Rudolf Hilferding
Encyclopedia
Rudolf Hilferding was an Austrian-born Marxist
economist, leading socialist theorist, politician and chief theoretician for the Social Democratic Party of Germany
(SPD) during the Weimar Republic
, almost universally recognized as the SPD's foremost theoretician of his century, and a physician.
He was born in Vienna
, where he received a doctorate having studied medicine. After becoming a leading journalist for the SPD, he participated in the November Revolution in Germany and was Finance Minister of Germany in 1923 and from 1928 to 1929. In 1933 he fled into exile, living in Zurich
and then Paris, where he died in custody of the Gestapo
in 1941.
Hilferding was a propounder for the "economic" reading of Karl Marx
identifying with the "Austro-Marxian
" group. He was the first to put forward the theory of organized capitalism. He was the main defender to the challenge to Marx by Austrian School
economist and fellow Vienna
resident, Eugen von Böhm-Bawerk. Hilferding also participated in the "Crises Debate" – disputing Marx's theory of the instability and eventual breakdown of capitalism on the basis that the concentration of capital
is actually stabilizing. He edited leading publications such as Vorwärts
, Die Freiheit
, and Die Gesellschaft. His most famous work was Das Finanzkapital (Finance capital), one of the most influential and original contributions to Marxist economics with substantial influence on Marxist writers such as Vladimir Lenin
,
influencing his writings on imperialism
.
into a prosperous Jewish family, consisting of his parents, Emil Hilferding, a merchant (or private servant), and Anna Hilferding, and of Rudolf's little sister, Maria. Rudolf was sent to a public gymnasium
which he graduated from as an average student, allowing him access to the university. Directly afterwards, he enrolled at the University of Vienna
to study medicine.
Even before his school leaving examinations, in 1893 he joined a group of Vienna students that weekly discussed socialist literature and later formed with young university teachers the student-organization Freie Vereinigung Sozialistischer Studenten, whose chairman was Max Adler. This is where Hilferding first intensely came in contact with socialist theories and first became active in the labour movement
. The organization also participated in social-democratic demonstrations, which came in conflict with the police, drawing the attention of the Social Democratic Party of Austria
(SPÖ).
As a university student, he became acquainted with many talented socialist intellectuals. Aside from his studies of medicine, he studied history, economy, and philosophy. He and his fellow socialist students and friends Karl Renner
, Otto Bauer
and Max Adler also studied political economy, taught by the marxist Carl Grünberg
, and attended the lectures of the philosopher Ernst Mach
, who both influenced Hilferding significantly. He became one of the staunchest supporters of Victor Adler
, founder of the SPÖ.
Having graduated with a doctorate in 1901, he began working in Vienna as a pediatrist, however not with much enthusiasm. He spent much of his leisure time studying political economy, where his real interest lay, but he would not give up his profession until his first publications gave him success. He also joined the social-democratic party in Austria. In 1902 he contributed to the social-democratic newspaper Die Neue Zeit
on economic subjects as requested by Karl Kautsky
, at that time the most important marxist theoretician worldwide and who developed a long-lasting personal and political friendship with Hilferding. His collaboration with Kautsky and his regular contributions to the Neue Zeit, the leading theory organ of the socialist movement, made him become a mediator between Kautsky and Victor Adler
, trying to reduce their ideological differences.
In April 1902, he wrote a review of Eugen von Böhm-Bawerk
's Karl Marx and the Close of His System (1896) defending Marx's economic theory against Böhm-Bawerk's criticism. He also wrote two significant essays concerning the use of the general strike
as a political weapon. Already in 1905, his numerous publications have made him one of the leading social-democratic theoreticians and brought him into close contact with the party leadership of the SPÖ and of the Social Democratic Party of Germany
(SPD). Together with Max Adler, he founded and edited the Marx-Studien, theoretical and political studies spreading Austromarxism
until 1923.
Karl Renner
, Adler and Hilferding founded an association to improve the worker's education, which established Vienna's first school for workers in 1903.
Hilferding married the doctor Margarete Hönigsberg
, whom he had met in the socialist movement and who was eight years his senior. She also had a Jewish background, had made her exams at the University of Vienna, and was a regular contributor to Die Neue Zeit. Margarete gave birth to their 1st child Karl Emil. Kautsky worried that Hilferding, who now complained about his lack of time, would neglect his theoretical work in favor of his good social situation as a doctor in Vienna. Kautsky used his connections to August Bebel
, who was looking for teachers for the SPD's training center in Berlin, to suggest Hilferding for this position. In July 1906, Bebel recommended Hilferding for this job to the party executive, which agreed to give it to him for six months.
's call, started teaching Economics and Economic history
at the training center of the SPD in Berlin. Having arrived in Berlin in November 1906, he taught there for one term, but a law forbade the employment of teachers without German citizenship. He had to give up this job and was replaced by Rosa Luxemburg
after being threatened of eviction by the Prussian police in 1907.
Until 1915, he was the foreign editor of the leading SPD newspaper Vorwärts
, in the immediate proximity of the most important party leaders. Bebel had recommended Hilferding for this job, after there was a conflict between the editors of Vorwärts and the party executive. His appointment was also meant to raise the share of marxism in the editing. In a short time, Hilferding took a leading role in the paper and was soon appointed editor-in-chief. Together with his work for Die Neue Zeit and Der Kampf, it provided him an adequate income. He was also supported by his fellow Austrian, Karl Kautsky
, who was his mentor and whom he succeeded in the 1920s as the chief theoretician of the SPD. Hilferding's theoretical abilities and his personal relationships to leading socialists allowed him to make his career in the party.
