The European Oligarchies React by Defending “National Socialism”

The Soviet Revolution dealt a great blow to the ruling classes of the western states, which did not hesitate to organize and to back parties appealing to the masses of workers, with platforms of aggressive social reform in a desperate attempt to prevent the triumph of Bolshevism.

This “language of class anxiety” (Maier 2011, 22-38) would lead to the rise of Benito Mussolini (1922-1943) in Italy and Adolf Hitler (1933-1945) in Germany, both populist leaders who ended up imposing fascist dictatorships which actually did make surprisingly significant progress in the area of labor and economic reform.^[1008]

After coming to power in 1922 by way of a coup d’etat (The March on Rome), Mussolini strengthened the executive, reorganized the government administration and created public bodies to bolster the economy through massive investment in public works and industrial consortia. As a result, Italy overcame its economic crisis and enjoyed an era of great prosperity that made the fascist regime, at least initially, extremely popular.^[1009]

In Germany, the authoritarian constitutional tradition stemming back to the 1850 Prussian Constitution, was significantly reinforced by Bismarck’s imperial concep­tions during the Wihelmine period (Eley 1996). Germany’s defeat in World War I, the Spartacist Revolt and the Versailles Diktat, rampant inflation, which took off in 1923, and the fallout of the Great Depression after 1929 provided fertile ground for a totalitarian model of the state in Germany.^[1010] All these circumstances explain why Hitler, after failing to pull off his own coup (Beer Hall Putsch, Munich, 1923), rose to power 10 years later via election in 1933, and quickly imposed a fierce dictator­ship.

Both Mussolini and Hitler, embraced a state model according to which the government actively intervened in the economy and adopted the measures neces­sary to prevent social injustice, but on a strictly “national” scale, soundly rejecting any notions of international solidarity, as forwarded by Lenin. It is highly signif­icant that the party with which Hitler came to power was called the National Socialist German Workers Party (Nationalsozialistische Deutsche Arbeiterpartei, NSDAP), a political organization founded in 1920, months after the failure of the Spartacist Uprising and the foundation of the Kommintern⁵

Hitler, however, sought not only to take over the German state, but to redefine the very idea of the “nation”, propounding a racist concept (McDonough 2003, 60) according to which the German people (Deutsches Volk) needed to be purified to contain only pure Aryan blood (Mosse 1989, 43-58). This warped notion of the nation (Stolleis 1998, 64-86) led to the extermination of entire ethnic groups (geno­cide), including the Jews and gypsies, as part of the Nazis’ “Final Solution” (Endlosung), along with the elimination of persons with physical and mental defects to improve the race through eugenic engineering (Browning 2004, 374-423).

17.6.1 Perfectly Legal Dictatorships

In this general overview, we do not have enough space to present a detailed analysis of totalitarian regimes and their institutions. We can make the general observation, however, that dictators, whether communist or fascist, have invariably sought to adorn their autocratic regimes with the trappings of legality.

Thus, for example, in Italy, Mussolini never repealed the country’s constitu­tional regime, nor did he dethrone the king. Rather, he merely “suspended” the Albertine Statute. In fact, Mussolini never even formally became the head of state. During the fascist ventenio, Italy remained a monarchy. This did not, however, prevent the fascists from carrying out a gradual legal assault on the state, which would ultimately allow them to control the government as Italy’s sole party, beginning with electoral reform through the Acerbo Law (1923), which rewarded the party winning the elections—even if by a narrow margin—two-thirds of the seats in the national legislature (Ghisalberti 2012, 347-348).^[1013]

