Social Democracy and the Paradox of the Vanguard: Rudolf Hilferding’s Odyssey

William Smaldone

THE NAZI SEIZURE of power in the winter of 1933 marked the total failure of the reformist project of the German Social Democratic Party (SPD) and brought about the party’s virtual destruction.

From exile in Prague and Paris, the defeated socialist leadership now had to grapple with the implications of this catastrophe for the party’s strategy and form of organization. In the face of nazi barbarism, it was clear that the old legal methods would no longer suffice and that new ideas were needed to keep the party functioning both within Germany and abroad.

One of social democracy’s most important intellectuals and a long-time party leader, Rudolf Hilferding, played an important role in the SPD’s attempt to rethink its structure and mode of action.

To many Europeans in the quarter century preceding the First World War, the German Social Democratic party’s march to power had seemed inexorable. By 1912 the SPD consisted of a large and complex organization with an elected leadership that could count on the support of over one-million dues-paying members and four times as many voters.

Despite the fact that the system was rigged against it, the SPD still won over one quarter of the seats in the parliamentary elections that year, and its delegation was far larger than that of any other single party. The SPD’s electoral strength, its alliance with Germany’s burgeoning trade-union movement, and its network of social, cultural and political organizations made it into what many regarded as the model socialist party; its victory appeared to be merely a matter of time.

The SPD leadership’s decision to back the German war effort in 1914 unleashed a series of events that shook, but did not destroy, the party’s preeminence.

While the founding of the anti-war Independent Social Democratic Party (USPD) in 1917 and, one year later, of the German Communist Party (KPD), certainly reduced the SPD’s share of popular support, the party emerged after the establishment of the Weimar Republic as the country’s strongest left-wing political organization. A solid majority of its leaders remained convinced that socialism could be achieved gradually via parliamentary means.

After 1933, with nazism in power, Hilferding’s and his party’s search for a democratic means of fighting and defeating a monstrous enemy represents a classic example of one of the central dilemmas faced by democratic socialists in the twentieth century.

Rudolf Hilferding rose to prominence within the Austrian and German socialist movements prior to the First World War. He began his career as a student of Karl Kautsky, the most important socialist theoretician at that time, and in 1903 he became a regular contributor to Kautsky’s journal, the Neue Zeit.

In 1910 Hilferding published his great work of political economy, Finance Capital, which catapulted him into the front rank of social democracy’s leading theoreticians. Regarded by many as the fourth volume of Marx’s Capital, Hilferding’s book examined the ongoing and, at that time, little-studied fusion of bank and industrial capital, its relationship to intensifying imperialist rivalries among the great powers, and its role in increasing the likelihood of a major war.

Many of Europe’s major socialist thinkers, including Eduard Bernstein, V. I. Lenin and Rosa Luxemburg, quickly recognized that Finance Capital represented an important adaptation of Marxist theory to the development of modern capitalism and took its arguments into account in their own work.

In addition to his activity as a theorist, Hilferding was also a talented newspaper man and eventually took over the politically important position of chief editor of the SPD’s leading daily, Vorwaerts, published in Berlin. Working closely with Kautsky, during the pre-war years he supported the SPD’s use of legal means to build a mass movement that would ultimately conquer power through the ballot box.

Hilferding was proud of social democracy’s vast organizational network—its trade union, cultural, and political institutions designed to attract workers by providing important services and political education—and rejected the pursuit of radical strategies that might threaten its existence. He believed that violent revolution for the achievement of socialism would be necessary only if reactionary forces attempted to roll back the democratic gains of the working class, or if a major war fueled social upheaval.

In 1918, when that upheaval finally came and the monarchy collapsed, Hilferding had already made the painful decision to abandon the SPD over the war issue. As a leader of the breakaway USPD, in addition to serving on the party’s executive committee and editing the USPD’s Berlin paper Die Freiheit, it was Hilferding who laid the first comprehensive plan for the socialization of the German economy before the First Congress of Workers’ and Soldiers’ Deputies that December.

During the fall of 1918, Hilferding believed that the hour of socialism had arrived in Germany. He supported the creation of a socialist republic characterized by the gradual socialization of key sectors of the economy (especially mining and heavy industry), the introduction of democratic economic planning, the institutionalization of workers’ councils as a means of democratizing enterprises and improving planning, and a parliamentary political system.

These hopes came to naught, however, as the rifts in the workers’ movement deepened and the nationalist right reemerged in opposition to democratic change in virtually any form.

The conflict between the pro- and anti-war socialist factions that originally had led to the SPD’s division and the formation of the much smaller, but generally more radical, USPD only intensified after the collapse of the monarchy.

