The Labor Problem In Germany

By Alfons Goldschmidt

Before the Hitler regime, Germany was the classic country of labor organization. Not only from the point of view of numbers, but of form and methods, the workers’ organizations served as models for workers’ movements in other countries. Organization into labor unions as well as into labor parties was, with some interruption, growing steadily for decades, and reached an enormous volume after the war. The members of the general German league of unions increased from a little more than 2,000,000 in 1914, to almost 8,000,000 five years after the war. The drawing up of trade union agreements between the workers and employers became so common in Germany that the number of those contracts grew from 7,819 for 107,503 factories with 1,120,000 men in 1918, to 10,768 contracts for 890,237 enterprises, with about 14,500,000 employees. In the last years before Hitler no important industrial undertaking was made outside of these agreements. The solution by arbitration of differences between employers and employees played a decisive role in the policy of both sides. Strikes, lock-outs, and all the principal problems of labor were settled in this manner.

But this was not a quiet development. The struggle for unions and union rights was very difficult, and the way toward a strong position of the unions was paved with thousands of victims. That the influence of the union system did not cover the demands and necessities of Germany’s labor became more evident during the war, when the growth of unions ceased, due to military economic centralization, and after the war when a system of labor councils in the factories was established by law to give the workers a more direct influence in and control of industrial conditions. Of course, these labor councils never became an effective instrument of the labor movement, nor a strong complement to the unions, but were utilized by the unions to organize workers within the plant.

The old theoretical struggle within the unions and the Social-Democratic Party of Germany about the necessity and the opportunity of a general strike was not solved before the war; but after the war during the “Kapp Putsch.” Then the main question at issue in this struggle, namely, whether the unions should merely be a weapon for the improvement of the economic conditions of the German workers or, ultimately, a political weapon too, was answered by the fact that the workers’ parties and the unions faced the danger of being entirely destroyed. Therefore immediately after the beginning of the reactionary “putsch” the general strike was proclaimed and served effectively. Thus the first reactionary uprising after the war was broken down.

But the economic crisis of Germany, especially the increase of unemployment after 1929 to about 9,000,000 out of work and the millions working only some few hours during the day, became so threatening that the opposition within the unions and parties and from outside of the unions grew against the union policy of the reformist leaders. The re-establishment of the political and administrative power of the Social-Democratic Party in 1928, backed by union leaders and some lower functionaries, proved to be a hindrance to a more decisive course of labor against the rapidly organizing forces of reaction, and especially the Hitler movement. I believe for my part that the various offers by the Communist Party of Germany to the leaders of the Social-Democratic Party to act in common were rejected by the Social-Democrats especially because of the restrictive influence of hundreds of thousands of Social-Democrats holding positions in public and semi-public administrations. The more gigantic the volume of the Socialist unions and Party became, the weaker became the will of the reformist leaders and office-holders.

In this atmosphere, the reactionary pre-Hitler German government could plan to stabilize Germany’s capitalism on the basis of the unions; to make the unions, so to speak, a firm ground for profit calculation even after this calculation had been shattered by the crisis. It was no longer possible for any industrial enterprise in Germany to plan its business for more than some weeks or months ahead. Although the calculation-destroying inflation was over, the period of deflation did not bring the slightest security to German capitalism. No balance existed any more.

Under such conditions the pre-Hitler government was ready to work together with the unions, that is, to grant the workers a certain degree of social security on the basis of reduced wages, hoping to stabilize profits through long-term trade union agreements. This is one way for capitalism to avoid an entire collapse temporarily.

Under the Bruening government a law was passed which cut wages by 10 to 25 per cent. All the reformist union leaders agreed with the measure and fought in the unions to maintain it. This was their first step in aiding fascism and helping finance-capital in Germany to overcome the crisis.

It is characteristic that one of the most important members of the Nazi party, Gregor Strasser, who was murdered by his former friends in June, 1934, was in favor of an alliance of Germany’s reaction with the unions. Those hesitations, the conservatism of many Socialists in secure administrative positions, the weakening of the will of the leaders by discussions of possible unification with the Hindenburg government, etc., cleared the way for Hitler.

I should like to relate here a characteristic discussion which I had in Berlin with the Socialist Premier of Prussia, and other high government officials and union leaders, about two weeks after Hitler came to power. Then the unions were not yet destroyed, and the Socialist government in Prussia, ousted some days later, had at its disposal many millions of unified workers, the Prussian police and, not least, the Communist Party, which was ready to help: that is, to fight with the Socialist Party in this day of terrible emergency.

