The Impact of the 1929 Crisis

Just a few years before Hitler’s takeover in 1933, his National Socialist German Workers Party (NSDAP) remained largely irrelevant. It was only after the stock market crash in 1929 that their vote total jumped from eight hundred thousand in 1928 to over six million in 1930 and 37 percent of the vote in 1932, making them the largest party in parliament.

The backdrop for this rapid growth was of course the ongoing economic crisis eating away at the very foundations of global capitalism. The massive slump in investment caused by the 1929 crash led to a 29 percent decline in global industrial production by 1932. Germany’s industry was particularly hard hit, as it was financed by massive foreign (particularly American) loans, which collapsed as soon as lenders withdrew credit.

As firms large and small went bankrupt across the country, considerable sections of the middle classes were thrown into poverty. The peasantry also suffered as food prices dropped, and workers faced wage cuts averaging 30 percent. By 1933, unemployment had gone from 1.3 million in 1929 to roughly 6 million. Only one-third of workers were employed full time.

After the last democratically elected government of the Weimar Republic stepped down in March 1930, President Hindenburg appointed a presidential cabinet without parliamentary backing, often relying on emergency decrees to rule. Hindenburg’s chancellor Heinrich Brüning and his successor Franz von Papen launched a massive austerity drive, drastically cutting unemployment benefits, social spending, and pensions while raising taxes on food and consumer goods. As a result, widespread hunger became a regular feature of urban life.

The state’s austerity drive served the interests of Germany’s employer class. Just weeks after the Wall Street crash, the League of German Industry called for the welfare state to be “adapted to the limits of economic sustainability,” decrying “unjustified and immoral abuse” of social security benefits.

In the eyes of German employers, the economic crisis had been caused by a bloated welfare state, high wages, and short working hours, so they responded by canceling contracts, lowering wages, and abolishing the eight-hour workday. The German state backed up these moves in 1932 by abolishing collective bargaining and the right to strike.

Austerity was designed to relieve German business of high labor costs, thereby lowering prices of German products on the world market and boosting the national economy. But since all industrial economies were pursuing similar export strategies, the promised recovery never came and poverty continued to rise.

Polarization

The crisis was most devastating for the unemployed and the middle classes, who were in turn the two social groups where the Nazis found most of their support.

For craftsmen, small businessmen, civil servants, and shop owners, the crisis subjected them to pressure from two sides. The late German sociologist Arno Klönne described them as “feeling threatened by the increasing concentration of industrial and finance capital on the one hand, and by the demands of the well-organized industrial working class on the other.” National Socialist demagoguery, directed against both finance capital and the labor movement, proved particularly appealing to members of the middle class.

The situation of the unemployed was of course dramatically worse than that of the middle classes. As the old social security system collapsed, unemployment in Weimar Germany increasingly became a bitter struggle for survival, while skyrocketing unemployment erased any hopes of finding a job in the near future.

In this context, the SA and other terrorist groups under Nazi command quickly attracted legions of jobless Germans, who found a newfound sense of belonging, camaraderie, and power in Nazism. The racism and antisemitism embedded in Nazi ideology gave many members a sense of pride and superiority over the Jews, foreigners, and homosexuals to whom they were allegedly superior.

Another important aspect of the NSDAP’s success was the image they projected of themselves as a radical alternative to the existing republic. According to Klönne, “the youth and the long-term unemployed” in particular were “driven by desperation and impatience; they could not be approached with some sort of ‘long-term perspective,’ they wanted jobs and bread, here and now.” The NSDAP promised “immediate measures to remedy their desperate situation.”

By manipulating this image and appealing to the most vulnerable social groups, Hitler’s party managed to become a true mass movement within a few years — the SA alone had four hundred thousand members by 1932.

The growth of the radical right is only half of the story, however. Rather than viewing the last years of the Weimar Republic as one of a nationwide rightward shift, they should be understood as a process of political polarization benefiting both right and left.

Thus the German Communist Party (KPD) increased its vote total by 1.3 million in the first election after the stock market crash, and membership more than doubled to a quarter million between 1928 and 1932. The Communists exerted a visible street presence, organizing demonstrations and engaging in physical confrontations with the Nazis.

The overall strength of the German labor movement, the largest and most powerful in the world at the time, is evidenced by the fact that even in the last free elections in November 1932, only a few short months before Hitler’s takeover, the KPD and SPD combined still obtained more votes than the Nazis. Given their numerical strength and anti-fascist politics, a confrontation between the Nazis and the workers’ parties seemed inevitable.

