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The Third Period, "social fascism," and the "United Front from Below"
In 1928, the KPD shifted an openly revolutionary posture for the first time since the failed Hamburg Uprising of 1923. Aligning with the Comintern's ultra-left Third Period under the slogan "Class against class," the party believed that a global economic crisis in all capitalist countries was immanent. This looming economic crisis would heighten class tensions, presenting a unique opportunity to organize the masses and build a socialist revolution. In preparation for this new period of struggle, the party began building its own, militant, mass organizations in opposition to any forces that might try to prop up the Weimar Republik. In addition to siphoning away SPD supporters, this strategy of building a revolutionary Einheitsfront von Unten (United Front from Below) involved recruiting disaffected farmers, independent trade union supporters, and Nazi supporters--particularly those in the SA (Sturmabteilung). In this period, the KPD referred to the SPD as "social fascists," in line with their belief that the when the time came, the SPD would not support a socialist revolution. By not doing so, it was believed that the SPD was therefore propping up fascist forces to save the ailing Weimar Republik.

The trade union movement held a place of special importance in this new strategy. Like the SPD, the KPD believed that the "bourgeois" trade union movement under the auspices of the Allgemeiner Deutsche Gewerkschafts would fail to take the necessary steps to foment revolution when the economic crisis came. In line with this thinking, the party launched a new, independent arm of the trade union movement, the Revolutionäre Gewerkschafts Opposition (Revolutionary Trade Union Opposition) in 1928. The party tried to build cells in major factories throughout Germany through which to grow the revolutionary movement, spread party propaganda, and meet more SPD or Nazi workers who might join their cause. Though more and more members joined the RGO each year, the movement was ultimately not successful. By 1933, most German workers still remained affiliated with the SPD-backed union movement (and some had joined the Nazi backed NSBO). Many workers that had joined the RGO and left the SPD-backed unions to do so, meanwhile, had lost the union protections at their workplaces. With the onset of the Great Depression in 1929, these workers were therefore among the first to be laid off. (Fischer, Conan. The German Communists and the Rise of Nazism. London: 1991, p. 132).

In 1931, the party reported a membership of 200,000. By the end of 1932, this number had climbed to nearly 300,000. The historian Conan Fischer estimated that almost 85% of these 300,000 members--most of whom were new recruits--were unemployed. This strong growth in numbers, therefore, did not correlate in steady growth of membership dues or in the number of experienced, leadership-ready cadres in the party ranks. (Fischer, Conan. The German Communists and the Rise of Nazism. London: 1991, p. 161).

The KPD leadership initially first criticised but then supported the 1931 Prussian Landtag referendum, an unsuccessful attempt launched by the far-right Stahlhelm to bring down the social democrat state government of Prussia by means of a plebiscite; the KPD referred to the SA as "working people's comrades" during this campaign.

The KPD continued to participate in the elections during this period, believing them to be an effective tool with which to spread their revolutionary message. The party usually polled at more than 10% of the vote, and gained 100 deputies in the November 1932 elections, getting 16% of the vote and coming third (it's best performance). In the presidential election of the same year, its candidate Thälmann took 13.2% of the vote, compared to Hitler's 30.1%. In this period, while also opposed to the Nazis, the KPD regarded the Nazi Party as a less sophisticated and thus less dangerous fascist party than the SPD, and KPD leader Ernst Thälmann declared that "some Nazi trees must not be allowed to overshadow a forest [of social democrats]". In February 1932, Thälmann argued that “Hitler must come to power first, then the requirements for a revolutionary crisis [will] arrive more quickly”. In November 1932, the KPD and the Nazis worked together in the Berlin transport workers’ strike.

Critics of the KPD accused it of having pursued a sectarian policy. For example, the Social Democratic Party criticized the KPD's thesis of "social fascism", and both Leon Trotsky from the Comintern's Left Opposition and August Thalheimer of the Right Opposition continued to argue for a united front. Critics believed that the KPD's sectarianism scuttled any possibility of a united front with the SPD against the rising power of the National Socialists.

