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The ideological background to the German corporate tradition.


The growth and development of the paternalistic and collaborative attitude of German employers toward their workforce and as a political ideology can only be understood and analyzed as an outgrowth of trends of thought that had characterized German intellectual life since the French Revolution. The French Revolution, with its emphasis on the individualism, rationalism, and empiricism of the Enlightenment, on the one hand, and the Commercial and Industrial Revolution, which was accompanied by the growth of capitalism and the capitalist spirit on the other hand, were two movements that deeply affected German thought and German life. And as a result, both movements produced strong reactions and responses in Germany. In the view of Othmar Spann, following the French Revolution German "economists turned away from atomistic and mechanistic views towards an organic conception of society, a conception which was rooted in philosophy and bore fruit in the romanticist movement. A universalist social and economic idea was contraposed to an individualist one." (1)

The greatest impact of this German response was felt in the field of philosophy. The overthrow of empiricism effected by Kant led to the replacement in post-Kantian philosophy of an individualism based on the doctrine of natural right with a universalist and organic conception of the State. The cultural expression of this new philosophy was romanticism. In Germany romanticism emerged as a political and economic movement of some consequence. However, in England and the rest of Europe it remained a literacy and cultural expression. The romanticist conception of the relation of man to society was decribed by Spann in the following passage: (2)
   Regarded by the romanticists as a part of a universe, man was no
   longer looked upon as individualistic, as isolated; he had now
   become a member of the cosmic commonwealth. Thus, too, in the
   State and in society he was no longer contemplated as subjective and
   self-governing, but as a member of a living and organized social
   aggregate. The skepticism and mysticism of the ego must be
   extended to the community; State and society had to be absorbed
   into the cosmic continuum, and it was in this wise that they became
   the objects of romanticist scrutiny.

Spann concluded that "romanticism was the first countermovement directed against the Enlightenment, humanism, and the Renaissance. In it the German spirit was striving to return to its former self, to the self which had come into being in the Middle Ages. Hence, romanticism may be aptly termed neo-Gothicism." (3)

The economic aspect of the German response manifested itself in a renewed interest in corporatism and corporative institutions. Prior to 1789 the "old corporative order" had commonly been taken for granted in central Europe, since German society had retained intact a large assortment of characteristically medieval institutions, even after the rise of the absolute monarchies. (4) The old craft guilds, which were abolished in France by a decree of June 17, 1791, continued to play an important role in the German economy until almost the latter part of the nineteenth century. Legal restrictions upon occupational mobility were not removed in Germany as a whole until 1869. Furthermore, the early development of corporatism in Germany was influenced by the growth of German nationalism during the Wars of Liberation waged by Prussia against Napoleonic France. In striving to vindicate Germany's cultural individuality against the French Revolutionary principles of egalitarianism and individualism, many subsequent nationalist writers tended to exalt the estates and corporations of the Germanic past and to find in the nation's "old corporative order" a model for projected new forms of social organization.

The German corporatist tradition which arose out of these circumstances encompasses a vast multitude of heterogeneous theories, each dealing from its own particular standpoint with a different set of data and problems. On the one side, the questions involved the restoration or maintenance of certain social classes or groups. On the other side, they involved the establishment of a corporative electoral system, and the creation of a functional parliament. After the middle of the nineteenth century there was a shift in emphasis from the hereditary estates to the professional estates, which partly reflected the economic changes which were occurring in Germany.

Despite these diversities a recurrent although somewhat nebulous ideal can be perceived permeating the works of all these writers--that of an "organically constituted" Standestaat. The standische Idee in German political and social theory has always been closely bound up with an "organic" conception of state and society which elaborates upon the more or less explicit assumption that valid comparisons can be made between a living body and a politically organized community.

This generic conception has furnished virtually all German corporatists with a varied array of arguments in support of their fundamental tenets. Thus, it has been maintained that in society as in a living organism the demands of the whole must always take precedence over those of individual members or parts, since the existence of each part necessarily presupposes the existence of the whole, while the converse is not invariably true. And, just as all parts of the body are not equally indispensable to the whole, so individual members of society are unequal in capacity, and hence unequal in social, or even in divine, worth. Therefore, it follows that there must be an unequal apportionment of social functions, rewards, rights, duties, privileges, and responsibilities amongst the citizens of a community.

Furthermore, just as the mind or will presides over the conscious activities of the human body, so must the state possess a single leadership, while a hierarchical organization of authority parallels the subordination of lower bodily functions to the higher. However, the existence of complex organs within the body, and the unconscious character of certain physical functions (breathing and reflex actions), by analogy served to support a pluralistic interpretation of sovereignty, and to establish the need for political federalism and decentralization. In addition, the national community, like the human body, goes through stages of change and development--of growth or decay. Finally, the human community is held to resemble a living organism since its existence is dominated by the need to preserve inner cohesiveness and harmony. Otherwise, the persistence of unresolved internal conflicts must ultimately have deleterious consequences. Therefore, sudden or violent interruptions of an existing continuity of development are undesirable. Hence social change is to be a peaceful and gradual process, and must not disturb the relation of the various parts to one another or to the whole. (5)

Developing under the influence of the organic conception of society, German corporative doctrines have emphasized the binding ties of the community, in contrast to a mechanistic and atomistic individualism. Therefore, the social needs and obligations of men are held not to be fulfilled by a citizen-state relationship, but also require institutional embodiment of the subsidiary manifestations of the associative impulse. In this way the nation becomes an "organic union of many lesser communities or 'estates' rather than a mere aggregation of interchangeable human 'atoms'". (6) Consequently, the specific programs of German corporatist theorists have characteristically included a demand for the "statutory establishment of a universal scheme of vocational or professional organizations in which each constituent 'corporation' would be endowed with a more or less extensive body of legal rights and duties." (7) These duties would involve the representation of group interests between the estates, and the preservation of order and harmony among the elements within the estate.