Appealing to KPD members in the pages of the Militant in 1931, Leon Trotsky summarized the German political situation as follows:

If you place a ball on top of a pyramid the slightest impact can cause it to roll down either to the left or to the right. That is the situation approaching with every hour in Germany today. There are forces who would like the ball to roll down towards the Right and break the back of the working class. There are forces who would like the ball to remain at the top. That is a utopia. The ball cannot remain at the top of the pyramid. The Communists want the ball to roll down toward the Left and to break the back of capitalism.

Labor’s Final Defeat

German employers also understood that polarization could not go on forever, but were mostly worried about the possibility of the labor movement taking power. The Nazis understood how to capitalize on this fear, promising to enforce the interests of business by any means necessary. At a Nazi fundraiser organized by prominent industrialists, SS leader Rudolf Hess displayed photos of revolutionary demonstrations on one side, and uniformed SA and SS divisions on the other:

Here, gentlemen, you have the forces of destruction, which are dangerous threats to your counting houses, your factories, all your possessions. On the other hand, the forces of order are forming, with a fanatical will to root out the spirit of turmoil . . . Everyone who has must give lest he ultimately lose everything he has!

Former Nazi official Albert Krebs described the scene in his memoirs: “Not all capitalists were particularly enthusiastic about the Nazis, but their skepticism was relative and ended as soon as it became clear that Hitler was the only person capable of destroying the labor movement.” Terrified by the prospect of further gains for the labor movement, capital’s support for Hitler grew rapidly.

Trotsky illustrated the dynamic colorfully: “The big bourgeoisie likes fascism as little as a man with aching molars likes to have his teeth pulled” — that is to say, it was ugly, but it was necessary. Hitler kept his promise to capital. After being declared Chancellor in January 1933 he outlawed both workers’ parties and the trade unions within a few months. Thousands of Social Democrats, Communists and trade unionists were arrested and murdered.

Capital’s support was certainly decisive to Hitler’s rise, but a Nazi victory was still not inevitable. A series of terrible strategic blunders on the part of the German left played a major role in their downfall.

Social Democracy

The German Social Democratic Party (SPD) understood what sort of threat the NSDAP posed, yet failed to put up the kind of fight necessary to stop them. In a desperate attempt to block the Nazis from taking power through legal means and save Weimar democracy, the SPD pursued a strategy of supporting the “lesser evil” — i.e., the current right-wing, authoritarian government — as a bulwark against Hitler (who would certainly be even more right wing and authoritarian).

This entailed support for the candidacy of archconservative Hindenburg in the 1932 presidential election and toleration of Brüning and von Papen’s authoritarian presidential cabinets, as well as the tax hikes and spending cuts they enacted.  The strategy ran counter to the party’s political program, not to mention the material interests of its supporters.

The weakness of this strategy was particularly obvious on July 20, 1932, when Chancellor von Papen dissolved the SPD-led government in Prussia, the largest state in the republic. The SPD had already organized workers’ militias for precisely such a situation, the so-called Iron Front, a year earlier. But when faced with an actual confrontation the party leadership abandoned armed resistance, instead urging calm and restraint.

The German trade union confederation (ADGB) followed a similar path. Many trade unionists were also SPD members and supported the lesser evil strategy, tolerating Hindenburg’s government in hopes of stopping the Nazis through constitutional means. Consequentially, they also refrained from calling for a general strike in Prussia in 1932.

Nazi Propaganda Minister Joseph Goebbels, however, was very much aware of the implications of July 20. As he recorded in his diary a few days later: “The reds have been defeated. Their organizations did not put up any resistance. The reds have missed their moment of truth. There will not be another.”

Ultimately, Goebbels was right. As a result of the Prussian disaster, half a million voters defected from the SPD in elections two weeks later. The disastrous non-response of July 1932 was repeated six months later when the Nazis took power and systematically eviscerated the labor movement.

The KPD

The Communists were the only organization of the working class that organized extra-parliamentary resistance to the Nazis while opposing the government’s austerity drive, but they too failed. Their failure was due largely to an inability to develop a clear analysis of fascism and comprehend the threat it posed.

