Committee Against Fascist Economics (CAFÉ), June 12, 2026
L.K. Samuels
National Socialist Germany had some economic successes in their early years, but that did not last long. By 1936, Germany was beginning to suffer economic problems, largely due to its stifling economic policies that imposed centralized, mandatory socialism. Some historians have written about this Nazi’s economic downturn in great detail. However, the scope of Germany’s economic crisis by the late 1930s has never been well-known to the public. I first came across this little-known oddity of Nazi economic failure long ago. And it came via a chemist and oil engineer — my father-in-law, Bill Heider.
He recalled to me a curious conversation with a newly arrived German oil engineer and his family. The husband had just arrived in Venezuela in the late 1930s, eager to work in the rural oil fields. My father-in-law had befriended this erudite German family, who seemed out of place. Surprised to see an educated German oil engineer in the Venezuelan jungle, Bill felt compelled to ask the foreigner why he had relocated to such a primitive area. The answer was surprising. The German chemist said that he and his family were “starving” in Germany. He complained about server food shortages and the mostly empty food shelves. He said that he had attempted to make food with chemicals but had failed. As the shortages increased, his world darkened. He finally escaped from his home country and hoped for a better future in South America, at least one that had ample food.
The Nazi’s high spending on military weaponry and armed forces, the takeover of most companies’ Board of Directors (over 51 percent of Board Members had to be Nazi Party members in good standing), and their generous National Socialist People’s Welfare (NSV) welfare system were draining their treasury.
Hitler and Nazi economists worried about an economic crash similar to what almost brought down Lenin’s communist rulership in 1921, where hundreds of violent food riots spread across Soviet Russia. Most mills and factories closed, and hundreds of striking workers were shot. It is estimated that around 5 million Russians died due mostly to food shortages. Lenin had to introduce his New Economic Policy (NEP), where he characterized the NEP as “a free market and capitalism, both subject to state control”, while socialized state enterprises would operate on “a profit basis.” This failure scenario frightened many socialists and Marxists.
As Germany’s economy continued to flounder, the Nazi administration pursued greater centralization of its domestic and foreign economies, and international trade slowed, resulting in serious food shortages and rationing of key consumer goods such as produce, butter, and many other “consumables.”[1] In fact, by 1939, Germany had defaulted on its foreign loans, and most of its trade was conducted under a command economy.
Even gasoline and fuel needed to operate cars were rationed, preventing many German citizens from owning or driving vehicles. As for shortages, one American magazine reported in 1937 that Germany was having the “most serious food shortage since the war.”[2] German restaurants were ordered to limit their menus. A popular German ditty exposing the discontent went: “Hitler has no wife; the farmer has no sow [seeds]; the butcher has no meat; that is the Third Reich.”[3]
By 1936, Germany’s reckless spending, foreign-exchange controls, and anti-free trade policies had reached a crisis point. This precipitated a foreign-currency shortage and reduced raw-material imports to the point where manufacturers had in-house supplies “sufficient for only two months.”[4] This self-induced economic crisis presented Germany with the choice between producing guns or butter. Without a sharp drop in rearmament expenditures, many believed that there had to be sharp reductions in living standards or a big increase in exports.[5] Yet the government feared that reducing living standards and consumer goods might unleash social discontent if it were to reignite higher inflation. Hjalmar Schacht, who became Germany’s Economics Minister, was alarmed, warning that the high deficits would damage the economy. He strongly encouraged Hitler to slam the brakes on rearmament, but military officials disagreed, and Schacht’s prestige and power slowly began to wane. To combat this economic crisis, in 1936, Hitler issued a Four-Year Plan reminiscent of the Soviet Union’s Five-Year Plans, which set out a series of economic measures to rearm the nation and increase factory production. The plan was primarily designed to get Germany ready not only to be self-sufficient but to be prepared for war. The plan never achieved its goals, and instead heightened serious shortages and rationing for the average German citizen. However, Hitler was so fearful of industrialists and financiers revolting over the rising nationalization of Germany that he included in his 1936 “Four-Year Plan Memorandum” a directive for the Reichstag to pass “A law providing the death penalty for economic sabotage.”[6]
A year after Hermann Göring was appointed “Plenipotentiary for the Four-Year Plan” in 1936, Schacht resigned as Minister of Economics and remained President of the Reichsbank until Hitler dismissed him in 1939. The high deficit spending and rearmament hawks had won control. Many historians argued that by 1938-39, Germany’s economy was approaching a financial meltdown that tottered on the edge of financial ruin, which could have persuaded Hitler to veer towards war in order to plunder foreign lands and to nationalize Jewish property along with the property of other disfavored minorities.[7]
Military spending in 1936 exceeded 10% of gross national product (GNP), the highest among European countries, crowding out private investment in consumer goods.[8] By 1938, the German military budget had risen rapidly, “consuming 17 percent of GNP.”[9] As for the proportion of national income, “private consumption fell from 71 percent in 1928 to 59 percent in 1938, a fall of exceptional magnitude in the economy of the size of Germany’s.”[10] As for overall spending, the government’s share of the GNP rose dramatically from “17 percent of GNP in 1932 to 33 percent in 1938,” effectively controlling the supply of credit.[11]
Also disastrous for Germany’s economy was the crowding out of financing for private, consumer-based ventures. Government financing via the central bank dominated the investment process, with some corporate tax rates reaching as high as 98 percent during the war years. Hitler had predicted this with uncanny accuracy, stating that if war came, “higher incomes would be squeezed.”[12] By the time war broke out, the corporate tax rate had doubled from 20 percent in 1936 to 40 percent in 1939.[13] Even so, while some favored corporations were given tax exemptions, state financial restrictions left them as a mere “shell of private ownership.”[14] During Göring’s efforts to re-militarize Germany,
The Third Reich state ownership expanded into the productive sectors, based on the strategic industries, aviation, aluminum, synthetic oil and rubber, chemicals, iron and steel, and army equipment. Government finances for state-owned enterprises rose from RM 4,000m in 1933 to RM 16,000m 10 years later; the capital assets of state-owned industry doubled during the same period; the number of state-owned firms topped 500.[15]
This amount of nationalization might appear small, but Germany is not a large country, comparable in geographical size to the state of Montana, thus making the United States 28 times larger than Germany. Although the nationalization of key industries continued, there was some minor privatization, but this accounted for only 1.4 percent of total fiscal revenues in 1937-38.[16] Nonetheless, some historians maintain that the limited privatization was adopted solely to improve cash flow, as the treasury had been depleted by the rapidly expanding military buildup.
