The Economy and Class Structure of German Fascism

Chapter 1: Ramifications Around the Bendlerstrasse Berlin

In the early 1930s, Alfred Sohn-Rethel found himself embedded within the heart of German capitalism, working as a research assistant for the Mitteleuropaischer Wirtschaftstag (MWT), a prominent business organization located near the Bendlerstrasse in Berlin. This area, known for housing the German Army Headquarters (Reichswehr), was a significant locus for both political and economic power in Weimar Germany. The MWT, a key player in the German business sector, included representatives from major industrial firms such as Siemens, I.G. Farben, and Krupp, as well as banking and agricultural sectors. The office was located within a larger network of power, sharing space with various business groups and institutions that played central roles in Germany’s financial, industrial, and political life. The proximity to the military and other powerful groups gave Sohn-Rethel a unique vantage point to observe the complex relationships between business, politics, and the emerging fascist movement.

Sohn-Rethel reflects on the almost invisible yet highly significant connections he witnessed among these various groups. The MWT’s members, despite their seemingly neutral façade, were deeply interconnected through their mutual financial interests, and many had longstanding relationships with high-ranking military officials, government ministers, and leading businessmen. This network of power was not confined to the MWT but extended across various sectors of German society, from the land-owning Junkers to the industrial magnates of the Ruhr Valley. Working within such a setting allowed Sohn-Rethel to witness firsthand how the economic elites, who initially maintained a veneer of detachment from Nazi ideology, were gradually drawn into supporting Hitler’s rise to power.

At the MWT, Sohn-Rethel’s role as a research assistant was to analyze economic data and provide reports on industrial trends, but he quickly realized that his position placed him at the epicenter of a critical economic and political shift. The office itself was a microcosm of the broader German power structure. Behind closed doors, economic policies were formulated that would not only reshape the financial landscape but also influence the political direction of the country. From his vantage point, Sohn-Rethel began to observe the tensions brewing between different factions of German capital, particularly between large-scale industry and agricultural interests.

The central question that preoccupied many in these circles was how to stabilize the German economy after the devastation of the Great Depression. While industrialists sought international trade and expansion, agricultural interests, particularly the Junkers, pushed for protectionist policies that prioritized self-sufficiency. This tension was evident within the MWT’s own operations, as representatives from these factions often clashed over policy direction. Sohn-Rethel noted that the industrialists, who were more focused on expanding their markets and maintaining their profits through international trade, saw the protectionist policies of the agriculturalists as counterproductive. In contrast, the Junkers and agrarian elites feared the collapse of their traditional way of life and sought to preserve their power through nationalistic and protectionist measures.

Sohn-Rethel’s analysis reveals that the economic crisis created by the Depression exposed the deep contradictions within the German capitalist structure. The slump of the early 1930s had a devastating impact on the German working class, but it also revealed cracks within the ruling elite. The tension between the needs of industrial capital and those of agrarian capital, as well as the growing resentment among the working class, provided fertile ground for radical political ideologies, including fascism. This was a crucial period, as the working class, disillusioned by the Weimar Republic’s failure to address their needs, became increasingly susceptible to the messages of extremist movements.

The interactions between the different factions within the MWT, as well as the broader political landscape in Berlin, highlighted the class interests that would soon lead to the consolidation of power in the hands of the Nazi Party. Sohn-Rethel’s unique position allowed him to observe the gradual shift in alliances that occurred in the early 1930s, as business elites, initially hesitant about the Nazi movement, came to view Hitler as a means of stabilizing the economy and preserving their wealth and influence. Despite initial skepticism, many industrial leaders began to see the potential of aligning with the Nazis, whose aggressive economic policies promised to resolve the crisis and restore Germany’s economic strength.

The Bendlerstrasse and the surrounding area, which housed various military and political institutions, thus became a focal point for the discussions that led to the eventual consolidation of Nazi power. It was here, within this web of business, military, and political interests, that Sohn-Rethel observed the gradual rise of fascism as a solution to the contradictions of German capitalism. The MWT’s role in facilitating the collaboration between industrial capital and the Nazi regime would later be crucial in the establishment of the fascist economic system.

Sohn-Rethel’s experiences in Berlin served as a lens through which he could examine the internal contradictions of monopoly capitalism. These contradictions were not merely economic but also deeply political, as the elites who once dominated German capitalism were faced with the rise of an unpredictable and volatile force: the Nazi Party. By the end of this chapter, Sohn-Rethel sets the stage for understanding how these economic and political shifts would culminate in the Nazis’ total takeover of Germany, a takeover that would reshape both the economy and the social order in ways that aligned with the interests of monopoly capital.

Chapter 2: The Work of the MWT – The Bureau Hahn

In this chapter, Sohn-Rethel examines the internal contradictions and economic tensions within the German monopoly capitalist class during the critical period of 1930 to 1933. At the center of this analysis is the Mitteleuropäischer Wirtschaftstag (MWT), and more specifically, the Bureau Hahn, named after its head, Dr. Max Hahn. This bureau was not merely a technical or statistical office—it functioned as a semi-covert policy coordination center for key actors in German big business, operating at the intersection of industry, agriculture, and finance.

The MWT was ostensibly a representative organization for German business, designed to provide a platform for dialogue between different sectors. However, Sohn-Rethel reveals that beneath its surface function of promoting economic cooperation, the MWT became a battleground for conflicting interests. Most significantly, it mediated the strategic tensions between two major factions: the internationally oriented heavy industrialists—especially those from the Ruhr region—and the more conservative, inward-looking agrarian elites, such as the Junkers of East Elbia.

Dr. Hahn’s bureau was tasked with preparing reports and policy recommendations for resolving Germany’s deepening economic crisis. Yet the information and policy positions it produced were far from neutral. Hahn, an influential figure, represented the more nationalist and militaristic interests within German capital. His bureau became a nerve center for aligning these interests and coordinating opposition to both Weimar parliamentary democracy and Brüning’s deflationary economic policies.

