(2) The State may content itself with participating in the ownership of certain private enterprises. It owns, for example, a certain number of shares in a corporation. In such a case, it does not manage the enterprise wholly, but it has the right of codecision in the general direction of affairs. This is partial socialization.
(3) Finally, the State may leave in the hands of individuals the ownership of enterprises which it wishes to subject to the principles of collective economy; but it unites, if necessary by constraint, all those that belong in one industry or in the same category of industries, such as chemistry, coal, metallurgy, etc. Thus united the enterprises are administered by means of organs in which are represented all the categories of the population interested in it, such as owners, workers, trade unionists, consumers, etc. These organs must be guided, in the direction they give to this management, above all by a concern for the general interests of the commonwealth. This is collective economy properly so-called or nationalization.
This last form of collective economy is particularly interesting, be it said. For, on the one hand, it avoids the just criticisms of bureaucracy and exaction generally directed against socialism properly so-called. On the other hand, it takes into account the principal demands of the working class at the present time in recognizing for the workers the right to participate in the direction of business enterprises.[69]
The Constitution does not clearly choose between these three different methods of applying the principles of collective economy in the large sense of the word. It declares all three possible and leaves to the ordinary legislature, whenever it is desirable to regulate an industry in the general interest, the task of choosing the bearing it wishes to give such regulations and the régime to which it wishes to subject the industry in question.
(1) In effect, according to the terms of [Article 156] of the Constitution, the Reich may transfer private business enterprises to public ownership, that is to say, take over the property for the Reich, the States, or for the municipalities.
(2) The Reich may participate itself or have the States or the municipalities participate in the administration of these enterprises, or may secure for itself in some other manner a decisive influence in these enterprises.
(3) Or, finally, without taking to itself all or part of these enterprises the Reich may regulate, on the basis of autonomy and according to the principles of collective economy, the production and the distribution of wealth.
In this last case the Constitution specifies that the business enterprises which are made subject to a nationalization measure, shall form “an autonomous body” (Selbstverwaltungskörper). This is a new form in public law. The “autonomous body” is somewhat analogous to ordinary public corporations. It administers itself with the organs necessary for it. It enjoys great independence, but it is nevertheless subject to supervision by the State. [Article 156], par. 2, of the Constitution specifies that when legislation subjects a given industry to the system of nationalization and organizes the autonomous body it must constitute the administrative organs of this body in such a way that there shall be insured the co-operation of all the producing elements of the people, and that the salaried employés and wage-earners participate in administration and that the production and distribution satisfy first of all the interests of the commonwealth.
These organs form the Industrial Economic Councils which we have already examined. An example will illustrate this hypothesis. Legislature decides, for instance, to subject the chemical industry to the régime of the collective economy. It combines, therefore, all the manufactories of chemical products into a sort of obligatory cartel, the bond uniting the different manufactories being more or less close according to circumstances. The system of administration by “autonomous bodies” will consist of the institution of one or more organisms, such as Economic Councils of the Chemical Industry, in which will be represented all the individuals, associations and Councils interested, and which will manage together the German chemical industry. The chemical industry will thus form an autonomous body, that is to say, a sort of public corporation under the supervision of the State. Further than this, however, it is not possible at the present time to specify the distinctive traits of this new legal category. We must wait until legislation has organized a number of autonomous bodies before we can state precisely their general characteristics and give them a place in the collective institutions of public law. Still less possible, naturally, is it to forecast the economic consequences to which they may give rise.
However, the Constitution has not felt that it should give the ordinary legislator absolute freedom to proceed according to his fancy to the enactment of measures for socialization more or less complete. It has therefore provided certain limits on the exercise of the rights it confers on the legislature.