The social ideal would be the organization of every occupational group, and the membership of every working person in a vocational organization. Various theorists have differed, however, as to whether or not such membership should be compulsory. Ralph H. Bowen summarizes these corporative proposals as follows: (8)
   The most common unit of organization proposed has been the trade
   (Fach) or profession (Beruf). Employers and workers have generally
   been considered as representing separate subdivisions of the same
   vocational category. Provision has commonly been made for
   conciliation of divergent interests within each group, and in
   particular for arbitration of the conflicting demands of management
   and labor. Many schemes have favored compulsory arbitration of
   wage disputes, some have advocated legal prohibition of strikes and
   lockouts, and all have had the aim of moderating industrial strife
   with a view to its ultimate elimination. Some sort of council would
   embrace all persons associated with a single enterprise or
   establishment, and a pyramidal structure would then be evolved out
   of combinations of these bodies at regional and national levels. A
   corporative chamber or national economic council, variously
   projected as subsidiary to, as co-equal with, or as superseding the
   territorial parliament, has usually been placed at the apex of this
   pyramid as the supreme organ of "functional" representation.

In his book German Theories of the Corporate State, Ralph Bowen distinguishes four periods of German corporative thought prior to the rise of National Socialism: First, the formative period, 1789-1870; Second, Social Catholicism, 1871-1894; Third, Monarchical Socialism, 1895-1913; Fourth, German Collective Economy, 1913-1919. In the course of this development of corporative theory, the various writers and thinkers have touched upon and discussed virtually the entire scope of modern economic, political, social, moral, and cultural issues. Furthermore, the recent evolution of corporative doctrines has been influenced by happenings and events in German and European history, as well as by the backgrounds and circumstances, the prejudices and peculiarities of the individual contributors. To understand the development of National Socialism as a partial outgrowth of the corporative tradition, it is necessary to examine briefly the doctrinesand ideas of some of the leading personalities.

Johann Gottlieb Fichte

Johann Gottlieb Fichte (1762-1814), political philosopher and intellectual leader of the German nationalist and romanticist reaction against the French Revolution, is regarded as one of the earliest ideological precursors of National Socialism. (9) Fichte formulated an organic conception of the state, in which the state was described as an "organized product of nature" (organisiertes Naturprodukt), each particle of which had existence only by virtue of its participation in the whole. (10)

According to Fichte, the individual became, "as a result of this union, a part of an organized whole, and thus, fused into oneness with it". (11) This outlook led Fichte to distinguish the State as a special entity with an existence independent of the individual members of which it was composed.

In 1800, Fichte published a small book, Der geschlossene Handelstaat, which extolled the benefits of a "closed commercial state", (12) and which was to profoundly influence the development of corporatism in Germany. Thus, he maintained that it should be a goal of the state to interfere with the balance of the economy so as to attain complete independence of foreign countries. Fichte then outlined a series of proposals whereby the state was to regulate economic activity so as to provide a suitable occupation for each citizen. This responsibility arose out of a special property-contract (Eigentumsvertrag), which formed part of a general social contract entered into by naturally constituted functional groups (Stande), rather than by isolated individuals. The state in turn was to apportion economic activities among the various natural estates (Stande), such as raw material producers, manufacturers, and merchants, which in turn were subdivided into 'trades' and 'callings', whose interrelationships were to be regulated by state-enforced contracts. (13) The measures, which the state would employ to regulate economic activity, included: (14)
   planning and control of the volume of production, compulsory
   buying and selling at fixed prices, control of quality by setting
   examinations for prospective craftsmen, state-managed warehouses
   as a safeguard against crop-fai1ures and, finally, prohibition of
   privately conducted foreign trade and substitution of a state
   monopoly aiming at the highest possible degree of autarchy.

Under Fichte's scheme, the state was also to restrict occupational mobility by making entry into any trade or profession conditional upon obtaining permission from the public authorities, Furthermore, the state was to guide entry into the essential occupations, before allowing entry into those devoted to luxuries and services. (15)

As a result of the above project, the price mechanism underwent a transformation. In a capitalist system of free competition, the price mechanism serves as a means of resource allocation, reflecting the relative desires of the individual buyers. Under Fichte's scheme of regulated prices, however, the price system was to serve as a means for adjusting the distribution of income, in accord with a 'just wages' plan. Although these ideas had slight contemporary influence, they were to profoundly affect the development of corporatism and of romantic political theory in Germany. (16)

Adam Muller

Adam Muller (1779-1829), the most important of the political romanticists, "applied the newly acquired philosophical notion of community to economics, politics, and sociology." (17) Although Muller at first regarded himself as a disciple of Adam Smith and a believer in the ideals of the French Revolution, he soon turned to romanticism and furthered the organic conception of state and society as developed by Fichte and Schelling. In his view, "the state was 'the aggregate of human affairs, their interconnection to form a living whole'; it was something absolutely vitalized and spiritual, 'the realm of all ideas, forever in motion'; it was a moral community, which became unified through the surrender of its parts to the world, through love for mankind." (18) Therefore, happiness could only be found in self-surrender to the community, and freedom through imposing a social order whereby each citizen could express his own individuality in the performance of his appropriate function in the organic hierarchy of nature. "Medieval Germany was the ideal state, with its feudal rights, its personal and spiritual (not commercial) ties between the members of the body politic." (19) Muller's conception of the state was strongly anti-egalitarian: (20)
   If the separate components of civil society were not endlessly
   unequal and varied there could be no state, for the state was surely
   not established once and for all by one original compromise that
   reconciled and united all conflicting elements; rather, it is itself
   a continuing process of compromise, reconciliation, and agreement
   among these elements.

