On economic front how can we really distinguish between Nazi economy v. Authoritarian capitalism of the modern China & pre-democratic South Korea/Taiwan? Perhaps that Nazi Germany’s distinctive lack of any constitutional order & structural lawlessness allows more executive free reign than modern CCP, which Xi still had to operate under some party-legal structure; maybe South American junta are more akin then in their shared lack of constitutional order?
Seems the modern CCP runs more "party-state" authoritarian capitalism, where party committees and reps sit inside firms, both private and state-owned. The Volkswagenwerk borderline case is illuminating bc it was more like a party propaganda front that was then quickly converted for military production.
John, thank you so much for this. I was not aware Substack supported endnotes! I have two bookshelves full of books on the Shoah, over half of which I’ve read, and some I have not such as the Adam Tooze book Wages of Destruction you discuss. And not Maier, but I have read Mayer’s Why Did the Heavens Not Darken? The "Final Solution in History, which—by documenting how Hitler almost always ranted against the Judeo-Bolsheviks.
From my reading, most relevant to your piece is I think Gotz Aly’s Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (2006 [2005 in German]. Apparently, Tooze was critical of Aly in a published review (Adam Tooze, "Economics, Ideology and Cohesion in the Third Reich: A Critique of Goetz Aly's Hitlers Volksstaat," Dapim: Studies on the Shoah 20 (2006): 217–232.) which he has on his website: https://adamtooze.com/wp-content/uploads/2017/01/Tooze-Review-of-Aly-for-Dapim-2005-.pdf
He saw Aly’s work as problematic, first saying: “In Hitlers Volksstaat Aly concerns himself not with Himmler’s expansive schemes of population displacement and genocide, but with the machinery of financial expropriation that stripped the Jewish population of Europe of its wealth.” He admits, “The German population as a whole benefited from these exactions. But it did so indirectly, as contributions taken from the victims of the regime reduced the tax burden that had to be levied on the Reich.”
He goes on, and if you are wondering how this is problematic, so am I: “The devil, according to Aly, is in the detail. The regime of exploitation directed first against the Jews and then the rest of the population of occupied Europe was designed to support a generous system of social provision for the German population. And this in turn was essential to sustaining the mass loyalty that underpinned Hitler’s regime.
The accumulation of small benefits - the marginal reduction in taxes on certain groups in the population, the extension of welfare benefits most notably for the wives of conscripted soldiers, the personal and collective profits of Aryanization and the continental operation of the black market - were not. accidental features of the Nazi regime. They were, Aly claims, the real foundation of consent and cooperation in the Third Reich. They were, in fact, the foundation of a new popular social order in Germany that has lasted to this very day.”
Not being an historian of the holocaust (I’m an historical sociological of the system of real property), I now see that the concern was the Aly’s details were valuable, but the conclusions were over-interpreted, similar to criticisms—which I shared—of Goldhagen’s Hitler’s Willing Beneficiaries. In that case, Mayer’s work seemed much more convincing.
Tooze’s concern was: “It is a measure of the unsettling originality of his work that, whereas it is possible to think of a variety of authors who subscribe to each of the other three positions, Aly may be the first to stake out the territory in the top right hand corner, combining a materialist approach with an emphasis on popular, rather than elite, support for the regime.” In other words, Goldhagen’s approach was idealistic and focused on popular forces rather than elite interest/actions, and the critique of Aly is it is focused on the material interests of the population versus that of the elites.
I found Aly’s work convincing, in that it seemed to show a direct relationship between when the German state was short on funds and when it implemented specific components of the entire extermination/expropriation process of the Shoah. (See Chapter Ten, the Trail of Gold.)
In any case, I’ll have to read Tooze. There goes my summer vacation, when I’m going to be working in any case!
That Tooze review makes interesting reading, so thanks for the reference. Unfortunately the substack comment function appears to have truncated or mangled your link, so here's another one which should hopefully work for interested readers - https://shorturl.at/pCAmC
First off, this is great. Really useful to have an accessible distillation of Nazi economic practice like this. Two (minor) points tho.