Sohn-Rethel pays close attention to how the Bureau Hahn maneuvered during the economic depression. By 1931, the German economy was paralyzed by overcapacity, deflation, and a credit crisis. Unemployment soared, investment collapsed, and the state was unable to find a fiscal solution without alienating powerful economic actors. In this context, the MWT began to shift its role: it evolved from being a technical advisory body to acting as a political instrument for organizing consent among Germany’s industrial bourgeoisie for more authoritarian and expansionist policies.

This process, however, was far from smooth. Sohn-Rethel outlines how the German business class was divided not just by economic sector, but by different strategic outlooks on how to overcome the crisis. The more internationally engaged corporations (e.g. Siemens, I.G. Farben) favored policies that maintained Germany’s integration with the global economy. They feared that autarky and protectionism would isolate Germany and destroy their access to foreign markets and capital.

In contrast, many other industrial and agrarian interests advocated for a turn inward—toward national rearmament, state planning, and eventually fascist dictatorship. The Bureau Hahn became a key institutional force pushing for this realignment. It forged a consensus that economic recovery could not be achieved through market solutions or parliamentary methods, but only through decisive state action directed by a strong nationalist government.

Sohn-Rethel’s insider perspective shows how this shift did not occur all at once but was the product of gradual erosion of democratic legitimacy and the increasing acceptance of authoritarian solutions within elite circles. The Bureau Hahn coordinated influential memoranda, white papers, and behind-the-scenes discussions that emphasized the need for reorganizing the state along more centralized and militarized lines.

Moreover, the MWT began to systematically marginalize the voices that still supported liberal economic policies. Through strategic meetings, private lobbying, and control of expert knowledge, the MWT worked to normalize a vision of the economy that was consistent with fascist corporatism: one in which the state would suppress class conflict, plan production, and direct capital toward imperialist expansion. It is within this shift that we can see how the economic logic of monopoly capitalism converged with the political logic of fascism.

Importantly, Sohn-Rethel highlights the unique role that agricultural interests played in this process. Though often overlooked, these landowning elites were not passive spectators but active participants in the push toward fascism. They had longstanding ties to the military and deeply resented the democratic institutions that threatened their social position. Within the MWT, they formed powerful alliances with industrialists who were prepared to sacrifice democratic forms of governance in exchange for economic recovery and political control.

By the end of the chapter, Sohn-Rethel presents a disturbing yet compelling picture of how institutions like the MWT and figures like Max Hahn laid the groundwork for fascist rule—not by organizing brownshirts in the streets, but by coordinating the intellectual and strategic consensus of Germany’s economic elite. The MWT helped transform fascism from a fringe movement into a viable governing solution, capable of uniting divergent capitalist interests behind a shared program of militarism, expansion, and repression.

This chapter, then, is crucial in Sohn-Rethel’s overall argument: it reveals that the rise of Nazism was not merely the product of mass hysteria or ideological manipulation, but a rational (though reactionary) response by Germany’s ruling class to the internal contradictions of monopoly capitalism during crisis. Through institutions like the MWT, the bourgeoisie ultimately chose fascism as the only available means to preserve their class power.

Chapter 3: The Dilemma of Rationalization

In this chapter, Alfred Sohn-Rethel delves into one of the key contradictions of German capitalism in the lead-up to fascism: the so-called “rationalization” process of the late 1920s and early 1930s. Rationalization referred to the drive by German industrial firms to modernize production—mechanize, consolidate, and increase output per worker through scientific management and technological innovation. At first glance, this appears as a progressive, efficiency-driven movement. But Sohn-Rethel shows how this process, when conducted under the imperatives of monopoly capitalism, led not to stability and growth, but to intensified economic dysfunction.

By the mid-1920s, Germany was already lagging behind the United States in terms of industrial productivity. Inspired by American methods—particularly the Fordist model—German capitalists sought to catch up by introducing new machinery, streamlining labor processes, and reducing redundancies. These changes were meant to improve competitiveness and reduce production costs. The state and industry promoted rationalization as a way to restore German economic power in the post-war context. However, as Sohn-Rethel points out, rationalization occurred in a highly contradictory setting: the modernization of the means of production took place without a corresponding expansion in mass purchasing power. In other words, productivity soared while wages and domestic demand stagnated or even declined.

This imbalance had devastating consequences. Increased output without increased consumption led to chronic overproduction—goods were produced at a volume that far exceeded what the domestic or global market could absorb. Firms, especially in heavy industry, were caught in a paradox: they became more efficient but less profitable. Rationalization, rather than resolving the crisis of capital accumulation, deepened it. Entire sectors suffered from falling prices and shrinking margins despite technical advancement.

For workers, rationalization translated into layoffs, wage cuts, speedups, and the erosion of trade union power. Rationalization often went hand in hand with anti-labor policies, including the mechanization of previously skilled work, which undermined worker autonomy and bargaining power. The resulting unemployment and labor unrest further depressed consumer demand, worsening the economic spiral.

Sohn-Rethel argues that the real dilemma of rationalization lies in the irrationality of applying rational economic methods within a capitalist framework that prioritizes private profit over social needs. Rationalization made sense from the standpoint of individual firms but proved disastrous for the system as a whole. It created islands of efficiency within an ocean of economic stagnation.

The contradiction was even sharper in monopoly capitalism, where a small number of giant firms dominated sectors like steel, coal, and chemicals. These monopolies were in a position to coordinate prices and production levels to some extent, but their primary interest remained profit maximization—not the health of the overall economy. Thus, rationalization became a tool for intensifying competition among firms while simultaneously disorganizing the broader market.

This contradiction found expression in political instability. Rationalization under monopoly capitalism did not lead to the liberalization of politics or a more equitable society—it increased social inequality, undermined democracy, and delegitimized the Weimar Republic. It created a class of economically displaced workers and downwardly mobile middle-class individuals, many of whom became susceptible to the authoritarian and revanchist appeals of fascism.

Sohn-Rethel identifies the failure of the capitalist class to resolve the contradictions of rationalization as a crucial turning point. The more that firms rationalized, the more the economy slipped into crisis. Instead of rethinking the system, large capital increasingly turned toward authoritarian solutions. Rationalization thus prepared the ground for fascism—not just ideologically, but structurally.

