Economic Foundations of National Socialism
by Zoltanous
Gottfried Feder was born in Würzburg and descended from a family of high-ranking Bavarian public officials. He received his early education at the Humanistic Gymnasium in his native city before continuing his studies at the technical faculties of Munich, Berlin, and Zurich, where he earned his diploma in civil engineering. After working for a company that specialized in reinforced concrete construction, he opened his own independent engineering office in 1908. That same year he married, and the marriage produced two sons and one daughter. In 1917 Feder made a deliberate attempt to found his own political organization in order to advance the financial theories he was developing. He later led one of the earliest propaganda courses in Bavaria, during which he met both Dietrich Eckart and Adolf Hitler sometime between June and September of 1919. He joined the German Workers’ Party, the organization that would soon evolve into the NSDAP, and his involvement inside the movement deepened rapidly from that point forward. He served as a Reichstag deputy from 1924 to 1936, edited the NS Bibliothek from 1928 to 1938, was named president of the NSDAP Economic Council in 1930, and received appointment as State Secretary in the Reich Ministry of Economics in 1933 before being reassigned in 1936 to a professorship at the Technical College in Berlin.
Three years after his first effort to influence Bavarian state policy, Feder published in 1919 the Manifesto For Thr Abolition of The Slavery of Interest. In 1918 he had already presented detailed financial proposals to the Bavarian Republic, but those proposals were rejected. He then sent the manifesto itself to Kurt Eisner, who headed the Bavarian Soviet Republic, yet received no reply whatsoever. The published manifesto, which was highly respected in nationalist circles, offered a precise and uncompromising diagnosis of Germany’s economic situation.
“By Mammonism is to be understood: on the one hand, the overwhelming international money-powers, the supragovernmental financial power enthroned above any right of self-determination of peoples, international big capital, the purely Gold International; on the other hand, a mindset that has taken hold of the broadest circle of peoples; the insatiable lust for gain, the purely worldly-oriented conception of life that has already led to a frightening decline of all moral concepts and can only lead to more. This mindset is embodied and reaches its acme in international plutocracy.”
“Mammonism is the sinister, invisible, mysterious reign of the great international money-powers. Mammonism is however also a mindset; it is the worship of these money-powers on the part of all those who are infected with the Mammonistic poison. Mammonism is the unlimited hypertrophy of the—in itself healthy—human drive for acquisition. Mammonism is the lust for money grown into a madness, which knows no higher goal than to pile money on top of money, which seeks with unequaled brutality to coerce all forces of the world into its service, and must lead to the economic enslavement, to the exploitation of the work-potential of all peoples of the world.”
— Gottfried Feder, Manifesto For The Abolition of Interest-Slavery
Feder condemned the slavery of interest together with every form of money that was not earned through genuine productive labor, including the artificial creation of bank money through credit expansion.
“The chief source of power for Mammonism is the effortless and endless income that is produced through interest. The idea of interest on loans is the diabolical invention of big loan-capital; it alone makes possible the lazy drone’s life of a minority of tycoons at the expense of the productive peoples and their work-potential.”
— Gottfried Feder, Manifesto For The Abolition of Interest-Slavery
In his earlier book The German State on a National and Socialist Foundation in 1923 he had already set forth the practical alternative of a work standard, a currency system backed by the actual labor potential of the worker and implemented through work titles or tickets that the worker could convert into paper money at a state bank. He repeatedly emphasized that “money is and should be nothing other than a voucher for completed labor” issued by the state as a medium of exchange for productive work, never allowed to grow through interest at the expense of labor.
These ideas exercised decisive influence on the 25-Point Program of the NSDAP, a document that Feder himself helped to author. The program contained a series of demands that reflected the anti-usury and pro-labor orientation Feder had developed.
“11. Abolition of all income not earned by work. Breaking of the servitude imposed by the interest of money.”