In his economic discourses Muller emphasized the interconnection and unification of all social elements in contrast to "the misleading tendency to isolate and to abstract which was characteristic of the individualist classical economists." (21) Muller believed that the apotheosis of competition as a creative force in economic activity was leading to a cleavage between labor and capital, by setting workers and capitalists against one another as two hostile classes. Instead, he stressed "the vitalizing energy of the personal interdependence of all the members of the community, as in the patriarchal family, in the craft guild, and on a landed estate." Muller found the structure of the family analogous to that of his projected ideal state. The four elements of the family (age, youth, masculinity, and femininity) correspond to the four factors of production (spiritual capital, concrete capital, labor, and land) which in turn constituted the four economic estates (clergy, merchants, producers, and nobles) who by their very contrasts created the harmony of the whole: (22)

Complete economic life consists of the individual development and reciprocal interaction of the four economic estates--the clergy, the nobility, the productive Burgerschaft and a genuine estate of merchants--though this last estate is yet to be created--that is, of a Lehr-, Wehr-, Nahr-, und Verkehr-Standes.

Furthermore, each estate was to be endowed with its characteristic form of property: the clergy with corporate property, the nobles with entailed family property, and the commoners with individual private property. Those estates differed as to function and life-purpose, and represented "the three generic types of freedom which of themselves can both limit and guarantee one another by means of their reciprocal opposition...because each stands for one eternal element in human nature. (23) Muller's principal work, Elemente der Staatskunst, was published four years after his conversion to Roman Catholicism. As a result, it and subsequent writings were permeated "with the kind of Catholicism, which was so closely bound up with Austrian politics of the time." (24) Consequently, the highest rank among the three estates was assigned to the clergy. The clerics were also assigned the more mundane roles of conciliating differences between the other two estates and of unifying society by fostering Christian ethics and ideals. Naturally, to perform these arduous tasks the clergy "required a rich endowment of worldly goods and of 'other instruments of power'". (25) The function of the nobility was associated with nature, "with the soil and its performance". The Moral foundation of this estate was "self-sacrifice on behalf of the whole community, on behalf of the state." (26)

Muller relegated the material economic activities of urban production to the special province of the producers, or third estate. However, he rejected the mercantile or commercial element as a distinct fourth estate, due to its preoccupation with materialistic and hedonistic pursuits to the exclusion of spiritual motives. In short, Muller's ideal was "the theocratic, hierarchical, and pluralistic society of the Middle Ages". (27) Even Dr. Othmar Spann, who considered Muller "the greatest political economist of his own day", concludes: (28)
   Considered as a whole, romanticist economics did not undergo any
   considerable evolution, and failed to exercise notable influence. It
   remained ineffective chiefly because, in the field of applied
   economics, Adam Muller, Gentx, and Haller in especial, inclined
   towards an extremist and reactionary absolutism. In this they were
   swimming against the current of events, and Muller was penalized by
   neglect--to the great detriment of our science. The political program
   of these economists was based on the unqualified rejection of all
   liberal reforms, the liberation of the serfs seeming to them no less
   undesirable than the freedom of industry. They wanted a simple
   return to medieval conditions.

Georg W.F. Hegel

Georg W.F. Hegel (1770-1831) formulated "the philosophic grounds underlying many a subsequent expression of the generic corporatist ideal." (29) Hegel conceived of the estates as mediators "between the government on the one hand and the people...on the other." (30) He distinguished three estates in civil society (agricultural, industrial, and general or ruling), with each estate having a characteristic mode of life, which was reflected in a distinctive psychology. The 'natural' or agricultural estate depended directly upon the soil for its livelihood, and lived in accordance with a primordial code of primitive morality rooted in the patriarchal family. The 'general' estate included the educated and professional groups, who operated the machinery of government, and whose primary concern was the welfare of the nation as a whole. Hegel felt that these two estates were inherently imbued with a spirit of universality, but that the industrial estate was too individualistic.

Therefore, the corporation (Korporation) was envisioned as a principle of social cohesion. A corporation would be established for every branch of industry and commerce, with each corporation embracing all the individuals in a given occupation. Hegel conceived of the corporation, as being "the means not only of assuring to each member a secure livelihood appropriate to his station in life (a just wage), but also of conferring upon him a sense of social worth, a consciousness of full membership in society," (31) and
   The corporation rightly conceived, however, is not an exclusive
   guild; it is rather the means of giving ethical content to a single
   branch of industry and of absorbing it into a realm where it can
   gain strength and honor.