In Germany, during 1933-1938, approximately “45 percent of all investment was supplied by the state.”[17] Even Albert Speer, Hitler’s Minister of Armaments and War Production, worried about a complete government takeover of the private sector in Germany, warning that “a kind of state socialism seemed to be gaining more and more ground, furthered by many of the [Nazi] party functionaries.” He was fearful that Germany’s industry and “war production could easily become the framework for a state-socialist economic order,” which would be the “instruments for the doom of private enterprise.”[18] This was a legitimate concern that dogged German industrialists, since many Nazi party radicals favored “nationalization of industry,” or what was also regarded as “state socialism.”[19]
When Göring and the Nazi regime wanted additional industry capacity or raw resources, they would either establish a new state-operated company or seize a privately-owned one. For instance, in 1937, Göring decided to nationalize private deposits of iron ore, “taking control of all privately owned steelworks and setting up a new company, known as the Hermann Göring Works.”[20] As one historian put it, Göring and the Nazis’ military-industrial empire represented “one of the major steps towards restricting private industrial capitalism and substituting a ‘völkisch,’ state- run industrial economy.”[21] A state-owned holding company, Göring Works (Reichswerke) was able to obtain “huge sums of money” in efforts to seize, organize, or forcibly merge industries, whereas funding for private- sector companies in other areas, like the Ruhr region, was “curtailed.”[22] Despite the rush toward state ownership, many industries that remained in the private sphere were showered with grants, subsidies, or other state assistance. Other companies that managed to remain private came under the specter of a bureaucratic mentality that was easily transferable “between the state economic apparatus and that of industry,” leading, for instance, to the “’Nazification’ of IG Farben,” one of Germany’s leading chemical and pharmaceutical companies.[23] This Nazification process spilled over into all areas of public life in order to make sure everything was in alignment with Nazism.
Despite this state assistance, businesses were also crippled by a politically organized and directed economy. In fact, the socialist economic policies of the Nazis closely matched those of President Franklin D. Roosevelt, strangling the middle class and small businesses with high taxation, regulations, cartels, and central planning. These policies of mixed-economy “dirigisme” closely corresponded to both Italian Fascist and National Socialist economics. Hungarian historian Ivan T. Berend referred to economic dirigisme as an inherent aspect of fascist economies[24] in which the state took a heavy-handed, often socialist-lite approach to directly control economic activity. Berend was also aware of the relationship between warfare and a welfare state, professing that “’warfare’ and ‘welfare’ were thus not isolated from each other but combined in state economic dirigisme.”[25] Berend’s narrative dovetails with R.J. Overy’s assertion in War and Economy in the Third Reich that Hitler was not only “an enemy of free-market economics,” but a “reluctant dirigiste.”[26]
R.J. Overy characterized the Nazis as committed “to a position in which the economic New Order would be controlled by the Party through a bureaucratic apparatus staffed by technical experts and dominated by political interests, not unlike the system that had already been built up in the Soviet Union.”[27]
Hitler’s regime had rejected economic liberalism, become a stalwart enemy of liberal capitalism, embraced closed-economy blocs of protectionism under autarky, and warmed up to the “idea of seizing ‘living space’ and resources by force.”[28] In stages, Hitler established a planned, command economy with centralized, hierarchical decision-making that was strikingly similar to those of many nations after World War II. According to Overy, Nazi Germany had transformed into a “command economy, governed by military priorities, but run by a coalition of state officials, soldiers, party hacks, and industrial technocrats.”[29]
Historian Adam Tooze described Nazi economic policies as statist and socialist, emphasizing that the Third Reich imposed greater economic controls than any other non-communist regime in modern history.[30] According to German-born Israeli historian Avraham Barkai, Hitler’s regime also opposed free competition and the idea that markets could self- regulate.[31] Moreover, Barkai insisted that Nazi officials presumed that economics was a zero-sum game among nations, whereby any expansion of wealth was at the expense of another nation. Under this mercantilist doctrine, wealth-building could occur only through the annexation or conquest of other nations.