He published his most famous work, Das Finanzkapital (Finance Capital), in 1910, which was an important theoretical milestone that has kept its importance until today. It built Hilferding's reputation as a significant economist, a leading economist theoretician of the Socialist International
, and, together with his leading position in Vorwärts, helped him raise into the national decision level of the SPD. It also confirmed his position in the marxist center of the SPD, of which he was now one of the most important figures. Since 1912 he represented Vorwärts at the meetings of the party commission, which allowed him to decisively take part in the decision-making of the socialist politics in the years before World War I
.
When World War I broke out in 1914, Hilferding opposed the SPD's politics of Burgfrieden
and their involvement with the German war effort during World War I
, including their voting for war credits from the very beginning. However, in an internal party voting, he was only in a small minority, led by Hugo Haase
, a close friend of him, and thus they had to yield to the party's decision to grant war credits. Hilferding signed together with the majority of the editors of Vorwärts a declaration to oppose these politics. In October 1915, the SPD leadership fired all these opposing editors, but Hilfering had already been drafted into the Austro-Hungarian Army
as a medic long before.
At first, Hilferding was stationed in Vienna, where he led the field hospital
for epidemics. He lived together with his wife and his two sons, Karl and Peter, who was born in 1908. Thanks to his correspondence with Kautsky, he got news about the party. Then, in 1916, he was sent to Steinach am Brenner
, near the Italian border, as a combat medic
. During the whole war, Hilferding remained active in writing and was politically involved. He published numerous articles in Die Neue Zeit and Kampf. One of these articles, published in October 1915, summarized the situation of the SPD and revised his theories of Finance Capital containing his first formulation of the concept of organized capitalism.
Independent Social Democratic Party of Germany
(USPD) in 1918. During the November Revolution in 1918, he returned to Berlin, shortly after the Republic was proclaimed and the emperor had fled. For the following three years, he was editor-in-chief
of the USPD's daily newspaper, Die Freiheit
, and thus member of the party executive. The Freiheit quickly became one of Berlin's most widely read dailies with a circulation of 200,000.
Later, Kurt Tucholsky
bashed him for his work for the newspaper in Die Weltbühne
in 1925.
The Council of the People's Deputies
, the provisional government of the November Revolution, consisting of members of the SPD and USPD, which had signed the cease-fire, delegated Hilferding to the Sozialisierungskommission (Socialization Committee). Its official task was to socialize industries which were suitable. He spent months with this project, which was, in spite of support among the workers, of no real interest to the government and the SPD leadership opposed its reforms. Hilferding gave a speech before the worker's councils' congress and presented them a plan to socialize the industry. It went down well with the congress and a resolution was passed, but the government didn't follow. The government's lack of support was the reason why this committee ceased in April 1919. After the Kapp Putsch
, the government, under pressure, appointed a new Socialization Committee, of which also Hilferding was a member, but still the government refused economic reforms.
Tensions between the SPD and USPD escalated when Friedrich Ebert
used troops for a suppression of riots in Berlin on 23 December 1918 without consulting the USPD. When the SPD rejected demands for military and economic reforms, the USPD withdrew from the government. Hilferding, who had accused the SPD of trying to oust the USPD from government, supported this decision. After a bad outcome in the elections for the Weimar National Assembly
, leading USPD politicians, including Hilferding, started to support workers' council
s. Hilferding wrote articles in the Freiheit and made suggestions how they should be implemented, which were sharply critizised by Lenin.
In 1919, he acquired German citizenship and in 1920, he was appointed to the Reich Economic Council. In 1922 he strongly opposed a merger of the USPD with the Communist Party of Germany
, which he attacked throughout the 1920s, and instead supported the merger with the SPD, where he emerged as its most prominent and visible spokespersons. At the peak of the inflation in the Weimar Republic
, he served as the German Minister of Finance from August to October 1923. He contributed to stabilize the mark, but couldn't stop the inflation. During his term of office the introduction of the Rentenmark
was decided, but he resigned from office shortly before the monetary reform
took place.
From 1924 to 1933 he was publisher of the theoretical journal Die Gesellschaft. On 4 May 1924 he was elected to the Reichstag
for the SPD where he served as the SPD's chief spokesman on financial matters until 1933. Together with Karl Kautsky
he formulated the Heidelberg Program in 1925. Between 1928 and 1929 he again served as the finance minister, at the eve of the Great Depression
. He had to relinquish this position because of pressure from the President of the Reichsbank, Hjalmar Schacht
, causing his fall in December 1929 by imposing to the government his conditions for the obtainment of a loan.
and other important party leaders, first to Denmark
, then Saarbrücken
, Paris, and finally Zurich
, Switzerland, into exile in 1933. He lived in Zurich until 1938 and from 1939 on in Paris, France. However, he remained influential, having been appointed important posts in SPD's Sopade
. Between 1933 and 1936, he was editor-in-chief of Die Zeitschrift für Sozialismus and contributor to Neuer Vorwärts. Until 1939 he was also the party's representative for Socialist International
and his advice was sought by the SPD leadership in exile.