— NSDAP, 25-Point Program
Point 11 explicitly called for the abolition of all income not earned through work. Immediately beneath this point stood the direct declaration demanding the Abolition of the Servitude Imposed by the Interest of Money. The program as a whole sought to break the power of international finance capital while protecting productive German labor and small enterprise. On 22 May 1926 the leadership of the party issued a formal statement declaring that the fundamental principles and core ideas of the program could not be altered in any way, although the practical means of realizing those principles might be adjusted according to changing circumstances. This affirmation locked the Federian monetary reform at the absolute center of the NSDAP’s economic doctrine for the remainder of the party’s existence. The essential principles that flowed directly from this foundation — the four core pillars of National Socialist economics, included the use of certificates of work (labor vouchers as the sole basis of currency), the establishment of cooperative banks under state oversight, the complete elimination of usury along with the abolition of debt service on all public and private obligations, the allocation of credit without any profit motive for the producer, and the firm anchoring of currency in productive labor rather than in speculative finance or gold. These pillars were not abstract theory; they were the operational blueprint that converted the Manifesto’s diagnosis into state policy, ensuring that money served labor instead of enslaving it.
Feder remained one of the most popular figures inside the party, especially in the rural districts of northern Germany, and for a long period the NSDAP continued to employ his distinctive slogans and characteristic phrases as special symbols of the movement. Adolf Hitler himself, in the foreword to Feder’s 1923 book, described the work as the catechism of the movement.
“The literature of our movement has in it obtained its catechism.”
— Adolf Hitler, foreword to Gottfried Feder, The German State on a National and Socialist Foundation
After the seizure of power, however, Feder’s public presence began to fade from the political scene. He gradually became a more obscure intellectual figure, was later reduced to the rank of Government Secretary, and ultimately withdrew in 1936 to his academic position at the Technical College in Berlin. Many observers interpreted this trajectory as evidence that the Federian ideas, which had essentially constructed the entire economic platform of the party, were being abandoned under the Hitler regime. Others cited Feder’s political marginalization and what appeared to be his replacement by Dr. Schacht as confirmation of a decisive shift away from the original radical economic vision.
Such interpretations fail to grasp the deeper structural reality that actually governed the period. Hjalmar Schacht was a liberal banker and a committed supporter of laissez-faire economics. He had served as President of the Reichsbank from 1923 to 1930 and then became Reich Minister of Economics from 1933 to 1939. Despite the speed of his rise to power, a rise that stood in direct contradiction to the lies created by the Allies after the war that continue to be perpetuated even today, Schacht, even while attempting on multiple occasions to divert Hitler from his chosen course, always governed upon the platform that Feder had constructed inside the party rather than upon any platform of his own creation. Many of Schacht’s specific plans were refused outright or were deliberately altered so that they would conform to that existing framework. Schacht was obliged to operate strictly inside the National Socialist perimeters at all times. His attempts to steer policy toward more conventional business interests or to implement certain war-preparatory measures that would have come at the expense of broader popular economic development repeatedly collided with the Federian constraints. These efforts generated growing distrust on the part of Hitler himself. Joseph Goebbels recorded in his diary entries from 1936 that Hitler was skeptical of Schacht but retained him for reasons of external policy. The internal disturbance caused within the party by Schacht’s economic views eventually reached such a level that the NSDAP leadership felt compelled to reaffirm the party’s own economic ideal directly to Schacht.
“When Dr. Schacht still was president of the Reichsbank and a powerful figure in Nazi Germany the leaders of the party warned Dr. Schacht that the maintenance of the party and the bureaucratic administrative machine was ahead of the interests of the business community, which could only exist to pay its tribute to the State.”
— Günter Reimann, The Vampire Economy
Otto Wagener, who served as chief of the economic policy sector of the NSDAP, informed Hitler directly that Schacht was an exponent of world capitalism and remained hostile to the revolutionary approach of the State in relation to the economy. Schacht himself later narrated in his autobiography the numerous disagreements he maintained with the movement in general, including with important figures such as Himmler and the organization of the SS.
“A few days after he had assumed the ministry, Himmler sent his assistant Kranefuss, who announced that his chief, the chief of the SS, had instructed him to inform Schacht that he did not approve of Schacht assuming the Federal Ministry of Economic Affairs because the points of view of the leader of the SS on economic matters differed completely from those that Schacht intended to carry forward, and that Herr Himmler therefore asked that Schacht voluntarily resign his position and place his resignation in the hands of the Führer, in which case Herr Himmler was prepared to leave him without problems in his position as president of the Reichsbank.”
— Hjalmar Schacht, Confessions of The Old Wizard
Schacht refused this demand, and a sustained period of tension between his administration and SS circles followed. To make the situation entirely clear, the economic ideas of Schacht always stood in disagreement and open conflict with those of the party. Far from enjoying any real freedom to implement his own preferred policies, Schacht was forced to maintain his authority upon a strictly Federian base. This constraint rendered impossible many of the plans he advanced, especially those presented closer to the outbreak of war, that would have impeded the economic development of the German people and effectively robbed them of their rightful progress.