Analogous to the current Red Chinese-style market socialism, the Nazis sought the benefits of economic efficiency and innovation to grease their warfare-welfare machine. In his 1944 book, economist Otto Nathan argued that the Nazis had imprisoned market economics within the four walls of despotism, remarking that the Hitlerites had created “a totalitarian system of government control within the framework of private property and private profit. . . But the traditional freedom of the entrepreneur was narrowly circumscribed.”[32]
The Nazis’ Welfare State and Socialization
As for the Nazis’ capabilities to provide for an elaborate and generous welfare state, in Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, Götz Aly remarked that the Nazi leadership’s “aim was clearly to soak the rich and ‘neutralize big spenders,’” since they harbored “hostility towards the wealthy.”[33] In essence, Nazi Germany had become a redistributive regime that sought to rob the rich to pay the poor to fashion a universal social utopia—a sort of social justice mecca that has been dubbed a “racist-totalitarian welfare state.”[34] In fact, the Nazis’ “policies were remarkably friendly toward the German lower classes, soaking the wealthy and redistributing the burdens of wartime to the benefit of the underprivileged.”[35] Aly detailed how, besides plundering conquered territories and undesirable minorities, Hitler’s regime financed its lavish social safety net for Germans with the proper racial pedigree, writing that “to achieve a truly socialist division of personal assets, Hitler implemented a variety of interventionist economic policies, including price and rent controls, exorbitant corporate taxes, frequent “polemics against landlords,” subsidies to German farmers as protection “against the vagaries of weather and the world market,” and harsh taxes on capital gains, which Hitler himself had denounced as “effortless income.”[36]
The German public was hit particularly hard by the effects of rent control. To gain popularity among the people during the early years of Hitler’s dictatorship, the Nazis froze wages, prices, and rents.[37] The results were unfavorable to the public. State-controlled rent only exacerbated the problems for German renters since “very few houses were built” during the 12-year Nazi era.[38] The Nazis did strengthen tenants’ rights and provide some government rent subsidies for the poor, but by 1938, minorities, especially Jewish renters, were no longer entitled to these programs.[39]
To achieve socialism, the Nazis had to engage in extensive social welfare programs. According to Michael Burleigh in The Third Reich: A New History, “charity” was “integral to National Socialism.” He explained that their social welfare policies were an “uncomplicated reflection of human altruism” that “became a favoured means of mobilizing communal sentiment, that most underrated, but quintessential, characteristic of Nazi Germany.”[40]
Joseph Goebbels once applauded the generosity of Hitler’s welfare state, boasting in a 1944 editorial, “Our Socialism,” that “We and we alone [the Nazis] have the best social welfare measures. Everything is done for the nation. . . the Jews are the incarnation of capitalism.”[41] After all, in addition to old age insurance (social security) and universal socialized single-payer healthcare, the Nazi administration provided a plethora of social safety net benefits: rent supplements, holiday homes for mothers, extra food for larger families, over 8,000 day-nurseries,[42] unemployment and disability benefits, old-age homes, and interest-free loans for married couples, to name just a few. But there was more: under the Third Reich’s redistributive-like policies, the main social welfare organization—the “National Socialist People’s Welfare” (NSV)—was not only in charge of doling out social relief but “intended to realize the vision of society by means of social engineering.”[43] In other words, the Nazi welfare system ushered in a menagerie of welfare programs: aid to poor families and pregnant women, nutrition programs, welfare for children, ad nauseam. The Nazis also put energy into “cleansing of their cities of ‘asocials,’”[44] which ushered in a no-welfare-benefits-for-the-unfit program, based on a welfarism that was committed to a sort of social Darwinist collectivism. Other “asocials” and underperforming workers were housed in Gestapo-operated “labor education camps,” a new category that, by 1940, encompassed two hundred camps that held 40,000 inmates. [45]
Established in May 1933, the NSV deemed that they had created the “greatest social institution in the world.” To keep it that way, Hitler ordered its new chairman, Erich Hilgenfeldt, to “see to the disbanding of all private welfare institutions,”[46] which began the Nazis’ effort to both nationalize charity and control society by determining who received social benefits. And yet, the banning of privately-operated welfare organizations implied far more. Such social engineering policies meant that the Nazis were entrenched in their statist, left-wing beliefs that government had to be the sole provider of welfare services. By socializing welfare in Germany, the Nazis exhibited their true red-revolutionary colors, following in the socialist footsteps of the Soviet Union. Even today, most American left-wing progressives would be hard-pressed to deny Non-Government Organizations (NGOs) the opportunity to carry out charitable work in the community. So, does this place American progressives on the far right because the Nazis’ social welfare programs were so extremely left-wing?