After the attack on France he and Breitscheid fled to the unoccupied Marseille
. Efforts were undertaken by the Refugee Committee, under Varian Fry
, to get him out of Vichy France
, along with Rudolf Breitscheid
. However, they both refused to leave illegally, because they didn't have identification papers. They were arrested by the police of the Vichy government in southern France and, despite their emergency visa to enter the United States of America, handed over to the Gestapo
on 9 February 1941. He was brought to Paris and was severely maltreated on the way. After being tortured, he died of unknown circumstances in a prison in Paris, the Gestapo dungeon of La Santé
. His death was not officially announced until the fall of 1941. Fry, among others, believed that Hilferding was murdered by the Gestapo on the orders of Adolf Hitler
or another senior Nazi Party
official.
Hilferding's wife, Margarete, died in the Theresienstadt concentration camp
in 1942.
's and Bukharin
's "largely derivative" writings on the subject. Writing in the context of the highly cartel
ized economy of late Austria-Hungary
, Hilferding contrasted monopolistic
finance capitalism to the earlier, "competitive" and "buccaneering" capitalism of the earlier liberal
era. The unification of industrial, mercantile and banking interests had defused the earlier liberal capitalist demands for the reduction of the economic role of a mercantilist
state; instead, finance capital sought a "centralized and privilege-dispensing state".
Whereas, until the 1860s, the demands of capital and of the bourgeoisie
had been, in Hilferding's view, constitutional
demands that had "affected all citizens alike," finance capital increasingly sought state intervention on behalf of the wealth-owning classes: capitalists, rather than the nobility
, now dominated the state.
In this, Hilferding saw an opportunity for a path to socialism that was distinct from the one foreseen by Marx: "The socializing function of finance capital facilitates enormously the task of overcoming capitalism. Once finance capital has brought the most importance branches of production under its control, it is enough for society, through its conscious executive organ – the state conquered by the working class – to seize finance capital in order to gain immediate control of these branches of production." This would obviate the need to expropriate "peasant farms and small businesses" because they would be indirectly socialized, through the socialization of institutions upon which finance capital had already made them dependent. Thus, because a narrow class dominated the economy, socialist revolution could gain wider support by directly expropriating only from that narrow class. In particular, according to Hilferding, societies that had not reached the level of economic maturity anticipated by Marx as making them "ripe" for socialism could be opened to socialist possibilities. Furthermore, "the policy of finance capital is bound to lead towards war, and hence to the unleashing of revolutionary storms."
Marxism
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
economist, leading socialist theorist, politician and chief theoretician for the Social Democratic Party of Germany
Social Democratic Party of Germany
The Social Democratic Party of Germany is a social-democratic political party in Germany...
(SPD) during the Weimar Republic
Weimar Republic
The Weimar Republic is the name given by historians to the parliamentary republic established in 1919 in Germany to replace the imperial form of government...
, almost universally recognized as the SPD's foremost theoretician of his century, and a physician.
He was born in Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
, where he received a doctorate having studied medicine. After becoming a leading journalist for the SPD, he participated in the November Revolution in Germany and was Finance Minister of Germany in 1923 and from 1928 to 1929. In 1933 he fled into exile, living in Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
and then Paris, where he died in custody of the Gestapo
Gestapo
The Gestapo was the official secret police of Nazi Germany. Beginning on 20 April 1934, it was under the administration of the SS leader Heinrich Himmler in his position as Chief of German Police...
in 1941.
Hilferding was a propounder for the "economic" reading of Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
identifying with the "Austro-Marxian
Austromarxism
Austromarxism was a Marxist theoretical current, led by Victor Adler, Otto Bauer, Karl Renner and Max Adler, members of the Social Democratic Workers' Party of Austria during the late decades of the Austro-Hungarian Monarchy and the First Austrian Republic...
" group. He was the first to put forward the theory of organized capitalism. He was the main defender to the challenge to Marx by Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
economist and fellow Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
resident, Eugen von Böhm-Bawerk. Hilferding also participated in the "Crises Debate" – disputing Marx's theory of the instability and eventual breakdown of capitalism on the basis that the concentration of capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
is actually stabilizing. He edited leading publications such as Vorwärts
Vorwärts
Vorwärts was the central organ of the Social Democratic Party of Germany published daily in Berlin from 1891 to 1933 by decision of the party's Halle Congress, as the successor of Berliner Volksblatt, founded in 1884....
, Die Freiheit
Die Freiheit (1918)
Die Freiheit was a daily newspaper published from Berlin between 1918 and 1922. Die Freiheit was the organ of the Independent Social Democratic Party of Germany . Rudolf Hilferding was the editor-in-chief of the newspaper....
, and Die Gesellschaft. His most famous work was Das Finanzkapital (Finance capital), one of the most influential and original contributions to Marxist economics with substantial influence on Marxist writers such as Vladimir Lenin
Vladimir Lenin
Vladimir Ilyich Lenin was a Russian Marxist revolutionary and communist politician who led the October Revolution of 1917. As leader of the Bolsheviks, he headed the Soviet state during its initial years , as it fought to establish control of Russia in the Russian Civil War and worked to create a...
,
influencing his writings on imperialism
Imperialism
Imperialism, as defined by Dictionary of Human Geography, is "the creation and/or maintenance of an unequal economic, cultural, and territorial relationships, usually between states and often in the form of an empire, based on domination and subordination." The imperialism of the last 500 years,...
.