In the course of this discussion I asked the Prussian Premier if the Socialist Party would not immediately act. “It is already five minutes after twelve,” I remarked to him. But he turned furiously against me, crying: “We are Democrats and Social-Democrats and we acknowledge the right and duty of President Hindenburg to entrust the greatest party with the organization of the government. But the greatest party is actually the Nazi party, whose representative is Hitler. This is our Constitution and we shall be constitutional to the end.” I objected, saying that Hitler had nothing to do with the Constitution, and that it was his trick to misuse the Constitution with the aim of violating the Constitution “legally" after coming to power. I then asked the union leader if the unions would not do something at once. He replied: “We stand ready-armed and we need only press the button to have the general strike effective within one hour.” I asked him when he would press the button. Then this man, who was to be Premier of Prussia for two days longer, jumped to his feet shouting: “We will proclaim the general strike at the moment Hitler dares to violate one paragraph of the Constitution.” This is clear enough. I left the meeting horribly depressed and saw the entire labor movement of Germany breaking down.

The Communist press was already suppressed, the persecution of political opponents had already begun, Berlin was covered with a pestilence of Nazi espionage. In short, the Constitution had already disappeared and the unions remained passive with their weapons at their feet, until they were entirely destroyed. The button was not pressed; but the Socialist Party and all the German labor organizations, economic and political, a proud army of direct members and sympathizers of approximately 12,000,000 in the last elections, disappeared.

The Constitution was so extremely well interpreted and executed in the end that it not only became a scrap of paper, but an instrument to be falsified and violated to such an extent that it turned into a direct and deadly instrument against the labor movement in Germany with all its glorious tradition. There were sacrifices of blood, money, and enthusiasm, together with destruction of thousands of buildings, papers and reviews, textbooks and schools. Members were killed or incarcerated in concentration camps and prisons.

In 1932 Hitler addressed a large crowd of coal and iron industrialists at the town hall in Duesseldorf in Rhenania. This group was headed by Fritz Thyssen, a son of one of the most successful expansionists in Germany’s heavy industry. The address was not published, but one of the participants told me on the occasion of a speech which I delivered against Hitler at the same place two weeks later: “None of us believe in this nonsense on economics, but what shall we do? Through Hitler we can get rid of the unions. This is our aim because the unions, with their policy on wage scales and working conditions, deprive us of every opportunity to make a reasonable profit.”

This was indeed the main idea of Thyssen in particular, who was more or less weakened by the crisis. The idea was so to change the workers’ organizations as to attempt to make of the unions a real instrument for fascist policies.

Hitler was from the start financed by these magnates like Thyssen, and with brief interruptions when he did not seem as successful as he should, his private army was fed and nourished out of the industrial funds, with the aid especially of the big landowners in Pomerania and Eastern Prussia. So the organizations of workers of Germany were entirely changed into what Hitler called the “Labor Front.”

Hitler had hoped to enter upon a period of world prosperity, with Germany sharing in it so that he could get the glory of one who had supposedly saved the German people from its unemployment and misery.

One could realize from the start of the Hitler regime, however, that Germany would not become prosperous, even if international capital should enjoy a period of seeming prosperity. The only way for the Hitler regime was the increase of armament and of all the so-called heroisms and sacrifices, cancellation of the Treaty of Versailles, reoccupation of the Rhineland zone, aid for the fascists in Spain, etc. All the violations of treaties, the great words in bad German, were and are merely smokescreens for the main and real purpose of the Hitler regime, namely, to give back to capitalists one hundred-fold and more of what Hitler had received. For some time the method looked successful to those who do not understand the process of the creation of value and least of all the danger of a fast development of constant capital. Hitler had promised to eliminate unemployment. So began the famous labor struggles, and indeed millions of unemployed thus became “employed” in a sense. But the question is, what is employment?

The so-called “just” wages of the Nazis are today ten to fourteen marks per week. This is less than the relief paid by the republic before Hitler came to power. Labor becomes more and more compulsory, and consequently the remuneration lower and lower. Nazi industry and administration exhaust any and every opportunity to "squeeze out” the labor force of the German workers. They profit even from a fund created for workers’ vacations. The land laborers are even worse off than the industrial workers. To illustrate: A land laborer receives, with a family of nine children on a large farm not far from Berlin, in form of kind 465 marks, and in form of cash 315 marks yearly, or 11 pfennigs per hour. There are, as always in such situations, some categories of skilled workers, especially armament workers, who are better paid, but the average level of real wages is sinking rapidly. According to my calculation, the decrease of the average real wages since the end of January, 1933, has been between 25 and 30 per cent. If we identify this decrease with the lowering of purchasing power (purchasing power being power equal to the market), then we have a reduction of the entire purchasing power of Germany of from one quarter to one third, inclining more toward the latter than to the former figure.

