What was the National Recovery Administration? Where did it succeed? Where did it fail? Many questions surrounding the NRA are shrouded in a level of speculation, as it was an incredibly innovative and experimental project, which simultaneously accomplished many boastable feats, while also not being free from a vast array of criticisms. Many serious scholars have critiqued FDR’s attempt to begin the creation of a corporative state as overly-ambitious, and pointed out the lack of foresight and planning put into such an endeavor. That said, many accusations levied against the NRA find themselves squirming in a ditch of falsehoods and lies. Unfortunately, however, so do some of its supporters, who are desperate to create new lies to align it with their ideological systems. Among such chronic conveyors of inaccuracy are Corwin Schott, a writer keen on fantasizing that the National Recovery Administration acted as some sort of American counterpart to the German Labor Front. Such an attempt to conflate these two radically divergent economic organizations is steeped in historical illiteracy and infantile analysis. This paper hopes to analyze in depth the errors of Schott in his analysis of the NRA.
For the first third of Schott’s paper, he presents no noteworthy errors. However, abruptly, the notion is promoted that the NRA was “similar” to the DAF of Nazi Germany– an absurd statement to be sure:
“But what makes the NRA similar to the DAF was the element of “indirect representative bargaining.””
The average reader has enough integrity and intelligence to see that indirect representative bargaining is not anywhere near enough to classify two economic models as “similar.” We ought to entertain the notion that this bargaining really existed in Germany in the first place. Let us make a few things known: The NRA was, as Schott is well aware, developed under the NIRA (National Industrial Recovery Act) which secured rights for unionization, as well as collective bargaining, which was also intended to be promoted through the NRA’s codes. Even after the NRA was outlawed by the Supreme Court, many of its provisions appeared again within the National Labor Relations Act which notably caused a radical growth in unionization within the USA.
On the other hand the DAF suffocated worker power completely. Employers associations were able to maintain their power under Nazi Germany while trade unions were thoroughly crippled. To any revisionists who may deny this fact, one only needs to point out the frank words of Joseph Goebbels regarding the implementation of the “National Labour Day”:
“As the first draft of the law, I am proposing the declaration of May 1 as a national holiday of the German people, and I have been instructed by the Cabinet to implement it. … From then on, the confrontation with the trade unions begins. We won’t rest until they’re completely in our hands.”
Heinrich August Winkler: Arbeiter und Arbeiterbewegung in der Weimarer Republik
This was of course the context in which the DAF emerged. In the preceding weeks, a “committee for the protection of German labor” led by Robert Ley and Reinhold Muchow was developed, founded on March 29th of 1933 which was the committee that organized the plan to crack down on German labor unions. Goebbels noted in his diary on April 17th, 1933 a more blatantly sinister statement than the previous one:
“On 2 May, the trade union halls will be occupied. … There may be a few days of noise, but then they will be ours. There must be no consideration here. We are only doing the worker a service by freeing him from the parasitic leadership that has made his life miserable. If the trade unions are in our hands, then the other parties and organizations will not be able to hold on for much longer.”
Once the unions were smashed following the new National Labor Day, the DAF was established. There isn’t a need to demonstrate the antagonistic and diametrically opposed interests of the NRA & DAF any further than already has been demonstrated in these few paragraphs, however, there is much more to be covered.
“Instead of a trade union representation of interests, there was the education of employees and employers in the sense of Nazi ideology.” [2]
Any proposals to give bargaining power to the workers was swiftly resisted by the employers. Only a few weeks after the foundation of the DAF, Hitler ordered a decree which all but wiped out any legal means to bargain collectively or to strike. [3] Again, completely opposed to FDR’s NRA, which was created within the context of Article 7 of the National Industrial Recovery Act (its parent organization) which legislated that: “. . . employees shall have the right to organize and bargain collectively through representatives of their own choosing … employers shall comply with the maximum hours of labor, minimum rates of pay, and other conditions of employment…” If there were something else more opposed than the legislation which gave support to FDR’s NRA and the legislation which gave the backdrop for Hitler’s DAF, then pigs could fly. Ley stated regarding the purpose of the DAF, “to restore absolute leadership to the natural leader of a factory—that is, the employer… Only the employer can decide.” [3] By praxis, the labor trustees that Schott attempts to compare to the representatives of the NRA, always sided with private business owners, not the workers. [3] Again we find another contradiction between the DAF & the NRA. According to the Economic History Association, “NRA codes of fair competition, specifying agreements on pricing and terms of employment, arose from a perceived confluence of interests among representatives of “business,” “labor,” and “the public” in muting that rivalry.” [4] Clearly there is much more genuine care for a holistic integration of the representative interests of all social groups under FDR’s NRA than can be seen under the DAF.