Nevertheless, the German welfare safety net was extensive and massive, covering almost every aspect of life, even providing “free access to higher education.”[47] There was a number of little-known social welfare organizations that flourished under NSV’s expanding umbrella. One was the Office of Institutional and Special Welfare, which was responsible “for travelers’ aid at railway stations; relief for ex-convicts; ‘support’ for re-migrants from abroad; assistance for the physically disabled, hard-of-hearing, deaf, mute, and blind; relief for the elderly, homeless and alcoholics; and the fight against illicit drugs and epidemics.”[48]
The Office of Youth Relief, which had 30,000 branch offices in 1941, was responsible for supervising “social workers, corrective training, mediation assistance,” and for dealing with judicial authorities to prevent juvenile delinquency.[49] For instance, in the space of “only three budgetary years, the subsidies needed by Germany’s social welfare system had more than doubled,” from 640.4 million marks in 1938 to 1,395.3 million marks in 1941.[50] The NSV, second only in size to the German Labor Front, employed over 80,000 workers and over 1 million unpaid volunteers.[51] There were 8,000 community nurses throughout Germany, nicknamed “brown sisters.” One better-known program was the NSV’s “Winter Relief of the German People,” which organized an annual drive to collect charity for the poor under the slogan: “None shall starve or freeze.” Donations were said to be voluntary, but anyone who refused was punished or quickly became unemployed. These social welfare programs were a Hitlerian effort to place the community above the individual and advance the well-being of all citizens. As Hitler told a reporter in 1934, he was determined to give Germans “the highest possible standard of living.”[52]
It is no wonder the well-respected economist and economic historian Peter Temin described the Nazi socioeconomic system as a certain “brand of socialism.” Temin focused on three distinguishing properties of socialism—state ownership or regulation of big industry, government control of wages, and a universal welfare system of “social dividends” — a litmus test the Nazis clearly met.[53] Initially, Temin described the Nazi economy in the 1930s as resembling a Western-style mixed economy, but after further research, he later pegged it closer to the economy of the Soviet Union.[54]
In an effort to solve Germany’s economic problems, Hitler composed a secret memorandum in 1936, stating his future intentions thusly: “We are overpopulated and cannot feed ourselves from our own resources. . . The final solution lies in extending our living space, that is to say, extending the sources of raw materials and foodstuffs of our people.”[55]
In a nutshell, Hitler was saying that to achieve self-sufficiency, Germany had to go to war and annex neighboring nations. Hitler’s Keynesian policies had reintroduced a sort of neo-mercantilism, in which trade could only be conducted in the home nation or in one of its conquered colonies. If Hitler had embraced free-trade capitalism, Germany could have simply engaged in cooperative trade for vital raw materials instead of sending troops across borders. But socialists have historically favored state interventionism in the marketplace, where it enviably motivates all sorts of distortions that can foster special interests, subsidies, monopolistic privileges, shortages, rationing, conflict, and war. In other words, the Nazis’ socialist economy of high taxes, crony government, social welfare, stifling regulations, partial nationalization, large military expenditures, and high debt damaged the economy to the point where Hitler had to resort to military adventuring just to prop it up. Indeed, after years of Keynesian-fueled deficit spending and “borrowing gigantic sums of money,” the Third Reich’s national debt by 1939, “had reached 37.4 billion marks. . . Even Goebbels, who otherwise mocked the government’s financial experts as narrow-minded misers, expressed concern in his diary about the exploding deficit.”[56]
It is no wonder that most capitalists and business leaders did not support Hitler—they knew a socialist and political troublemaker when they saw one. Conservative adversaries such as the Industrial Employers Association portrayed the Nazis as “totalitarian, terrorist, conspiratorial, and socialist.”[57] Hitler acknowledged this animosity by ultra-reactionary elements, once telling Otto Wagener that “For we [National Socialists] too are considered “upstarts” and “leftists” by those same reactionaries. They are only too eager to apply such terms as “enemies of the fatherland,” “Bolsheviks,” and “inferiors.”[58]
Historians like R.J. Overy have asserted that “Hitler and the Nazi movement were anything but the tools of the German Big Business,” that “businessmen were wary of the closet anti-capitalism of the rank-and-file Nazis.”[59] In German Big Business and the Rise of Hitler, Henry Ashby Turner provided evidence that “Hitler received relatively little support from big business before coming to power in January 1933.”[60] Even Norman Thomas (1884-1968), the six-time presidential candidate for the Socialist Party of America, admitted, “In no way was Hitler the tool of big business. He was its lenient master. So was Mussolini except that he was weaker.”[61] Thomas also conceded that Nazism and communism manifested state capitalism, writing that “both the communist and fascist revolutions definitely abolished laissez-faire capitalism in favor of one or another kind and degree of state capitalism.”[62]
In Hitler 1889-1936: Hubris, Ian Kershaw was adamant that big business did not want the Nazis running the nation, writing: “Intensified anti-capitalist rhetoric, which Hitler was powerless to quell, worried the business community as much as ever. During the presidential campaign of spring 1932, most business leaders stayed firmly behind Hindenburg, and did not favour Hitler.”[63]
The Munich-born Konrad Heiden, who was a member of the Social Democratic Party of Germany and witnessed firsthand the rise of Hitler in Germany, told the same story: that big industrialists “did not, for the most part, encourage National-Socialism.”[64] Why would the National Socialists support the business community and the institution of private property when they “absolutely and aggressively rejected any notion of economic liberalism” and “had no use for a laissez-faire free market”?[65] Hitler himself pointed this out, declaring in 1927 at an NSDAP provincial congress in Stuttgart that “We reject the political aims of the industrialists.”[66]
Similarly, according to Cris Whetton in Hitler’s Fortune, during the 1920s, “the perception at the time was that Big Business was not interested in Hitler and that his attempts to enlist its aid were more in the nature of blackmail.”[67] Those in the business community who refused to temper their support of the Nazi party were often sacked, such as Robert Ley, a chemist with IG Farben, who was fired but later headed the Nazi regime’s German Labor Front.
