Defended only among the socialists by a small group of doctrinaires, this project had against it at the same time the Independents, the bourgeois parties and the Social Democrats. The Independents opposed it because it permitted capital to survive. The bourgeois parties opposed it because the supervised economy prevented the free play of economic factors and paralyzed initiative. The Social Democrats opposed it for fear of dissatisfying the Centre and the Democrats, of whom they had need to maintain themselves in power. Particularly opposed to Wissel’s project were the Trade Union conceptions supported in the Cabinet by the Minister of Food Supply, Robert Schmidt. He presented a counter-project which embodied the argument which the Socialists of the government opposed to the theoreticians of socialism. The work of socialization, said they, must be undertaken but slowly and the socialization of an industry must wait until that industry is sufficiently matured. This last conception prevailed and in July, 1919, Wissel resigned. Thereupon the offices of the Minister of Public Economy and that of Food Supply were merged and Robert Schmidt given the unified post.
It was to be expected, therefore, that the process of socialization would be considerably slowed up. In fact, the Constitution of the month of August confined itself to specifying and enlarging in several respects the principles of the law of socialization of March 23; and for several months there was only one law enacted along these lines, that of December 31, 1919, on the socialization of electricity.
But once more the people intervened. It may be recalled that one of the “Eight Points” of the agreement imposed on the Cabinet by the Trade Unions after the coup d’état by Kapp, provided that the Committee on Socialization be at once reconvened, that representatives of vocational associations be added to it, that new industries be socialized and that the socialization of industries already decreed be enforced.
In conformity with these engagements, the Cabinet in the beginning of May, 1920, submitted to the Reichstag a project of law that provided for the municipalization of a certain number of industrial enterprises, and reconvened the Committee on Socialization. The members of this committee, who were authorized to add to their number new colleagues on the condition that the total number of the members should not exceed thirty, were given a double mission. First they were to study and clarify the fundamental principles of socialism, for the purpose of determining the general lines along which the capitalist system should be transformed. Then they were to submit concrete and immediate proposals, which, inspired by the laws of collective economy, would permit the commonwealth to utilize directly the natural resources and the sources of power. The committee had also to study how the industries already socialized were functioning, what results had been attained and to propose, if necessary, all needful changes.
2.—THE COLLECTIVE ECONOMY.
All these labours, all these investigations, all these discussions of the problem of socialization had one result. They have shown how confused, even among the socialists, is the concept of socialism; that behind the same word may hide two economic systems extremely different, and that a whole series of almost imperceptible gradations may exist between the capitalist system and complete socialism.
The Constitution raises the following principle: Economic organization must cease to be dominated by considerations of private interests in order that hereafter it may be inspired exclusively by considerations of public interests. Private interests must be subordinated to collective interests. The present economic régime, based on private ownership, must be substituted by a new régime based on collective ownership (Gemeinwirtschaft). What is understood by this?
In its largest sense the expression “collective economy” may be defined as an organization, following a certain predetermined plan, of the economic system of a country for the purpose, on the one hand, of obtaining as large an increase as possible in production by the union of all forces affecting economy; and, on the other hand, for the purpose of devoting a proper part of the product to the community or to its productive members.[68] Thus a system of collective economy is any system that increases public influence in private enterprise, on the condition that it results in a more just administration and distribution, particularly in the cases of monopolized industries already organized into trusts or cartels.
In practice, the principle of collective economy may be applied under three different forms:
(1) The State may take over immediately and entirely the ownership of the industries it wishes to subject to the new régime, and direct by itself and alone, with the aid of its civil servants, the industries which it has seized. This is complete socialization.