The Central Committee overused the phrase “fascism” to the point of meaninglessness. As far as they were concerned, the German state had become fascist in 1930 when Hindenburg’s presidential cabinet took over. Indeed, the KPD leadership considered all other parliamentary parties to be variants of fascism, telling its members that “fighting fascism means fighting the SPD just as much as it means fighting Hitler and the parties of Brüning.”

The KPD took its position from Moscow, basing itself on the theory of “social fascism” that fascism and Social Democracy were not opposed but in fact functioned like “twin brothers,” as Stalin had once argued. In the context of deep capitalist crisis, it was Social Democracy —  holding back the workers from fighting capitalism — that constituted the “main enemy.”

Following this line, the leadership rejected all cooperation with the SPD, even when it came to fighting the Nazis: “The social fascists know that for us there can be no collaboration with them. With respect to the party of the Panzerkreuzer, the police-socialists and those paving the way for fascism, for us there can only be a fight to the death.”

Many Communists endorsed these sorts of radical-sounding phrases, as the KPD was increasingly a party of the unemployed. Communist workplace organization had almost ceased to exist. By the fall of 1932, only 11 percent of KPD members were waged laborers.

Thus, most Communists no longer knew Social Democrats as work colleagues, but only as supporters of the lesser-evil strategy and events like “Bloody May” on May 1, 1929, when police under the command of Social Democrat Karl Friedrich Zörgiebel violently suppressed a KPD-led demonstration.

Accentuating the blockade was the SPD leadership’s outright refusal to collaborate with the Communists. The SPD at the time was consumed by an anti-Communist fervor, often equating Communism with Nazism. Party Chairman Otto Wels declared at the Leipzig party convention in 1931 that “Bolshevism and fascism are brothers. They are both founded on violence and dictatorship, regardless of how socialist or radical they may appear.”

Rather than offering the majority of the population a political alternative, the KPD’s policy of directing most of its ire against the SPD drove it into the arms of the Right, at least for a little while. The most notorious example of this occurred in 1931, when the KPD supported a popular referendum against the Prussian SPD government initiated by Nazis and other nationalist forces.

The United Front

These disastrous policies were sharply criticized by various oppositional communists. Of particular importance were Leon Trotsky and August Thalheimer. Thalheimer had been a founder of the German “Right Opposition” (KPO), which had broken with the KPD in 1929. Trotsky, one of the most well-known leaders of the Russian Revolution and now a prominent dissident communist, led his followers from exile on the Turkish island of Büyükada. Both paid close attention to developments in Germany.

Thalheimer’s party argued that the rise of fascism could only be stopped through “an all-encompassing and planned general offensive” by the working class. The necessary organizational tool for this offensive was the united front. Trotsky agreed, arguing that both parties were equally threatened by Nazism and thus must fight together.

The objective necessity of the united front meant that the theory of social fascism must be abandoned. As long as the KPD refused to do so, it would fail to connect with SPD supporters: “This kind of position — a policy of shrill and empty leftism — blocks the Communist Party’s road to the Social-Democratic workers in advance.”

The appeal for a united front could not be directed exclusively to the party membership, but would necessarily entail negotiations between the leaderships as well. A pure “united front from below” would not succeed as a majority of party members wanted to fight fascism, but wanted to do so together with their leadership. Communists could not expect to only link up with Social Democratic workers prepared to break with their leaders.

The importance of organizing the broadest possible unity of action within the working class overruled other concerns. This did not mean, however, that Communists should moderate or soften their political demands.

On the contrary, it was in the context of unified working class action that Communists could best prove their credentials as anti-fascists: “We must help the social democratic workers in action — in this new and extraordinary situation — to test the value of their organizations and leaders at this time, when it is a matter of life and death for the working class.”

In order to guarantee this, the united front had to consist of political action, not parliamentary collaboration, and could only be built around a central point — in this case, the fight against fascism. It was of utmost importance that Communists retain their political and organizational independence within the front. Trotsky’s slogan — “March separately, but strike unitedly! Agree only how to strike, whom to strike, and when to strike! […] On one condition, not to bind one’s own hands” — summed up the approach well.

Trotsky and Thalheimer’s appeals for a united front were well-received by workers and intellectuals, as the popular desire for unity in the face of the growing Nazi threat was understandably widespread. This desire could be seen in the “Urgent Call for Unity” issued by thirty-three well-known public intellectuals including Albert Einstein in the run-up to the 1932 elections, calling for the KPD and SPD to “finally take a step toward building a united labor front, which is necessary not just for parliamentary, but for additional defense as well.”