Thälmann claimed that the right-wing leadership of the SPD rejected and actively worked against the KPD's efforts to form a united front against fascism. The party itself, however, continued to publicly attack the SPD and the General German Trade Union Federation well into 1932 and never attempted to form a coalition. A brawl between Nazi and KPD lawmakers in the Landtag of Prussia led to the creation of Antifa – short Antifaschistische Aktion, which the party itself described as a "red united front under the leadership of the only anti-fascist party, the KPD". Thälmann, however, reiterated that there was still a ‘principal fight’ to be led against the SPD and that there would be no ‘unity at all costs’.

After Franz von Papen's government carried out a coup d'état in Prussia, the KPD issued a call for all workers to support a general strike under its own leadership, which only resulted in limited local action. The statement was addended with a short call on the GGTUF, the SPD and the General Federation of Free Employees to join in, but the KPD’s belief that social democrats would have to be ‘coerced by the masses’ meant that their leaders were never approached directly. The KPD tried the same tactic again after Adolf Hitler was appointed as chancellor but was widely ignored by other organisations and individual workers this time as well.

Nazi era  edit
On 27 February, soon after the appointment of Adolf Hitler as chancellor, the Reichstag was set on fire and Dutch council communist Marinus van der Lubbe was found near the building. The Nazis publicly blamed the fire on communist agitators in general, although in a German court in 1933, it was decided that van der Lubbe had acted alone, as he claimed to have done. The following day, Hitler persuaded Hindenburg to issue the Reichstag Fire Decree. It suspended the civil liberties enshrined in the Weimar Constitution, ostensibly to deal with Communist acts of violence.

Repression began within hours of the fire, when police arrested dozens of communists. Although Hitler could have formally banned the KPD, he did not do so right away. Not only was he reluctant to chance a violent uprising, but he believed the KPD could siphon off SPD votes and split the left. However, most judges held the KPD responsible for the fire, and took the line that KPD membership was in and of itself a treasonous act. At the March 1933 election, the KPD elected 81 deputies. However, it was an open secret that they would never be allowed to take up their seats; they were all arrested in short order. For all intents and purposes, the KPD was "outlawed" on the day the Reichstag Fire Decree was issued, and "completely banned" as of 6 March, the day after the election.

Shortly after the election, the Nazis pushed through the Enabling Act, which allowed the cabinet–in practice, Hitler–to enact laws without the involvement of the Reichstag, effectively giving Hitler dictatorial powers. Since the bill was effectively a constitutional amendment, a quorum of two-thirds of the entire Reichstag had to be present in order to formally call up the bill. Leaving nothing to chance, Reichstag President Hermann Göring did not count the KPD seats for purposes of obtaining the required quorum. This led historian Richard J. Evans to contend that the Enabling Act had been passed in a manner contrary to law. The Nazis did not need to count the KPD deputies for purposes of getting a supermajority of two-thirds of those deputies present and voting. However, Evans argued, not counting the KPD deputies for purposes of a quorum amounted to "refusing to recognize their existence", and was thus "an illegal act".

The KPD was efficiently suppressed by the Nazis. The most senior KPD leaders were Wilhelm Pieck and Walter Ulbricht, who went into exile in the Soviet Union. The KPD maintained an underground organisation in Germany throughout the Nazi period, but the loss of many core members severely weakened the Party's infrastructure.

KPD leaders purged by Stalin  edit
A number of senior KPD leaders in exile were caught up in Joseph Stalin's Great Purge of 1937–1938 and executed, among them Hugo Eberlein, Heinz Neumann, Hermann Remmele, Fritz Schulte and Hermann Schubert, or sent to the gulag, like Margarete Buber-Neumann. Still others, like Gustav von Wangenheim and Erich Mielke (later the head of the Stasi in East Germany), denounced their fellow exiles to the NKVD.