In the case of Nazi Germany, one must remember that Hitler came to power legitimately by winning national elections and forming a coalition with Germany’s conservative parties, headed by Vice-Chancellor Franz Von Papen, in a government led by the Nazi leader on January 30, 1933. Following the dissolution of the Reichstag and the call for new elections, Hitler, in response to the Reichstag fire of February 27,1933, imposed the “Decree for the Protection of the German People and the State” (Verordnung des Reichsprasidenten zum Schutz von Volk und Staat), issued by President Hindenburg (Kershaw 2000, 439), which restricted public liberties a week before the elections to the Reichstag. This was the beginning of what Alan Bullock calls the “Revolution after power” (Bullock 2005, 137-171), a movement that was consolidated when the new assembly elected on March 5, granted Hitler full powers through the Enabling Act of March 24, 1933.^[1014] The fascist dictatorship was actually established in a legal manner, within the constitutional framework of the Weimar Republic,^[1015] preserving the facade of the “civil Rechtsstaat” (Stolleis 1998, 7) but forcing most German constitutionalists to emigrate.^[1016] The same situation arose, as we saw in Chap.

As for Soviet Russia, the October Revolution generated a very curious totalitar­ian state featuring successive constitutions (1918, 1924, 1936, 1977) containing a peculiar version of public law, including provisions such as an election rule whereby only the workers were allowed to vote (appearing in Lenin’s first consti­tution), which deprived all other social groups, from the middle class up, of political representation—a kind of censitary suffrage turned on its head to favor the workers rather than the elite. After Lenin’s death in 1924, Stalin, from his post as General Secretary of the Communist Party, managed to gain power by, over a 10-year period, killing off all his revolutionary comrades from the first stage—including Kamenev, Zinoviev and Trotsky, among others—through a set of kangaroo courts known as the “Moscow Trials” (1936-1938), in an effort to acquire total power and stigmatize any real or suspected opposition (Pringle 2006, 167-168). From this moment until his death (1953), Stalin went on to impose an iron dictatorship over a monolithic state based on relentless police repression, terror and massive propaganda.^[1017]

This, however, did not prevent him from approving his own constitution in 1936. Stalin’s fundamental law was peculiar, as it underwent constant changes, governing aspects which would normally be dealt with by ordinary laws, or even regulations (Duverger 1973, 422-424). In fact, Soviet constitutions were not lasting and stable foundational texts, but rather legislative hodgepodges undergoing constant change., including the Brezhnev Constitution of 1977, which officially gave up on the “dictatorship of the proletariat” and inaugurated the era of “Developed Socialism” (Daniels 1993, 313-315).

All of these classes of totalitarian states certainly merit a more detailed study, as they are extremely germane and valuable towards an understanding of the extent to which law in these regimes did not serve as a limiting force, but rather a legitimiz­ing instrument of power, something necessary after the collapse of the Ancien Re gime and the disappearance of tradition as the legitimate justification of power. Above all, they illustrate how each new autocratic regime ended up creating its own legitimacy and legal framework. From the constitutional history perspective, the most interesting fact is that specific aspects of these totalitarian regimes still form part of our democratic states in the twenty-first century. Without going any further, one can cite the power structure prevailing in our current mass parties, whose leadership is determined by conventions at which cadres of elites are elected which end up enforcing party discipline, particularly when it comes to drawing up electoral lists. These practices have led specialists in public law to expressively designate our contemporary political party leaders the “New Princes”, who have turned our democracies into “Partocracies” (Rubio Carracedo 1995, 72-77). Massification comes at a price.^[1019]

17.6.2 An Adapted Legal Theory: From Ihering to Carl

Schmitt

The consolidation of the nation-state in the nineteenth century also decisively transformed jurisprudence, furnishing law with a political dimension and meaning, as it gradually evolved into an instrument of the state.

The association of positive law with state law reached its zenith when Hitler came to power, in the form of the Rechtserneuerungsbewegung (Reformist Legal Movement), whose primary exponent was Carl Schmitt (Stolleis 2004, 169-173). When it comes to understanding totalitarian legal systems, it is worth looking at the criticism offered by Carl Schmitt of the liberal model of the state, in which he justified the establishment of an all-powerful regime, imposed upon the citizenry based on social considerations which he ultimately extended to all areas.^[1021]

The scholarly approach to law of Carl Schmitt (1914-1985), sought to provide theoretical underpinnings for the German National Socialist State before he ended up falling out with Hitler. However, Schmitt’s conception of the state went much further. One would expect Schmitt’s ideas to have been utterly discredited and forgotten after the collapse of Nazism. In fact, however, his works are still being republished and widely read, a telling indication of the extent to which they contain a lucid analysis of the harsh reality of the mass-based states prevailing in the first decades of the twentieth century.^{[1022] [1023]}

According to Schmitt, the limits imposed by the liberal model of the state had led to the development of intermediary bodies that completely overpowered and subverted the state, which was reduced to obeying their mandates and, therefore, failed to fulfill its primordial function of protecting civil society.

