to gain with a foreign policy that supported Soviet Russia than with one which involved mindlessly falling behind the Western ‘plutocracies’. Reventlow not only wrote a response to Radek’s Schlageter speech in his own newspaper Reichswart (‘Guardian of the Reich’), but in late August 1923 he and communist journalist Paul Frölich published a number of articles within the Rote Fahne debating back-and-forth the relationship between nationalism and revolution.

Ultimately, however, Reventlow’s wariness towards the KPD prevented him from offering unreserved support to the communists. While he welcomed the opportunity he had been given “to disseminate völkisch-soziale ideas among Communist idealists”, he could not allay his distaste for the Party’s many Jewish leaders- nor could he shake the suspicion that the Schlageter line was in reality merely a cynical bluff intended to trick nationalists into supporting a party that would ultimately subordinate their country to rule from Moscow. Reventlow in the end, like so many national-revolutionaries with anti-capitalist convictions, concluded that the cause of national and social liberation had no real future in a movement which took its marching-orders from an alien power.”

Again, people living in Weimar Germany were desperate in 1923. If one cannot comprehend this, instead trying to be a Jeffersonian by confusing ideologies for “theologies” (a natural consequence of Secularism), then they will never comprehend what the International Monetary Fund (IMF) really mean by “Sovereign Debt Restructuring.”

Are there any lessons that we can probably infer from this ARPLAN post? Anyone can become desperate when overburdened by Debt. There is a reason why I call Debt as “Schuld” because of how it also inflicts ‘a sense of guiltiness’ through the process of Kapital Accumulation. People are indebted all the time under Liberal Capitalism and they will literally do anything to get rid of their Debts. Weimar Germany is just one among many different examples of this. It was certainly not the last, as countries like Russia, Thailand, Argentina, Greece, Lebanon, and Zambia can all attest.

“Although nationalist sentiment among the German proletariat could be quite powerful, many rank-and-file communists were as suspicious of the new strategy of collaboration as the “Fascisti”. Regardless of which strident announcements were printed in the Rote Fahne or what abstract theoretical concepts were discussed and lectured on by their intellectuals, ordinary communist workers could not so easily put aside years of class conflict to embrace those they had always seen as their enemies. They were never as eager or willing as their leaders to become wanderers into the ideological void.

The nationalists, too, had considerable difficulty taking KPD assertions at face value. Those nationalists who had joined hands with the communists had assured their erstwhile enemies that they would join them wholeheartedly in their battle against capitalism and imperialism if they got rid of their Jewish leaders. This, of course, never happened – it never could have happened. Radek, the architect of the National Bolshevik strategy, was Jewish. Many eminent KPD leaders were Jewish. Even if, somehow, these had been sidelined or removed from the Party, the KPD purified and made purely German, the problem still would have remained that many of the Russian leaders were Jewish. Marx was Jewish. Bolshevism, in the eyes of “the gentlemen of the völkisch camp”, would always be innately Jewish. This was an insurmountable obstacle.

The end-result of this ingrained mutual distrust was a kind of political schizophrenia. While communist leaders engaged in a civilized exchange of ideas with their nationalist counterparts, violence on the streets continued to escalate. In part this dichotomy was borne out of the difficult position the KPD had placed itself in: on the one hand it was trying to appeal to nationalists by carrying out Radek’s Schlageter line, while on the other it was still trying to win over those workers in the camp of the Social-Democrats (SPD). In part the dichotomy was also caused by the growing strength of the NSDAP, especially in Bavaria. Not only did the National Socialists recruit from the same working-class constituency as the communists (often with great success), but their refusal to engage with the Schlageter line meant that they were not party to any kind of nationalist-communist truce.”  

He who does not know the history of other countries is condemned to repeat the same mistakes in their own country. The consequences alone are deadlier than the worst of Sovereign Defaults and Currency Devaluations. Further investigations into “Pan-Germanic Socialism” and “National Bolshevism” remain forthcoming on The Fourth Estate. Solidarity has to become something more than just a simple buzzword; it must be a way of life, applicable to the entire nation-state.



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