Life in Vienna
On 10 August 1877 Rudolf Hilferding was born in ViennaVienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
into a prosperous Jewish family, consisting of his parents, Emil Hilferding, a merchant (or private servant), and Anna Hilferding, and of Rudolf's little sister, Maria. Rudolf was sent to a public gymnasium
Gymnasium (school)
A gymnasium is a type of school providing secondary education in some parts of Europe, comparable to English grammar schools or sixth form colleges and U.S. college preparatory high schools. The word γυμνάσιον was used in Ancient Greece, meaning a locality for both physical and intellectual...
which he graduated from as an average student, allowing him access to the university. Directly afterwards, he enrolled at the University of Vienna
University of Vienna
The University of Vienna is a public university located in Vienna, Austria. It was founded by Duke Rudolph IV in 1365 and is the oldest university in the German-speaking world...
to study medicine.
Even before his school leaving examinations, in 1893 he joined a group of Vienna students that weekly discussed socialist literature and later formed with young university teachers the student-organization Freie Vereinigung Sozialistischer Studenten, whose chairman was Max Adler. This is where Hilferding first intensely came in contact with socialist theories and first became active in the labour movement
Labour movement
The term labour movement or labor movement is a broad term for the development of a collective organization of working people, to campaign in their own interest for better treatment from their employers and governments, in particular through the implementation of specific laws governing labour...
. The organization also participated in social-democratic demonstrations, which came in conflict with the police, drawing the attention of the Social Democratic Party of Austria
Social Democratic Party of Austria
The Social Democratic Party of Austria is one of the oldest political parties in Austria. The SPÖ is one of the two major parties in Austria, and has ties to trade unions and the Austrian Chamber of Labour. The SPÖ is among the few mainstream European social-democratic parties that have preserved...
(SPÖ).
As a university student, he became acquainted with many talented socialist intellectuals. Aside from his studies of medicine, he studied history, economy, and philosophy. He and his fellow socialist students and friends Karl Renner
Karl Renner
Karl Renner was an Austrian politician. He was born in Untertannowitz in the Austro-Hungarian Empire and died in Vienna...
, Otto Bauer
Otto Bauer
Otto Bauer was an Austrian Social Democrat who is considered one of the leading thinkers of the left socialist Austro-Marxist tendency...
and Max Adler also studied political economy, taught by the marxist Carl Grünberg
Carl Grünberg
Carl Grünberg was the first director of the Institute for Social Research. He established and edited a journal of labour and socialist history today known as Grünbergs Archiv . He retired in 1929 and left the Institute to Max Horkheimer....
, and attended the lectures of the philosopher Ernst Mach
Ernst Mach
Ernst Mach was an Austrian physicist and philosopher, noted for his contributions to physics such as the Mach number and the study of shock waves...
, who both influenced Hilferding significantly. He became one of the staunchest supporters of Victor Adler
Victor Adler
----Victor Adler was an Austrian Social Democratic leader.Born in Prague, Adler received a university degree in Vienna in 1881. He founded the Socialist movement in Austria and created the Marxist journals Gleicheit in 1886 and Arbeiter-Zeitung in 1889...
, founder of the SPÖ.
Having graduated with a doctorate in 1901, he began working in Vienna as a pediatrist, however not with much enthusiasm. He spent much of his leisure time studying political economy, where his real interest lay, but he would not give up his profession until his first publications gave him success. He also joined the social-democratic party in Austria. In 1902 he contributed to the social-democratic newspaper Die Neue Zeit
Die Neue Zeit
Die Neue Zeit was a German socialist theoretical journal of the Social Democratic Party of Germany that was published from 1883 to 1923. Founded by leading socialist politicians and theorists, it became the most important organ of the SPD competing with Sozialistische Monatshefte...
on economic subjects as requested by Karl Kautsky
Karl Kautsky
Karl Johann Kautsky was a Czech-German philosopher, journalist, and Marxist theoretician. Kautsky was recognized as among the most authoritative promulgators of Orthodox Marxism after the death of Friedrich Engels in 1895 until the coming of World War I in 1914 and was called by some the "Pope of...
, at that time the most important marxist theoretician worldwide and who developed a long-lasting personal and political friendship with Hilferding. His collaboration with Kautsky and his regular contributions to the Neue Zeit, the leading theory organ of the socialist movement, made him become a mediator between Kautsky and Victor Adler
Victor Adler
----Victor Adler was an Austrian Social Democratic leader.Born in Prague, Adler received a university degree in Vienna in 1881. He founded the Socialist movement in Austria and created the Marxist journals Gleicheit in 1886 and Arbeiter-Zeitung in 1889...
, trying to reduce their ideological differences.
In April 1902, he wrote a review of Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk
Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...
's Karl Marx and the Close of His System (1896) defending Marx's economic theory against Böhm-Bawerk's criticism. He also wrote two significant essays concerning the use of the general strike
General strike
A general strike is a strike action by a critical mass of the labour force in a city, region, or country. While a general strike can be for political goals, economic goals, or both, it tends to gain its momentum from the ideological or class sympathies of the participants...
as a political weapon. Already in 1905, his numerous publications have made him one of the leading social-democratic theoreticians and brought him into close contact with the party leadership of the SPÖ and of the Social Democratic Party of Germany
Social Democratic Party of Germany
The Social Democratic Party of Germany is a social-democratic political party in Germany...
(SPD). Together with Max Adler, he founded and edited the Marx-Studien, theoretical and political studies spreading Austromarxism
Austromarxism
Austromarxism was a Marxist theoretical current, led by Victor Adler, Otto Bauer, Karl Renner and Max Adler, members of the Social Democratic Workers' Party of Austria during the late decades of the Austro-Hungarian Monarchy and the First Austrian Republic...
until 1923.
