Tuesday, August 9, 2016

Future Schacht, XII: The Decay of Private Property


As we have seen in this series, while the rest of the world quickly rebounded from the brief recession following World War I, Germany, Austria, and Hungary plunged into what seemed a bottomless pit of despair.  If there is any question as to why a people so eminently civilized as the Germans permitted someone like Adolf Hitler to come to power, one need look no further than the unmitigated horror that the nation endured in the early 1920s.  Ground between the upper and nether millstones of reparations and hyperinflation, people were willing to follow anyone who could promise them order and security again.
Hitler's rival Ernst Roehm (liquidated).
There is nothing special or inhuman about the German people that caused them to support Hitler.  He promised order, and he delivered once he gained power . . . after he “liquidated” potential rivals in the Nazi Party during the “Night of the Long Knives.”  As people everywhere still do today, the Germans were ready to give up everything to gain even the smallest scrap of security and predictability.  Hitler managed to give hope to people who believed themselves past it, and were terrified that the hyperinflation and the chaos would return in the 1930s as the Great Depression began spreading its effects throughout the world.  How he did it was another matter.
While the Weimar Republic was socialist, it did not go as far as Hitler was prepared to take the new Third Reich.  The Nazi conception of landed property, Wunderlich, is indicative of the new Chancellor’s economic and social policies, as well as his stand on basic human rights.  Briefly, this provided that actual ownership of landed property was abolished, and land (and, by extension, other productive assets) was only considered to be in the temporary custody of whoever could make it productive.  Only workers had a right to own, and then only as long as they could work.  Once that ability ceased, title was to be taken away, as was life itself for anyone deemed a "useless eater," i.e., who consumed without producing, such as the mentally and physically disabled, or those engaged in occupations deemed useless, such as any journalist who said the wrong thing in print.
Reparations demands helped get Hitler elected.
Of course, the industrialists and financiers supported Hitler simply because he promised order and to maintain a stable currency at a time when Keynesian economic and monetary policy was starting to make its inroads on the soundness of the U.S. economy, and to get rid of the reparations payments that shackled economic growth and recovery.  They knew that, ultimately, Hitler was a socialist, but as national socialist opposed to international communism, he would do nothing to undermine their wealth and power . . . as long as it was used to support Hitler, the glory of the Third Reich, and world conquest.  Only bad Germans, useless eaters, inferiors, non-Aryans, and everyone else had anything to worry about.
And those who opposed the power of the German state had a lot to worry about, aside from their lives and liberty.  As early as 1927, Weimar jurists identified a “natural weakness of property” in unwritten law, and abrogated to the State the administrative power to restrict ownership rights.[1]
They also emphasized the old Germanic idea of “social duty,” a more conceptually sound idea related to the limitation of the exercise of rights when constrained by the common good.  More dangerous was the idea that, “the cultural development of the history of law” was a process “placing more and more objects outside of private property,” and demanded the abolition of rights that conflicted with Der Zeitbewußtsein, “the consciousness of the epoch.”[2]
Keynes: "euthanasia" of the "functionless investor" who doesn't work.
Nazism denied the absolute character of property, and imposed obligations conditioning property tenure, i.e., producing something that contributed to the security or needs of the State.  Property without function was to be abolished, shades of Lord Keynes’ hostility toward the rentier (someone who lives off the income of his or her investments), or, as he referred to the small property owner, “the functionless investor”[3] because he consumes what he produces instead of saving it to invest in new capital to create wage system jobs.  The acquisition of legal title was a “continuous process” of which legitimate use was the essence.  Ownership was not a right that stood by its own virtue, but a trusteeship for the discharge of the aims of the community.  “All property is common property.  The owner is obliged to administer it.”  Property rights could be justifiably revoked when those functions were not fulfilled.  This was connected with the romantic agrarianism which contrasted the “creative” peasant with the “parasitic and destructive nomad”[4] such as the Jews (a.k.a., "culture destroyers"), and which demanded Bodenstandigkeit, “rooting in the soil,” for the farm population and, by extension, anyone engaged in production.[5]
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[1]Wunderlich, the National Socialist Conception of Landed Property, 12 Social Research 60 at 61, 66, 72 (1945), quoted in Howard R. Williams, Cases and Materials on the Law of Property, Brooklyn:  The Foundation Press, Inc., 1954, pp. 46-48.
[2]Ibid.
[3]“I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work.  And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change.  It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged continuance of what we have seen recently in Great Britain, and will need no revolution.”  Keynes, The General Theory, VI.ii.
[4]See Adolf Hitler, Mein Kampf, New York: Houghten-Mifflin, 1971, pp. 287 - 296.
[5]Williams, loc. cit., Hitler, op. cit., pp. 138, 142.

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