As early as 1921, Paul Reusch, a leading Ruhr industrialist, was adamantly opposed to the Nazi Party. He replied back to an NSDAP fundraising letter with the message: “. . . We have no reason to support our own gravediggers.”[68] Despite Hitler’s early calls to rearm Germany, even the Krupp family, heavily involved in the arms business, supported Paul von Hindenburg in the 1932 elections, not Hitler.
German industrialists and capitalists were deeply worried that the Nazis would confiscate their assets and factories. Hermann Rauschning warned about the expropriation of the bourgeoisie’s property, writing: “But the National Socialist work of revolutionary demolition goes, of necessity, yet further. . . . The expropriation of property will inevitably follow, as well as the complete abolition of private enterprise.” [69] Dorothy Thompson, who interviewed Adolf Hitler in 1931 and again in 1934, was the first American journalist to be expelled from Nazi Germany. She reported in 1939 that, “Having first robbed the Jews, the Nazis are beginning to rob the Church, and later will almost certainly expropriate what is left of the bourgeoisie property.”[70] According to economist Dietrich Orlow, such persecution against the business community was prevalent as the Nazi party repeatedly poured “propagandistic venom on the capitalists and decadent bourgeoisie.”[71]
In 1931, Hitler revealed what he thought of the bourgeoisie and their place within his new world order, declaring in an interview with journalist Richard Breiting that “[W]e will do what we like with the bourgeoisie. . . We give the orders; they do what they are told. Any resistance will be broken ruthlessly. . . You just tell the German bourgeoisie that I shall be finished with them far quicker than I shall with Marxism.”[72]
In the same interview, Hitler brought up the 13th plank of his Nazi 25-Point program, explaining that it “demands the nationalisation of all public companies, in other words, socialisation, or what is known here as socialism.”[73] And yet he insisted he did not have to instigate complete socialization of industry, remarking that, “It does not mean that all these concerns must necessarily be socialised, merely that they can be socialised if they transgress against the interests of the nation.”[74]
This confidential, off-the-record interview of Hitler by Breiting was never published until 1968. The shorthand notes from the interview were considered so damaging to the Nazis that the Gestapo was ordered to seize them in 1934. Although all of Breiting’s personal papers were stored with his sister near Hamburg, he told the authorities that they were destroyed, even after enduring several Gestapo interrogations. As rumors persisted that the notes might still exist, two Gestapo agents in 1937 took him to a restaurant, where he died shortly afterward, most likely poisoned.[75] The Nazis refused to allow an autopsy.
Günter Reimann (1904-2005), the author of The Vampire Economy, who resided in Nazi Germany as a communist underground resister, documented the corrupt, abusive, and frightening conditions that businessmen faced under the Third Reich. In a letter to Reimann, one German businessman confided, “Business friends of mine are convinced that it will be the turn of the “white Jews” (which means us, Aryan businessmen) after the Jews have been expropriated. . . The difference between this and the Russian system is much less than you think, despite the fact that we are still independent businessmen.”[76]
The same businessman also expressed his feeling that most German businessmen “fear National Socialism as much as they did Communism in 1932” and that “these Nazi radicals think of nothing except ‘distributing the wealth.’” He bemoaned the fact that if a businessman makes a “sale at a higher price,” he might be “denounced as a ‘profiteer’ or ‘saboteur,’ followed by a prison sentence.” He further declared that, “Some businessmen have even started studying Marxist theories, so that they will have a better understanding of the present economic system.”[77] Evidently, many Nazi doctrinaires radiated an air of arrogance and entitlement in opposition to the business community, similar to how the bourgeoisie were maltreated in communist or socialist nations.
From another source, a German manufacturer grumbled about high confiscatory fines for the slightest mistakes. “A fine of millions of marks was imposed for a single bookkeeping error.”[78] Reimann also asserted that because of rigid and far-reaching decrees, “hundreds of thousands of small businessmen and their customers are forced to violate the law daily, and a whole army of policemen has been subsidized to catch these lawbreakers.”[79] In other words, Nazi Germany had morphed into bureaucratic tyranny aimed at legally disenfranchising and discriminating against the merchant class.