Schmitt was opposed to the rule of law because the legal system that limited state power was controlled and determined by the indirect and private “powers of society”, uncontrolled and unseen, who cared only about their own interests instead of defending the common good.

As magnus homo, or a sovereign person of the state similar to God, the Leviathan was destroyed from the inside in the 17th century... but its work, the state, survived it with an army and a police force, an administrative and judicial apparatus, and an effective and specialized bureaucracy. The state increasingly has come to resemble a mechanism and a machine, and the development of the concept of law has gone hand in hand with this evolution (...) the law has become a technical means of taming the Leviathan (“placing a hook in the Leviathan’s nose”.). The state itself metamorphoses into a positivist legal system.^[1024]

This situation, in Schmitt’s opinion, called for the reestablishment of a direct link between the individual and the state, instead of one mediated via a so-called “representative assembly”, whose laws corrupted this relationship.

17.6.3 The Expansion of Social/Legal Protection

in the Interbellum Period

The liberal state model suffered a great blow in Europe as a result of World War I, but in the United States its spirit was not only intact but even reinforced, as the country flourished, establishing itself as the world’s most powerful nation after

1918. Yet, in America, which continued to embrace free markets and limited government in the wake of the Great War, the principle of the need for public intervention in economic matters was soon to be accepted, not as a consequence of war, as was the case in Europe, but in response to the devastation wrought by the Great Depression, which shook the nation’s faith in laissez faire and the liberal model which it had hitherto embraced with few reservations.

17.6.4 The Crisis of the Liberal State Model in the U.S.A.:

The New Deal

17.6.4.1 The United States After World War I

Until 1918, the United States had been just one more power within the set of western nations, in a world controlled, as we have seen, by the European nation­states. The Great War, however, would alter this situation forever. A single statistic is sufficient to illustrate the transformation: in 1914, the United States owed the various European states some 3 billion dollars. The trade balance was, thus, heavily tilted in the Continent’s favor. By 1918, the European states owed the U.S. federal government no less than 14 billion dollars—almost five times more.^[1025]

Whereas Europe had been ruined and destroyed during this period, the United States enjoyed an era of burgeoning prosperity. With immense natural wealth, a huge domestic market, the absence of customs barriers, and new techniques that made possible better and cheaper production (like scientific management, or “Tay­lorism”, and assembly lines), the United States became a society marked by mass production and consumption (Chambers 2000, 61-63). This transformation enabled the country to become the world’s premier economic power.^[1026] In 1925, the U.S. provided the global economy with more than half its iron, coal, steel, copper, oil and cotton, despite a population accounting for less than 5 % of the world. Thanks to this wealth the U.S. government was able to grant massive loans to a Europe ravaged by war, such those via the Dawes Plan (1924), followed by the Young Plan (1930), for the settlement of German war reparations and national recovery (Murphree 2005, 269-272).

The two terms of President Calvin Coolidge (August 2, 1923-March 4, 1929), were a time of great economic prosperity, the so-called “Roaring 20s”, an era of tycoons like the most famous of them all, John Davidson Rockefeller (1839­1937), who amassed huge fortunes and built genuine empires in just a few years (Morris 2005). The private sector’s resources dramatically surpassed those of the public sector, a situation consolidated by America’s still relatively pristine liberal state model. This spectacular prosperity led people to speculate on the stock exchange without initial capital, using borrowed money to invest on Wall Street, trusting that its constantly rising dividends would enable them to repay their loans and turn a profit. For many years this practice actually worked.^[1027] Alongside the “real economy”, however, a speculation-driven bubble gradually swelled, con­siderably distorting the appearance of prosperity. At the end of the first decade of the twenty-first century, this situation has become eerily familiar to western economies.