Although the SPD and USPD jointly formed a Provisional Government in November 1918, the SPD’s refusal to move forward with the socialization of industry, its antipathy towards the workers’ councils, and its willingness to ally itself to the reactionary officer corps when dealing with popular unrest frustrated the USPD and convinced its leaders to leave the coalition in late December.

At the same time, after the USPD’s frustrated radical left-wing, known as the Spartacist League, quit the party, the stage was set for bloody confrontation. Reorganized as the KPD, a majority of the Spartacists unrealistically hoped to harness growing popular unrest to successfully seize power and set up a republic with power concentrated in the councils. When the KPD attempted a rising in early January, the SPD swiftly used the army to smash it.

The bloody suppression of this and other left-wing rebellions in other regions in the spring, and the murder of such communist leaders as Rosa Luxemburg and Karl Liebknecht [on January 15-16, 1919, by a military death squad operating on instructions of the Social Democratic government—ed.], opened an unbridgeable chasm between the right and left wings of the German workers’ movement.

From 1918 to 1920, Hilferding and a majority of the USPD leadership attempted to steer a middle course between the counterrevolutionary policies of the SPD and the adventurism of the communists. Despite the USPD’s rapid growth (it garnered almost 19% of the vote in the elections of March 1920 compared to 7% the previous year), this effort proved fruitless in the face of factional infighting over the efficacy of parliamentary vs. extra-parliamentary tactics and the party’s entrance into the newly founded Communist International (Comintern).

In October of 1920 over 400,000 members of the USPD’s left-wing (roughly 40 per cent of the total membership) quit the party to enter the KPD, transforming the latter from a splinter group into a mass party overnight. Despite this enormous enhancement of its strength, however, the KPD’s efforts to revive the revolutionary movement utterly failed, culminating in a disastrous rebellion in March 1921.

By the end of 1920, the division of the socialist left and the resurgence of the nationalist right convinced Hilferding that the socialist revolution had lost it momentum and that the new capitalist republic was itself in danger. To defend the latter, he urged social democracy to reunify its divided factions and adjust its strategy.

Following the merger of the remainder of the USPD with the SPD in 1922, Hilferding became the party’s leading theoretician. Working from an economic analysis that overly stressed the increasingly organized, planned nature of monopoly capitalism and its ability to stave off crises, he argued that the SPD needed to carry out a “politics of the possible,” i.e. a policy of gradual reform.

In assuming that long-term economic stability would provide the basis for incremental reforms, Hilferding urged the party and the trade unions to fight for the socialist transformation of society within the framework of the parliamentary order. The Depression of 1929, and even more decisively the victory of Nazism, completely destroyed his assumptions and required him to rethink his views.

Well before Hitler’s takeover, Hilferding had understood clearly that the nazis were bent on establishing a dictatorship, and he had recognized that the secret of their success was the promotion of a chaotic ideology that won substantial support from virtually all social groups. By the summer of 1933, he was arguing that the NSDAP (the Nazi party, “German National Socialist Workers Party”) had established a “total state” that expanded its control into every sphere of society.

Such a regime obliterated all other political institutions and extended its authority over all economic, social, and cultural institutions as well. The state intended to depoliticize the populace and eliminate any opportunity for people to participate in local or national decision making. The nazis wanted to “atomize” individual citizens, force them into state-controlled organizations, and transform them into state slaves.

During the summer of 1933, the SPD executive committee in exile (the Sopade) appointed Hilferding chief editor of the party’s new theoretical journal, the Zeitschrift fuer Sozialismus (ZfS), which appeared regularly from the fall of 1933 until 1936. In this capacity, and as a regular contributor to the party weekly Neuer Vorwaerts, Hilferding was at the center of the social-democratic discussion of the nature of the nazi regime and how the party should react to it.

In the early years of his exile, Hilferding did not believe that the nazis had fundamentally altered the nature of the capitalist order, and he predicted that their deficit spending and autarchic policies would ultimately steer the economy into the abyss. To stem the inevitable loss of popular support, they would turn to aggressive nationalism and probably war, but such a policy could not master the class conflicts inherent to capitalism.

Fascism, Hilferding believed, had used class antagonisms to come to power, but in the long run it, too, would “become the victim of those class antagonisms and class struggles.”

Although he expected the nazis to lose much of their popular support, Hilferding also emphasized that material want and political disillusionment alone would not bring down the national-socialist state. The overthrow of the “total state” could only be achieved through a “total revolution” backed by mass movements.