Now let us turn to the problem of German territory. “A people without space”—this was and is the slogan of German reaction. Not a people without means, and real means, to use their labor power; but without space. What is space? There is a geographical and an economic space. They are not identical. If these two places could be identified, then Brazil and Africa, for instance, would be the wealthiest territories of the world. The economic space depends directly upon the conditions of labor power. The better those conditions, the larger the economic space. As the conditions of German labor power, under Nazi rule, are becoming worse and worse, Germany’s economic space logically becomes more and more limited. That means that Germany under another rule, not preparing for war, and not confusing the armament race (that is, falsified employment), with real employment, would have sufficient space for at least twice its present population. It is necessary to change our idea of territorial space because of the fundamental mistakes made in Nazi Germany and elsewhere. With the idea of space, we must change the idea of employment and unemployment. I have devoted many years to the study of this central problem and have come to the conclusion that the identification of territorial space and economic space is one of the main causes of the dangerous theory of expansion which infects millions of minds and enables the expansionists in capitalist countries to go on with their destructive policy of competition for the acquisition of colonies.

The slogan of self-sufficiency or “autarchy” is the same as the slogan “people without space.” It is a kind of neo-mercantilism, that means, monopolization of labor force in favor of the sale of this cheap labor force on the world market, the conquest of new colonies, conclusion of treaties with the same tendency, the pressure for loans, raw materials, etc., by war menaces, etc. This autarchy means a gigantic military camp or fortress exploiting the labor force of the working man in order to produce cheaply, and to increase the armament and finally to replace their own sinking purchasing power or value by victimizing millions on the battlefields. It is not by chance that a general, namely, Goering, became the leader of this process, with Dr. Schacht, a man without understanding of economic laws, behind him.

Since the proclamation of the so-called new “Social Constitution,” formulated in a law of January 20, 1934, “regulating national labor,” labor conditions have gone down. Through this Constitution all the old rights of the workers in the factory, permitting them to elect labor councils, were abolished. Instead the Nazi government, under the cover of a so-called election, actually appointed “trustees” of the Labor Front (called Vertrauensleute). Under this new law the principle of leadership in the interests of the factory owners was carried through. All strikes were forbidden and any differences as to working conditions, wages, etc., were left in the hands of Nazi district functionaries. The old independent force of organized labor was wiped out. What had previously been a Nazi policy since May 22, 1933, now became a law.

With the intensification of the armament industry, the capitalist market became a state market without the disappearance of capitalistic private property. This means that a regular circulation no longer exists. Although under such conditions German money value became more or less “empty,” it was until now possible to maintain an apparent money stability inside of Germany. Outside of Germany, that is, in the sphere of a relatively regular circulation, the German mark has no more purchasing power. Therefore the necessity of obtaining foreign money by an increase of exports. Here we have the cycle which it is impossible to avoid, and the danger of the explosion of sinking labor power.

To continue this destructive and unproductive policy of capitalist monopolization, Germany needs goods which it has to import and pay for with foreign money. Here is a list published by Dr. Schacht showing the percentage of foreign goods already consumed in Germany in 1934:

Imports 1934 Per 1000 Tons

Participation of Foreign Markets in Total Consumption in %

(a) Food

Fruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Vegetables . . . . . . . . . . . . . . . . . . . . . . . . . .



Leguminous Plants . . . . . . . . . . . . . . . . . . . .



Fats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Eggs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Fish . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



(b) Raw Materials and Unfinished Products

Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Wool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Timber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Iron Ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Manganese Ore . . . . . . . . . . . . . . . . . . . . . . .



Copper Ore . . . . . . . . . . . . . . . . . . . . . . . . . .



Zinc Ore . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Mineral Oil . . . . . . . . . . . . . . . . . . . . . . . . . .



Skins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



India Rubber . . . . . . . . . . . . . . . . . . . . . . . . .



Industrial Fats . . . . . . . . . . . . . . . . . . . . . . . .



At present Germany is suffering from a terrible lack of iron ore, which can only partially be supplied from within Germany. In 1936 the import of iron was about 19,000,000 tons, against 3,400,000 tons in 1932. Here we have one of the main causes of the Spanish “adventure” of Nazi Germany. Here we also have one of the main causes or Germany’s war drive against France and of the Swedish fear of German attacks. It is not a case of a crusade for the maintenance of heroic Nazism, but for very concrete objectives.

The import of textile raw materials is also sinking rapidly, and so it is and must be, much more than before, with all products (especially food) which Germany cannot raise in sufficient quantities for herself. The destruction of labor power cannot remain unpunished. The regime has already spent about 25,000,000,000 marks for armament, and by the end of the current year it will have spent, more or less, 40,000,000,000 marks. This horrible burden is carried by 15,000,000 workers, millions of them not paid at all, or no better than beggars. Therefore the Nazi government feverishly makes propaganda for the consumption of cabbage, carrots, forestry products, etc. The production of “Ersatzstoffe,” that is, substituted raw material and food, only accelerates the process of decline because of the enormous cost.