In fascism, Sohn-Rethel sees a grotesque resolution of this contradiction. The Nazi regime did not reverse rationalization—it intensified it, but under state control and with a political program of militarization and imperial expansion. Fascism redirected rationalized production toward armaments and war, effectively solving the overproduction problem by destroying surplus through military means.

This is the chapter’s most profound insight: that under fascism, the contradictions of rationalization were not solved economically but politically and violently. Rationalization, which was meant to make capitalism more efficient, ended up making it more destructive. The Nazi state intervened to absorb and redirect the productivity unleashed by rationalization, not to serve human needs, but to serve war and repression.

Ultimately, Sohn-Rethel uses this chapter to argue that the economic irrationalities of capitalist rationalization—and the inability of the bourgeoisie to address them within a democratic framework—help explain why fascism emerged as a “solution” to crisis. The very tools of modernity and science, instead of bringing emancipation, were co-opted to build a regime of terror, war, and totalitarian control.

Chapter 4: The Brüning Camp and Harzburg Front

This chapter examines the political split within the German ruling class between 1930 and 1932—a division that would decisively shape the course of German fascism. Sohn-Rethel focuses on two distinct factions: the Brüning camp, representing relatively stable industrial and financial interests aligned with Chancellor Heinrich Brüning’s deflationary economic policies; and the Harzburg Front, a coalition of reactionary nationalists, heavy industrialists, militarists, and agrarian elites who sought a more aggressive, authoritarian transformation of the state.

Heinrich Brüning, chancellor from 1930 to 1932, pursued a policy of extreme austerity in response to the Great Depression. Backed by President Hindenburg and tolerated by segments of big business, Brüning implemented wage reductions, public spending cuts, and tax increases—all aimed at reducing Germany’s budget deficit and regaining international credit. His underlying goal was to revise the Versailles Treaty by proving Germany’s economic discipline, in hopes of gaining foreign support for reparations relief.

The Brüning camp, therefore, consisted largely of corporations like Siemens, Deutsche Bank, and IG Farben—firms integrated into international markets, dependent on global trade, and invested in the preservation of legal and financial stability. These companies, while not necessarily democratic in outlook, saw Brüning’s policies as a necessary evil to preserve Germany’s international standing and avert social revolution.

But for much of Germany’s domestic industry—especially the Ruhr heavy industry, East Elbian Junkers, and segments of nationalist middle-class capital—Brüning’s policies were unacceptable. They viewed deflation not as discipline but as paralysis. To them, the Weimar Republic was irreparably broken, and only a strong nationalist state could revive the economy and restore order. These interests coalesced into the Harzburg Front, named after the meeting in the town of Bad Harzburg in October 1931 that symbolically united nationalist forces opposed to the Republic.

The Harzburg Front brought together an alliance of nationalist politicians (like Alfred Hugenberg), paramilitary formations (such as the Stahlhelm), and leaders from heavy industry and agriculture. Although ideologically diverse, they were united by their rejection of liberal democracy, hostility to Marxism and trade unions, and their desire to restore a militarized, corporatist state. Significantly, Adolf Hitler and the Nazi Party were present at the Harzburg rally—not yet dominant, but already gaining recognition as a force the elites could harness.

Sohn-Rethel interprets this alignment as more than just political maneuvering; he sees it as a reflection of structural contradictions within German capitalism. The Brüning camp represented capital sectors whose reproduction depended on international conditions—stable currency, access to loans, and export markets. The Harzburg camp, in contrast, was rooted in the national economy—coal, steel, agriculture—which had been devastated by the collapse in domestic demand and needed immediate state intervention, tariffs, and rearmament.

A critical insight in the chapter is that neither camp represented the whole of German monopoly capital. Instead, capital was split along lines of exposure to the world market. This cleavage is key to understanding why the fascist solution, ultimately imposed by the Harzburg camp and its Nazi allies, could come to dominate. It was not that all capital wanted fascism—but rather that in crisis, those sectors demanding immediate state rescue and authoritarian control proved more politically effective.

Sohn-Rethel shows that Brüning’s austerity measures not only failed to solve the crisis but also alienated the very working and middle classes he aimed to pacify. Mass unemployment, wage suppression, and collapsing social protections eroded support for the Republic. As the Nazi vote surged in 1930–1932, Brüning was increasingly isolated. Meanwhile, the Harzburg Front gained traction, presenting fascism as a “practical” solution to social disorder, labor unrest, and economic collapse.

By late 1932, Brüning was forced out, and the influence of the Harzburg Front—though fragmented—helped pave the way for Hitler’s appointment as Chancellor. Importantly, Sohn-Rethel argues that the Harzburg Front was not just a transitional alliance. It symbolized the realignment of German capital around authoritarianism, a convergence between industrial and agrarian elites that laid the foundation for the Nazi state.

This chapter thus captures a crucial moment when the dominant class could no longer govern through liberal means. The bourgeoisie was fractured, and in that fracture, fascism emerged not as an alien force, but as a resolution to capitalist crisis—a resolution born from within the contradictions of German capital itself.

Chapter 5: The Pillars of the Brüning Camp

In this chapter, Sohn-Rethel takes a deeper look at the industrial and financial sectors that supported Chancellor Heinrich Brüning’s deflationary strategy during the early 1930s. While the previous chapter outlined the ideological and strategic division between the Brüning camp and the Harzburg Front, this chapter focuses specifically on the economic foundations of the Brüning camp—what Sohn-Rethel calls its “pillars.”

These pillars were composed of large, export-oriented industrial corporations and international banks—firms that required macroeconomic stability, access to global credit markets, and the maintenance of international trade networks. Companies such as Siemens, IG Farben, AEG, and major financial institutions like Deutsche Bank and Dresdner Bank formed the economic backbone of this camp. Unlike the Harzburg Front, which drew support from national capital and crisis-ridden sectors, the Brüning camp represented those with something to lose from radical rupture.

