Bernard E. Harcourt | The Frankfurt School on State Capitalism: Introduction to Coöperism 8/13

By Bernard E. Harcourt

“One cannot disregard the fact that all the political currents which now affect the masses, whether they style themselves fascist, socialist, or communist, tend towards the same form of State capitalism.”

— Simone Weil, “Prospects,” 1933.[1]

Any theory of coöperism—any model of political economy that centers cooperation among workers, consumers, and ordinary citizens—must have an account of its opposite, namely top-down models that privilege state control of the economy. These include forms of state capitalism in which the state is essentially the guarantor of financial and economic activity, as well as forms of socialism or communism in which the state owns the means of production.

I would argue that state capitalism also includes contemporary American-style neoliberal capitalism in which the government treasury bails out and backstops the economy. As I argue in Cooperation, the term capitalism, as applied to an economy like the United States, is a misnomer because the system functions not primarily as a product of the free exchange of capital, but rather because of the U.S. Treasury’s bail-outs during financial crises and their promise to backstop the American economy—without which the dollar would collapse, the national debt would implode, and the country would go bankrupt and fall into chaos. Rather than capitalism, I would call such an economic regime “treasurism” or “tournament dirigisme”—a form of state dirigisme that favors capital holders. So I would include current American capitalism within the broad category of “state capitalism.”

Regardless, any theory of coöperism must understand its principal alternatives: state capitalism and state-controlled economies. Coöperism is a bottom-up (or bottom-down) framework that is opposed, point-by-point, to top-down political and economic frameworks. One of those top-down frameworks, perhaps the classic form, is what is called “state capitalism.” So in order to understand a bottom-up regime of cooperation, it feels necessary to spend some time thinking about its opposite:  a top-down form of state capitalism.

It is for this reason that Coöperism 8/13 returns to the mid-twentieth century debates over state capitalism, and, more specifically, to the lively debate within a circle of expatriate German thinkers over the rise and establishment of National Socialism under Adolf Hitler. Among these German thinkers were the labor lawyer and political theorist Ernst Fraenkel (1898-1975) and several members of the Institute for Social Research in Frankfurt, including Otto Kirchheimer (1905-1965), Franz Neumann (1900-1954), and Friedrich Pollock (1894-1970), who moved to Columbia University during the war as part of the Frankfurt School in exile.

Now the term “state capitalism” was deployed, early on, in the mid-19th century, by revolutionary anarchists such as Mikhail Bukanin (1814-1876), to criticize state socialism; and by social democrats, such as Wilhelm Liebknecht (1826-1990), to criticize the social policies and welfare legislation enacted under Otto von Bismarck in 1883 (which were actually called “State Socialism”).  Lenin, Emma Goldman, and other revolutionaries used the term in debates over bourgeois reforms and communism. One place where the term came back, full force, was in the debate over National Socialism, the economic regime of Nazi Germany—and it is there that we turn to tonight.

The rise of National Socialism in Germany during the 1920s and 30s presented a puzzling challenge to the conventional opposition between free market capitalism and state-controlled planned economies. To be somewhat schematic, once Hitler took power, the National Socialist government privatized rather than nationalized financial, banking, and heavy industries, eviscerated labor organizing, and enabled the formation of goliath corporate monopolies, such as the I.G. Farben and the Krupp works, that operated freely but under the thumb of the Nazi state. In effect, Nazi leaders put in place a centralized war economy but allowed private enterprise to do its bidding. As a centralized form of capitalism that included both state planning but also private enterprise, National Socialism defied the dyad of free market vs. government interference that started with the Physiocrats and François Quesnay and extended through invisible hand and laissez-faire economic theories.

Fraenkel, Kirchheimer, Neumann, and Pollock confronted this new and puzzling economic form, National Socialism. They tried to understand its internal contradictions, and it was in that context that they developed and debated how to properly characterize the economic regime—offering terms like “state capitalism,” “state organized private-property monopoly capitalism,” “managerial society,” “administrative capitalism,” “bureaucratic collectivism,” “totalitarian state economy,” “state socialism,” and more.

During a previous 13/13 seminar, Abolition Democracy 6/13, Martin Saar and I began a discussion of the Frankfurt School debates over state capitalism, focusing on the work of Pollock, Neumann, and Theodor Adorno. There are several essays there that help frame this seminar, including a lengthy introduction on Pollock and Neumann, Martin Saar’s synopsis of his argument, an epilogue to the conversation, as well as a recording of the seminar. But we did not broach Fraenkel’s contributions, or those of Kirchheimer. We return now to those debates with a larger field of thinkers.