But Germany was also turning into an informant-surveillance state. Small business owners had to provide daily reports to the local Nazi officials on what was “discussed in Herr Schultz’s bakery and Herr Schmidt’s butcher shop.”[80] If shopkeepers grumbled too much, they would be considered “enemies of the state,” and could suffer the loss of their business license or lose quotas for often scarce goods. Similar to what the Communist Party implemented after seizing power in Russia, the Nazi Party imposed an administrative program of housewatchers (Blockleiter— block warden, or Blockwalter—block administrator), which encouraged low-level Nazi officials to keep watchful eyes on their assigned commercial or neighborhood city blocks, reporting to authorities anyone who might be a “dangerous element.”[81] The duty of the Blockleiter was to spy on the general public and report to the Gestapo those who failed to give the “Heil Hitler” greeting, befriended Jews, voiced dissent, or engaged in any anti-Nazi activities.[82]
As for taxes, the business community had to bear the burden in silence. Many citizens were horrified by the multitude of newly imposed taxes. Reimann writes: “You cannot imagine how taxation has increased. Yet everyone is afraid to complain.” Shopkeepers paid up to 28 percent of their net income in taxes, which included a turnover tax, income tax, trade tax, municipality tax, citizen tax, church tax, guild contribution, Winter Help, contributions for the chamber of artisans, and health insurance.[83]
Vera Micheles Dean, a Russian-American political scientist, noted in her 1939 book Europe in Retreat that the same expropriation-of-private-property charges levied against the Soviet Union could be made against Nazism. Dean asserted that both Nazi Germany and Soviet Russia had established a “monopoly of political and economic power” to mutilate the “liberties of individuals and dissident groups” under a similar totalitarian state.[84] She concluded that, “What the Nazis have introduced in Germany is a form of graduated Bolshevism, directing their first assault upon Jewish capitalists — bankers, industrialists and businessmen — but poised to train their guns on the Catholic Church and Aryan capitalists.”[85]
Dean warned that there is no “reason to expect that the Nazis will stop” with only abusing the Jewish population. As for the legality of private property, Hitler made it clear that the state must exercise immense control over it. Hitler stated: “I want everyone to keep what he has earned subject to the principle that the good of the community takes priority over that of the individual. But the State should retain control; every owner should feel himself to be an agent of the State. . . . The Third Reich will always retain the right to control property owners.”[86]
The Nazis did not need to officially convey title to all private property to the state; that was unnecessary. If the state controls the use of private property, it has de facto acquired full ownership.
A hero of the far left, President Hugo Chávez (1954-2013) of Venezuela, exemplified the social and revolutionary nationalism of Germany. He, like Hitler, retained limited property rights as well as refusing to nationalize his entire economy. According to one source, although Chávez was an avowed “socialist, his model even includes a respect for private property,” [87] while promoting social property too.[88] Hitler’s adherents felt the same way. They pursued many socialist policies that paralleled Chávez’s regime, nationalizing hundreds of German businesses while championing state-augmented welfare, compulsory unionism, social equality (only among Germans), a classless society, collectivistic populism, currency capital controls, and authoritarian-style rule. How could Hugo’s left-wing “Chavismo” movement respect property rights without earning a “right-wing” moniker?
Historically, a nation has to first trudge through a fascist gradualism of nationalization before reaching a communist society of absolute state ownership of the means of production. As the saga under President Nicolás Maduro’s regime attests, Venezuela’s fascio-socialization of society was a transitional phase of mayhem that resulted in total economic collapse; the same calamity that had befallen Lenin’s “War Communism” in 1921. Such left-wing nationalism and fascism plagued the economies of both the Nazis of Germany and the Fascists of Italy, causing them to drift from state capitalism to a more extreme state socialism. As private assets were coercively converted into public assets, their economies sputtered and faltered, leading to the aggressive plundering of other nations.
Governmentalists may boast of the wonders of full socialization, but the price paid by society is not only economic collapse but the abandonment of socialist principles. Fascio-socialization of an economy induces an inverse effect, meaning that as one moves closer to the edge of undiluted socialism, the more it devours the integrity of theoretical socialism, equity, and community. At this point, unforeseen consequences sabotage reality in a seemingly calculated effort to disproportionally injure society.
Unabridged nationalization inevitably devolves into totalitarian nightmares, since central planners dictate the state’s definition and policies, and if someone objects, jobs, housing, and food become bargaining chips to compel obedience to the authorities. Trotsky made this point clear about Stalinism in The Revolution Betrayed, writing: “In a country where the sole employer is the state, [opposition] means death by slow starvation. The old principle: “who does not work shall not eat,” has been replaced with a new one: ‘who does not obey shall not eat.’”[89]
Still, Marxist theoreticians contended that socialism would never reach glorious fruition until all means of production were under direct state or worker ownership. Despite this theory, German Nazism had accomplished a form of government ownership feat without officially confiscating every parcel of private land or enterprise. Leonard Peikoff in The Ominous Parallels maintained that the “unqualified right” to control property is still a form of state ownership, writing: “If ‘ownership’ means the right to determine the use and disposal of material goods, then Nazism endowed the state with every real prerogative of ownership. What the individual retained was merely a formal deed, a contentless deed, which conferred no rights on the holder. Under communism, property is collectively owned de jure. Under Nazism, there is the same collective ownership de facto.”[90]
In other words, if you don’t control the use of your property, you don’t own it. Period. Ownership means control over what you own. The Nazis had no intention of allowing individual control over their estates or assets, repeatedly proclaiming that, under a command economy, the national interest supersedes individual interests. It was the Nazi political and party- controlled state that determined the national or common interest. At any moment, individual or company property could be expropriated and taken over by the state or given to someone else, all without any semblance of due process. This is why German businessmen were studying Marxism; they wanted to know what to expect.
Hitler and the Nazis were so proud of their command economy that they heaped praise on others who they thought might emulate them. The chief Nazi newspaper, Völkischer Beobachter, found much in Franklin D. Roosevelt’s proposed economic policies to commend, applauding “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies” and “the development toward an authoritarian state” based on the “demand that collective good be put before individual self-interest”.[91]
[1] Evans, Richard J. The Third Reich in Power, 1933-1939, Penguin Books, 2006, p. 411.
[2] “Wotan’s Nazis: Germans Tighten Belts to Slogan, Guns Instead of Butter,” The Literary Digest, Jan. 2, 1937, p. 12. http://www.oldmagazinearticles.com/food-rationing_in_Pre-World_War_Two_Germany.