At every single step, the DAF is an utter catastrophe to use as an economic entity similar in any way to the NRA. Many more points could be made in this regard, however, I need only the facts that the DAF restricted the workers’ abilities to leave their present job, and never presented itself as an organization to defend workers, but rather, as stated during its foundation, to “see that every single individual should be able to perform the maximum of work.” Finally, even in practice the DAF produced worse results for the citizenry at every step than the NRA did. William Shirer notes that by the end of the Nazi regime, and all throughout the 30s, wages remained consistently low, and oftentimes [3] even lower than they were during the Great Depression by the time that it had ended. Meanwhile, the USA boasted considerable achievements in the improvement of material life for its citizens due to the NRA.
“Under industrial self-government, representatives of business, labor, and government would draft agreements, or codes, of “fair” business and labor practices for each of the nation’s major industries. Among other things, the codes could include provisions for controls on prices, production, and marketing and were required to include provisions for minimum wages, maximum hours, and the right of workers to organize and bargain collectively.”
https://web.archive.org/web/20120114164753/http://www.novelguide.com/a/discover/egd_02/egd_02_00388.html [5]
Need it be stressed further that the NRA is not comparable in practice or in theory to the ideas which motivated the DAF?
“Much like other corporatist regimes, including Salazar’s Portugal and the Japanese Empire, the NRA promote business cartels”, says Schott. He has hardly done his research. Schott goes on to blabber about how it’s an admirable thing to favor large capitalist firms– a pathetic stance for a so-called “futurist” as he prides himself to be. Schott is completely in error regarding his understanding of the NRA’s relationship with small or large businesses.
The NIRA had explicitly stated that codes for fair competition, which of course were the primary aim of the NRA, must not “eliminate or oppress small enterprises” as specified in Section 3(a)(2) of the NIRA. The National Recovery Review Board, led by Clarence Darrow, did submit that the NRA favored larger firms. This was a coincidental systemic issue, not intended, as the NRA’s parent act strictly forbade the oppression of small firms. But the character of Darrow should be noted before we take his report on the NRA at face value. Ran by a lawyer convicted of two cases of attempting to bribe jurors, the National Recovery Review Board “reflected a belief in the competitive market system; this was diametrically opposed to the cooperative, corporate ethos upon which the NRA was based. From the viewpoint of the Darrow Board, the problem was not that the NRA had gone astray; rather, its very nature was malign.” [6] There was never a chance that Darrow was going to find the NRA as anything other than guilty as a corrupt system. The reason that the National Recovery Administration observed benefits disproportionately favoring large firms was due to the minimum price-setting being too high for many small firms, unintentionally so, while simultaneously not breaking up larger companies. Darrow would complain that the NRA had “so obviously” gotten up to promote big business, but this is clearly a falsehood due to its attempt to empower the working class through codes to promote unionization and labor rights.
The paper “the National Recovery Administration Reconsidered”, by Gerald Berk, covers the shipping container code, an instance where the NRA worked in a rather holistic manner and aided small business. [7] As is stated in the abstract:
“It was successful not because it coordinated and enforced collective action, but because it organized “collaborative learning.” The code showed manufacturers how to compete over productivity and product diversity instead of volume. … this paper shows how the Federal Trade Commission (FTC) led a movement of cost accountants, trade associations, and peak business associations in an effort to channel competition from predation into improvement in products and production processes through “developmental trade associations.””
Gerald Berk also notes that in 1934, FDR instituted a review committee to attempt to assess why small businesses oftentimes were pushed back by NRA codes. [7] Why would FDR have done this if his intention was to promote large enterprise? The short answer which requires no mental gymnastics is that he wouldn’t have. The harm done towards private businesses was simply a mistake, not some grand plan to help promote macro-corporations as Schott seems to gleefully imply, in his state of ignorance as to the unfortunate predicament that the NRA found itself in regarding its effects in the private sector.
Let’s diverge for a second to laugh at one of the rather “out-there” statements made in this trash-heap of an article written by this apish half-wit.
“If you wish to rapidly build productive forces, boost consumer spending, and also win popular support by improving labor conditions, large firms which can accumulate vast profits are the ideal.”