17.6.4.2 The Great Depression

When Coolidge completed his second term, the American presidency remained in Republican hands, as he was succeeded by Herbert Clark Hoover (1929-1933). Within just months of Hoover’s election, the U.S. financial system collapsed. From Wednesday, October 23 to Tuesday, October 29 (Black Tuesday), the New York Stock Exchange plummeted. By the time, the market stabilized in mid November stocks had lost half their value. Fifty billion dollars had disappeared into thin air.^[1028]

The Wall Street collapse was, in fact, only the symbol and most vivid illustration of a wider crisis. In reality, the entire American economic system unraveled in what came to be called the “Great Depression”.^[1029] The worst part of this crisis was that, because all the western countries depended on America’s prosperity, the economic earthquake in the U.S. sent out shock waves that destroyed banks and factories all around the world, leaving millions unemployed. Tariffs were raised and a monetary crisis ensued. On September 21, 1931, the Bank of England abolished the gold standard (Kindleberger 2013, 157), triggering the collapse of the pound sterling, hitherto the world’s benchmark currency, which dragged down the currencies of many other countries with it.

This was the first serious global financial crisis (Boyce 2012), and it had dramatic social consequences. The middle class was devastated^[1030] which, among other things, allowed Hitler to win the German elections in 1933, by promoting himself as a populist leader,^[1031] who would put an end to the abuses committed by the capitalists who had plunged the world into chaos, and do so without falling into the hands of Bolshevik revolutionaries.^[1032] After Communist totalitarianism, Italian Fascism and Germany’s “national socialism” became compelling alternatives to the liberal state, whose very survival was called into question. The 1929 Great Depression would have important constitutional consequences in the U.S.^[1033]

17.6.4.3 Roosevelt’s New Deal

The liberal model of the state did not disappear, but it did have to be adapted to address new circumstances, even in the United States of America, the world’s most liberal regime. This was the task which befell the nation’s 32nd president, Franklin Delano Roosevelt (FDR), the longest-serving in the country’s history, as he was in the White House from March 4, 1933 until April 12, 1945. Elected four times, he died in office, cutting short his final term.^[1034]

FDR, a Democrat, triumphed in the election of 1933 with a platform whose central tenet was protection for the common man from the ravages of the Great Depression. To this end he proposed a “New Deal” based on the premise the state should intervene to stimulate the economy and, in general, to alleviate the situation of the needy.^[1035] This program was carried out in two phases. Immediately after taking office, Roosevelt began to take steps to revive the U.S. economy in the short term (“The 100 Days”.). In 1935 a second, more ambitious, longer-term phase began. The New Deal included federal aid to farmers, public assistance to the homeless, and established the nation’s first social welfare system (Social Security Act, August 14, 1935), agricultural protection legislation (Agricultural Adjustment Act, May 12, 1933) and an ambitious initiative known as the National Recovery Administration (NRA), a government body created via the National Industrial Recovery Act of June 16, 1933, a bill encapsulating the very essence of the New

Deal (Beaudrau 2005, 97-120). Its aim was to regulate economic affairs, including work hours, minimum wages and guaranteed prices. The federal government strove to bolster the economy through a bold policy of public works, including the creation of a government agency for the exploitation of the Tennessee River (Tennessee Valley Authority Act, May 18, 1933), featuring major investments to improve its navigability, control floods and generate electricity. Also undertaken was the construction the Hoover and the Colorado River Dam, on the border between the states of Arizona and Nevada, which took 5 years to build (1931-1936) and whose workers founded the nucleus of what is today the city of Las Vegas. Thanks to the New Deal what American constitutionalists call the Administrative State went from a question of words to actual deeds (Rohr 1986, 111).^[1036]