In the debates, Neumann famously argued in his book Behemoth (1942) that National Socialism under the Third Reich did not constitute a state because it did not abide by the rule of law. “National Socialism is—or tending to become—a non-state, a chaos, a rule of lawlessness and anarchy,” Neumann wrote, “which has ‘swallowed’ the rights and dignity of man, and is out to transform the world into a chaos.”[2] Pollock argued that it constituted instead a new form of what he called “state capitalism.” Fraenkel, for his part, described the Nazi state as a “dual state,” in his book of that title, a state whose functioning is divided in two, containing both elements of regulation and the rule of law on the one hand, and on the other hand, areas of violence and arbitrariness unlimited by any legal norms.

A central question raised by Fraenkel, Neumann, and Pollock in these debates is whether the “rule of law” could ever in effect be fascist. In other words, whether the two concepts—rule of law and fascism—are mutually exclusive, or a contradiction in terms. Neumann’s challenge that the Nazi regime was lawless and therefore no state at all, I would argue, was a proxy for another question: Can the rule of law ever be fascist?

Like Fraenkel, I do not doubt that there were rule of law elements to the Nazi regime—no matter how hideous or (to return an expression) “degenerate” they were. So for instance, in previous work, I studied the gun laws that Hitler enacted during the Third Reich and found well-codified gun control laws put in place under his leadership. Contrary to the usual myth that Hitler favored gun control, he liberalized gun control laws for most Germans, while cracking down on Jews. Without going into unnecessary detail, the law and regulations Hitler implemented in 1938 demonstrate every aspect of the rule of law, with the exception of explicit discrimination. But explicit discrimination was also common in the United States at the time, and no one would doubt that there was the rule of law in this country. In fact, as some historians have documented, the Nazis modeled their discriminatory provisions on American Jim Crow laws.

Can a fascist rule of law, then, be “the rule of law”? Neumann and Fraenkel seemed, at least on my reading, to have wanted to keep the term “rule of law” sanitized and found ways to do that—Neumann by severing the term entirely from the Nazi regime, Fraenkel by partitioning the rule of law elements into a separate part of a dual state. Sadly, I would argue that the rule of law is sufficiently malleable that it can be pushed in many different directions. During the Obama administration, for instance, the United States engaged in summary execution of an American citizen abroad, without trial, justified by lengthy legal briefs from the Department of Justice. The summary executions were fully legitimized by the rule of law and by due process. So these readings raise important questions not only about state capitalism, but more broadly about the rule of law.

Our objective in this seminar will be to analyze and assess the model of state capitalism and state-centric economies as a foil to economic regimes that are based on bottom-up (or bottom-down) forms of cooperation. The question we will ask is how the study of state capitalism at mid-century can enlighten our understanding of coöperism.

To discuss these issues, we are honored to be joined by the three leading thinkers on these mid-century debates. Clara Maier is a professor of political theory and of the history of political thought at Columbia University and an expert on the political thought of the Weimar Republic, on the conceptual history of Nazism, and on the writings of Ernst Fraenkel and the Frankfurt School. Jens Meierhenrich is a professor of political theory and international relations at the London School of Economics and here at Columbia Law School, and an expert on Ernst Fraenkel and Nazi law. He is the editor of Fraenkel’s book, The Dual State: A Contribution to the Theory of Dictatorship, and the author of many books, including The Remnants of the Rechtsstaat: An Ethnography of Nazi Law (Oxford University Press, 2018) and The Violence of Law (Cambridge University Press, 2023). His edited collections include The Cambridge Companion to the Rule of Law (Cambridge University Press, 2021). William E. Scheuerman is a professor of political theory and of the history of political thought at Indiana University Bloomington and an expert on German political thought, legal theory, and the Frankfurt School. He is the author of Between the Norm and the Exception: The Frankfurt School and the Rule of Law (MIT, 1994) and of Frankfurt School Perspectives on Globalization, Democracy, and the Law (Routledge, 2008). He is the editor as well of, among other books, From Liberal Democracy to Fascism: Legal and Political Thought in the Weimar Republic (Humanities Press, 2000) (with Peter Caldwell). I could not think of a more extraordinary panel to address the state of the debate on state capitalism at mid-twentieth century.

Welcome to Coöperism 8/13!

Continue here to watch the seminar and read the other essays for Coöperism 8/13 on “The Frankfurt School Critique of National Socialism and State”


[1] Simone Weil, “Prospects,” (1933) cited in Benjamin P. David, Simone Weil’s Political Philosophy: Field Notes from the Margins (Lanham, MD: Rowman & Littlefield, 2023), at 1.

[2] Franz Neumann, Behemoth: The Structure and Practice of National Socialism, 1933–1944 (New York: Oxford University Press, 1942), 459.