[3] Ibid.
[4] Kershaw, Ian. Hitler 1936-1945: Nemesis (New York, NY: W.W. Norton & Company, 2000), p. 9.
[5] Ibid.
[6] Dawidowicz, Lucy. ed., A Holocaust Reader (New York, NY: Behrman House, 1976), p. 32.
[7] Aly, Götz. Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, Picador, 2005, p. 44.
[8] Braun, Hans-Joachim. The German Economy in the Twentieth Century, (New York, NY: Routledge, 1990), p. 85.
[9] Dunnigan, James, and Macedonia, Raymond M., Getting It Right: American Military Reforms After Vietnam to the Gulf War and Beyond (William Morrow & Co., 1993), p. 384.
[10] Martel, Gordon. ed., The Origins of the Second World War Reconsidered, second ed. (New York, NY: Routledge, 2014), p. 109.
[11] Berman, Sheri. The Primacy of Politics: Social Democracy and the Making of Europe’s Twentieth Century, Cambridge University Press, (2006) p. 146.
[12] Ibid., p. 147.
[13] Ibid., p. 147.
[14] Temin, Peter. “Soviet and Nazi Economic Planning in the 1930s,” The Economic History Review, New Series, Vol. 44, No. 4, Nov. 1991, pp. 573-593.
[15] Overy, R.J., War and Economy in the Third Reich, Oxford, UK, Clarendon Press (Oxford University Press) 1994, p. 16.
[16] Germà, Bel. “Against the mainstream: Nazi privatization in 1930s Germany,” Departament de Política Econòmica i EEM. Torre 6, planta 3, Barcelona, Spain, 2004, p. 11. http://www.ub.edu/graap/nazi.pdf.
[17] Panayi, Panikos, ed., Weimar and Nazi Germany: Continuities and Discontinuities (New York, NY: Routledge, 2014), p. 44.
[18] Speer, Albert. Inside the Third Reich: Memoirs (New York, NY: Simon and Schuster, 1970), p. 359.
[19] Kitchen, Martin. Speer: Hitler’s Architect (New Haven, CT and London, UK: Yale University Press, 2015), p. 202.
[20] Evans, Richard J. The Third Reich in Power, 1933-1939, Penguin Books, 2006, p. 372.
[21] Overy, R.J. War and Economy in the Third Reich, Oxford, UK, Clarendon Press (Oxford University Press) 1994, p. 146.
[22] Ibid., p. 107.
[23] Ibid., p. 17.
[24] Berend, Ivan T. An Economic History of Twentieth-Century Europe: Economic Regimes from Laissez-Faire to Globalization, Cambridge University Press, 2006, p. 93.
[25] Ibid., p. 90.
[26] Overy, R.J. War and Economy in the Third Reich, Oxford, UK, Clarendon Press (Oxford University Press) 1994, pp. 1-2.
[27] Ibid., p. 118.
[28] Ibid., p. 1.
[29] Ibid., p. 17.
[30] Tooze, Adam. The Wages of Destruction: The Making and Breaking of the Nazi Economy (New York, NY: Penguin, 2006), pp. 658-660.
[31] Barkai, Avraham. Nazi Economics, Nazi Economics: Ideology, Theory, and Policy, New Haven, Yale University Press (1990), p. 10.
[32] Otto Nathan, The Nazi Economic System. Germany’s Mobilization for War (Cambridge, MA: National Bureau of Economic Research, 1944), p. 5.
[33] Aly, Götz. Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, Picador, 2005, pp. 65-66.
[34] Ibid., p. 2.
[35] Ibid., p. 7.
[36] Michael C. Moynihan, “Hitler’s Handouts Inside the Nazis’ Welfare State, ”Reason magazine,” Aug./Sept. 2007. https://reason.com/archives/2007/08/15/hitlers-handouts.
[37] Hallett, Graham. The Social Economy of West Germany, Palgrave Macmillan (1973), p. 15.
[38] Ibid., p. 16.
[39] Michman, Dan. The Emergence of Jewish Ghettos during the Holocaust (Cambridge University Press, 2011), p. 32.
[40] Burleigh, Michael, The Third Reich, A New History, Hill and Wang, (2001), p. 219.
[41] Victor Klemperer, I Will Bear Witness: A Diary of the Nazi Years, 1942-1945, vol. 2 (Random House, Inc., 2001), p. 317; Goebbels’ “Our Socialism” editorial, written on Apr. 30, 1944.
[42] Evans, Richard J. The Third Reich in Power, 1933-1939, Penguin Books, 2006, pp. 489-491.
[43] Steber and Gotto, Visions of Community in Nazi Germany: Social Engineering and Private Lives, Oxford University Press, (2014) p. 2.
[44] Michael Geyer and Sheila Fitzpatrick, Beyond Totalitarianism: Stalinism and Nazism Compared (Cambridge University Press, 2009), p. 147.
[45] Ibid., p. 147.
[46] Steber and Gotto, Visions of Community in Nazi Germany: Social Engineering and Private Lives, Oxford University Press, (2014), p. 92.
[47] Berman, The Primacy of Politics, p. 147.
[48] Steber and Gotto, Visions of Community in Nazi Germany: Social Engineering and Private Lives, Oxford University Press, (2014), p. 93.
