The Rise of Cartels

As Hans Mommsen effectively summarizes a complex story, the most important political developments of the economic recovery years during the mid- 1920s took the form of an “extra- parliamentary offensive” against the complex of policies that had been part of the social settlement signaled by the Weimar Constitution and the ensuing governing coalitions, with the highly symbolic issue of the limitation of the working day prominent among the policies under immediate attack and with the supports of the collective bargaining regime as a whole clearly in prospect as targets. The prime agents of employer action were newly strengthened patterns of business organization, ranging from cartels that interlinked enterprises with regard to certain of their functions to trusts that brought key sectors under ever more unified control, all tending toward effective monopoly in the markets, whether or not the ownerships were in fact fully joined. After the economic collapse of 1930, the resistance to a regime hospitable to unions gained effective power, and the task of resistance shifted to the unions and their political supporters. The young Franz Neumann— still in his twenties, it should be recalled— figured as an important voice in both phases. The challenge of the cartels arises first in the minutes of the executive committee of the principal trade union formation in 1925 and 1926, not directly in relation to changed power configurations in bargaining but rather with regard to the change in the capacity to resist and undermine public economic policy, as it affects prices, industrial rationalization and foreign trade, during the period of recovery from hyperinflation. Yet, by the end of 1928, Neumann's introduction of the theme into his analysis of the Ruhr struggle exceptionally put the immediate issue in the context of the shifting power relations in collective bargaining. It followed major joint submissions along the old lines to Chancellor Marx by the Social Democratic unions earlier in the year, an authoritative policy prospectus called “Economic Democracy” published by a leading labor intellectual, Fritz Naphtali, and subsequently adopted by the union federation as its program5 as well as two important earlier interventions by Neumann himself.