[The Third Generation is Fassbinder's] most violently outspoken film yet, and incidentally the first from Germany … to represent fictional terrorists on the screen. Expanding into a high-camp melodrama the idea of collective responsibility underlying his Germany in Autumn episode, Fassbinder disregards the politically rigidified idea of terrorists as either demons or martyrs; and instead locates the colourful members of his terrorist cell … at the centre of a complex, wheels-within-wheels social machine governed only by the laws of greed, profit, cross and double-cross….
[In] Fassbinder's angry, and only superficially cynical, apocalyptic vision, there are no right or left, no good or bad guys….
The Third Generation is not the first Fassbinder film to suggest a kinship between cops and outlaws (this motif ran through his earliest thrillers, as through many of the films noirs which inspired them)…. But it is the first of his films to locate these twin themes unequivocally in contemporary society or to relate them to post-'68 developments there. If its characters still behave with theatrical, nay, Sirkian relish, the film's references are none the less more frequently drawn from actuality than from the movies….
[The] spectator is overwhelmed by the choice of meanings offered by the film's multi-track sounds, by the impossibility of making any kind of coherent sense from the Babel of the new technology. The flickering screens in the corner of nearly every frame (images within images echoing the theme of wheels within wheels) connect and question both the medium of film and the ideology of surveillance. The watchers are watched and the biters bit. Nothing is sacred in a society which has substituted communications systems for forthright communication. Not even terrorism, the nation's sacred monster.
It is in this consequent spirit that Fassbinder dares to make fun of his misfit desperadoes, to show them squabbling over properties on the Monopoly board or over possible exotic aliases. In Germany at least, his irony has proved as unpopular as his adulation might have done. (p. 245)
Jan Dawson, "The Sacred Terror," in Sight and Sound (copyright © 1979 by The British Film Institute), Vol. 48, No. 4, Autumn, 1979, pp. 242-45.∗