Until recently, the left-wing inflationist Ellen Brown used the example of Hitler’s Germany to show that Greenbacker economics really works.
She was taken to task for this. She told Gary North:
First, since you’ve made so much of my Hitler example and I’ve taken so much grief over it, I’ve quit using it to illustrate my point, even though the transformation of Germany’s absolutely bankrupt economy into one powerful enough to take on the rest of the world in World War II was pretty dramatic.
Wow. So she still thinks Hitler’s position on economics was pretty darn good, but she’d better not say so anymore. Got it.
In general, people like Brown act as if the economic system of Nazi Germany could be completely compartmentalized, as in: we like the economics; we just don’t like the concentration camps and genocide.
Any chance Hitler’s control over the economy and his later atrocities flowed from the same source, namely his centralized power over the German nation?
It’s not just the Left that occasionally slips and notes that hey, say what you will about Hitler, but he sure was good on the economy. It’s also the anti-capitalist Right, which thinks it’s striking a blow against deracinated laissez faire and in favor of the interests of the historic German nation.
The truth about Hitler’s economy is rather more mundane: far from some world-historic innovation, it was the usual military Keynesianism we’ve seen in many times and places.
Writes economist Albrecht Ritschl:
Recovery from the Great Depression [in Germany] was mainly driven by a rebound effect that was visible in the data already by late 1932. Up to around 1936, the German recovery was no more advanced than that of Britain or the United States, where far less expansionary fiscal policies were followed. However, even in Germany the fiscal impulse generated by the budget deficit was too small to be consistent with Keynesian demand stimulation under an income/expenditure mechanism. In order to explain the very high, at times two-digit growth rates of GNP during the recovery, deficits would have had to be two to five times higher than they actually were. Apparently, recovery was due to forces other than fiscal and monetary policy, just as in the cases of Britain and the United States….
Nazi recovery appears less spectacular than was hitherto believed. Our results also indicate that government spending was dominated by war preparation already in a very early phase of the Nazi recovery. I find little justification for the popular interpretation that recovery was sparked off by non-military work-creation and the construction of the autobahn network. Investment in the autobahn reached sizable magnitudes only in 1936. All these projects pale in comparison with the rapid buildup of military expenditure, except for the year of 1933 when rearmament had not yet really begun. To secure the desired high speed of war preparation, the Nazi administration took early, often draconian steps to crowd out private demand. The growth in consumer spending fell short of the increase in national product, and the contribution of private investment to the recovery remained unimpressive.
Strict control of private expenditure was partly achieved by maintaining taxation at the high levels reached during the depression years.
That’s your economic miracle: government spending on armaments.
That doesn’t actually cater to consumer needs, you say, and therefore isn’t what an economy is supposed to be all about?
Go to the head of the class.
Speaking of class, the real truth of the Nazi economy is just one of the topics I hit in my government course for the Ron Paul Curriculum.
Here’s the stuff nobody taught you, crammed into a one-semester course.
Emancipate yourself from the state’s control over your mind:
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