Although Hegel's views on the concept of the state and on historical development were attacked by some National Socialist theorists, Friedrich Bulow, a National Socialist writer, observed in 1934 that "the fundamental observations of Hegel on estates and corporations contain the essence of estate theory and the spiritual foundation on which every 'Standestaat must be based." (32)

Franz von Baader

Franz von Baader, (1765-1841), an important precursor of the Social Catholic movement, was one of the first romanticists to face the economic and social problems created by the industrial revolution. Residing and working in England and Scotland in the 1790's brought von Baader a first-hand acquaintance with the social evils accompanying industrialization which had beset Great Britain, and which he attributed to the individualism, materialism, and economic liberalism of Adam Smith and his followers. Von Baader was therefore a believer in the need for a new organic social order, whose organizing principle was to be Christian love, and not reason or self-interest. He concluded that in order to establish a truly harmonious social community: (33)
   Every part must have its prescribed or ordained place in relation
   to the whole, from which it follows that no part ... may take
   upon itself the act of ordination... This unity (Einigung) must
   come about as the result of subordinating all the parts to the
   unifying agency (Einende). Without an organic social hierarchy,
   without power, authority and subordination, ... therefore no
   organism can subsist.

In his principal economic treatise, Ueber das dermalige Missverhaltnis der Vermogenslosen oder Proletairs zu den Vermogen besitzenden Klassen der Sozietat, von Baader criticized capitalism as reducing the condition of the workers to a slavery worse than that of the helots of ancient Greece. He also made a number of recommendations designed to effect a transformation of society, which were summarized by Dr. Johannes Sauter as follows: (34)
   (1) suitable renovation of the estates of the realm and the
   corporations; (2) enfranchisement and representation of the fourth
   estate (by compulsory enrollment of proletarians in trade unions
   with priests as leaders) and the right of 'advocacy'; (3) a
   modernized association of a monetary economy with a natural
   economy; (4) abolition of the unconditional freedom of industry
   at home, and of the unconditional freedom of foreign commerce.

Although von Baader did not greatly influence contemporary developments, and is even regarded by Othmar Spann as "the most utterly forgotten of all the romanticists", he was an important contributor to the German corporatist tradition. He also exercised a profound influence on Baron von Ketteler and the Social Catholic movement.

Karl Georg Winkelblech (Karl Marlo)

Karl Georg Winkelblech (1810-1865), better known as Karl Marlo, was one of the earliest proponents of a "social parliament", based on vocational representation, as a means of saving the independent craftsman and small property-owners from the advance of capitalism. In 1848 and 1849 Marlo even acted as leader and spokesman of a short-lived handicraft workers' movement. Marlo believed that the abandonment of the medieval guild system in favor of "the pernicious principle of free competition" had only resulted in "freedom for the rich", and was leading to the "preponderance of capital over labor". He feared that the growth of an impoverished industrial proletariat was not only leading to economic and social misery, but also to the estrangement of the workers from the 'organic' national community. In a speech delivered at the Hamburg Congress of North German Handicraft

Workers on June 2, 1848, Marlo outlined his scheme for the reorganization of economic life: (35)
   ... nothing short of a comprehensive guild-constitution
   (Zunftverfassung) embracing all branches of industry can protect
   Germany from the fate of France and England and from the perils of
   communism ..., In place of the old, artificial guild system we must
   install a new, natural one. Furthermore, in order to assure to each
   member of society, 'without regard for special rights,... a means of
   livelihood (Erwerbssphare) corresponding to his capacity for work',
   a comprehensive scheme of social legislation must be instituted for
   all Germany. In preparing those laws...full consultation of all
   affected interests should take place through the medium of 'a social
   chamber' (social parliament) ...which will submit its resolutions to
   the political chamber (political parliament) ... A special election
   law should ensure that 'all social estates' and 'all types of
   vocational activity (Berufsgeschafte) would be proportionately
   represented in the social parliament.

Despite his admiration of Germany's medieval guild system, which led Spann to describe his economic ideas as standing "midway between feudalism and socialism", (36) Marlo did not want a return to past conditions. He envisioned a harmonious social order embracing public, private, and cooperative enterprises, with the guild-like workers' associations being assigned the dominant role in the economy. In these guilds the means of production were to be collectively owned and operated by the workers. Furthermore, each guild or estate was to promote the interests of its members, relatively free from state intervention. Thus, "self-government of industry" would replace bureaucratic centralization, while the welfare of the nation as a whole would be fostered by "an organic grouping (Gliederung) of producers" in a federation of guilds. In Marlo's scheme the role of the state was limited to the determination of overall economic policies, the administration of a few public industries, and the passage of ameliorative social legislation. After the demise of the handicraft workers' organization, Marlo seemingly faded into obscurity until his ideas and writings were revived in the 1870s by Albert Schaffle and the state socialists.

Friedrich List

Although not a writer in the corporatist tradition, Friedrich List (1789-1846) was influenced by Adam Muller and other romanticists, and was regarded by National Socialist theorists as an important ideological precursor. List, who is described as "the apostle of economic nationalism" and the "representative of nascent (German) industrial capitalism", (37) was an ardent protectionist and an active leader of a German merchants' and industrialists' association. The association advocated the creation of a customs union and free-trade area for Prussia, Austria, and the German states, coupled with the erection of tariff barriers against foreign (particularly English) manufactured goods.