Karl Renner
Karl Renner
Karl Renner was an Austrian politician. He was born in Untertannowitz in the Austro-Hungarian Empire and died in Vienna...
, Adler and Hilferding founded an association to improve the worker's education, which established Vienna's first school for workers in 1903.
Hilferding married the doctor Margarete Hönigsberg
Margarete Hilferding
Margarete Hilferding, born Hönigsberg was an Austrian Jewish female teacher, doctor, individual psychologist.Hilferding was the first woman admitted into the Vienna Psychoanalytic Society.- Literature :* Margarete...
, whom he had met in the socialist movement and who was eight years his senior. She also had a Jewish background, had made her exams at the University of Vienna, and was a regular contributor to Die Neue Zeit. Margarete gave birth to their 1st child Karl Emil. Kautsky worried that Hilferding, who now complained about his lack of time, would neglect his theoretical work in favor of his good social situation as a doctor in Vienna. Kautsky used his connections to August Bebel
August Bebel
Ferdinand August Bebel was a German Marxist politician, writer, and orator. He is best remembered as one of the founders of the Social Democratic Party of Germany.-Early years:...
, who was looking for teachers for the SPD's training center in Berlin, to suggest Hilferding for this position. In July 1906, Bebel recommended Hilferding for this job to the party executive, which agreed to give it to him for six months.
Life in Berlin and World War 1
In 1906 he gave up his job as a doctor and, following August BebelAugust Bebel
Ferdinand August Bebel was a German Marxist politician, writer, and orator. He is best remembered as one of the founders of the Social Democratic Party of Germany.-Early years:...
's call, started teaching Economics and Economic history
Economic history
Economic history is the study of economies or economic phenomena in the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and by applying economic theory to historical situations and institutions...
at the training center of the SPD in Berlin. Having arrived in Berlin in November 1906, he taught there for one term, but a law forbade the employment of teachers without German citizenship. He had to give up this job and was replaced by Rosa Luxemburg
Rosa Luxemburg
Rosa Luxemburg was a Marxist theorist, philosopher, economist and activist of Polish Jewish descent who became a naturalized German citizen...
after being threatened of eviction by the Prussian police in 1907.
Until 1915, he was the foreign editor of the leading SPD newspaper Vorwärts
Vorwärts
Vorwärts was the central organ of the Social Democratic Party of Germany published daily in Berlin from 1891 to 1933 by decision of the party's Halle Congress, as the successor of Berliner Volksblatt, founded in 1884....
, in the immediate proximity of the most important party leaders. Bebel had recommended Hilferding for this job, after there was a conflict between the editors of Vorwärts and the party executive. His appointment was also meant to raise the share of marxism in the editing. In a short time, Hilferding took a leading role in the paper and was soon appointed editor-in-chief. Together with his work for Die Neue Zeit and Der Kampf, it provided him an adequate income. He was also supported by his fellow Austrian, Karl Kautsky
Karl Kautsky
Karl Johann Kautsky was a Czech-German philosopher, journalist, and Marxist theoretician. Kautsky was recognized as among the most authoritative promulgators of Orthodox Marxism after the death of Friedrich Engels in 1895 until the coming of World War I in 1914 and was called by some the "Pope of...
, who was his mentor and whom he succeeded in the 1920s as the chief theoretician of the SPD. Hilferding's theoretical abilities and his personal relationships to leading socialists allowed him to make his career in the party.
He published his most famous work, Das Finanzkapital (Finance Capital), in 1910, which was an important theoretical milestone that has kept its importance until today. It built Hilferding's reputation as a significant economist, a leading economist theoretician of the Socialist International
Socialist International
The Socialist International is a worldwide organization of democratic socialist, social democratic and labour political parties. It was formed in 1951.- History :...
, and, together with his leading position in Vorwärts, helped him raise into the national decision level of the SPD. It also confirmed his position in the marxist center of the SPD, of which he was now one of the most important figures. Since 1912 he represented Vorwärts at the meetings of the party commission, which allowed him to decisively take part in the decision-making of the socialist politics in the years before World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
.
When World War I broke out in 1914, Hilferding opposed the SPD's politics of Burgfrieden
Burgfrieden
Burgfrieden—literally "fortress peace" or "castle peace" but more accurately "party truce"—is a German term used for the political truce the Social Democratic Party of Germany and the other political parties agreed to during World War I...
and their involvement with the German war effort during World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, including their voting for war credits from the very beginning. However, in an internal party voting, he was only in a small minority, led by Hugo Haase
Hugo Haase
Hugo Haase was a German politician, jurist and pacifist.-Biography:Haase was born in Allenstein , Province of Prussia, the son of Jewish shoemaker and small businessman, Nathan Haase, and Pauline née Anker. He studied law in Königsberg and established himself as a lawyer...
, a close friend of him, and thus they had to yield to the party's decision to grant war credits. Hilferding signed together with the majority of the editors of Vorwärts a declaration to oppose these politics. In October 1915, the SPD leadership fired all these opposing editors, but Hilfering had already been drafted into the Austro-Hungarian Army
Austro-Hungarian Army
The Austro-Hungarian Army was the ground force of the Austro-Hungarian Dual Monarchy from 1867 to 1918. It was composed of three parts: the joint army , the Austrian Landwehr , and the Hungarian Honvédség .In the wake of fighting between the...
as a medic long before.