[49] Ibid., pp. 93-94.
[50] Aly, Götz. Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, Picador, (2005), p. 163.
[51] Burleigh, Michael. The Third Reich, A New History, Hill and Wang, (2001), pp. 221-222.
[52] Interview with Hitler by Louis Lochner, Associated Press correspondent in Berlin. Quote from Michael Burleigh, The Third Reich, p. 247.
[53] Temin, Peter, Lessons from the Great Depression, (Lionel Robbins lectures), (Cambridge, MA: MIT Press, 1989), p. 111. Note that the Nazi welfare system excluded Jews and other minorities, who were deprived of their German citizenship, something that occurred with unpopular minorities under communist dictatorships as well.
[54] Christoph Buchheim and Jonas Scherner, “The Role of Private Property in the Nazi Economy: The Case of Industry,” The Journal of Economic History, Vol. 66, No. 2, June 2006, pp. 392-393.
[55] Lee, Stephens J. Hitler and Nazi Germany (London and New York: Routledge, 2000), p. 70.
[56] Aly, Götz. Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State, Picador, 2005, p. 39.
[57] Ashby, Henry Turner, German Big Business and the Rise of Hitler (Oxford University Press, 1985), p. 114.
[58] Wagener, Otto. Hitler—Memoirs of a Confidant, Yale University Press, (1985), p. 288.
[59] Overy, R.J. War and Economy in the Third Reich, Oxford, UK, Clarendon Press (Oxford University Press) 1994, p. 12.
[60] Watson, George. The Lost Literature of Socialism, Cambridge, England, The Lutterworth Press, (1998) p. 76.
[61] Norman Thomas, A Socialist’s Faith (W.W. Norton, 1951), p. 53.
[62] Ibid., p. 55.
[63] Kershaw, Ian. Hitler 1889-1936: Hubris, W.W. Norton & Company (1999) p. 359.
[64] Heiden, Konrad. Hitler: A Biography, Constable & Co. LTD (1938), p. 58.
[65] Barkai, Avraham. Nazi Economics: Ideology, Theory, and Policy, New Haven, Yale University Press (1990), p. 26.
[66] Orlow, Dietrich. The Nazi Party 1919-1945, Enigma Books (2010), p. 61. Hitler at the May 1927 NSDAP provincial congress in Stuttgart.
[67] Whetton, Cris. Hitler’s Fortune (Yorkshire, UK: Pen & Sword Books, 2004), pp. 141-142.
[68] Ibid., p. 140.
[69] Hermann Rauschning, The Revolution of Nihilism: Warning to the West (New York, NY: Alliance Books Corporation, 1939), p. 88.
[70] Thompson, Dorothy, “On the Record,” Harrisburg Telegraph (Harrisburg, PA), Mar. 6, 1939, p. 7.
[71] Orlow, Dietrich. The Nazi Party 1919-1945, Enigma Books (2010), p. 61, referring to the 1926-1927 time period.
[72] Calic, Edouard, ed. Secret Conversations with Hitler, The Two Newly-Discovered 1931 Interviews, John Day Company, (1971), p. 36.
[73] Ibid., p. 31. “Public companies” refers to publicly-traded companies (corporations) listed on stock exchanges.
[74] Ibid., p. 32.
[75] Ibid., pp. 14-15.
[76] Reimann, Günter. The Vampire Economy: Doing Business Under Fascism, (2014), Mises Institute. First published under Vanguard Press in New York (1939), p. 6.
[77] Ibid., p. 7.
[78] Ibid., p. 12.
[79] Ibid., p. 84.
[80] Ibid., p. 31.
[81] Ibid., p. 33.
[82] Nathan Stoltzfus, Resistance of the Heart: Intermarriage and the Rosenstrasse Protest in Nazi Germany (Rutgers University Press, 2001), p. 84.
[83] Reimann, Günter. The Vampire Economy: Doing Business Under Fascism, (2014), Mises Institute. First published under Vanguard Press in New York (1939), pp. 31-32.
[84] Vera Micheles, Dean. Europe in Retreat, revised ed. (New York, NY: Alfred A. Knopf, Inc., 1939), p. 206.
[85] Ibid., p. 207.
[86] Calic, Edouard, ed. Secret Conversations with Hitler, The Two Newly-Discovered 1931 Interviews, John Day Company, (1971), pp. 31-32.
[87] Sivaramakrishnan, Arvind. “Hugo Chávez: Death of a socialist,” The Hindu, Mar. 6, 2013. https://www.thehindu.com/news/international/world/hugo-chvez-death-of-a-socialist/article4481169.ece.
[88] Salmerón, Victor. “Plan Chávez prevé crear 30 mil empresas de propiedad social,” El Universal (in Spanish), June 13, 2012.
[89] Trotsky, Leon. The Revolution Betrayed: What is the Soviet Union and Where is it Going?
Written in 1936. First published: 1937, p. 241.
[90] Peikoff, Leonard, The Ominous Parallels: The End of Freedom in America (New York, NY: Meridian Books, 1993), p. 18. First published 1982.
[91] David Boaz, “Hitler, Mussolini, Roosevelt: What FDR had in common with the other charismatic collectivists of the 30s,” Reason magazine, Oct. 2007. http://reason.com/archives/2007/09/28/hitler- mussolini-roosevelt.