17.6.5 A New Deal for Europe?

Amidst the aftermath of the First World War, the liberal model would not be reestablished in Europe. In fact, to prevent the spread of Soviet-style revolution the oligarchies of the European states did not hesitate to launch serious social reform to match the promises of Soviet Russia, where in 1918 the platform of the Bolshevik Party called for full employment through the creation of a sweeping Social Security system. Thanks to Nikolai Aleksandrovich in 1925, the Soviet Union introduced the first national system of free medicine, made possible by the “nationalization” of the country’s doctors.^[1037] In the same line, the Stalinist consti­tution of 1936 stated that citizens had the right to a public health system funded entirely by the state. The Soviet system guaranteed every citizen employment, and favored an increase in birthrates through the assignment of public housing, with larger homes for larger families (Majnoni d’Intignano 1993, 30).

In western Europe states with non-democratic governments actually made greater progress in the area of protection for workers and the socially disadvantaged than did parliamentary democracies, with the clear exception of democratic England, where the welfare state saw considerable advances during the post-war period when the principles of the Beveridge Plan of 1942 (Rosanvalllon 1992, 147-148) were implemented.

The case of France, meanwhile, is paradigmatic: the Left triumphed in the elections of 1937, with its Popular Front victorious, but the measures adopted in favor of the poor were limited. The most important achievement of Andre Leon Blum’s government were the social benefits it secured for French workers, includ­ing a reduction in work hours to 40 per week, guarantees of paid vacation time (15 days per year),^[1038] and respect for trade union representation and social negoti­ation through collective bargaining agreements. Moreover, employment immedi­ately became one of the main priorities of the “French State” created by the two legislative chambers by virtue of an act passed on July 10, 1940, which did away with the Third Republic and granted Marshall Petain full powers to draft a new constitution. The French national motto, Liberte, Egalite, Fraternite (Freedom, Equality, Brotherhood), was even replaced by Travail, Famille, Patrie (Work, Family, Fatherland).^[1039]

There was also considerable progress made in the area of social protection under the dictatorships established in Italy, Spain, and, above all, Germany. In Italy, Mussolini’s fascist government not only bolstered the economy through major public works, such as the Mediterranean Highway and the excavation of the Roman Forum, but also founded major public companies and entities to reorganize production in key industries. At the same time Italy rearmed, launching imperialists campaigns in Libya and Ethiopia and intervening decisively in the Spanish Civil War. Mussolini’s regime acted to provide workers with legal protection through the Labor Charter of April 21, 1927,^[1040] reinforced by the Law on Corporations of February 5, 1934, the creation of a mandatory “worker’s card” for salaried employees, and the implementation of the idea of vertical unions in which the principle of class struggle was replaced by that of corporate promotion. This was the “Corporate State” (Blinkhorn 2006, 39-43).

In Spain, the tepid social protection efforts initiated from 1883 to 1903 by the Social Reforms Commission (de la Calle 1989) led to passage of the Work Accidents Law (Ley de protection de los trabajadores accidentados) of 1900, which established Spain’s first social insurance system. Though the scope of this legislation was limited, after this point the pace of reform accelerated, with the foundation of the Institute of Social Reform (Instituto de Reformas Sociales) in 1905, the National Institute of Social Welfare (Instituto National de Prevision) in 1908, and in 1919 the first insurance for retired workers (Retiro Obrero), and the law establishing maternity insurance in 1923.^[1041] Social protection increased consid­erably under Primo de Rivera’s dictatorship because of the regime’s commitment to social worker protection and social welfare. Worthy of note is an initiative by Eduardo Aunos,^[1042]who issued the relatively revolutionary approval of the principle of mixed negotiation commissions consisting of both workers and employers to resolve labor conflicts; the socialist leader Francisco Largo Caballero was appointed in December of 1925 as councilor of state^[1043]; and a Work Code was approved in 1926.