This revolution would demand a great deal of mental, technical, and organizational preparation; above all it would need leadership. In October 1933 Hilferding argued that the SPD had two main tasks: first, to organize illegal operations in Germany and build cadre that would take over the movement’s leadership; second, to prepare itself intellectually in order to lead the fight and to exercise power after the revolution.

Hilferding argued that the current situation necessitated reorganizing the SPD along decentralized, conspiratorial lines that would make underground operations in Germany possible. Such activities would allow the movement to lead the popular forces that he believed would eventually smash nazism in a civil war.

It would then fall to social democracy to establish a revolutionary government that would, at a minimum, destroy the fascist regime, condemn nazi criminals, purge the bureaucracy, the courts, and the military, staff these organizations with revolutionaries, and expropriate heavy industry, the banks and semi-feudal landed estates.

Such actions, he thought, would avoid the mistakes made during the German Revolution of 1918, from which many of the old imperial institutions had emerged unscathed only to topple the republic later on.

Hilferding well knew that these proposals represented a call for the transformation of the SPD along lines very similar to the decentrally-organized but centrally-directed “vanguard party,” advocated by Lenin and eventually adopted by the world communist movement. He was fully aware of the risks this change entailed both for the time of underground struggle and for the period of revolutionary reconstruction.

Hilferding warned against elitist intolerance that could arise among revolutionaries whose strong convictions enabled them to endure hardship and danger but also could make them dismissive of those who disagreed with them. He was concerned that, as in Russia, such an elite could transform the dictatorship of the proletariat into a dictatorship over the proletariat.

Hilferding opted for the vanguard party, at least in theory, because he saw no other way for social democracy to carry on. That he did so with great trepidation was natural, for he had rejected bolshevik methods and fought against their extension to Germany ever since their victory in Russia’s civil war.

In a letter to Kautsky written only a month after the October Revolution, Hilferding commented that, though his heart was with the Bolsheviks, they themselves seemed quite heartless, and their intentions were difficult to surmise. He believed they were in a truly incomparable situation and that, although the revolutionary workers and peasants had much power on their side, they were in disarray and faced powerful domestic and foreign class enemies.

Like so many other socialists at that time, including the Bolsheviks, Hilferding did not think a socialist revolution could survive in backward Russia without the aid of the Western European proletariat. Unlike Lenin and his associates, he was dubious about the prospects for the revolution’s spread. Yet the revolution did survive and, for a time, seemed poised to expand into Western Europe.

Using draconian methods of organization and discipline, including terror, the Bolsheviks defeated the armies of their equally ruthless opponents and rooted out perceived and real enemies behind the lines. In the process they destroyed all forms of legal opposition within the country and established a regime under which virtually all political and economic power was concentrated not in the hands of the soviets, but in the Bolshevik party that controlled them.

This party’s structure, organized according to Lenin’s principles of democratic centralism, proved itself not only suitable for underground work against the Tsarist order but also in seizing and holding power during the civil war. Through the establishment of the Third International in 1919, the Bolsheviks also created a revolutionary international organization that, set up along democratic-centralist lines, aimed to subordinate affiliated parties to their control.

In the years immediately following the bolshevik revolution, Hilferding believed that socialist parties around the world were duty-bound to support it. From its inception, however, he questioned the Bolsheviks’ confidence that the revolution would spread and rejected their methods, especially when they intruded into German politics.

Hilferding was convinced that it was impossible to establish socialism in war-ravaged Russia, because “in the long run no policy can remove itself from the constraints of . . . economic relations, and we have learned from Marx that the role of force in economics is limited.” Thus, he asserted early that the Bolshevik effort to push Russia rapidly toward socialism would founder on the economic weakness of the country.

Although not opposed to the use of violence against enemies of the revolution, Hilferding rejected the sweeping use of terror and repression against dissidents of all types on theoretical as well as moral grounds. For him, socialism and democracy were inextricably bound and it was impossible for a revolutionary minority forcibly to impose socialism on society.

In 1920, when the Comintern issued its twenty-one conditions to all parties that wished to affiliate with it, Hilferding turned openly against Leninism itself. He quickly grasped that the Bolsheviks aimed to split the USPD by driving out all those that they thought might oppose their policy in Germany. Not only did they include him on a long list of leaders to be expelled from the party, but they demanded that the USPD’s members enter the KPD, which was subordinated to Comintern control.

Hilferding completely rejected the idea that a foreign body should be able to control a national workers’ party and apply, as the Bolsheviks wished to do, tactics that worked in Russia as if they were universal truths. He opposed democratic centralism as contrary to democratic principles widely accepted in the socialist movement.

