Page 92 - The Making of the German Post-war Economy

THE SOCIAL DEMOCRATIC PARTY 65

differentiated between Marxism and communism, which he rejected as a
degenerate form of Marxism, the German post-war democracy had to be
socialist and anti-capitalist. According to the party chairman ‘there is no
socialism without democracy. [...] Conversely, in capitalism democracy is
in permanent danger [...], thus the German democracy must be socialist.’
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This view was founded on a socio-political, economic and psychologically-
oriented analysis of totalitarian fascism, Leninism and Stalinism: while
fascism and Bolshevism were characterised by an undemocratic structure
of society, capitalism was characterised by an undemocratic structure of
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the economy; thus the way of Germany could only be a ‘third’ one.
Political and economic democracy were supposed to complement each
other leading to the conception of a ‘Third Way’ which Schumacher
explicitly formulated in June 1947: ‘we must differentiate ourselves from
the Russians in that Europe must be democratic [...]; and we must
differentiate from the United States in that Europe must be socialist.’
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With regard to the German political and economic structure, Schumacher
outlined the alternative: ‘either we succeed in forming Germany’s
economy socialist and its policy democratic, or we will cease to exist to be
a German people.’ Adopting the terminology of Marxist criticism of
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capitalism and combining anti-fascist views with anti-capitalist points, the
chairman of the SPD derived the Sozialistische Demokratie (Socialist
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Democracy) located between Bolshevism and capitalism.
The economic foundation of this social democratic Third Way was
based on the concept of a mixed economy labelled Wirtschaftsdemokratie
(Economic Democracy), which combined elements of socialism with
aspects of capitalism. According to Kurt Schumacher, the socialist reform
of society and the anchor of democracy could only be achieved by the
non-profit orientation of the economy and the nationalisation of basic
industries. Primarily, the devotee of labour leader Ferdinand Lassalle
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aimed at limiting the power and influence of large-scale industry and
requested a more turning away from market capitalism towards socialist
planning. Thus, in contrast to the British and French post-war
nationalisations, socialisation and planning in Germany were primarily
concerned with wresting the power to abuse economic and ultimately
political influence from cartels and industrialists without returning it to the
hands of an all-powerful government or state bureaucracy. However,
especially in the light of the severe economic situation in the aftermath of
the war, Schumacher considered the capitalist system as economically,
politically and ethically inadequate and unjustifiable. For a period of
transition with its exceptional circumstances, such as the absence of a
dependable, or rather morally and politically acceptable, market
mechanism, the party chairman requested some kind of economic