These firms had invested heavily in modernization and international partnerships during the relative stability of the mid-to-late 1920s. Their profitability depended on Germany’s economic integration with the global capitalist system, and they were wary of any nationalist turn that might provoke protectionism or capital flight. Brüning’s orthodox economic policy—focused on deflation, wage suppression, and balanced budgets—was seen by these interests as the least disruptive path through the crisis, even if it meant prolonged suffering for the working class.

Sohn-Rethel argues that the Brüning camp’s commitment to austerity was not merely ideological but structurally determined. These firms feared inflation more than recession. Having just recovered from the trauma of hyperinflation in 1923, they prioritized a stable Reichsmark and fiscal conservatism over growth. They also feared worker unrest and were deeply hostile to trade union power—but they preferred controlling labor through legal means rather than the violent repression championed by the fascist right.

Importantly, Sohn-Rethel notes that this camp still supported constitutional legality, even if reluctantly. While many industrialists held anti-democratic views privately, the Brüning camp was not yet prepared to discard the Weimar system. They hoped to manage the crisis through technocratic governance and presidential decrees (via Hindenburg), rather than open dictatorship. This made them politically conservative but not immediately fascist.

The chapter further explores how these corporations participated in Brüning’s program of wage deflation. In agreement with government policy, they froze or cut wages, arguing that lower labor costs would restore competitiveness and attract foreign capital. But Sohn-Rethel highlights the fallacy of this reasoning: without purchasing power, domestic demand collapsed, worsening the depression and undermining the very competitiveness the policy aimed to achieve.

Meanwhile, unemployment soared and social tensions deepened. Although the Brüning camp avoided direct confrontation with labor, its policies—by design—exacerbated working-class immiseration. This economic suffering provided fertile ground for the Nazis and other radical parties, who promised a more active and nationalist solution to crisis. The Brüning camp, in effect, undermined its own position by insisting on policies that destroyed the social base of Weimar democracy.

Sohn-Rethel also points to the passivity of the Brüning camp as a major weakness. These firms had enormous economic power but little political will. They failed to mobilize effectively in defense of the Republic or to build alliances that might have strengthened centrist or reformist forces. Their strategy was one of cautious preservation—yet the storm of the depression required bold action. In this vacuum, the more aggressive forces of the Harzburg Front and the Nazi Party seized the initiative.

By the end of the chapter, Sohn-Rethel makes a clear judgment: while the Brüning camp represented the more rational and globally integrated sectors of German capitalism, it was precisely their inflexibility and short-sightedness that made them ineffective in the face of fascist advance. Their refusal to countenance any redistribution of wealth or real economic intervention left only one path open—the authoritarian solution of the far right.

Chapter 6: The MWT and the Harzburg Front

In this chapter, Alfred Sohn-Rethel traces the gradual but decisive shift of the Mitteleuropäischer Wirtschaftstag (MWT) from a mediating institution among business factions to an increasingly partisan body aligning itself with the goals of the Harzburg Front. What began as a platform to coordinate economic research and represent a range of industrial and agrarian interests became, by 1932, a politically active organization pushing for authoritarian restructuring of the German economy and state.

The MWT’s original mission was to bridge gaps between sectors: large-scale industry, finance, and agriculture. In earlier years, it functioned as a kind of economic parliament for German capital. But as the crisis of the Weimar Republic deepened, and as Brüning’s deflationary policies failed to restore stability, the organization evolved into a strategic base for reactionary interests. In Sohn-Rethel’s analysis, the MWT’s leadership and internal dynamics increasingly reflected the demands of the Harzburg Front.

Key to this transformation was the convergence of the agrarian Junkers and the heavy industrialists of the Ruhr, a process facilitated and ideologically smoothed over by the MWT. Previously, these two blocs had diverging economic interests: Junkers sought protectionist agricultural policy and land subsidies, while Ruhr industrialists looked outward for export markets. But by the early 1930s, both found common cause in demanding state intervention, suppression of labor, and an end to parliamentary government.

The MWT began advocating for policies that mirrored fascist goals: cartelization of agriculture, state coordination of industrial policy, and an anti-labor economic order. Sohn-Rethel shows how this ideological realignment within the MWT narrowed the space for compromise between rival capital factions and marginalized the remnants of the Brüning camp. The group increasingly lobbied for economic autarky, rearmament, and the consolidation of executive power.

A key moment highlighted in the chapter is the MWT’s response to Brüning’s removal and the appointment of Franz von Papen in 1932. Rather than resisting Papen’s more openly authoritarian direction, the MWT welcomed it as a corrective to Brüning’s ineffective technocracy. It intensified its cooperation with the Harzburg camp, with MWT committees now serving as unofficial policy advisors to the new government.

Sohn-Rethel stresses that this transformation was not driven by ideology alone—it was rooted in material interest. As deflation destroyed small capital and undermined social peace, sectors of monopoly capital began to favor a state that could manage labor and stabilize accumulation by force. The MWT became the institutional space in which these preferences were translated into programmatic demands—a staging ground for the fascist transition.

This shift was also visible in how the MWT treated data and expertise. Once a body dedicated to collecting economic statistics and producing neutral analysis, it now weaponized knowledge to legitimize authoritarian policies. Reports downplayed unemployment and overproduction, and instead emphasized the “irrationality” of labor strikes or the “threat” of Marxist parties. In Sohn-Rethel’s view, the MWT ceased to be a think tank and became a planning office for dictatorship.

Importantly, the MWT helped provide the respectability and institutional infrastructure that allowed fascist economic policy to appear orderly and “scientific.” Far from being a chaotic seizure of power, the economic transition to fascism was prepared through white papers, conferences, and memoranda drafted by MWT experts. This allowed monopoly capital to feel that it was not abandoning modernity, but simply guiding it into a more “disciplined” form.

By the end of the chapter, Sohn-Rethel shows how the MWT, while not a Nazi organization per se, paved the way for Nazi rule. It did so by dissolving the last resistance among centrist business interests, building bridges between capital and authoritarian politics, and normalizing the idea that democracy must be sacrificed for economic survival. The MWT thus played a critical role in transforming fascism from a populist movement into a credible governing project for German monopoly capital.