Re the reference to Germà Bel citing Nazi Germany as the first case of large scale privatization in that era, that threw me because I remembered Toscano attributing the same thing to the Fascist regime. And Claude now tells me that Bel wrote another piece (Claude said this was also 2010 in EHR - its actually 2011 in Cambridge Journal of Economics - remember kids, check everything AI says!! at least once, anyway...) entitled "The first privatisation: Selling SOEs and privatising public monopolies in Fascist Italy (1922-1925)", which I think was what Toscano was leaning on. So yeah, Fascist economics defo against the contemporary corporatist tide - but Mussolini first, Hitler second. Does no damage to your overall point.
Second is is harder to categorize and I don't have historian grade references for. You touched on the slavery question already (and iirc elsewhere you mentioned this represented a political decision on the part of the regime not to replace militarily enlisted free male labour with free female labour, but imported non-national slave labour), but there's also the question of access to raw materials. Sakai raised this in the original Hamerquist/Sakai exchange back in the early noughts ("Confronting Fascism: Discussion Documents for a Militant Movement, the 2002 founding document for the Three-Way Fight tendency) - i.e. that to say that the Third Reich did not structurally challenge the economic base of capitalism is an over-simplification. Naturally, given his political background, he focused on the role of re-introducing mass slavery. And how that impacted on the bourgeois capitalist relation to labour via the labour-commodity market. But there's also the role of the party not only controlling access to marginal scarce labour inputs (in the access to slave labour), but also the access to an ever-increasing list of raw material inputs that became politically allocated rather than purchasable on the open market. Of course similar things can be said about US war production. But there's an interesting research question there as to whether the Third Reich "behemoth" clientelism went beyond that, not just in labour inputs but also in materials, in terms of undermining market resource allocation
At last. Thank you, John, for something I wish I'd had in the 1970s—the shortest and most comprehensive answer to a couple of my fellow teachers at Saint Ann's who wanted to explain to their students reading Orwell's 1984 that Naziism was a form of socialism.
Excellent post BTW John. It’s exasperating to consider how many people’s apparent understanding of political economy is limited to ‘government involvement in economy = socialism’. If that’s the case then ‘socialism’ must be humanity’s default economic system since at least the end of the Neolithic era.
Something to add to the Volkswagen story is that the ‘seed capital’ provided for it through the DAF was from the seized assets of the former German trade union movement. In that sense the largest expropriation carried out by the National ‘Socialists’ was from workers, not capitalists.
One day, more folks will realize that academia, at least after grade 12, has a very constricting effect on your scholarly life, narrowing your scholarship and even limiting your interests.
My sense of the Nazi economic policy was that it was highly irresponsible given the use of the mefo bills to fund the rearmament. This off balance sheet financing was going to be very inflationary when the bills were coming due in the late 1930s. What prevented this inflation was the fact that the Nazi State conquered other countries and used their resources to refinance this debt. Unless this took place the Nazi State probably would have collapsed economically.
Adam Tooze's *Wages of Destruction* is the seminal work on Third Reich economics policies, eminently researched, and Tooze's own fluency in German allowed him access to valuable archival material in the original language. An excellent specialist companion to the many monographs published on the political origins of Naziism, such as those of Richard Evans, Ian Kershaw, et al.
Of course...just adding my own appreciation of the work, as my own lay interests in Hitler, Naziism, and the rise and fall of the Third Reich were motivated by the published works of well-known (largely British) historians, but a deep dive into Nazi economics policies was provided by *Wages of Destruction*, which was the point I was trying to make, but apparently failed.
On economic front how can we really distinguish between Nazi economy v. Authoritarian capitalism of the modern China & pre-democratic South Korea/Taiwan? Perhaps that Nazi Germany’s distinctive lack of any constitutional order & structural lawlessness allows more executive free reign than modern CCP, which Xi still had to operate under some party-legal structure; maybe South American junta are more akin then in their shared lack of constitutional order?