Following Rosa Luxemburg’s earlier critique of Lenin’s organizational ideas, he argued that by concentrating so much authority in the party central committee, bolshevism undermined the democratic life of the membership, its creativity, and its ability to learn from mistakes. In essence, bolshevism substituted the revolutionary “vanguard” for the movement itself.

Following his return to the SPD, Hilferding used his position in that party to vehemently criticize the communists. Throughout the Weimar period he condemned the KPD’s attacks on the SPD and the parliamentary order and argued that it would be impossible for the two workers’ parties to cooperate against the radical right.

Following the conclusions drawn by the Comintern’s Sixth World Congress held in 1928, the KPD now assumed that society had entered into a new or “third” period of post-war history. After an earlier period of revolution (1917-1923) and then one of capitalism’s partial stabilization(1924-1928), the Comintern now argued that the intensifying crisis of capitalism required communists to intensify their fight against “bourgeois” or “social fascist” labor parties like the SPD. Unlike the social democrats, who attempted to defend the republic by working through its institutions, the KPD, along with the nazis, relentlessly attacked them and sought to bring the system down.

Until 1930, Hilferding believed that the SPD would be able to destroy its left-wing rival, but the onset of the Depression and the KPD’s subsequent growth weakened that confidence. By the early thirties, he and his colleagues in the SPD leadership found themselves backed into a corner from which they were unable to escape by legal means. Their refusal to act illegally against their anti-democratic enemies left them and the republic subject to their opponents’ mercy.

Given this history, it becomes quite understandable why Hilferding hesitated to advocate a Leninist-style mode of organization in exile, and, in addition, why he subsequently proposed it. While he grasped and rejected the strong anti-democratic potential contained within democratic centralism, he also understood that such a structure would enhance social democracy’s ability to act and, ultimately, to wield power as it was unable to do under the republic.

Here, in a nutshell, lies the paradox of the vanguardist model of politics as practiced during much of the twentieth century. As Eric Hobsbawm has recently pointed out, “without the Leninist party `of a new type’… it is inconceivable that by 1950 over one third of the human race would have found itself living under Communism.” The tens of thousands of professional revolutionaries who staffed such parties had a faith in a cause, discipline, and ruthlessness that made the seizure of power and its retention possible against extremely heavy odds.

This is not to say that such parties were usually successful. It should be remembered that the nazis easily destroyed the KPD in Germany in 1933, and that communist insurrections in Europe and elsewhere failed far more often than they succeeded. Yet their successes were monumental; the Russian and Chinese Communist parties not only seized and held power, but radically transformed their societies and represented a fundamental challenge to the capitalist world order.

At the same time, however, it is essential to note that, especially under Stalin, the undemocratic tendencies and extreme centralization that characterized many of the post-revolutionary Leninist states far exceeded Hilferding’s (and Luxemburg’s) worst fears concerning their long-term development.

The Stalinist caricature of democratic centralism was carried into eastern Europe, for the most part, at the point of the bayonet and never gained broad-based legitimacy there. As it did in the Soviet Union, dynamic economic development and rapid social change characterized its initial stages of operation, but the system eventually stagnated under the weight of an all-pervasive, rigid bureaucracy that stifled initiative and innovation.

The repressive power of the one-party state in these societies remained undiminished even after the threat of capitalist intervention, in an immediate sense, was no longer of pressing concern. The dictatorship of the proletariat never took the form suggested by Lenin in State and Revolution; instead it looked rather like the tyranny feared by Hilferding.

And yet, facing the challenge of nazism in power, Hilferding found himself advocating a Leninist type of party structure. Like many other twentieth-century democratic revolutionaries around the world, when facing an enemy using barbaric methods to secure its rule, he could find no other viable organizational model to carry on the struggle.

In countries where revolutionary-democratic socialists have come to power by electoral means, such as Chile, they have been destroyed by right-wing forces that did not hesitate to draw blood. Elsewhere, revolutionary-democratic movements that have included strong Leninist components have overthrown brutal dictatorships, such as the Somoza regime in Nicaragua, only to fall after reestablishing political space for their enemies while under external attack.

Thus, whether seeking to overthrow established tyrannies or to hold power themselves, democratic socialists often faced hard choices that threatened to contradict principles of democracy and freedom that they themselves held dear. As the Mensheviks in Russia, the Social Democrats in Germany, and the Sandinistas in Nicaragua learned, it was impossible to fight their anti-democratic opponents with traditional democratic methods. Failure to develop or use alternative strategies in the face of determined enemies meant defeat.

