In 1926, the Social Democratic Party of Germany (SPD) finance minister Rudolf Hilferding published an article in Die Gesellschaft which considered the significance of industrialist Paul Silverberg’s speech to the Dresden meeting of the country’s leading business association—the Reichsverband.1 Silverberg was the first industrialist to suggest that German capital could reconcile itself to the Weimar Republic instead of seeking its overthrow. (He was also, as it happens, the only Jewish industrialist of any note in the 1920s, at least after Rathenau’s assassination in 1922, and would leave Germany for Switzerland at the end of 1933.) Hilferding argues that this was the first time since Bismarck’s days that the alliance between the big landowners and heavy industry had come under severe strain. Thanks to the territorial losses imposed on Germany, the Versailles Treaty had “reduced the weight of heavy industry.” Coal and iron had been worst affected by the economic crisis and the occupation of the Ruhr, and this had completely reversed the relation between capital and the state as the barons of coal and steel became critically dependent on bank finance. This weakening of heavy industry went along with a qualitative change in the structure of German industry. He writes:
To a much greater degree, the leadership of industry passes to industrial groups of a different kind from the heavy industry of Rhineland-Westphalia. In the very years that the raw materials sector suffered so badly, the German electricity industry, for example, consolidated its position through technical renovation and financial consolidation. Above all, however, it was the chemical industry that conquered the preeminence it enjoys today above all other sectors. With its capital of 1.1 billion marks it is the biggest industry in Germany and one of the biggest in the world. Far from being dependent on heavy industry, its processes for the liquefaction of coal could well make the coal industry dependent on it.
Hilferding points to Carl Duisberg’s position as Chairman of IG Farben’s Supervisory Board and, simultaneously, head of the Reichsbverband as a clear expression of the leading position of the chemical industry. But this industry, like so many of the finishing industries, is not in such immediate and unmediated conflict with the working class as heavy industry is. In the latter, wages form the major portion of industrial costs. Every demand for higher wages or shorter working hours encounters the fiercest opposition there. The lords of coal and iron were the most determined enemies of the unions and of wage contracts. But in the finishing industries, wages are much less important than the other elements of cost. Their profits are so extraordinary that wage increases are of declining importance, the continuity of the plant becomes vastly more important. Their attitude to the workers’ organizations is also quite different and more inclined to compromise.
Before the war, heavy industry was the bearer of an aggressive German imperialism. Germany’s defeat in the war broke its military might, yet Germany remained an economic powerhouse of the first order. Therefore, German capitalism’s external drive had to take a different form, which it found in international business partnerships (Interessengemeinschaften). German industry has gradually emancipated itself from the political leadership of heavy industry. With the country becoming dependent on international loans, the Reichsverband became a supporter of the Dawes Plan. It wants no part of any struggle over the form of state, it recognizes that social power-relations have changed. The utopia of destroying the unions and Social Democracy is now finished. The German National People’s Party’s (DNVP) monarchism and aggressive nationalism are rejected by German industry. The only supporters of such a politics are sections of the intelligentsia and of the declassed elements who include former army officers. But these are layers on which no party can build a lasting future. Against this background, Hilferding concludes that Silverberg’s speech will only strengthen that party’s will to join the government. ….
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