It's a very good quesiton which I cant answer off the top of my head
Seems the modern CCP runs more "party-state" authoritarian capitalism, where party committees and reps sit inside firms, both private and state-owned. The Volkswagenwerk borderline case is illuminating bc it was more like a party propaganda front that was then quickly converted for military production.
John, thank you so much for this. I was not aware Substack supported endnotes! I have two bookshelves full of books on the Shoah, over half of which I’ve read, and some I have not such as the Adam Tooze book Wages of Destruction you discuss. And not Maier, but I have read Mayer’s Why Did the Heavens Not Darken? The "Final Solution in History, which—by documenting how Hitler almost always ranted against the Judeo-Bolsheviks.
From my reading, most relevant to your piece is I think Gotz Aly’s Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (2006 [2005 in German]. Apparently, Tooze was critical of Aly in a published review (Adam Tooze, "Economics, Ideology and Cohesion in the Third Reich: A Critique of Goetz Aly's Hitlers Volksstaat," Dapim: Studies on the Shoah 20 (2006): 217–232.) which he has on his website: https://adamtooze.com/wp-content/uploads/2017/01/Tooze-Review-of-Aly-for-Dapim-2005-.pdf
He saw Aly’s work as problematic, first saying: “In Hitlers Volksstaat Aly concerns himself not with Himmler’s expansive schemes of population displacement and genocide, but with the machinery of financial expropriation that stripped the Jewish population of Europe of its wealth.” He admits, “The German population as a whole benefited from these exactions. But it did so indirectly, as contributions taken from the victims of the regime reduced the tax burden that had to be levied on the Reich.”
He goes on, and if you are wondering how this is problematic, so am I: “The devil, according to Aly, is in the detail. The regime of exploitation directed first against the Jews and then the rest of the population of occupied Europe was designed to support a generous system of social provision for the German population. And this in turn was essential to sustaining the mass loyalty that underpinned Hitler’s regime.
The accumulation of small benefits - the marginal reduction in taxes on certain groups in the population, the extension of welfare benefits most notably for the wives of conscripted soldiers, the personal and collective profits of Aryanization and the continental operation of the black market - were not. accidental features of the Nazi regime. They were, Aly claims, the real foundation of consent and cooperation in the Third Reich. They were, in fact, the foundation of a new popular social order in Germany that has lasted to this very day.”
Not being an historian of the holocaust (I’m an historical sociological of the system of real property), I now see that the concern was the Aly’s details were valuable, but the conclusions were over-interpreted, similar to criticisms—which I shared—of Goldhagen’s Hitler’s Willing Beneficiaries. In that case, Mayer’s work seemed much more convincing.
Tooze’s concern was: “It is a measure of the unsettling originality of his work that, whereas it is possible to think of a variety of authors who subscribe to each of the other three positions, Aly may be the first to stake out the territory in the top right hand corner, combining a materialist approach with an emphasis on popular, rather than elite, support for the regime.” In other words, Goldhagen’s approach was idealistic and focused on popular forces rather than elite interest/actions, and the critique of Aly is it is focused on the material interests of the population versus that of the elites.
I found Aly’s work convincing, in that it seemed to show a direct relationship between when the German state was short on funds and when it implemented specific components of the entire extermination/expropriation process of the Shoah. (See Chapter Ten, the Trail of Gold.)
In any case, I’ll have to read Tooze. There goes my summer vacation, when I’m going to be working in any case!
That Tooze review makes interesting reading, so thanks for the reference. Unfortunately the substack comment function appears to have truncated or mangled your link, so here's another one which should hopefully work for interested readers - https://shorturl.at/pCAmC
Thanks I edited my post to add the correct link.
First off, this is great. Really useful to have an accessible distillation of Nazi economic practice like this. Two (minor) points tho.