At first, Hilferding was stationed in Vienna, where he led the field hospital
Field hospital
A field hospital is a large mobile medical unit that temporarily takes care of casualties on-site before they can be safely transported to more permanent hospital facilities...
for epidemics. He lived together with his wife and his two sons, Karl and Peter, who was born in 1908. Thanks to his correspondence with Kautsky, he got news about the party. Then, in 1916, he was sent to Steinach am Brenner
Steinach am Brenner
Steinach am Brenner is a market town in the district of Innsbruck-Land and is located south of Innsbruck in the Wipptal at the Sill River. It has 3340 inhabitants.-Geography:...
, near the Italian border, as a combat medic
Combat medic
Combat medics are trained military personnel who are responsible for providing first aid and frontline trauma care on the battlefield. They are also responsible for providing continuing medical care in the absence of a readily available physician, including care for disease and battle injury...
. During the whole war, Hilferding remained active in writing and was politically involved. He published numerous articles in Die Neue Zeit and Kampf. One of these articles, published in October 1915, summarized the situation of the SPD and revised his theories of Finance Capital containing his first formulation of the concept of organized capitalism.
Weimar Republic
Hilferding joined the anti-warAnti-war
An anti-war movement is a social movement, usually in opposition to a particular nation's decision to start or carry on an armed conflict, unconditional of a maybe-existing just cause. The term can also refer to pacifism, which is the opposition to all use of military force during conflicts. Many...
Independent Social Democratic Party of Germany
Independent Social Democratic Party of Germany
The Independent Social Democratic Party of Germany was a short-lived political party in Germany during the Second Reich and the Weimar Republic. The organization was established in 1917 as the result of a split of left wing members of the Social Democratic Party of Germany...
(USPD) in 1918. During the November Revolution in 1918, he returned to Berlin, shortly after the Republic was proclaimed and the emperor had fled. For the following three years, he was editor-in-chief
Editor in chief
An editor-in-chief is a publication's primary editor, having final responsibility for the operations and policies. Additionally, the editor-in-chief is held accountable for delegating tasks to staff members as well as keeping up with the time it takes them to complete their task...
of the USPD's daily newspaper, Die Freiheit
Die Freiheit (1918)
Die Freiheit was a daily newspaper published from Berlin between 1918 and 1922. Die Freiheit was the organ of the Independent Social Democratic Party of Germany . Rudolf Hilferding was the editor-in-chief of the newspaper....
, and thus member of the party executive. The Freiheit quickly became one of Berlin's most widely read dailies with a circulation of 200,000.
Later, Kurt Tucholsky
Kurt Tucholsky
Kurt Tucholsky was a German-Jewish journalist, satirist and writer. He also wrote under the pseudonyms Kaspar Hauser, Peter Panter, Theobald Tiger and Ignaz Wrobel. Born in Berlin-Moabit, he moved to Paris in 1924 and then to Sweden in 1930.Tucholsky was one of the most important journalists of...
bashed him for his work for the newspaper in Die Weltbühne
Die Weltbühne
Die Weltbühne was a German weekly magazine focused on politics, art, and business. The Weltbühne was founded in Berlin on 7 September 1905 by Siegfried Jacobsohn and was originally created strictly as a theater magazine under the title Die Schaubühne. It was renamed Die Weltbühne on 4 April 1918...
in 1925.
The Council of the People's Deputies
Council of the People's Deputies
The Council of the People's Deputies was the name given to the government of the November Revolution in Germany from November 1918 until February 1919....
, the provisional government of the November Revolution, consisting of members of the SPD and USPD, which had signed the cease-fire, delegated Hilferding to the Sozialisierungskommission (Socialization Committee). Its official task was to socialize industries which were suitable. He spent months with this project, which was, in spite of support among the workers, of no real interest to the government and the SPD leadership opposed its reforms. Hilferding gave a speech before the worker's councils' congress and presented them a plan to socialize the industry. It went down well with the congress and a resolution was passed, but the government didn't follow. The government's lack of support was the reason why this committee ceased in April 1919. After the Kapp Putsch
Kapp Putsch
The Kapp Putsch — or more accurately the Kapp-Lüttwitz Putsch — was a 1920 coup attempt during the German Revolution of 1918–1919 aimed at overthrowing the Weimar Republic...
, the government, under pressure, appointed a new Socialization Committee, of which also Hilferding was a member, but still the government refused economic reforms.
Tensions between the SPD and USPD escalated when Friedrich Ebert
Friedrich Ebert
Friedrich Ebert was a German politician of the Social Democratic Party of Germany .When Ebert was elected as the leader of the SPD after the death of August Bebel, the party members of the SPD were deeply divided because of the party's support for World War I. Ebert supported the Burgfrieden and...
used troops for a suppression of riots in Berlin on 23 December 1918 without consulting the USPD. When the SPD rejected demands for military and economic reforms, the USPD withdrew from the government. Hilferding, who had accused the SPD of trying to oust the USPD from government, supported this decision. After a bad outcome in the elections for the Weimar National Assembly
Weimar National Assembly
The Weimar National Assembly governed Germany from February 6, 1919 to June 6, 1920 and drew up the new constitution which governed Germany from 1919 to 1933, technically remaining in effect even until the end of Nazi rule in 1945...