List rejected the atomistic individualism and the liberal internationalism of Adam Smith and Ricardo on the grounds that they abstracted from and ignored the "concept of the concrete cultural community, the idea of the nation as contrasted with the idea of unrestricted, cosmopolitan inter-course between individuals". (38) Furthermore, List held that the nations--as 'organic' subordinate aggregates of the world economic aggregate, intervening between the individual and mankind as a whole--pass through various phases of economic evolution, and pass through them at different times. Therefore, the universal economic principles and policies enunciated by the classicists could not be applicable at all times and to all peoples.

List further believed that the estimation of the prosperity and power of a nation in terms of 'exchange-value' was inadequate, and needed to be supplemented by a 'theory of the productive forces' that lie behind values--"the prosperity of a nation is great, not in proportion to the accumulation of wealth, but in proportion to the development of the productive forces". Such a theory of productive forces was to include not only a knowledge of the conditions of the origination and reproduction of national wealth, but also of the mutual relationships of all the nation's resources in the interarticulated parts of the economic organism. Thus, in essence List adumbrated the 'circular feed-back' principle underlying modern macroeconomic criticism of neo-classical partial equilibrium analysis: (39)

"The fundamental difference between partial equilibrium analysis and analysis of complete economic systems is that indirect "feedback" effects that may be negligible as long as we are looking at the behavior of a single small element of the economic system will often build up, when we consider the system as a whole, to a crucial importance.... When we turn to look at the economy as a whole, the aggregate effect on the demand for shoes, or for most products, of a change in wages in industry as a whole is likely to be too large to ignore."

In his theory of economic evolution, List distinguished five states of development: First, the hunting; Second, the pastoral; Third, the agricultural; Fourth, the agricultural and manufacturing; Fifth, the agricultural-manufacturing-commercial states. He also believed that while England and France were in the fifth and highest phase, not all nations could reach this state of development: (40)

"That naton will have the maximum productive power, and will consequently be the richest, which has developed to the utmost within its own area all the forces of manufacture in all their ramifications, and whose territory and agricultural production are big enough to provide its manufacturing population with the bulk of the necessary raw materials and means of subsistence."

To attain equilibrium between the agricultural, manufacturing, and commercial sectors, state intervention and the creation of the proper institutional framework were considered necessary. The most important form of state intervention, however, was the stimulation of manufacturing, especially by means of tariff protection. In his acceptance and even encouragement of industrialization, List departed from the corporatist writers of this period, who generally viewed the industrial revolution with misgivings. However, in his evaluation of the economic doctrines of Friedrich List, Dr. Othmar Spann concludes: (41)
   All that List did was to carry out Muller's leading notion in fuller
   detail, especially by showing how the various branches of industry
   were interconnected in a way which determined and intensified
   production, and further by demonstrating the links between
   agriculture and industry.... No doubt in Muller's writings the whole
   train of thought is directed towards a strictly organic
   (universalist) conception of the State, whereas in List we often
   note an inclination towards a liberating application of universalism.
   Certainly, too, we find that Muller is always aiming at the
   establishment of corporative relations, based on personal elements,
   and giving a privileged position to the landed gentry; whilst List
   is always working for the development of a modern monetary economy
   and of large-scale industry.

During the last half of the nineteenth century there was a shift in emphasis in the writings of the corporatist theorists, reflecting the development of the party system, the changes in economic and social conditions as a result of the accelerated pace of industrialization, and the growth of Marxian socialism based on the class struggle. In the 1850s and 1860's the establishment of parliamentary institutions and the rise of the new political parties produced a series of abstract and academic critiques, some of which were greatly influential in the evolution of subsequent corporatist and National Socialist doctrines. Included among these writers were such notables as Karl Christian Planck, August Winter, Karl Levita, Ferdinand Walter, and Konstantin Frantz. In his survey of the corporatist writers of this period, Bowen concludes: (42)
   All these critics found fault with the assumption that the
   territorial constituency furnished a satisfactory unit for popular
   election of legislators. They contended that by itself such a
   scheme could not possibly result in an 'organic' consultation
   of the most responsible sections of public opinion. They argued
   further that to make all political decisions dependent upon the
   periodically expressed will of a simple numerical majority of the
   electorate was to endanger the rights and interest of minority
   groups, and they regretted that party Leaders were as a rule
   obliged to pay more heed to the exigencies of vote-getting than
   to the formulation of constructive policies based on
   expert knowledge of actual social conditions.

Using Marlo's "social parliament" as a point of departure these writers advocated some form of "functional" representation, through the establishment of a second parliamentary chamber of "vocational estates" (Berufsstande.) Thus, an "organic consultation" of the most responsible sections of the nation would be obtained by placing power in the separate and independent groups, which were held to mediate between the individual and the state. This system was considered to have the advantage of bringing technically proficient people with a direct interest in legislation into the government, and also of avoiding the demagoguery associated with more nose-counting.

Wilhelm Emmanuel Baron von Ketteler

In the last quarter of the nineteenth century the social problems resulting from industrialization and urbanization, accompanied by the deterioration of the position of the handicraft workers and many skilled craftsmen, had led to a rapid growth of the revolutionary Socialist Workers' Party, which was a fusion of Marxian and Lasallean socialist groups. As an alternative to this hedonistic, rationalistic, and materialistic outlook the Social Catholic movement in the 1870s proposed a comprehensive reconstruction of society along corporative lines. The intellectual leader and founder of this earlier and more radical German Social Catholicism was Wilhelm Emmanuel Baron von Ketteler (1811-1877), Bishop of Mainz.

