END OF GERMAN CAPITALISM
211
The effect of State-controlled national monopoly in Germany, how–
ever, has been the reverse: it has weakened, if not eliminated, the
economic contradictions of capitalism. For a long time now, bour–
geois and Marxist observers have been predicting imminent catas–
trophe
in
Germany, and yet the economy seems stronger today than
ever: there is 100% production and employment, the State expe·
riences little difficulty in maintaining its huge expenditures, infla–
tion seems more remote today than in the early years of the Nazi
regime.*
Why this difference in the economic effects of private as
against State monopoly? The chief economic advantage enjoyed
by private trusts is that they exist in a predominantly market econ–
omy and hence are able to levy tribute with the iron hand of
monopoly on the relatively weak and unorganized non-monopo–
listic sections of the economy. "Monopoly organizations," writes
Bukharin, "can overcome the tendency towards lowering the rate
of profit by receiving monopoly super-profits at the expense of non–
trustified industries." Private monopolies thus throw the national
economy still further out of balance and bring on ever more severe
crisis because their whole strategy, their
raison d'etre
in fact, lies
in taking advantage of and intensifying the disproportion between
the monopolized and the non-monopolized parts of the whole econ·
omy. As Lenin describes it in
Imperialism:
"At the same time
monopoly, which has grown out of free competition, does not abol–
ish the latter but exists alongside it and hovers over it, as it were,
and, as a result, gives rise to a number of very acute antagonisms,
friction and conflicts."
In the case of a 'State-capitalist trust,' however, the whole
economy is controlled by the State, and there exists no longer any
free-market sector. Hence the kind of unbalances created by the
growth of private monopolies do not arise. Furthermore, the State
controls not only all branches of the national economy, but also all
*It
would be interesting to compile a register of prophecies of disaster, from 1933
to 1939, made by economists outside Germany. Even Dr. Schacht, Reichsbank head
and Economics Minister, became convinced that financial disaster lay ahead
if
spend–
ing
were not reduced and finally came into such sharp opposition on the point that he
had to be stripped of all his powers. His prophecies have not come true. Schacht's
case is a particularly striking example of the 'cultural lag' observable in thinking on
this subject both in Marxists and in bankers, and for the same basic reason, that both
think in terms of a capitalist economy. Although Schacht himself created much of the
ingenious economic machinery by which the Nazi State controlled the contradictions
of capitalism, he was, after all, by training a banker and this proved more decisive
than his more recent experiences as a bureaucrat.