, leading USPD politicians, including Hilferding, started to support workers' council
Workers' council
A workers' council, or revolutionary councils, is the phenomenon where a single place of work or enterprise, such as a factory, school, or farm, is controlled collectively by the workers of that workplace, through the core principle of temporary and instantly revocable delegates.In a system with...
s. Hilferding wrote articles in the Freiheit and made suggestions how they should be implemented, which were sharply critizised by Lenin.
In 1919, he acquired German citizenship and in 1920, he was appointed to the Reich Economic Council. In 1922 he strongly opposed a merger of the USPD with the Communist Party of Germany
Communist Party of Germany
The Communist Party of Germany was a major political party in Germany between 1918 and 1933, and a minor party in West Germany in the postwar period until it was banned in 1956...
, which he attacked throughout the 1920s, and instead supported the merger with the SPD, where he emerged as its most prominent and visible spokespersons. At the peak of the inflation in the Weimar Republic
Inflation in the Weimar Republic
The hyperinflation in the Weimar Republic was a three year period of hyperinflation in Germany between June 1921 and July 1924.- Analysis :...
, he served as the German Minister of Finance from August to October 1923. He contributed to stabilize the mark, but couldn't stop the inflation. During his term of office the introduction of the Rentenmark
German rentenmark
The Rentenmark was a currency issued on 15 November 1923 to stop the hyperinflation of 1922 and 1923 in Germany. It was subdivided into 100 Rentenpfennig.-History:...
was decided, but he resigned from office shortly before the monetary reform
Monetary reform
Monetary reform describes any movement or theory that proposes a different system of supplying money and financing the economy from the current system.Monetary reformers may advocate any of the following, among other proposals:...
took place.
From 1924 to 1933 he was publisher of the theoretical journal Die Gesellschaft. On 4 May 1924 he was elected to the Reichstag
Reichstag (Weimar Republic)
The Reichstag was the parliament of Weimar Republic .German constitution commentators consider only the Reichstag and now the Bundestag the German parliament. Another organ deals with legislation too: in 1867-1918 the Bundesrat, in 1919–1933 the Reichsrat and from 1949 on the Bundesrat...
for the SPD where he served as the SPD's chief spokesman on financial matters until 1933. Together with Karl Kautsky
Karl Kautsky
Karl Johann Kautsky was a Czech-German philosopher, journalist, and Marxist theoretician. Kautsky was recognized as among the most authoritative promulgators of Orthodox Marxism after the death of Friedrich Engels in 1895 until the coming of World War I in 1914 and was called by some the "Pope of...
he formulated the Heidelberg Program in 1925. Between 1928 and 1929 he again served as the finance minister, at the eve of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
. He had to relinquish this position because of pressure from the President of the Reichsbank, Hjalmar Schacht
Hjalmar Schacht
Dr. Hjalmar Horace Greeley Schacht was a German economist, banker, liberal politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank under the Weimar Republic...
, causing his fall in December 1929 by imposing to the government his conditions for the obtainment of a loan.
Life in exile
After Hitler's coming to power, Hilferding as a prominent socialist and Jew had to flee, together with his close associate Rudolf BreitscheidRudolf Breitscheid
Rudolf Breitscheid, was a leading member of the Social Democratic Party and a delegate to the Reichstag during the era of the Weimar Republic in Germany....
and other important party leaders, first to Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, then Saarbrücken
Saarbrücken
Saarbrücken is the capital of the state of Saarland in Germany. The city is situated at the heart of a metropolitan area that borders on the west on Dillingen and to the north-east on Neunkirchen, where most of the people of the Saarland live....
, Paris, and finally Zurich
Zürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
, Switzerland, into exile in 1933. He lived in Zurich until 1938 and from 1939 on in Paris, France. However, he remained influential, having been appointed important posts in SPD's Sopade
Sopade
Sopade was the name of the exile organization of the Social Democratic Party of Germany . It operated in Prague from 1933 to 1938, from 1938 to 1940 in Paris and until 1945 in London....
. Between 1933 and 1936, he was editor-in-chief of Die Zeitschrift für Sozialismus and contributor to Neuer Vorwärts. Until 1939 he was also the party's representative for Socialist International
Socialist International
The Socialist International is a worldwide organization of democratic socialist, social democratic and labour political parties. It was formed in 1951.- History :...
and his advice was sought by the SPD leadership in exile.
After the attack on France he and Breitscheid fled to the unoccupied Marseille
Marseille
Marseille , known in antiquity as Massalia , is the second largest city in France, after Paris, with a population of 852,395 within its administrative limits on a land area of . The urban area of Marseille extends beyond the city limits with a population of over 1,420,000 on an area of...
. Efforts were undertaken by the Refugee Committee, under Varian Fry
Varian Fry
Varian Mackey Fry was an American journalist. Fry ran a rescue network in Vichy France that helped approximately 2,000 to 4,000 anti-Nazi and Jewish refugees to escape Nazi Germany and the Holocaust.-Early life:...
, to get him out of Vichy France
Vichy France
Vichy France, Vichy Regime, or Vichy Government, are common terms used to describe the government of France that collaborated with the Axis powers from July 1940 to August 1944. This government succeeded the Third Republic and preceded the Provisional Government of the French Republic...
, along with Rudolf Breitscheid
Rudolf Breitscheid
Rudolf Breitscheid, was a leading member of the Social Democratic Party and a delegate to the Reichstag during the era of the Weimar Republic in Germany....
