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Post re: Germany: on the Nazi Economy (Cameron Sawyer, Russia)
Created by John Eipper on 01/17/10 6:48 AM - re-germany-on-the-nazi-economy-cameron-sawyer-russia

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re: Germany: on the Nazi Economy (Cameron Sawyer, Russia) (John Eipper, USA, 01/17/10 6:48 am)

David Gress wrote on 16 January:

I believe that Harold James and Adam Tooze have written the basic works on the economy of the Third Reich, including the war economy. Plus of course numerous German works of earlier decades. Am I missing something?

Cameron Sawyer replies:

In economics, there is not really such a thing as a basic work. Five economists will usually have five different views on any given subject (one thing which makes the field more interesting, actually). In any case, there is plenty besides Tooze to read on the subject, and yet there is plenty which has not yet been written. I am attracted to the subject because there are so many popular misconceptions about it. Besides that, my book would not be a study of the economics of the Nazi regime. It would be about how the conduct and outcome of the war was determined by economics.

Adam Tooze's recent Wages of Destruction is fairly conventional, popular history, in any case. The statistics of the Nazi war economy are fairly uncontroversial--the Nazis could not produce enough to win. But Tooze concentrates on Nazi problems of raw materials, not the form of organization of the economy. It is true that certain raw materials bottlenecks caused the Nazis huge problems--for example, the lack of vanadium and other materials for toughening steel played hell with the reliability of German tanks and other machinery. But in my opinion this is the wrong focus. These material shortages themselves would not have existed if it had not been for the Nazi policy of restricting trade to countries aligned with the Nazis, which was a cornerstone of Nazi economic policy.

I have not read Harold James. I do not think that he wrote about the Nazi economy as a whole. He wrote about the Weimar economy (German Slump; which is on my bookshelf but I haven't read it yet) and about the origins of German finance capital.

There are much more extensive sources, perhaps unsurprisingly, in German. For the conventional, politically correct view in Germany today, see the article on the Bundeszentrale fuer politische Bildung (the Federal Center for Political Education) website, called Wirtschaft und Gesellschaft unterm Hakenkreuz (Economy and Society under the Swastika), http://www.bpb.de/themen/C6TWMI,0,0,Wirtschaft_und_Gesellschaft_unterm_Hakenkreuz.html. Conventional and generally wrong, in my opinion. The thesis of this article is that the German economy was taking off due to Keynsian measures, but that a shortage of foreign exchange and raw materials kept this Aufschwung from improving the lives of people. This shows a failure of understanding of command economies and of the inherent difficulties in measuring command economies--nothing in a command economy has a real value, and so booms can be created on paper. This same problem caused Western economists to constantly overestimate the economic performance of the Soviet Union. But the BPB site is particularly funny--the economy is booming but there are no goods, because of x,y,z. Right.

One should start with what the Nazis themselves read. The classic; in some ways the blueprint for the Nazi economy is Hans Reupke's Der Nazionalsozialismus und die Wirtschaft (National Socialism and the Economy, 1931). It was Reupke who came up with the peculiar Nazi form of socialism which was Soviet in many aspects, but with private ownership of large enterprises. Small and medium enterprises were taxed almost out of existence; large enterprises under the Nazis were under tight state control and were organized into cartels. The other key primary source are the various works of Hitler's main economist, Hjalmar Schacht (his full name, interestingly enough, was Hjalmar Horace Greely Schacht), who was head of the Reichsbank and Minister of the Economy during the 1930s. Schacht, who was part of the conspiracy to assassinate Hitler in 1944, survived and lived until 1970 and wrote a bunch of books. His Grundsaetze deutscher Wirtschaftspolitik (Basic Principles of German Economic Policy) of 1932 is a valuable primary source.

One contemporary study I really enjoyed was Hans-Erich Volkmann's Oekonomie und Expansion--Grundzeuge der NS-Wirtschaftspolitik (Economy and Expansion--Fundamentals of the National-Socialist Economic Policy, 2003). This study focuses on the economic logic of German expansionism, and so provides another interesting point of connection between economics and the war. Imperialism, in the Leninist sense, doesn't benefit market economies which have decent trade relations with the rest of the world, but becomes an imperative for an autarkical one. Why did Nazi Germany suffer so much from a lack of raw materials? Because of its economic system; not because of its lack of mines. Unable to buy the materials they needed, the Nazis had to take them by force. Only they couldn't take them by force in the end, because they lacked the economic power to do so. A vicious cycle which was the direct cause of the downfall of the Nazi regime.

A notable contemporary German specialist on the Nazi economy was Prof. Christoph Buchheim of the Universitaet Mannheim (Buchheim just died a couple of weeks ago, alas). Buchheim's The Role of Private Property in the Nazi Economy: The Case of Industry analyzes the nature of private property under the Nazi regime, and forces one to be more careful when arguing that industry was privately owned in name only. It was more complicated than that. Buchheim's Corporate Freedom of Action in Nazi Germany: A Response to Peter Hayes is full of interesting information about the complicated relationship between big business and the Nazi state.

Speaking of Peter Hayes, this English historian made the most detailed studies of particular companies under the Third Reich. Industry and Ideology: IG Farben in the Nazi Era is just one of them; he also wrote a history of the Degussa firm under the Nazis, From Cooperation to Complicity.

A fascinating study of the methods and instruments of central planning under the Nazis is Daniela Kahn's Die Steurung der Wirtschaft durch Recht im Nazionalsozialismus, 2006. This is a detailed study of the Reichsgruppe Industrie, one of the key instruments of economic planning of the Nazis.

Just in case anyone still thinks that Germany had any kind of economic recovery in the way we think of economic recovery today, Joerg Baten of the Universitaet Tuebingen and Andrea Wagner of my own alma mater, the Ludwigs-Maximillians Universitaet of Munich, have laid this idea to rest in an innovative way in their study Autarchy, Market Disintegration, and Health: the Mortality and Nutritional Crisis in Nazi Germany, 1933-1937, Economics and Human Biology, Vol. 1, pp. 1-18, January 2003. Baten and Wagner studied the demographic data of the 1930s, including mortality rates, height of children, etc., and show convincingly that Germans were gradually starving to death under the Nazis, and were much less well off nutritionally during the height of the so-called Nazi recovery even than in the depth of the Great Depression. The authors make a good case for a biological standard of living, as they call it, which can be measured much more objectively than other ideas of a standard of living, particularly in totalitarian societies where price data mean little.

One really interesting, really unusual view which contradicts my own views, and which I am still thinking about, is the one of the Swiss economist Albrecht Ritschl, Deficit Spending in the Nazi Recovery, 1933-1938, http://personal.lse.ac.uk/ritschl/pdf_files/ritschl_dec2000.pdf. Ritschl argues that no aspect of Nazi macroeconomic policy drove the German economy in the 1930s--that the policies didn't have time to take effect. He argues, based on a very careful analysis of the data, that most everything that happened in the German economy from the time of the election of Hitler in 1933 until the start of the war in 1939 was rebound effect after the crash and Great Depression. I am afraid that there is a lot to this argument, which may force me to reconsider some of my views.

I short, there is plenty to think about, and plenty to read on this subject. I encourage David Gress not to stop with Adam Tooze, if he finds the subject interesting.

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