In his treatise Christianity and the Labor Problem (Die Arbeiter und das Christenthum), Ketteler attributed the causes of modern social woes to the dominance of capital and the economic system of laissez-faire liberalism. Both forces were regarded as outgrowths of the individualism and materialism that operated "to bring about the dissolution of all that unites men organically, spiritually, intellectually, morally and socially." Bishop Ketteler also vehemently opposed the democratic basis of the institutions of liberalism:43

"The decisions of the majority are the only basis of what is called the modern state.... Tell me why the majesty of the popular will should bow before the strong boxes of our opulent liberals. If it has the right to trample our conscience in the dust, to sneer at our faith, to deny God and Christ, it would be supremely ridiculous to maintain that it must remain rooted to the spot as if by enchantment before the gold of our millionaires."

Ketteler further believed that the atomization or 'pulverization' resulting from laissez-faire capitalism could only be counteracted by the establishment of a universal system of labor organization, whose fundamental unit would be the 'corporation'. The 'corporation' was to include all members of a single vocation and bind them together in a spirit of Christian brotherhood: (44)
   The old Christian corporations have been dissolved, and men are still
   zealously at work trying to remove the last remnants, the last stone,
   of this splendid edifice. A new building is being erected to replace
   it. But the latter is only a wretched hut built on foundations of
   sand. Christianity must raise a new structure on the old foundations
   and thus give back to the workingman's associations their real
   significance and their real usefulness ... When men combine in a
   Christian spirit, there subsists among them, independently of the
   direct object of their association, a noble bond which like a
   benevolent sun pours out its light and warmth over all.... In a word,
   Christian associations are living organisms.

Franz Hitze

Franz Hitze (1851-1921), a disciple of Bishop Ketteler, was the author of a book published in 1880, Capital and Labor and the Reorganization of Society (Kapital und Arbeit und die Reorganisation der Gesel1schaft), which contained a vehement attack on laissez-faire capitalism, while at the same time outlining a comprehensive statement of the Catholic corporative program for social reconstruction. To Hitze, an economic system based on competition was unacceptable from a moral viewpoint because it had lost the medieval idea of 'vocation', and had substituted in its place the open market where labor was to be sold to the highest bidder, just as any other good. Furthermore, Hitze believed that competition was an unsatisfactory regulator of production and distribution, resulting in overproduction on the one hand, and in "underconsumption by the masses" on the other hand. These fundamental contradictions in turn led to an unending series of booms and busts. Hitze also acknowledged the existence of a conflict between capital and labor: (45)
   It is no longer possible to ignore the fact that a conflict exists
   between capital on the one side and labor on the other. There
   remains open to us no course but to acknowledge this conflict
   openly, to organize it, to give it legitimate organs, to assign to
   it a recognized place where, under the eyes of the central state
   authority, the battle can be fought out.

To resolve this conflict, a corporative system was recommended, whose basic organizational unit would be the "vocational estate". Hitze envisioned seven of these estates--industrial workers, peasants, large landowners (the nobility), large-scale industrialists, small-scale industrialists, large-scale traders, and small-scale traders--which in turn would select representatives to a Chamber of Estates, designed to supplement the territorial parliament.

The principal function of these estates would be the social "regulation of production and distribution", which necessarily included the public regulation of prices and the circumscription of the forces of competition. In the evolution of Catholic social thought, Franz Hitze stands out from his predecessors and successors, both in his emphasis on the state direct government intervention in the economic processes, and in his more extreme proposals for the thoroughgoing reconstruction of society along corporative lines.

Baron Georg von Hertling

After 1880 German Catholic writers and spokesmen shifted their emphasis away from corporative programs of social reconstruction to what Dr. Bowen calls 'meliorism'. Meliorism is defined as the acceptance of the "existing capitalist-individualist social order", while working within this frame work to correct certain abuses. Baron Georg von Hertling, a parliamentary leader of the Center Party, was the chief spokesman for the meliorist viewpoint. Hertling believed that "occupational freedom and the other economic liberties established by liberal legislation should be upheld in principle, leaving it to social legislation, to private charity, and to voluntary labor organization to remedy specific abuses without recourse either to far-reaching state intervention or to sweeping institutional change." (46) Until after World War I the meliorists dominated the Social Catholic movement, apart from a few isolated scholars and academicians .

Albert Schaffle

In addition to the Social Catholic movement, the last quarter of the nineteenth century saw the rise of another German movement relying on corporative doctrines, which has (47) been labeled "Monarchical Socialism" by Elmer Roberts. Monarchical socialism also arose in response to the social and economic problems accompanying the accelerated pace of industrialization and urbanization, and as an alternative to the revolutionary Marxian socialist parties. The intellectual leaders of this movement--Albert Schaffle, Adolf Stoecker, Adolf Wagner, and Adolf Held--were acknowledged by Werner Sombart as nineteenth century representatives and forbearers of National Socialism. (48)

Schaffle and Wagner, who were professors of political economy at Tubingen and Berlin, were anti-1iberal, antidemocratic, and anti-Marxist. Both "elaborated an organic conception of state and society that was profoundly conservative in all its main ramifications." (49) Furthermore, Schaffle was strongly influenced by the Social Darwinists. As a result his writings contained frequent demonstrations of real analogies between biological and social phenomena. In his treatise, Structure and Life of the Social Body (Bau und Leben des sozialen Korpers), Schaffle conceived of the social body as a form of organic life, whose principle of coherence was spiritual, and whose very existence was subject to the same biological laws of growth and development as physiological bodies. And as a consequence of the struggle for existence by the social organism, there emerges the need for authority, for a "central regulatory apparatus ... to ensure the unified integration of all social will and action with a view to preserving the social whole and all its essential parts.... In the state--the central, universal corporation (Universalkorporation)--the whole nation achieves unity and individuality." (50)

