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Capitalism in Reich Crushed,”foreign Affairs” Article Holds

The capitalist system in Germany was pronounced dead, and the institution of private property all but extinct, by an anonymous writer, identified as a German economist, in the July issue of Foreign Affairs, published today.

The Nazis have almost completely socialized and collectivized every branch of German economic life, arriving at practically the same result achieved by the Communists in Russia according to the writer, who signs himself “V”. The editors of the magazine explained that his intimate connection with German affairs made it necessary for him to conceal his identity.

Though Fascism and Communism present themselves as diametrically opposed, wrote V, “the fact is the world has never seen two supposedly hostile economic and social systems more alike in essentials, both of practice and ideology.”

Holding that capitalism and democracy go hand in hand, the writer traced the stops by which, he said, the Nazis wrested away individual control in trade, industry and agriculture, parallel with their overthrow of personal liberty and democratic institutions. In the near future, he predicted, even the remaining outward forms of private ownership will be abolished in Germany.

The Nazis started, he said, with government control of imports and exports, enforced by a rigid license system giving precedence to imports of armament material. As a logical outcome, he said, the government had to regulate the kind, quality, quantity and price of goods manufactured for export, and the use of imported materials.

This in turn, brought about price regulation, V. wrote, and establishment of a system which makes “every price a political issue.” Then, having abolished the free market, the government necessarily regulated capital investment, V continued, licensing factory construction and expansion according to a “descending scale of urgency” armaments, food, domestic raw material, export promotion, and, if any material and labor are left over, housing.

Similar restrictions, he added, were applied to establishment and expansion of retail business.

The government control is administered through a multitude of official organizations, often with conflicting programs, V said.

“Here, as always,” he said, “general planning leads to a general jumble.”

He traced extension of government control to the farmers, who are told what crops to plant and how much of them, to consumers, who find prices and often the quantities they may buy are fixed, to the banks, and to labor.

What leeway for private profit still exists, he said, is further limited by decrees fixing profits at 6 or 8 percent and requiring any excess to be invested in government bonds which are held in escrow.

Not only are labor and labor relations rigidly regulated, he said, but by the device of the “work book” the worker is forced to take any position prescribed and travel anywhere in the country when ordered.

“Withdrawal of the work book amounts to the death sentence,” V wrote. “By this threat, armies of workmen have for many months been transported from one part of the country to another like prisoners of war The workers must leave behind their families, who are given one mark (25 cents) a day.

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