Chapter 7: A Memorandum for South East Europe

In this chapter, Sohn-Rethel presents a striking piece of evidence: an economic memorandum prepared by the Mitteleuropäischer Wirtschaftstag (MWT) that outlined a plan for reorganizing Central and South East Europe under a new imperial order. While never officially adopted as state policy, the document reveals the strategic thinking of German monopoly capital in the early 1930s—and its alignment with fascist expansionism.

The memorandum, drafted in early 1932 by the Bureau Hahn within the MWT, was intended as a proposal for German and Italian economic coordination in Eastern Europe. It proposed dividing the region into spheres of influence, with Germany taking economic control over Hungary, Romania, Yugoslavia, and Bulgaria, while Italy would focus on Albania and parts of the Balkans. This regional division mirrored a colonial logic: Eastern Europe was viewed not as a set of sovereign nations, but as a resource hinterland to be rationally exploited by the dominant imperial powers of Central Europe.

Sohn-Rethel notes that the language of the memorandum is strikingly technocratic—there is no explicit mention of war, nationalism, or ideology. Instead, it couches the imperial ambition in terms of “economic integration,” “market stabilization,” and “rational division of labor.” The goal was to secure sources of agricultural and raw material supply for Germany’s reindustrialization, while opening up markets for German manufactured goods.

But beneath the surface of technical jargon lies the heart of fascist economic logic: the territorial expansion of the economic sphere, justified as a solution to domestic crisis. The overcapacity and overproduction plaguing German industry could not be resolved within the existing borders. Only through external markets—especially ones subject to German domination—could capital accumulation resume. Hence, fascism’s geopolitical turn was not irrational adventurism, but a planned response to capitalist crisis.

The memorandum also proposed that Germany should take responsibility for infrastructure development—railways, ports, pipelines—in the targeted countries, in exchange for privileged access to their natural resources and agricultural products. The goal was to create a “Mitteleuropa” economic bloc under German hegemony, bypassing the constraints of global markets and bypassing the restrictions of the Versailles system. Sohn-Rethel reads this not as a Nazi invention but as a project born from within organized monopoly capital itself.

Interestingly, the memorandum envisioned not only economic domination but also institutional control: German firms and consortia would have regulatory influence over trade policies, customs tariffs, and banking systems in the target countries. This level of planning implies a vision of empire built on economic administration—an anticipatory version of what would later be realized under Nazi occupation.

Sohn-Rethel underscores that the MWT’s proposal was not marginal or delusional. On the contrary, it was circulated among top industrial and agrarian interests in Germany and Italy, and reflected a growing consensus that Germany’s survival required imperial expansion. The memorandum served as a blueprint for what would later become Hitler’s economic policy in Eastern Europe—but here, we see it emerging first in the boardrooms and study commissions of capitalist elites.

One of the most important insights of the chapter is that fascist imperialism was not imposed from above by Hitler or the military—it was cultivated by economic elites facing the limits of national accumulation. The East was viewed not only as a racial or strategic space, but as a vital economic territory, essential for securing raw materials, food, and geopolitical leverage. In Sohn-Rethel’s words, the drive to conquer the East was economic in form, fascist in method.

The chapter concludes with a chilling implication: fascism’s territorial ambitions were not a distortion of capitalism, but a continuation of it by other means. The memorandum illustrates how capitalist planning, stripped of democratic restraints, slides easily into imperial domination. The fascist state, in this view, is not a break with capitalism but its reconfiguration for war and empire.

Chapter 8: The Role of Agricultural Policy

In this chapter, Sohn-Rethel explores the pivotal role that agricultural policy played in the radical economic restructuring of Nazi Germany. He reveals how agrarian interests, far from being isolated relics of feudalism, were central to the struggle for economic control. Agricultural policy was not only about food production—it was about reforming the entire economic and political structure by reconfiguring the relationship between rural producers, industrial capital, and the state.

Sohn-Rethel shows that there were two major agrarian forces in Germany: the traditional large-scale landowners, the Junkers, and the smaller, often family-run peasant farms. These groups had distinct economic needs and political orientations. The Junkers, who still wielded significant power in Eastern Germany, favored protectionist measures and state-supported credit arrangements to secure their dominant position. In contrast, the smallholder peasants—despite being integrated into the capitalist market economy—remained vulnerable to market fluctuations, often suffering from low wages and heavy indebtedness.

Under the crisis conditions of the early 1930s, the fragmentation between these groups threatened the overall stability of the German economy. In response, the economic elites pushed for a unified agrarian policy that would serve industrial interests as well as consolidate rural production. Agricultural cartelization emerged as a key solution. By organizing the diverse agricultural sectors into rigid, state-controlled cartels, the regime aimed to regulate production, stabilize prices, and secure a steady supply of raw materials—particularly food—to sustain both the civilian population and military needs.

This process was deeply intertwined with the broader fascist aim of economic autarky. The Nazis sought to insulate Germany from the fluctuations of the global market by creating a self-sufficient national economy. For agriculture, this meant moving away from the laissez-faire market dynamics that had governed the Weimar period. The new policy prioritized state intervention. Farms were to be integrated into a centrally planned system, where production quotas, prices, and distribution channels were dictated by the state rather than by market forces.

Sohn-Rethel explains that the agrarian policy was deliberately designed to benefit both heavy industry and the ruling elites. On one side, industrialists needed stable, predictable inputs—a secured supply of grain, dairy products, and other agricultural outputs—to meet the demands of rearmament and, eventually, war production. On the other side, large landowners welcomed state measures that promised to protect their interests against the volatility of smaller peasant producers. In practice, this meant policies that favored the Junkers at the expense of independent peasant farming. By restricting competition and centralizing control, the state effectively transformed the agricultural sector into a tool of imperialist expansion.

The policy of agrarian cartelization also had profound social consequences. As the state imposed quotas and reorganized credit systems, peasant farmers found themselves stripped of the autonomy to make independent economic decisions. Their production was no longer governed by local conditions or market demand but by bureaucratic regulations aimed at maximizing state control over food supplies. This transformation led to widespread discontent among the smaller producers, whose traditional way of life was being dismantled in favor of a homogenized and centrally controlled agricultural order.