One cannot, of course, boil down the twentieth century’s many complex revolutionary confrontations into a series of conflicts in which the socialist left was inevitably forced to discard democracy and adopt a more repressive “vanguardist” path against the forces of counterrevolution. In every crucial struggle there were always different strategies and tactics available to the left which, although often ineffectual and/or unfeasible at the time, may point the way for alternative socialist politics in the future.

As Chris Harris recently observed, Latin America provides an example of a region where recent setbacks have led many revolutionary movements to move away from vanguardist models and pay greater attention to democracy. Harris argues that the development of new forms of direct democracy will be essential to any successful democratic-socialist effort to break the power of the ruling classes.

Many earlier twentieth-century socialists, including Hilferding, held views similar to these, and their calls for new forms of democratic participation grew out of their specific contexts.

In 1918, for example, following the collapse of the German and Austrian monarchies, Hilferding and his Austrian comrade Otto Bauer argued not only that the socialist governments that followed them should begin the expropriation of heavy industry and large-estates as a key first step in the transition to socialism, but also that to prevent civil war the revolutionary regimes had to include broad sectors of the population—workers, managers, and consumers—in the economic decision-making process.

Such suggestions as “economic parliaments” on the local and national levels aimed to win the political support or toleration of a majority of the people and to avoid violent class conflict. Thus, at a time when both the German and Austrian governments were in socialist hands, Hilferding and Bauer recognized that the successful development of a new society depended not only on traditional parliamentary institutions, but on the creation of new ones that would promote dialogue and compromise between social groups.

As noted above, after the defeat of the socialist revolution in Germany, Hilferding once again focused on the centrality of parliamentary reform as a means of moving toward socialism and, along with his most of his comrades, refused to break with this position until the SPD’s defeat was total.

Yet as Donna Harsch has recently suggested, even as the growing nazi threat convinced most SPD leaders that there was no viable option to a defensive parliamentary strategy, there were other choices available. The party was actually in the process of developing new techniques to win followers and effectively mobilize the rank and file for extraparliamentary actions that could have served at least as a partial alternative to social democracy’s moribund parliamentarianism.

To a leadership rooted in the parliamentary tradition, however, this strategy was only palatable as a means of boosting the party membership’s morale, rather than of achieving serious political ends.

As total defeat in 1933 drastically narrowed the social democrats’ political options, Hilferding found himself responding to the changed situation by putting forward strategies that he had long rejected. In the end, however, neither he nor his colleagues in the Sopade (the party’s executive committee) could follow through with the changes he had proposed to restructure the party.

The conservative Sopade was unwilling to surrender its claim to be the legitimate leadership of the party in exile and rejected the criticisms of rival factions that demanded that it step aside. Hilferding had to choose between his old comrades in the executive, from whom he had become increasingly estranged, and radical groups such as Neu Beginnen, whose demands for a Leninist restructuring of the SPD were similar to his own.

His ultimate decision to side with the Sopade was based on his belief that it was the only faction within social democracy that would consistently fight the communists. He rejected all suggestions that the KDP and SPD could form a united front against fascism and could not bring himself to work with people whom he considered complete hypocrites.

In January 1935 he summed up his feelings in a letter to Paul Hertz, co-editor of the ZfS and supporter of discussions with the KPD:

There is one thing that is decisive for me [and] that is the attitude toward democracy and therefore toward communism. Ever since bolshevism produced a socialism based on force, repression, and terror, the only correct question for me has been: freedom or slavery. Socialism . . . can mean both, and the real tragedy is that freedom and socialism are no longer identical . . . I cannot, therefore, compromise on the question of dictatorship. Dictatorship is not transitional or educational, but makes the dictators increasingly despotic, and that is the case in Russia as well as in Italy or Germany.

For that reason, I reject any cooperation with the communists, as long as they are for dictatorship and terror. I cannot understand how one can protest together with murderers and terrorists (and today, more than ever, that is what Stalin’s worshippers are) against murderers and terrorists.

This passage makes clear that, for Hilferding, the organizational question itself had drifted into the background by 1935 as social democrats divided not only over the issue of how to lead the fight against nazism, but also on the questions of who should lead it and what their relationship should be with their communist rivals.

One year earlier, Hilferding had called on social democracy to prepare itself to lead a clandestine struggle against fascism and, ultimately, a civil war. He resisted using the term “dictatorship” to describe the regime that would replace nazism, but envisioned a revolutionary government able to wield extensive power and open the road to socialism. Now his sense of principle prevented him from taking this step, and he attempted to distance himself from the SPD’s warring factions. Ultimately, their conflicts remained unresolved and the movement ineffectual until the Second World War destroyed the nazi state.

ATC 75, July-August 1998