This philosophy led Schaffle to vigorously condemn liberalism and Marxian socialism since both viewed the state as "a vast piece of machinery" existing only for the individual and having "no value whatsoever as an historic, organic whole that binds together races, estates, corporative bodies and associations, families and individuals." (51) In the sphere of economic organization Scha'ffle, who was more conservative than most corporatist theorists, believed that "capitalist leadership of production" was a more efficient form of industrial organization. This in turn necessitated retention of the profit motive and the system of wage-labor. However, he also maintained that it was the duty of the state to: (52)
   establish and to safeguard the further development of an organized,
   corporative system for reaching agreements between employers and
   workers ... on matters relating to wages and conditions of
   employment.... A complete scheme of representative associations for
   both parties is the most important point of support for the program
   of positive social reform.... Not otherwise can we hope to overcome
   class antagonisms ... on the basis of the existing and not yet
   obsolete stage of social development.

Schaffle favored the rise of large-scale trade unions on the one side and the growth of cartels and trade associations on the other side. He hoped that with the aid of a benevolent state these movements would spontaneously develop into corporative industrial organizations, in which both labor and capital would become aware of their true community of interests. (53) To promote this class solidarity, a system of compulsory workers' insurance organized on corporative lines was recommended.

In Schaffle's scheme the state was assigned the relatively minor roles of providing "firm authoritative guidance in economic life" and of "constantly furthering, protecting, and regulating ... the play of private, associative, and corporative forces." Furthermore, the state was to avoid centralized interference, while allowing the new corporative bodies to operate "with as much freedom and relative independence as academic senates ... enjoy at the present time." (54) In the political sphere, Schaffle condemned the territorial franchise and advocated a reform of parliament along corporative lines. Although not too explicit he felt that the local and state governments as well as the "vocational unions", such as agriculture, commerce, industry, transportation, finance, insurance, the free professions, churches, and universities, should be represented by delegates to the Reichstag, or to a separate corporate chamber.

Despite extensive theorizing and voluminous writings, Schaffle's most important contribution to German political life was his attempt to organize workers' insurance along corporative lines. After the Reichstag rejected his original plan, providing for a high degree of centralization and government administration, Chancellor Bismarck drew up a social insurance plan which made vocational bodies or "insurance societies" (genossenschaftlichen), comprised of both employers and workers, the bearers of the insurance liability. Hence, the central government functioned only in a general supervisory capacity. This change was largely due to the influence of Albert Schaffle, with whom Bismarck had maintained an active correspondence in the interval between the plans.

Adolf Stoecker

Adolf Stoecker was a prominent "monarchical socialist" of this period, whose importance as a precursor of National Socialism may be seen by the action of Baldur von Schirach in making his biography "required reading" for members of the Hitler-Jugend. (55) Stoecker, a Lutheran minister, founded the Christian-Social Workers' Party in an attempt to wean the workers away from the Social Democratic Party. He was also a patriotic German nationalist and a critic of the Jewish religious and cultural role in late nineteenth century Germany. (56)

In the field of labor relations, Adolf Stoecker advanced a number of ideas which were greatly influential in the organization of National Socialist labor institutions such as the Deutschearbeits Front. He denied the necessity for a "class struggle" and maintained that the interests of labor and capital were identical in theory, and could be reconciled in practice by state intervention in economic and social matters. Stoecker believed that within the factory itself the employer should act as "leader", with the workers being his "followers". At the same time, however, the employer was to assume responsibility for the welfare of his "followers". In effect, "the employer-employee relationship must take on the character of a family tie. The boss must become a patriarch, his workers must become his enlarged family." (57)

Stoecker also felt that employers should frequently consult with workers' representatives on factory rules and regulations, recreational programs, and welfare activities, although this policy was not to include "meddling by the worker in the technical, financial, or economic policy of the enterprise." Although Stoecker held a seat in the Reichstag from 1881 to 1893 and from 1898 to 1908, his Christian-Social Workers' Party was never a political success. With the advent of economic prosperity in 1896 it declined in importance.

In the 1880's Chancellor Bismarck attempted to "promote the development of corporative political and economic institutions", as a consequence of his dissatisfaction with the results of democratic parliamentarianism. This took the form of submitting to the Reichstag a project for a National Economic Council of 125 members, which was to study and evaluate all proposals for economic legislation prior to parliamentary action. (58) The National Economic Council was viewed by Bismarck as a preliminary step toward superseding or complementing the democratically elected Reichstag with a corporative chamber based on vocational associations. However, in June 1881 the Reichstag refused to approve the project, which was then dropped. However, this did not result in a total suppression of the corporative ideal, which played a major role in the economic theory of National Socialism, and retained a strong hold on German minds even after the defeat and suppression of that regime. While most other post-war European economies have been subject to frequent industrial disputes, the corporate ideal of collaboration between labor and management as necessary parts of the same productive enterprise has served to help keep the German economy functioning as a major powerhouse on an otherwise deeply troubled continent.

(1) Spann, Othmar. 1930. Types of Economic Theory, (translated by Eden and Cedar Paul). London: George Allen & Unwin, pg. 154.