At the same time, the push for autarky in agriculture disrupted traditional trade patterns. The state intervened to encourage the importation of agricultural inputs only on terms that benefited German industrialists. Foreign trade was reoriented toward establishing a closed, internally dominant market. This not only limited the variety and quality of food available but also prevented the natural adjustment mechanisms of a free market from operating, thereby deepening the economic crisis in the rural sector.

Sohn-Rethel ultimately argues that the transformation of agricultural policy was emblematic of the broader fascist strategy. It was less a matter of economic efficiency and more of a deliberate effort to remodel society along the lines of state-controlled production. By subordinating agriculture to the needs of industrial expansion and military preparation, the Nazi regime created a dual economy—one that was rigorously planned and ultimately unsustainable in the long term. The measures taken to control agrarian production reflected the regime’s willingness to sacrifice individual autonomy and market flexibility for the sake of national autarky and militarization.

This chapter, therefore, is crucial for understanding how economic policies were mobilized to consolidate fascist power. The agrarian reforms were not isolated interventions; they were an integral part of a comprehensive plan to reconfigure German society along authoritarian and imperial lines. By tightly controlling agriculture, the regime could stabilize prices, secure food supplies, and create a disciplined labor force—all of which contributed to the broader objective of aligning the entire economy with the imperatives of a fascist state.

Chapter 9: The Industrialists and the Agrarian Cartelization

In this chapter, Sohn-Rethel delves deeper into the fusion of industrial and agrarian interests under Nazi economic policy—focusing specifically on how Germany’s industrial elite became central actors in the agrarian cartelization process. This wasn’t merely a case of two economic sectors collaborating for mutual benefit; rather, it was the integration of agriculture into a monopoly capitalist framework, with heavy industry exerting dominance over rural production.

The concept of cartelization—organizing producers into legally sanctioned associations that control prices, output, and market shares—had existed in Germany well before the Nazis. However, under fascism, it took on a new structural and political function. Rather than acting as stabilizers within a free market economy, cartels became instruments of the state, coordinating production along militarized and autarkic lines. Industrialists, particularly from sectors like chemicals (IG Farben), steel, and machinery, became deeply involved in planning and managing these agrarian cartels.

Sohn-Rethel shows how this alliance was not equal. The leadership of German industrial monopolies viewed agriculture not as a partner, but as a resource base to be administered for the benefit of the national economy, especially arms production. Agricultural producers were expected to deliver standardized goods in predictable quantities, with prices fixed and controlled by agencies largely influenced by industrial and bureaucratic interests.

One of the central institutions in this process was the Reichsnährstand (Reich Food Estate)—a corporatist body established in 1933 that brought all German farmers under a single command structure. It centralized decisions on prices, quotas, and production methods. While outwardly presented as a body protecting rural interests and national self-sufficiency, Sohn-Rethel argues that it functioned primarily as a mechanism for industrial domination of the countryside.

Industrial capital had several reasons to support this transformation:

1. Securing Inputs: A controlled agricultural sector ensured a steady supply of food and raw materials—especially essential in preparation for war.
2. Labor Management: Cartelized agriculture, run along military-bureaucratic lines, helped enforce labor discipline and made rural labor more exploitable.
3. Price Stability: Industrial firms benefited from predictable agricultural prices, allowing them to plan their production and input costs in a more controlled environment.
4. Political Control: Subordinating agriculture helped neutralize the rural population as a political force, especially the smallholders who might resist authoritarian centralization.

Sohn-Rethel stresses that this wasn’t just about economics—it was about creating a new social order. Under fascism, the classical bourgeois distinction between city and countryside, industrialist and farmer, was dissolved into a single system of state-managed capital accumulation. Agrarian life was no longer a separate sphere but was reorganized to serve the needs of rearmament, militarization, and class domination.

Importantly, the chapter highlights the anti-market nature of Nazi capitalism. This was not liberal capitalism, where competition drives production, but a planned and hierarchical system, where decisions were made not by market forces but by committees of technocrats, business leaders, and party officials. While the rhetoric emphasized “organic national unity,” in practice it meant the elimination of market autonomy and the full subjugation of rural life to the demands of industrial capital.

Sohn-Rethel also points out the long-term fragility of this system. While it achieved short-term stability and mobilization, it eroded the flexibility and resilience of the agricultural sector. Small farmers were pushed into debt, innovation stagnated, and productivity gains plateaued. The suppression of market signals in favor of top-down directives ultimately created inefficiencies that would resurface during the war.

This chapter, then, is crucial to Sohn-Rethel’s overall argument: fascist economics was not simply about ideology or brute force—it was a structured, rationalized form of capital accumulation tailored to the needs of militarism and dictatorship. The industrialists’ takeover of agriculture was a key part of this system, transforming food production into a component of a war economy and helping to build the foundations of fascist totality.

Chapter 10: The Dialectic of Fascism

In this pivotal chapter, Sohn-Rethel moves beyond the descriptive analysis of fascist economic policies to explore theoretical foundations. He presents fascism as a dialectical outcome of monopoly capitalism in crisis—not an aberration or “foreign body,” but a product of its internal contradictions. This chapter is the philosophical and analytical heart of the book, in which Sohn-Rethel situates fascism within a Marxist framework, interpreting it as a pathological resolution to the irresolvable tensions of late capitalism.

At its core, the dialectic of fascism refers to how capitalism’s economic rationality produces political irrationality when confronted with crisis. In a healthy capitalist system, surplus value is realized through the circulation of commodities—wages are paid, goods are bought, profits are reinvested. But under monopoly conditions, especially during a depression, this circulation breaks down. Industrial overcapacity, stagnant wages, and declining demand choke the economy. Rather than adapting through reform or redistribution, monopoly capital seeks external solutions—territorial expansion, military conflict, and state coercion.

Sohn-Rethel argues that fascism emerges not despite the logic of capital, but because of it. The economic imperatives of capital accumulation, when no longer sustainable within democratic frameworks, give rise to a new kind of state—one that abandons market mechanisms in favor of direct political control. The fascist state does not negate capitalism; it restructures it violently to ensure continued accumulation. Hence, fascism is not a negation but an extreme continuation of capitalism—capitalism without its liberal, democratic shell.

