Modern Times: The World From the Twenties to the Nineties Read Online Free PDF Page A

38 Russian industry, even when not publicly owned, had an exceptionally high dependence on tariff barriers, state subsidies, grants and loans, or was interdependent with the public sector. The links between the Ministry of Finance and the big banks were close, with civil servants appointed to their boards. 39 In addition, the State Bank, a department of the Finance Ministry, controlled savings banks and credit associations, managed the finances of the railways, financed adventures in foreign policy, acted as a regulator of the whole economy and was constantly searching for ways to increase its power and expand its activities. 40 The Ministry of Trade supervised private trading syndicates, regulated prices, profits, the use of raw materials and freight-charges, and placed its agents on the boards of all joint-stock companies. 41 Imperial Russia, in its final phase of peace, constituted a large-scale experiment in state collective capitalism, and apparently a highly successful one. It impressed and alarmed the Germans: indeed, fear of the rapid growth in Russia’s economic (and therefore military) capacity was the biggest single factor in deciding Germany for war in 1914. As Bethmann Hollweg put it to Riezler, ‘The future belongs to Russia.’ 42
    With the onset of the war, each belligerent eagerly scanned its competitors and allies for aspects of state management and intervention in the war economy which could be imitated. The capitalist sectors, appeased by enormous profits and inspired no doubt also by patriotism, raised no objections. The result was a qualitative and quantitative expansion of the role of the state which has never been fully reversed – for though wartime arrangements were sometimes abandoned with peace, in virtually every case they were eventually adopted again, usually permanently. Germany set the pace, speedily adopting most of the Russian state procedures which had so scared her in peace, and operating them with such improved efficiency that when Lenin inherited the Russian state-capitalist machine in 1917–18, it was to German wartime economic controls that he, in turn, looked for guidance. 43 As the war prolonged itself, and the losses and desperation increased, the warring states became steadily more totalitarian, especially after the winter of 1916–17. In Germany the end of civilian rule came on 9 January 1917 when Bethmann Hollweg was forced to bow to the demand for unrestricted submarine warfare. He fell from power completely in July, leaving General Ludendorff and the admirals in possession of the monster-state. The episode marked the real end of the constitutional monarchy, since the Kaiser forewent his prerogative to appoint and dismiss the chancellor, under pressure from the military. Even whilestill chancellor, Bethmann Hollweg discovered that his phone was tapped, and according to Riezler, when he heard the click would shout into it ‘What Schweinhund is listening in?’ 44 But phone-tapping was legal under the ‘state of siege’ legislation, which empowered area military commands to censor or suppress newspapers. Ludendorff was likewise authorized to herd 400,000 Belgian workers into Germany, thus foreshadowing Soviet and Nazi slave-labour methods. 45 In the last eighteen months of hostilities the German élite fervently practised what was openly termed ‘War Socialism’ in a despairing attempt to mobilize every ounce of productive effort for victory.
    In the West, too, the state greedily swallowed up the independence of the private sector. The corporatist spirit, always present in France, took over industry, and there was a resurgence of Jacobin patriotic intolerance. In opposition, Georges Clemenceau fought successfully for some freedom of the press, and after he came to supreme power in the agony of November 1917 he permitted some criticism of himself. But politicians like Malvy and Caillaux were arrested and long lists of subversives were compiled (the notorious ‘Carnet