. However, they both refused to leave illegally, because they didn't have identification papers. They were arrested by the police of the Vichy government in southern France and, despite their emergency visa to enter the United States of America, handed over to the Gestapo
Gestapo
The Gestapo was the official secret police of Nazi Germany. Beginning on 20 April 1934, it was under the administration of the SS leader Heinrich Himmler in his position as Chief of German Police...
on 9 February 1941. He was brought to Paris and was severely maltreated on the way. After being tortured, he died of unknown circumstances in a prison in Paris, the Gestapo dungeon of La Santé
La Santé Prison
La Santé Prison is a prison operated by the Ministry of Justice located in the 14th arrondissement of Paris, France. It is one of the most famous prisons in France, with both VIP and high security wings....
. His death was not officially announced until the fall of 1941. Fry, among others, believed that Hilferding was murdered by the Gestapo on the orders of Adolf Hitler
Adolf Hitler
Adolf Hitler was an Austrian-born German politician and the leader of the National Socialist German Workers Party , commonly referred to as the Nazi Party). He was Chancellor of Germany from 1933 to 1945, and head of state from 1934 to 1945...
or another senior Nazi Party
National Socialist German Workers Party
The National Socialist German Workers' Party , commonly known in English as the Nazi Party, was a political party in Germany between 1920 and 1945. Its predecessor, the German Workers' Party , existed from 1919 to 1920...
official.
Hilferding's wife, Margarete, died in the Theresienstadt concentration camp
Theresienstadt concentration camp
Theresienstadt concentration camp was a Nazi German ghetto during World War II. It was established by the Gestapo in the fortress and garrison city of Terezín , located in what is now the Czech Republic.-History:The fortress of Terezín was constructed between the years 1780 and 1790 by the orders...
in 1942.
Finance Capital
Hilferding's Finance Capital (Das Finanzkapital, Vienna: 1910) was "the seminal Marxist analysis of the transformation of competitive and pluralistic 'liberal capitalism' into monopolistic 'finance capital'", and anticipated LeninVladimir Lenin
Vladimir Ilyich Lenin was a Russian Marxist revolutionary and communist politician who led the October Revolution of 1917. As leader of the Bolsheviks, he headed the Soviet state during its initial years , as it fought to establish control of Russia in the Russian Civil War and worked to create a...
's and Bukharin
Nikolai Bukharin
Nikolai Ivanovich Bukharin , was a Russian Marxist, Bolshevik revolutionary, and Soviet politician. He was a member of the Politburo and Central Committee , chairman of the Communist International , and the editor in chief of Pravda , the journal Bolshevik , Izvestia , and the Great Soviet...
's "largely derivative" writings on the subject. Writing in the context of the highly cartel
Cartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
ized economy of late Austria-Hungary
Austria-Hungary
Austria-Hungary , more formally known as the Kingdoms and Lands Represented in the Imperial Council and the Lands of the Holy Hungarian Crown of Saint Stephen, was a constitutional monarchic union between the crowns of the Austrian Empire and the Kingdom of Hungary in...
, Hilferding contrasted monopolistic
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
finance capitalism to the earlier, "competitive" and "buccaneering" capitalism of the earlier liberal
Economic liberalism
Economic liberalism is the ideological belief in giving all people economic freedom, and as such granting people with more basis to control their own lives and make their own mistakes. It is an economic philosophy that supports and promotes individual liberty and choice in economic matters and...
era. The unification of industrial, mercantile and banking interests had defused the earlier liberal capitalist demands for the reduction of the economic role of a mercantilist
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
state; instead, finance capital sought a "centralized and privilege-dispensing state".
Whereas, until the 1860s, the demands of capital and of the bourgeoisie
Bourgeoisie
In sociology and political science, bourgeoisie describes a range of groups across history. In the Western world, between the late 18th century and the present day, the bourgeoisie is a social class "characterized by their ownership of capital and their related culture." A member of the...
had been, in Hilferding's view, constitutional
Constitutionalism
Constitutionalism has a variety of meanings. Most generally, it is "a complex of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law"....
demands that had "affected all citizens alike," finance capital increasingly sought state intervention on behalf of the wealth-owning classes: capitalists, rather than the nobility
Nobility
Nobility is a social class which possesses more acknowledged privileges or eminence than members of most other classes in a society, membership therein typically being hereditary. The privileges associated with nobility may constitute substantial advantages over or relative to non-nobles, or may be...
, now dominated the state.
In this, Hilferding saw an opportunity for a path to socialism that was distinct from the one foreseen by Marx: "The socializing function of finance capital facilitates enormously the task of overcoming capitalism. Once finance capital has brought the most importance branches of production under its control, it is enough for society, through its conscious executive organ – the state conquered by the working class – to seize finance capital in order to gain immediate control of these branches of production." This would obviate the need to expropriate "peasant farms and small businesses" because they would be indirectly socialized, through the socialization of institutions upon which finance capital had already made them dependent. Thus, because a narrow class dominated the economy, socialist revolution could gain wider support by directly expropriating only from that narrow class. In particular, according to Hilferding, societies that had not reached the level of economic maturity anticipated by Marx as making them "ripe" for socialism could be opened to socialist possibilities. Furthermore, "the policy of finance capital is bound to lead towards war, and hence to the unleashing of revolutionary storms."
External links
- Rudolf Hilferding Archive at marxists.org
- A Bibliography on Rudolf Hilferding