During the Second Republic (1931-1936), political instability and the outbreak of the Civil War explain the meager progress made towards the consolidation of a social welfare system, save for the creation of a National Savings Bank (Caja Nacional) against “forced unemployment” in 1931,^[1044] in contrast to the New State created by Franco on October 1,1936,^[1045] which made social welfare a top priority of the regime from the very outset (Aguilera-Barchet 2012, 671-672). In 1938, in the midst of the civil war, Franco’s government promulgated the Fuero del Trabajo (Labor Charter), the first of its “Fundamental Laws”, which may be considered the foundation upon which Spain’s Social Security system was built.^[1046] The second of Franco’s Fundamental Laws, the Fuero de los Espanoles (1945), in essence a declaration of fundamental freedoms, featured an extensive enumeration of social rights. In this regard Franco was clearly inspired by the ideas of the Spanish fascist party, La Falange, and its former leader Jose Antonio Primo de Rivera, whose legacy Franco sought to adopt (or co-opt, according his detractors) for his regime and party: the “National Movement”. This aspiration spurred Franco to create the Sindicatos del Movimiento (Movement Unions)^[1047] and a specific jurisdiction for the defense of employees’ interests: the Magistratura de Trabajo (Work Magistracy), still in place today.^[1048] May 1st was declared Labor Day in Spain (Fiesta del Trabajo), a celebration over which Franco personally presided every year.^[1049] A decisive stage in the history of Spanish social welfare provisions began during the long period when Jose Antonio Giron de Velasco served as Minister of Work, creating Illness Insurance (1942) and an Obligatory Old Age and Invalidity Insur­ance (1947). It would not be until 1963, however, when a universal Social Security system was created, based on a publically managed, unitary and integrated social protection model funded by mandatory contributions imposed by the state on employees and employers.^[1050]

During the era of Primo de Rivera Spain’s Portugal saw an army takeover in 1926, with Portugal’s military class placing university professor Coimbra Oliveira Salazar in power. After serving as Tax Minister in 1928 Salazar was later appointed by the military as President of the Council of Ministers, which 1 year later allowed him to promulgate a corporatist constitution inspired by the Church’s social doc­trines, specifically the Rerum Novarum encyclicals issued by Leo XIII (1891) and the Quadragesima Anno of Pio XI (1931).^[1051] With a similar objective Salazar would promulgate a “National Work Statute” in 1933 (Lewis 2002, 135).

An authoritarian and corporatist model of the state designed to achieve social welfare objectives also prevailed in Austria, drawing upon the works of Othmar Spann (Johnston 1983, 311-313) and imposed by Engelbert Dollfuss and Arthur Schuschnigg, until Hitler unilaterally proceeded to annex the country (Anschluss) on March 12, 1938 (Steininger 2008, 72-114).

With regards to Germany, it is noteworthy that the social welfare initiatives undertaken by Bismarck, far from being abandoned by Hitler, were actually expanded (Stolleis 2013, 133-148) with measures such as the launching of massive public works to stimulate the economy (12,000 km of highways), the rebuilding of the armament industry, and the creation of a model based on the mass consumption of goods previously available only to the most affluent. This effort included a law for the reduction of forced unemployment which succeeded in slashing the number of Germans out of work from six million to two million in just 3 years;^[1052] the creation of a Social Security system, and legislation to prevent layoffs and child labor. Other social welfare measures adopted by Hitler’s regime included the granting of low-interest loans to engaged couples, major tax reductions for large families, and the construction of affordable housing for one or more families, to be built on the largest possible parcels of land. The social policies of Hitler’s govern­ment led to the construction of over 677,000 buildings in Germany between 1933 and 1938, and more than 1,458,000 subsidized homes for those of humbler means. This housing policy was complemented by rent control policies which did not allow prices to exceed 20 % of renter income. The sadistic brutality, military belligerence and the crimes against humanity committed by the Nazi dictatorship, however, would overshadow and led people to overlook these surprisingly significant advances in social welfare, which allowed Hitler to convert Germany from a country in shambles in 1933, when he took power, into the world’s second strongest economy in just 3 years.^[1053]

17.7