What an incredibly stupid thing to say! The state-promotion of large firms will simply return society to liberalism, as large private interest is the interest that keeps today’s society in the predicament we are stuck in today. Schott references a study with a sample size no higher than 350 people to promote his notion that the entire global network of small private firms tends to be more exploitative than macrocorporations. Shame on the viewers for having some skepticism regarding this absurd claim. Without reference to data, it would be wise to assume that you will find far less mom-and-pop shops utilizing child labor within cobalt mines in underdeveloped nations in Africa, or exploiting the natural resources of underdeveloped countries.
To wrap up this long dissertation on why Schott’s article was beyond repairably uninformed, we will observe this last important bit to his article:
“To quote the American historian John Garraty: The two movements [F.D.R.’s America and Hitler’s Germany] nevertheless reacted to the Great Depression in similar ways, distinct from those of other industrial nations. Of the two the Nazis were the more successful in curing the economic ills of the 1930s. They reduced unemployment and stimulated industrial production faster than the Americans did and, considering their resources, handled their monetary and trade problems more successfully, certainly more imaginatively.”
The reason the Nazis didn’t collapse was because they used MEFO. MEFO was used to conceal the extraneous debts held by the regime & to provide military funds. By 1938 there were $12,000,000,000 reichsmarks worth in bills issued. The economy of Nazi Germany was not an impressive miracle. It was barely kept afloat by loans from private companies. By 1936, there was a sharply declining amount of funds available, and so in turn the term for Mefo bills of exchange was increased to 6 months and corporate taxes were increased to help keep the state afloat further. In 1938 a lack of income from MEFO bills resulted in a significant budget crisis. In July, corporate tax was increased again, in August excise taxes were increased, and by September, all civil construction projects had been brought to a complete deadstop. Income tax had to be increased by 1939 and the redemption of remaining MEFO bills was pushed back 17 years. In February of 1939, income taxes for single people and childless high-income citizens was raised for the first time since 1933, all tax breaks were completely canceled, the fire-protection insurance tax was increased, and even new taxes on betting & lottery activities were introduced to help keep the struggling pathetic regime afloat. [8] Between 1933-1938, the nazis failed to inspire foreign investment, the capital of joint-stock companies stagnated, the number of listed companies plummeted by 50%, the issue of industrial bonds collapsed, agricultural land was decreased by 800,000 hectares, 500,000 agricultural jobs were lost, its supply of fats and vegetable oils was cut in half, and who needs there to be anything else said?
The economy of Nazi Germany was a patent failure, constantly teetering on the verge of collapse, whose only successes can be credited to loans from private companies and extremely high tax rates. After reviewing the series of claims promoted by Schott, we have come away with a view of history that exposes his fraudulent and non-analytic understanding of reality. We can only hope that he will never attempt to write again, so that the online political space may be free from another form of unnecessary cancer.
REFERENCES:
- 1. Heinrich August Winkler: Arbeiter und Arbeiterbewegung in der Weimarer Republik. Bd. 3, Berlin/Bonn 1990, p. 927.
- 2. Rüdiger Hachtmann in Frank Becker, Ralf Schäfer (eds.): Sport und Nationalsozialismus. Wallstein Verlag, Göttingen 2016, ISBN 978-3-8353-1923-3, p. 28 ff.
- 3. William L. Shirer, The Rise and Fall of the Third Reich: A History of Nazi Germany, New York, Simon & Schuster, 2011, p. 203, 263 & 264
- 4. https://eh.net/encyclopedia/the-national-recovery-administration-2/
- 5. https://web.archive.org/web/20120114164753/http://www.novelguide.com/a/discover/egd_02/egd_02_00388.html
- 6. Sniegoski, Stephen J. (1990). “The Darrow Board and the Downfall of the NRA”. Continuity. 1990 (14): 63–83. ISSN 0277-1446.
- 7. Berk G. The National Recovery Administration Reconsidered, or Why the Corrugated and Solid Fiber Shipping Container Code Succeeded. Studies in American Political Development. 2011;25(1):56-85. doi:10.1017/S0898588X11000022
- 8. Ralf Banken: The Origin of the Silent War Financing in the “Third Reich” 1935–1939. (PDF) In: Yearbook of Economic History Volume 61 Issue 2. 4 November 2020, pp. 459–485, here 467ff., accessed on 15 June 2021.
- 9. William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal, 1932–1940 (1963) p. 69.
Authored By: Blackshirt Thomas Berth
The Seamusite Fascisti 