Miracle Wages
The next day, the Worker's Factory project spread throughout Germany via Red Flag and across the entire world through the Comintern’s The Truth. The core message ran like this:
It was radical, no question, but in this moment a revolutionary’s radicalism served us well. The vital point was that the project had completely severed the capitalist’s role in production. A factory did not need to split owners from workers; when everyone owned, managed, and labored together, the machines still turned. By proving it could succeed inside a capitalist economy, the ultimate aim was to demonstrate that socialism is more efficient than capitalism. Beyond that, it would win the moderates’ support and prepare the soil for revolution.
“Stirring up trouble again, Chairman Heinz?” Representative Pieck asked with a booming laugh. “Turning the government’s own laissez-faire policy against it—what a marvelous twist.”
“It is entirely feasible, Representative Pieck.”
“I’m not doubting its feasibility. Anyone who knows Russia cannot doubt the possibilities of socialism. My concern is something else. What you are attempting is to plant democracy in the vast ocean of capital. The great industrialists will use every weapon at their disposal to crush it. Can you withstand that?”
“That burden does not fall on me, but on the workers who have reclaimed their sovereignty. This is merely an experimental glimpse of the society that will come after the revolution.”
“Haha, ever the same, Comrade Heinz.” Pieck clapped a heavy hand on my shoulder. “I will give you every ounce of help I can, Chairman.”
By nine o’clock, when I returned to the factory, the workers had already arrived. They stood in clusters, laughing and talking over one another.
“Ah, Representative Heinz!”
“Why are you here so early? We thought you’d sleep late.”
“I stayed home too long and grew restless. It felt better to come here even if there’s nothing I have to do.”
“Same for me. After all, there’s no boss ordering us around anymore, is there?”
“Ahaha, true enough.”
Because they now understood themselves as the owners and managers, they came to the factory even when no one demanded their labor.
“Right, then. We need to sell what we made yesterday…”
That morning the discussion turned to where the newly produced tools should be sold.
“Frankly, I don’t want to sell them on the regular market.”
“Why not?”
“We seized this factory fighting the capitalist bastards. Selling the fruits of our labor back to them? Unthinkable.”
“That’s true too.”
“Then how about this? No matter how hard we search for a market free of capitalists, profit will still flow back to them in the end. So we sell enough to generate revenue, but we make sure the buyers who depend on our tools help us build more factories in our own way.”
Leo from the organizing committee had brought a solid answer.
“That’s a good idea.”
It really wasn’t a bad approach. Change the economic base, and the superstructure would inevitably shift as well.
“Then let’s head to Cologne. That’s the biggest market.”
The workers loaded the truck with tools and set off for Cologne.
“We’ll be back before lunch. Rest while we’re gone.”
One man took the wheel while three or four others rode in back with the cargo. Three hours later the truck returned.
“You’re back! How much did you get?”
“Three pfennigs apiece, four thousand marks total.”
“Not bad at all.”
“After factory upkeep it’s still respectable. And once we start making more expensive items than simple bolts and nuts, the margin will improve further.”
Johann, who handled the accounts, set aside maintenance costs and the price of materials for the next run, leaving 3,400 marks.
“That’s seventeen marks per person. Same as yesterday’s wage.”
“Seventeen marks…”
In October of the year before last, just before the stock-market crash triggered a steep wage collapse, the average German hourly wage had been roughly eighty pfennigs. On an eight-hour day that came to 6.4 marks. (One mark equals one hundred pfennigs.)
“My God, we earned seventeen marks in a single day?”
“And it will only go up from here.”
These men, all former unemployed workers, could hardly contain their astonishment at receiving nearly three times their old daily wage.
“This is the money the capitalists have been stealing from you while pretending to grant it as a favor.”
“…My God.”
Seventeen marks. And yesterday’s work had been nothing more than cleaning the factory and making small tools—barely six hours of real labor.
“The possibilities are endless, comrades. If workers take ownership and control of every industry like this…”
“…Oh my God.”
“Enough standing around! Back to work, everyone!”
The proof of efficiency was complete.
Once our first factory began paying the miraculous wage of seventeen marks per person per day, the other factories purchased by the Comintern and run by the People’s Front started shifting to worker management one after another. Production lines and hours differed, so earnings varied, but on average every worker could take home at least fifteen marks daily.
The result was an overwhelming success.
Liberal papers, led by the Frankfurter Zeitung, rushed to cover the factories. Wels had done us a tremendous service.
“The Social Democratic Party and the People’s Front are undertaking a new experiment known as the Worker’s Factory plan. The idea is to purchase idle factories and place them under joint ownership and management by the workers themselves.”
“What is the purpose of this scheme?”
“As everyone knows, Germany stands at an existential precipice because of the Great Depression. The Chancellor continues to delay and obstruct our demand that he abandon austerity. We intend to test just how efficient a factory can be when workers own and operate it directly, without managers or private owners.”
Cooperation with the Social Democrats had been essential. What would once have been denounced as “Bolshevik factory seizures” had, through the mouth of the SPD, been reborn with the elegant title of “a laboratory for socialist economics within Germany.” Naturally, any link to the Comintern remained hidden. After all, if the Social Democrats were behind it, who would suspect involvement from an organization like the Comintern? That was how ordinary people would reason.
Surprise. In reality I had designed the project and launched it with Comintern funds.
Complete self-sufficiency would arrive soon enough. Still, the conservative press churned out scandal sheets whether the stories were true or not.
“Workers owning factories? That is logically impossible, ladies and gentlemen! How long can such an enterprise possibly last? Can you not already see them tearing one another apart to claim a larger share of the profits? The economy must rest on a solid, unshakable vertical hierarchy!”
Gustav Krupp, head of Fried. Krupp AG and the leading figure in German steel, made the statement at an official press conference a few days later. Even a giant like Krupp had felt the blow when its workers walked out. The firm’s shares had tumbled as austerity measures were repeatedly voted down, risen briefly when those measures were forced through by emergency decree, then fallen again. No wonder the man was seething.
“All anyone’s talking about is us.”
Every major newspaper, whether friendly or hostile, was covering the Worker’s Factory project.
“Heinz, you… are a genius.”
“Hardly. This model has already been proven in Russia and Spain. It is entirely possible. The workers are perfectly capable of owning and running their factories directly; I merely gave them a push from behind.”
“A push from behind. Is it not astonishing that no one thought of that simple act until now? It was only possible because it was you, Heinz.”
“I could have done nothing alone, Thälmann. It succeeded because the Communist Party existed, because the Social Democratic Party existed, because the Comintern existed.”
“True, yet it was still your brilliant idea that set everything in motion. Recommending you as chairman was the right decision.”
“Pfft! You had no idea I would do anything like this back then, did you?”
“Of course not. I would not have regretted it even if I had.”
Both Thälmann and Wels now placed greater trust in me; the rise in confidence from both the KPD and the SPD was an unexpected bonus.
Within days the productivity and self-sufficiency of every factory had stabilized. Soon every worker was earning at least twenty marks a day no matter the circumstances. With unemployment racing toward ten percent, the press called the figure “unbelievable.” In less than a month the flood of applicants forced us to expand the scale of the factories.
Brüning appeared to be rattled that we were carrying out such experiments while parliament lay paralyzed by the emergency decree. On February 8—well before the two-week mark when the first reading of the reform bill had been scheduled—he suddenly convened the Reichstag.