In the small towns of Bruchsal and Oranienburg where Trotsky’s German supporters had some political influence, they managed to build anti-fascist committees that included both Social Democrats and Communists. In many other places where no Trotskyists were present, local Communist and Social Democratic activists simply ignored their leaders and began working together, as has been proven by recent archival research.

Joachim Petzhold, for example, surveyed internal reports of the Interior Ministry from the summer of 1932, concluding that “many Communists wanted to unify with Social Democrats against fascism.” He notes the “discrepancy between the party leadership and party membership” in this regard.

This discrepancy can be seen in a police report from June 1932, in which was written that “during bloody confrontations with National Socialists … the practical united front is regularly deployed despite antagonisms between the two Marxist parties, and it is often the Communists who are the quickest and most enterprising in this activity.”

Another passage of the same report noted that “Practical united front activity is occurring across the Reich. SPD shop stewards collaborate with red colleagues, members of the Reichsbanner (an SPD-led workers’ militia) show up as delegates of their comrades to Communist meetings; members of the Iron Front in Duisburg discuss united front tactics in the KPD’s office.

Unified funeral processions and burials are commonplace everywhere, as are cross-party demonstrations in response to National Socialist marches. Social Democrats show up at the numerous anti-fascist conferences organized by the KPD; trade union functionaries declare that the KPD’s extended hand of brotherhood may not be turned away.”

Moves toward working-class unity also occurred in southern Germany. In July 1932, for example, local SPD leader Reinbold offered a truce to the Communists: “Setting aside that which divides us is an appropriate demand given the grave nature of our time.” Local KPD leaderships in the towns of Ebingen and Tübingen extended similar offers to the SPD and the unions around the same time.

In December 1931, isolated instances of joint SPD-KPD electoral lists occurred in Württemberg. The most pronounced example of practical unity took place in the small town of Unterreichenbach, where the KPD dissolved and joined with the local SPD to found a united workers party.

United by Defeat

Despite inspiring local dynamics, the KPD was already thoroughly Stalinized. All oppositional currents had long been expelled, meaning that Comintern loyalists controlled the party and dictated its line against the wishes of the membership if necessary. The line from Moscow was to hold on to the theory of social fascism until the bitter end.

When President Hindenburg named Hitler chancellor on January 30, millions of German workers were ready for a fight. Protests broke out across the country while factory representatives met in Berlin to coordinate a response to the SPD’s call for joint struggle.

Unfortunately, union leaders again called for restraint. The Vcce-chair of the ADGB stated: “We want to reserve the general strike as a measure of last resort.” Leader Theodor Leipart added: “We want to emphasize that we are not in opposition to this government. However, that cannot and will not stop us from also representing the interests of the working class vis-à-vis this government. ‘Organization, not demonstration’ is our motto.”

Only the KPD called for a general strike, urging all organizations of the working class to build a united front “against the fascist dictatorship of Hitler-Hugenberg-Papen”.  Sadly, these coalitions were only realized in a few smaller cities like Lübeck. For the most part, the KPD was unable to win substantial influence in the organized labor movement. Its years of political isolationism had driven it too far into the wilderness.

After January it was too late, Hitler and the Nazis had already defeated the strongest labor movement in the world. The KPD, the SPD and the trade unions were summarily outlawed and decimated. Their members met again, often for the last time, side by side in the first concentration camps erected by the new regime.

Though the Nuremberg trials did bring some of the most notorious Nazi criminals to justice, they also reduced the horror of fascism to the actions of a few particularly evil individuals while simultaneously integrating that horror into a narrative of collective national guilt. In such a narrative, both no one and everyone is at fault. “No one” in the sense that blame is assigned to high-ranking officials and their lackeys, but “everyone” because fascism requires a collective base of mass support, thus marking all who lived under the regime as potential collaborators.

Instead of submitting to this analytical double-bind, we should reclaim a view of history that acknowledges the conflictual and contested nature of social change. Fascism is never inevitable, but is rather the outcome of a confrontation between radically opposed social forces. Wherever there are fascists, there will likely be socialists and other leftists fighting against them. This was true of Germany in 1933 when the Left lost and Nazi barbarism won, and continues to be true in today’s Europe of renewed economic crisis and political polarization.