Although the dictator-general of Germany’s economy, Goering, menaces farmers and dealers for price speculation with the severest punishment, the prices go their natural way, that is, upwards. The rulers will soon realize, as did Germany’s imperialists during the war, that there is no possibility of stopping this process. In 1932, at the lowest point of Germany’s food consumption, the nourishment of the German people, especially of the German workers, was better than now. Even at that time they had more butter than cannon.

The promise that the workers should share the profits of capital has not been fulfilled. To submit to the individual leadership of the factory owners does not at all mean participation in their dividends or, if it does, then this participation is a fake, the so-called dividend-sharing amounting to no more than three, seven or ten marks per year. This curious type of “common-sense” economy becomes visible in the enormous rise of war industry profits and in the income of Nazi leaders. Goering receives 86,000 marks as president of the impotent Reichstag, while every deputy receives 17,400 marks per year for doing nothing except saying “yes” to Hitler once or twice during the year. Schacht, the President of the Reichsbank, who praises the sense for thrift, receives more than 300,000 marks per year, and so it is with hundreds and thousands of Nazi leaders, and this after the promise by Hitler to end the administrative corruption and the increase of “overhead” expenses. All this has to be paid by the workers.

The Hitler regime some time ago began its fifth year of social-economic destruction. A survey of the labor conditions in the four years of Hitlerism reveals on one side an increase of the employed workers from 12,500,000 in 1932 to 16,000,000 in 1936. But the total wages at the end of 1935 were only 31,700,000,000 marks, in comparison with 26,000,000,000 marks in 1932. This means that while the number of employed increased 25 per cent, more or less, the total income increased only 20 per cent. So state the official statistics. In reality, however, the income decreased from the insurance of unemployed about 1,900,000,000 per year. Furthermore, an enormous increase of taxes, money for social insurance, and so-called voluntary contributions, must be added to this loss, aside from the increase in prices of between 12% and 15 per cent. Using official statistics we find labor power in Germany 25 per cent weaker than at the beginning of the Hitler regime. In reality I believe that 30 per cent would be nearer the truth. This process of decline is now going on faster than before, because of the enormous amount of expenditure for armaments. In 1937 the volume of new constant capital of this entirely unproductive type will be 12,000,000,000 marks, that is, a little less than one-half of the total real wages in 1932, and a good deal more than one third of the total real wages in 1935.

In some industries, especially the armament industry, the real wages are higher than, for instance, in the textile industry. In the textile industry the weekly income of a male worker was in June, 1936, no more than 22.72 marks. If we subtract taxes, so-called voluntary contributions, and so forth, as well as the increase in prices, the weekly real income of this type of worker cannot be more than eighteen marks, or a little more than $7 weekly. That is much less than the average relief allotment in the United States. A worker’s family of four persons receives less than $2 per head. Food, clothing and expenses for shelter are the main expenses of the German workers. One can now imagine the misery already existing in Germany and growing every day. It is true that the number of armament workers increased enormously, but millions and millions have a lower standard of living than ever before. Their situation is worse than the situation of the unemployed before the Hitler regime.

On the other hand the labor time increased from 6.9 hours in 1932, to 7.5 hours in 1935. The total labor volume was, at the end of 1935, 46 per cent higher than in 1932. While the German workers had to work 46 per cent hours more than in 1932, and at present even more (some of them are working 100 hours per week), the real income sank destructively. The productivity per labor hour has increased so that the worker expends now much more energy per hour for much less real income.

Here we have another picture of the real economic condition of Germany today. It is the tragedy of capitalism of this time in general, and especially in the fascist countries, where unproductive constant capital is built with a tempo never seen before. Under such conditions we cannot speak at all of even the slightest stability of labor power, if we understand this to mean the daily restoration of labor’s own power by at least the necessary quantity and quality of food and shelter. The houses of workers are to a large extent in a miserable condition. Today 1,500,000 Germans do not live in their own apartments, and are obliged to live in a small and unhealthy part of the homes of others. Most of these Germans are workers. Millions live in stables, concentration camps, forced labor camps, and so forth.

The consequence of this entire situation in Germany is the cry for exports, credit, colonies, raw material, and food from outside. The participation of Nazi Germany in the Spanish war is an instance of such violent “business,” paid for with the strength and blood of the German workers and soldiers. How long can a country go on under such conditions?

The answer must be: not long. The reckoning is at hand. In spite of Nazi repression and destruction, the old fighting force of labor is again beginning to assert itself. We can see already the coming regime of a free Germany, which is now being shaped in the People’s Front.