(2) Ibid., pg. 157.

(3) Ibid., pg. 157.

(4) Clapham, J.H. 1928. The Economic Development of Germany and France: 1815-1914. Cambridge: Cambridge University Press, pp. 82-83.

(5) Coker, F.W. 1910. Organismic Theories of the State. New York: Holt, pp. 150-192.

(6) Bowen, Ralph H. 1947. German Theories of the Corporative State: with Special References to the Period 1870-1918. New York: McGraw-Hill, pg. 16.

(7) Ibid., pg. 17.

(8) Ibid., pg. 17.

(9) Hayek, Friedrich A. 1944. The Road to Serfdom. Chicago: University of Chicago Press, pg. 168.

(10) Fichte, Johann Gottlieb. 1845. "Grundlage des Naturrechts." In Sammtliche Werke (Edited by J.H. Fichte) Vol. Ill, pg. 208.

(11) Fichte, Johann Gottlieb, op. cit., pg. 204.

(12) Fichte, Johann Gottlieb. 1845. "Der geschlossene Handelstaat." In Sammtliche Werke (Edited by J.H. Fichte) Vol.III, pp. 387-513.

(13) Ibid., pp. 403-407.

(14) Bowen, Ralph H., op. cit., pg. 29.

(15) Fichte, Johann Gottlieb, op. cit., pp. 408-409.

(16) Bowen, Ralph H., op.cit., pg. 31.

(17) Spann, Othmar, op. cit., pg. 159.

(18) Ibid., pg. 159.

(19) Ibid., pg. 160.

(20) Muller, Adam. 1810. "Uber Konig Friedrich II und die Natur, Wurde und Bestimmung der preussischen Monarchie." Cited in J. Baxa, Einfuhrung in die romantische Staatwi ssenschaft (Jena 1931), pg. 11.

(21) Spann, 0thmar, op.cit., pg. 167.

22 Muller, Adam. 1808-1809. Die Elemente der Staatskunst, Vol. I Part 2. Vienna: Wila, pg. 33.

(23) Ibid., pg. 287.

(24) Roll, Eric. 1942. A History of Economic Thought. New York: Prentice-Hall, pg. 238.

(25) Bowen, Ralph H., op.cit., pg. 36.

(26) Muller, Adam, op.cit., pg. 288.

(27) Bowen, Ralph H., op.cit., pp. 37-38.

(28) Spann, Othmar, op.cit., pg. 169.

(29) Bowen, Ralph H., op.cit., pg. 39.

(30) Hegel, Georg W.F. 1821. Philosophy of Right (translated by T.M. Knox). Oxford: Oxford University Press, pg. 197.

(31) Bowen, Ralph H., op. cit., pg. 42.

(32) Bulow, Friedrich. 1934. Der deutsche Standestaat. Leipzig.

(33) Sauter, Johannes. 1925. Franz von Baaders Schriften zur Gesellschaftphilosophie. Jena: G. Fischer, pp. 31-55.

(34) Ibid., pg. 8.

(35) Speech delivered at the Hamburg Congress of North German Handicraft Workers, June 2, 1848. Cited in Ralph H. Bowen, op. cit., pp. 55-56.

(36) Spann, Othmar, op. cit., pg. 216.

(37) Roll, Eric, op. cit., pg. 244.

(38) Spann, Othmar, op. cit., pg. 199.

(39) Vickrey, William. 1955-1956. Theoretical Economics. New York: Columbia University Lecture Notes, pg. 295.

(40) List, Friedrich. 1841. Das nationaie System. Cited in Othmar Spann, op, cit., pg. 193.

(41) Spann, Othmar, op.cit., pp. 200-201

(42) Bowen, Ralph H., op.cit., pg. 64.

(43) von Ketteler, Wilhelm E. 1864. Die Arbeiterfrage und das Christenthum. Mainz.

(44) Ibid., pp. 130-136.

(45) Hitze, Franz. 1880. Kapital undArbeit und die Reorganisation der GeselIschaft. Paderborn.

(46) von Hertling, Georg. 1882. "Kritik der Hitze'schen Schrift, 'Kapital und Arbeit und die Reorganisation der GeselIschaft.'" Christlich-sozialeBlatter. Vol. 15, pp. 366-375.

(47) Roberts, Elmer. 1913. Monarchical Socialism in Germany. New York: Scribners.

(48) Sombart, Werner. 1934. A New Social Philosophy (Translated by Karl F. Geiser). New York: Greenwood Press, pp. 113-114.

(49) Bowen, Ralph H., op.cit., pg. 122.

(50) Schaffle, Albert. 1875-1878. Bau und Leben des sozialen Korpers. Vol. I. Tubingen, pg. 428.

(51) Schaffle, Albert. 1885. Die Aussichtslosigkeit der Sozialdemokratie. Tubingen, pg. 12!.

(52) Ibid., pp. 90-95

(53) Ibid., pp. 93-95.

(54) Ibid., pp. 16-17 and pp. 114-115.

(55) Bowen, Ralph H., op. cit., pg. 137.

(56) Snyder, L.L. 1935. From Bismarck to Hitler.

(57) Stoecker, Adolf. 1890. Christlich-Sozial: Reden und Aufsatze. Berlin, pp. 210-213.

(58) Bowen, Ralph H., op. cit., pp. 148-153.

Donald A. Swan (deceased)

Formerly, University of Southern Mississippi
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Date:Jun 22, 2013
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