Rule by Target

Nazi roots of the neoliberal state.

Can a frugal state be totalitarian? Or, in other words, is an anti-statist totalitarianism possible? These questions have been asked countless times during the era of triumphant neoliberalism: beginning in 1973 when Pinochet implemented the economic dictates of the Chicago School, passing through the various military regimes responsible for carpet privatizations (Argentina, Brazil, Paraguay, Uruguay, Bolivia, etc.), up to the discussions – no matter how wrongheaded – of the ‘sanitary dictatorship’ of neoliberal governance during the pandemic.

Totalitarianism requires a strong, ‘totalizing’ state, at least according to the doctrine promoted by Hayek in his 1944 Road to Serfdom, which in its redacted form, published by Reader’s Digest, sold one million copies. According to Hayek, a society sinks into totalitarianism as soon as the state begins to worry about the economic security of its citizens. The trajectory is irreversible; we start with social security and end up in concentration camps (or gulags). The omnipresence of the state is thus integral to ‘totalitarianism’ in the Arendtian sense.

A recent book, however, has planted in me a seed of doubt. Johann Chapoutot’s Libres d’obéir. Le management du nazisme à aujourd’hui (Free to Obey: Management, from Nazism to the Present Day [2020]), translated this year into Italian and German but, as is often the case, not English. Its central figure is Reinhart Höhn (1904-2000): a jurist, academic and SS general, sentenced to death for war crimes but subsequently pardoned. Höhn was part of a group of intellectuals that provided the theoretical framework not so much for Nazism itself as for the Gestapo, the SS and the occupation of almost all of Europe. His partners in this project included Werner Best (1903-89): a jurist too, but first and foremost a senior police officer in Hessen, then head of the political police, and finally plenipotentiary of occupied Denmark; Wilhelm Stuckart (1902-53), lawyer, jurisconsult to the Nazi party, member of the SS and formulator and compiler of the Nuremberg Race Laws; Franz Alfred Six (1909-75), a doctor of political science and member of the SS; Otto Ohlendorf (1907-51), an economic consultant and SS colonel who studied economics, held a doctorate in jurisprudence and commanded a unit responsible for around 90,000 deaths in Ukraine, before being sentenced to death at Nuremberg and hanged.

The presence of this educated élite at the head of one of the fiercest apparatuses of repression ever conceived, is a marked contrast with the hysterical image of SS officers in many American Second World War films: an image whose coarseness borders on the comical, and banishes the idea that a phenomenon like Nazism could ever repeat itself. We are typically reassured that such ghouls could never again implement such dangerous ideas. Not so in Chapoutot’s portrait. The author explains how these SS intellectuals were called upon to provide a conceptual framework capable of overcoming the enormous logistical difficulties by the conquest of practically the entire continent. In a 1941 text entitled Fundamental Problems for a German Administration of the Great Space, Werner Best wrote that ‘the rapid and powerful expansion of the territories on which the German people directly or indirectly exercise their sovereignty obliges us to review all concepts, principles and procedures through which this sovereignty has hitherto been thought and constructed.’ However much the territory under German dominion might increase, ‘the German people will never be able to afford doubling the number of public servants.’ More would have to be done with fewer personnel, not least because a large part of the male population was conscripted. The procedures of the state needed to be honed, made more flexible. In fact, Best had (unsuccessfully) proposed to Himmler that the public sector adopt a model of relativ lockeren Besetzung (‘relatively “loose” occupation’). The SS intellectuals thus became advocates of flexible management and streamlined protocols, at odds with the caricatured image of the Nazi dictatorship.  

Chapoutot charts the social trajectory of these characters following the defeat of Nazism. After his commuted twenty-year sentence, Franz Six became an advertising consultant for Porsche; Best worked as a consultant for the company Stinnes AG, then became an adviser to the Ministry of Foreign Affairs of the German Federal Republic. The most interesting story was that of Reinhart Höhn, who, having escaped the death sentence and spent years practicing homeopathy under a pseudonym, went on to found the Akademie für Führungskräfte der Wirtschaft (the Academy for Business Executives) at Bad Harzburg in Lower Saxony. By the time Höhn retired in 1972, around 200,000 German managers had passed through his institution; when he died, the number stood at 600,000. Professors at the school included other ex-SS officers, such as Six and Justus Beyer.

Bad Harzberg taught a style of management by target derived from Höhn’s reforms to the military chain of command. Under this system, the superior officer demands that his subordinates achieve their prescribed objectives, but leaves them free to decide exactly how, intervening only in exceptional cases (management by exception). Regrettably, Chapoutot does not investigate the relationship of the Bad Harzberg technique to the management styles now practiced in the United States. But his narrative shows how these hands-off methods were initially a product of German military expansion, which sought to reconcile a massive administrative operation with a reduced workforce.