The personal and political retreat of Gottfried Feder after 1933 therefore did not represent any genuine abandonment of his fundamental doctrines. Even as his day-to-day political role diminished, Feder continued to articulate the same vision in writings such as his 1934 book Gewerkschaften, DAF und der Wert der Arbeit (Trade Unions, The German Labor Front, and The Value of Labor), which applied the labor-voucher principle and anti-usury doctrines directly to the organization of the German Labor Front (DAF). The principles he had articulated with such clarity, the work standard, cooperative banks, the total abolition of interest slavery, the provision of credit without profit, and a currency anchored in real productive labor, remained the unchangeable foundation upon which the entire economic orientation of the regime continued to rest. These same principles extended directly into the practical organization of labor and production and found concrete expression in the structural pillars that defined the National Socialist economic system as a whole, including its institutional forms such as the German Labor Front. Feder may have withdrawn from the political foreground, yet the intellectual architecture he had supplied continued to shape and constrain economic policy long after his own personal influence had diminished.
Yet Feder’s economic vision extended beyond questions of currency, banking, and labor organization alone. The same principles that informed his attack upon interest-slavery and his defense of productive labor also shaped his conception of economic representation and administration. In his later writings Feder attempted to provide an institutional framework through which the productive forces of the nation could be organized into a coherent economic order. This aspect of his thought is particularly significant because it demonstrates that Feder did not merely propose a monetary reform but sought to construct an entire social and economic system resting upon occupational representation and the coordination of productive interests.
In this respect Feder’s ideas differed in form from the corporate institutions that emerged in Fascist Italy, although they shared the same fundamental premise that economic life should be organized according to productive function rather than party competition or unrestricted market forces. Whereas the Italian corporate state developed through a network of separate corporations representing individual branches of production, Feder envisioned a more centralized structure in which representatives of all productive occupations would ultimately converge within a single supreme economic authority. Both systems sought to overcome class conflict through functional corporatist representation, yet Feder proposed a distinctly German arrangement centered upon a unified national economic council.
In The Social State, Feder described this institution as the Central Council, a body intended to represent the entire productive life of the nation.
“The Central Council is the central organ which deliberates upon the economic interests of the country. All professions are to be represented in the Central Council, and each occupation is to have one representative of the employers and one representative of the employees. The number of votes is not the decisive factor; rather, the essential point is that every profession may speak through its representative.”
— Gottfried Feder, The Social State
The significance of this proposal lay in its rejection of both parliamentary representation based upon political parties and economic organization dominated by financial interests. Farmers, workers, industrialists, merchants, civil servants, craftsmen, and other productive groups would receive representation according to their actual function within the national economy. Economic policy would therefore emerge from the organized cooperation of productive occupations rather than from the competition of parties or the influence of speculative capital. Feder further assigned extensive responsibilities to this institution, making it the coordinating center of economic life.
“The work of the Central Council is, above all, to supervise comprehensively the entire process of production, to control that production, to investigate what is necessary, and furthermore to regulate production and distribution according to the results of that investigation. Alongside this there must be a large-scale regulation of labor and employment. Wage agreements, together with all questions relating to wages, are likewise in the hands of the Central Council.”
— Gottfried Feder, The Social State
Feder explained that this structure would be built from the bottom upward through successive levels of occupational representation. Local representatives of workers, farmers, merchants, industrialists, and other professions would elect regional delegates, who would in turn participate in the formation of a national council representing the entirety of productive Germany. The objective was not merely administrative efficiency but the creation of an economic order in which labor, production, and national purpose were united within a common institutional framework. Whatever degree of implementation these proposals ultimately achieved, they reveal that Feder’s contribution to National Socialist economic theory extended far beyond monetary questions. His writings sought to provide a comprehensive vision of economic organization in which currency, credit, labor, production, and representation formed interconnected parts of a single national system. The detailed examination of his thought, together with the analysis of the four pillars of National Socialist economics (work-based currency, state-directed cooperative credit, elimination of unearned interest income, and the primacy of productive labor over speculative capital), the specific role of Feder in relation to the German Labor Front, and his proposals for a unified Central Council, demonstrates with complete clarity that his vision was never discarded but instead formed the constraining base of the entire system from beginning to end.