Re the reference to Germà Bel citing Nazi Germany as the first case of large scale privatization in that era, that threw me because I remembered Toscano attributing the same thing to the Fascist regime. And Claude now tells me that Bel wrote another piece (Claude said this was also 2010 in EHR - its actually 2011 in Cambridge Journal of Economics - remember kids, check everything AI says!! at least once, anyway...) entitled "The first privatisation: Selling SOEs and privatising public monopolies in Fascist Italy (1922-1925)", which I think was what Toscano was leaning on. So yeah, Fascist economics defo against the contemporary corporatist tide - but Mussolini first, Hitler second. Does no damage to your overall point.
Second is is harder to categorize and I don't have historian grade references for. You touched on the slavery question already (and iirc elsewhere you mentioned this represented a political decision on the part of the regime not to replace militarily enlisted free male labour with free female labour, but imported non-national slave labour), but there's also the question of access to raw materials. Sakai raised this in the original Hamerquist/Sakai exchange back in the early noughts ("Confronting Fascism: Discussion Documents for a Militant Movement, the 2002 founding document for the Three-Way Fight tendency) - i.e. that to say that the Third Reich did not structurally challenge the economic base of capitalism is an over-simplification. Naturally, given his political background, he focused on the role of re-introducing mass slavery. And how that impacted on the bourgeois capitalist relation to labour via the labour-commodity market. But there's also the role of the party not only controlling access to marginal scarce labour inputs (in the access to slave labour), but also the access to an ever-increasing list of raw material inputs that became politically allocated rather than purchasable on the open market. Of course similar things can be said about US war production. But there's an interesting research question there as to whether the Third Reich "behemoth" clientelism went beyond that, not just in labour inputs but also in materials, in terms of undermining market resource allocation
These articles were very succinct and informative... excellent. I've become a paid subscriber and ordered your book.
At last. Thank you, John, for something I wish I'd had in the 1970s—the shortest and most comprehensive answer to a couple of my fellow teachers at Saint Ann's who wanted to explain to their students reading Orwell's 1984 that Naziism was a form of socialism.
Excellent post BTW John. It’s exasperating to consider how many people’s apparent understanding of political economy is limited to ‘government involvement in economy = socialism’. If that’s the case then ‘socialism’ must be humanity’s default economic system since at least the end of the Neolithic era.
Something to add to the Volkswagen story is that the ‘seed capital’ provided for it through the DAF was from the seized assets of the former German trade union movement. In that sense the largest expropriation carried out by the National ‘Socialists’ was from workers, not capitalists.
After reading something like this, I can’t understand why you don’t find a position in academia. It would probably make your parents so happy.
Absolutely no interest. My life now is totally free and I'm my own boss. My parents already happy with the book etc.
Bill Everdell:
One day, more folks will realize that academia, at least after grade 12, has a very constricting effect on your scholarly life, narrowing your scholarship and even limiting your interests.
My sense of the Nazi economic policy was that it was highly irresponsible given the use of the mefo bills to fund the rearmament. This off balance sheet financing was going to be very inflationary when the bills were coming due in the late 1930s. What prevented this inflation was the fact that the Nazi State conquered other countries and used their resources to refinance this debt. Unless this took place the Nazi State probably would have collapsed economically.
What are your thoughts about this issue?
Adam Tooze's *Wages of Destruction* is the seminal work on Third Reich economics policies, eminently researched, and Tooze's own fluency in German allowed him access to valuable archival material in the original language. An excellent specialist companion to the many monographs published on the political origins of Naziism, such as those of Richard Evans, Ian Kershaw, et al.
Did you read to the end or see my footnotes?
Of course...just adding my own appreciation of the work, as my own lay interests in Hitler, Naziism, and the rise and fall of the Third Reich were motivated by the published works of well-known (largely British) historians, but a deep dive into Nazi economics policies was provided by *Wages of Destruction*, which was the point I was trying to make, but apparently failed.
Outstanding economic history. I did a field with Harold James and knew Mike Allen in grad school.