The Nazi theorists were famously hostile to law and rights, viewed as creations of inferior Judaic and Latin cultures (Commandments of the Bible and Roman law codes respectively), and foreign to the proud German spirit which claims freedom from legal obligations. As such, they had a deep-rooted distrust of the state as a guarantor, responsible for the enforcement of law. The state was rather seen as a codified, ossified body which obstructs the flexibility and agility necessary for the expansion of Lebensraum. Nazis always talked of Reich (empire), never of Staat (state). Whereas Carl Schmitt saw states as bulwarks of political order, Best developed the idea of a Völkische Großraumordnung (popular order of the Great Space), in which the superior races would create zones of domination around themselves without fear of any normative restriction. Power was the only all-embracing source of political order. Aside from peoples (not, as per Schmitt, states), there existed no other normative points of reference that could be counterposed to the regime established by National Socialism.

For Höhn and his contemporaries, the state is unable to cope on its own when faced with the huge multiplication of tasks and responsibilities entailed by imperial expansion. It was precisely for this reason – to deal with re-armament, war preparations and the administrative challenges posed by the occupation of Europe – that para-state Nazi organizations began to surface, starting with the SS: a ‘private’ police force of 915,000 belonging to the party (even if Nazis always preferred to speak of a Bewegung – a movement – rather than a party). Likewise, Organisation Todt was born as a para-state company and ultimately employed 1.4 million foreign workers to meet civil and military engineering demands during the war. The state thus became one tool among many for achieving the Nazis’ domestic and overseas objectives.

Höhn believed that ‘legal theory has created an illusion, attributing to the state an “invisible personality”, transforming it in a perennial quest for sovereignty’, whereas in reality the state is nothing but an ‘“apparatus” at the service of power’, a tool which ‘the Nazi movement has captured, and to which it has ascribed other duties.’ In a chapter for the edited volume Grundfragen der Rechtsauffassung (Basic Questions for the Conception of Right), he elaborated on this argument: ‘The state is no longer the supreme political entity… It is rather an entity which limits itself to the execution of tasks assigned to it by the leadership (Führung), which operates in the service of the people. In this sense, the state is no more than a simple instrument . . . [to fulfill] the objectives it is assigned’.

It is this subordination of the state to externally-imposed targets and assignments that links Höhn’s theory to contemporary neoliberalism. Contrary to popular belief, neoliberals don’t seek to destroy the state; they know full well that without state there is no market. Rather, they want to invert the relationship of power between the market and the state. Not a market in the service of the state, but a state in the service of the market. Just as for Höhn the state is merely a mechanism equipped to achieve certain ends, so too for neoliberalism the state is a company that serves other companies – an entity that provides a service to be assessed in terms of the parameters of private enterprise (profitability, flexibility, best practices, benchmarking). None of this prevents a microscopic, pervasive control of citizenry, nor does it necessarily threaten the ability to stifle dissent. Just because war is outsourced to contractors (private mercenaries, that is to say) doesn’t mean it is less bloody, or lethal – or ‘total’.

The idea these Nazis passed down to us, then, is that of a heteronomous state, subordinated to external functions, designed to obey a logic which lies outside of it (and comes from a party or a company). This reverses the conventional wisdom. Totalitarianism doesn’t consist in enslavement by an omnipotent state; it rather wishes to impose a regime in which the state itself is enslaved as an instrument of an extrinsic omnipotence. A theory of management born to facilitate the advance of the Panzerdivisionen came to resemble the neoliberal project. We are thus able to resolve the Pinochet paradox, in which a brutal dictatorship violently imposes the free market. But if we were to think beyond 1973, it would be interesting to dwell for a moment on Paul Bremer’s 100 Orders, formulated in 2004 with the objective of instituting a neoliberal regime in Iraq, at the time occupied by the US Armed Forces. As Wendy Brown explains in Undoing the Demos (2015),

These mandated selling off several hundred state-run enterprises, permitting full ownership rights of Iraqi businesses by foreign firms and full repatriation of profits to foreign firms, opening Iraq’s banks to foreign ownership and control, and eliminating tariffs […] At the same time, the Bremer Orders restricted labor and throttled back public good and services. They outlawed strikes and eliminated the right to unionize in most sectors, mandated a regressive flat tax on income, lowered the corporate rate to a flat 15 percent, and eliminated taxes on profits repatriated to foreign-owned businesses.

Translated by Francesco Anselmetti.

Read on: William Davies, ‘The New Neoliberalism?’, NLR 101.