He draws attention to the dual character of the fascist state: on the one hand, it dissolves the mediating institutions of civil society (parliament, unions, the press); on the other, it retains and strengthens the power of capital over labor. Fascism abolishes the visible competition and pluralism of the market, but it preserves the essential social relation of capital domination. It is in this contradiction that Sohn-Rethel sees the essence of fascism.

Furthermore, Sohn-Rethel emphasizes that fascism does not create a new ruling class. The big industrialists, bankers, and landowners remain. What changes is the mode of rule: from indirect domination through markets and law, to direct domination through violence, ideology, and state planning. In other words, fascism reorganizes the superstructure of the capitalist system to maintain the base.

The chapter also addresses the ideological function of fascism. Sohn-Rethel argues that fascism offers the illusion of a third way—a synthesis of class antagonisms in the name of national unity. But this is a false resolution. The working class is not incorporated as an equal partner; it is subordinated and atomized through propaganda, repression, and co-optation. Fascist ideology replaces class struggle with racial myths, nationalism, and mysticism, channeling social tensions away from capital and toward scapegoats—Jews, communists, foreigners.

Sohn-Rethel’s dialectical perspective leads to a key insight: fascism contains its own negation. The very measures it takes to restore capital accumulation—state control, militarization, war—undermine the long-term sustainability of the system. War destroys capital, erodes labor power, and disrupts global markets. Eventually, the contradictions that fascism temporarily conceals re-emerge—often in even more violent and uncontrollable forms.

The chapter closes by emphasizing that fascism should not be seen as a temporary deviation, nor as something unique to Germany. It is a latent tendency within capitalism itself, especially when capitalist democracies are unable or unwilling to resolve economic crises in ways that benefit the majority. If the contradictions of monopoly capital are not addressed through redistribution, planning, and democratic control, the fascist option remains on the table—a brutal mechanism for restoring profitability through repression and war.

Chapter 11: The Reich ‘Food Estate’

In this chapter, Sohn-Rethel examines the Reichsnährstand, or Reich Food Estate—a centralized institution created by the Nazi regime in 1933 to control all aspects of agricultural production and distribution in Germany. This entity became the cornerstone of fascist agrarian policy, functioning both as an economic mechanism and as a tool of political control. While outwardly designed to protect farmers and promote national self-sufficiency, Sohn-Rethel argues that its true function was to subordinate the countryside to the needs of the fascist state and industrial capital.

The Reich Food Estate was established under the leadership of Walther Darré, a Nazi ideologue who propagated the “Blood and Soil” doctrine, glorifying peasant life and linking agriculture to Aryan racial purity. However, Sohn-Rethel shows that behind this ideological façade lay a highly centralized, bureaucratic apparatus that stripped agricultural producers of autonomy and subjected them to top-down planning and coercion.

All German farmers were required to join the Reichsnährstand, which regulated their production quotas, set prices, determined allowable crops, and dictated how and where goods could be sold. Free trade in agricultural goods was effectively abolished—the state became the only buyer and distributor, eliminating competition, bargaining, and any market signals that might otherwise guide rural economic life.

This was a complete corporatist transformation of agriculture. Small peasants and large estate owners alike were brought under the same regulatory umbrella, but Sohn-Rethel emphasizes that this formal equality masked material inequality. The regulations overwhelmingly favored large landowners, particularly the Junkers of East Elbia, who possessed the capital, labor, and political connections to meet production targets and benefit from subsidies.

Meanwhile, small farmers were crushed under the weight of bureaucracy. They received low prices for their goods, were denied access to capital unless they complied with state mandates, and faced criminal prosecution for violations of quotas. As their debt increased and flexibility disappeared, many smallholders became effectively indentured to the state apparatus, their farms turned into semi-militarized units of production.

Sohn-Rethel also shows how the Reich Food Estate served the needs of German industrial capital. The fixed prices and guaranteed supplies helped stabilize input costs for industries dependent on agricultural raw materials, such as textiles, chemicals, and food processing. More importantly, the system secured the food supply for Germany’s rearmament program—ensuring the army and cities would not face shortages even as the regime prepared for war.

The chapter outlines how this system created a dual structure of exploitation: on the one hand, labor exploitation on the farms intensified (especially through state-promoted wage suppression and conscription of rural youth into labor service), and on the other, the extraction of absolute surplus value increased as prices were manipulated to favor urban-industrial interests over rural producers.

Sohn-Rethel emphasizes that the Reichsnährstand was not a technocratic innovation—it was a political weapon, designed to break the independent will of farmers and integrate the countryside into the fascist economy. Farmers were no longer citizens negotiating their place in a market society; they became subjects of a state-directed economic order. Their work was glorified rhetorically but degraded materially.

The chapter also critiques the inefficiencies and irrationalities of the system. Without real market feedback or democratic input, planning often led to overproduction in some areas, shortages in others, and widespread waste. Administrative delays, corruption, and resentment grew. Yet the regime tolerated these inefficiencies because the political benefits—control, docility, and predictability—outweighed the economic costs.

In conclusion, Sohn-Rethel argues that the Reich Food Estate exemplifies the core logic of fascist economic management: centralization without accountability, hierarchy masked as unity, and material repression disguised as ideological purity. It was a microcosm of the broader fascist economy—a system designed not to meet human needs, but to coordinate labor and production in service of authoritarian rule and imperialist expansion.

Chapter 12: Arms Economy and the Four Year Plan

In this chapter, Sohn-Rethel analyzes the decisive turn in the Nazi economy with the implementation of the Four Year Plan in 1936. This plan marked the formalization of the arms economy—a state-led strategy to fully reorient German production toward war preparation. Sohn-Rethel shows how this shift crystallized the fascist transformation of the economy: from a crisis-ridden capitalist system to a militarized structure of accumulation, where profits were secured not through market expansion, but through rearmament and imperial ambition.

The Four Year Plan was introduced by Hermann Göring, whom Hitler appointed as the “Plenipotentiary of the Plan.” Göring’s role was to oversee the acceleration of rearmament, autarkic production, and infrastructure expansion, with the explicit goal of preparing Germany for war within four years. It granted sweeping powers to reorganize the economy through decrees, bypassing traditional ministries and corporate governance mechanisms.

