The Nazi Miracle

Alan Milward

  • Hitler: Memoirs of a Confidant edited by Henry Ashby Turner, translated by Ruth Hein
    Yale, 333 pp, £25.00, September 1985, ISBN 0 300 03294 3
  • Blood and Soil: Walther Darré and Hitler’s ‘Green Party’ by Anna Bramwell
    Kensal Press, 288 pp, £12.95, October 1985, ISBN 0 946041 33 4
  • Industry and Politics in the Third Reich: Ruhr Coal, Hitler and Europe by John Gillingham
    Methuen, 183 pp, £15.95, October 1985, ISBN 0 416 39570 8
  • Geschichte der Deutschen Kriegswirtschaft 1939-1945. Vol. II: 1941-1943 by Dietrich Eichholtz
    Akademie Verlag, 713 pp, January 1986

In the early summer of 1931, as the storm centre of the century’s worst depression roared back towards a Germany where already 4.5 million people were out of work, the Nazi Party for the first time faced the fact that it might be elected to government. ‘Finance capitalism’, which they had been lambasting for 12 years, had got the country into just the mess they had predicted. How to get out of it? In two years two million jobs had been lost. Promising to ‘do something about unemployment’ – to use the stirring language of Her Majesty’s Opposition – was an electoral necessity for all parties. Genuinely doing something about it was a real necessity for Hitler and the Nazis if they were to attain their first goals of getting power and restoring moral confidence to the nation.

There are two things for which almost everyone has been obliged to give some credit to the Nazi regime: recovery and full employment. In the 1930s really up-to-date economists hinted coyly that the Nazi government was a visible demonstration that Keynesian theory worked. How did it actually come about that a party could in three years transform an almost universal economic and social despair into high growth rates and full employment? How did Germany escape from a depression which makes the two which the British economy has recently traversed look like mild cyclical wobbles, and turn an unemployment rate which Mrs Thatcher has probably envisaged only in her worst nightmares into full employment? Where did jobs and self-respect come from?

Not, it must be said, from accepting the advice of businessmen and bankers. Depression and recovery took place against the background of a monotonous litany, familiar now to British ears, intoned by the world of big business: that wages and social security costs were too high, that the law should be changed to ‘de-bureaucratise’ the labour contract, that corporate taxation should be lower, and that temporary financial help was needed for industries which were part of the ‘national fabric’. The present British government has, of course, invested considerable effort in putting some of these suggestions into practice.

In 1931, the mismatch between the Nazis and the world of business was almost total. The really big businessmen, the heads of the major German corporations, moved in high circles – from which, as Henry Ashby Turner showed in his excellent study,[*] they looked down on the Nazis with shuddering distaste and mounting alarm. For their part, Hitler’s economic advisers regarded the world of big business with something between deep suspicion and open enmity. All their cures for unemployment started from the assumption, now frequently made in this country, that businessmen and bankers had misinvested capital and couldn’t, without some change in the capitalist system, be trusted to invest it in the interests of the whole community.

Both Hitler’s ‘confidant’ Otto Wagener, a managing director in the plywood industry and head of the economic policy section of the Party’s national executive, and Gottfried Feder, the author in earlier days of what sometimes still passed for the Party’s manifesto, insisted that a change of this kind involved drawing distinctions between different types of capital. Some capital was ‘speculative’ and some ‘productive’. For Feder this amounted to little more than an equation between ‘speculative’ capital and foreign investment: only German capital, and only when it was invested in Germany for German purposes, would be ‘productive’. The state, he said, should therefore nationalise the banks and remove the restrictions which the central bank was allowed to impose on the money supply independently of the Government. The way to create, Thatcher-like, a swarm of dynamic new enterprises which would regenerate the economy was to make low-interest loans through state intervention in the capital market. State intervention was necessary in order to recreate ‘individualism’.

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[*] German Big Business and the Rise of Hitler: Oxford, 504 pp., £25, 23 May 1985, 0 19 503492 9.