Sohn-Rethel stresses that this move signaled the end of any remaining illusions about market self-regulation or private initiative. The Nazi state, under Göring’s control, became the central planner, investment driver, and resource allocator. However, this did not amount to the nationalization of industry. Instead, the private monopolies remained intact—IG Farben, Krupp, Siemens, and others retained ownership and management—but their production and pricing were subordinated to the military goals of the regime.

A key insight here is that the Four Year Plan was not a socialist or collectivist enterprise, despite its centralized character. It was a form of command capitalism, where the state coordinated production to serve capital’s interest in accumulation, while simultaneously suppressing labor costs, civil liberties, and democratic institutions. This arrangement allowed German industrialists to expand production at guaranteed profits, without having to respond to consumer demand or competitive pressures.

Sohn-Rethel describes the arms economy as a solution to the contradictions of overproduction. In the 1920s and early 1930s, German industry suffered from excess capacity and insufficient markets. The arms buildup provided a “non-market” outlet for investment and production—a way to absorb surplus capital and labor without increasing consumer demand. Military orders replaced civilian consumption as the primary engine of industrial expansion.

The shift also had profound implications for the class structure. Workers were no longer producing for a consumer market—they were producing for the state, which in turn used its power to control wages, ban strikes, and impose compulsory labor service. The result was what Sohn-Rethel calls “absolute surplus value extraction”—capital accumulation driven not by productivity gains or market innovation, but by extended working hours, intensified discipline, and coercion.

A particularly striking consequence of the arms economy was the displacement of peacetime logic by wartime logic. Profitability no longer depended on competitive advantage or efficiency, but on political proximity to the regime, access to state contracts, and loyalty to the military-industrial apparatus. This created a form of planned corruption—a system in which capitalists thrived not by market performance but by integration into the war machine.

Sohn-Rethel points out that the success of the arms economy in reducing unemployment and reviving growth temporarily obscured its unsustainable nature. It did not solve the underlying contradictions of monopoly capitalism—it merely postponed them. As rearmament accelerated, raw material shortages emerged, foreign currency reserves were drained, and the state’s reliance on political repression increased. The only way to sustain the system was through external conquest—an expansion of the economic space via military aggression.

Thus, the Four Year Plan not only militarized the economy but made war a structural necessity. The internal logic of the system—capital accumulation without mass consumption, centralization without democracy, production without demand—required external expansion to survive. Sohn-Rethel concludes that the plan represented the completion of the fascist economic model: an economy in which capitalist interests were preserved through a state apparatus dedicated to war, discipline, and imperial plunder.

Chapter 13: A Fascist Economic System

In the final chapter, Sohn-Rethel synthesizes his historical and theoretical analysis to present a comprehensive portrait of the fascist economic system in Germany under National Socialism. His central argument is that fascism created a new form of capitalist organization, one that resolved the contradictions of monopoly capitalism—not by abolishing capitalism—but by violently restructuring its mode of operation through state control, militarization, and ideological mobilization.

He begins by emphasizing that Nazi Germany did not represent a departure from capitalism, but rather its authoritarian reconfiguration. Private ownership of the means of production remained intact. Monopolies were not broken up, and there was no redistribution of wealth to the working class. On the contrary, industrial giants such as IG Farben, Krupp, and Thyssen experienced their greatest expansion under the Nazi regime. What changed was the mechanism of accumulation: no longer driven by market competition or consumer demand, it was driven by state planning for war.

Sohn-Rethel identifies the key features of this fascist economic system:

1. Command Capitalism: Economic decisions were no longer governed by supply and demand but by central directives. Ministries, party bureaucrats, and military planners determined what was produced, in what quantity, and by whom.
2. Absolute Surplus Value: Labor was disciplined through a combination of wage suppression, anti-union legislation, and coercive institutions such as the Labor Front and compulsory labor service. Productivity gains were achieved not by innovation, but by extending work hours, lowering living standards, and controlling the labor force.
3. Militarization of the Economy: All sectors of the economy were reoriented toward rearmament. Civilian needs were subordinated to military priorities. Economic growth, insofar as it occurred, was largely artificial and unsustainable, rooted in state orders and deficit financing.
4. Autarky and Expansion: Nazi economic planning was founded on the impossible goal of autarky within a resource-poor nation. This contradiction could only be resolved through imperialist conquest—first in Eastern Europe, then wherever resources could be seized to sustain the war machine.
5. Integration of Capital and State: The relationship between the Nazi state and monopoly capital was not antagonistic but collaborative. Business leaders were integrated into decision-making bodies. State orders guaranteed profits. In return, capital submitted to political control, accepted limitations on autonomy, and helped implement fascist goals.

Sohn-Rethel emphasizes that this system was rational within its own logic, but irrational in a broader social and economic sense. It achieved temporary economic recovery, reduced unemployment, and restored profitability—but only by removing the democratic mechanisms that could have directed production toward collective welfare. Instead, resources were channeled toward war, repression, and mass destruction.

Importantly, Sohn-Rethel dispels the myth that fascism emerged from the failure of socialism. On the contrary, it emerged from the failure of liberal capitalism to resolve its contradictions peacefully. The ruling class, faced with the threat of revolution and unable to restore equilibrium through parliamentary means, chose fascism as a last resort. Far from being irrational or spontaneous, this choice was made through calculated alliances, memoranda, and policy shifts—many of which he explored in earlier chapters.

The chapter concludes by highlighting the fragility and violence of the fascist system. It appeared powerful and efficient, but it was built on repression, enforced consensus, and endless expansion. Once war began, the very structures that enabled economic coordination—centralization, militarization, suppression—also became liabilities. Labor shortages, resource depletion, and mass resistance eroded the system from within.

Sohn-Rethel leaves readers with a clear message: fascism is not the antithesis of capitalism, but a violent strategy for its survival under crisis. It reveals the lengths to which capital will go when threatened—not by external enemies, but by the contradictions it creates itself.