The Economic Doctrine of the Nazis

0:00Okay, now I come to a comparison of Hitler with Roosevelt, not quite as funny, but also instructive. Hitler and Roosevelt came to power pretty much at the exact time, at the beginning of 1933, when the Great Depression had already surpassed its peak, which occurred basically in 1932. Both men began their reign with a declaration of emergency and demanded special empowerment for themselves. The most pressing problem that both of them confronted was mass unemployment.

0:48In the United States, the unemployment rate in 1933 was 24.9% and in Germany the unemployment rate at that time was 20%. Now from the Austrian theory of the business cycle, we know the dos and the don'ts in order to come out of an economic crisis This is a crisis that was caused by credit expansion. What we should not do is, or what we should do is, we should stop, inflate and expand credit further, because that, after all, was the cause of the very crisis.

1:36The third rule, don't prevent or delay the liquidation of malinvestments. Malinvestments have occurred. They should be liquidated as quickly as possible so that these resources can be put to productive use again. The third rule, don't try to keep wage rates up. Some wage rates will have to fall, not necessarily all, but some will. Don't try to keep prices up. Some prices will have to fall, not necessarily all of them, but some will. And the last one, don't stimulate consumption, instead stimulate savings. Because what takes place in a recession is precisely a lack of savings that is revealed.

2:29Now, if all of this is done, that is, if people actually follow this advice, then we know that recessions can be over within a year or within two years at the most. Now, this was manifestly not the case, either in Germany or in the US. In both countries it took years to get out of the crisis, But interestingly, it took much longer in the United States, namely essentially until the end of World War II, than it did take in Germany. Hence, in both countries, obviously significant errors were made as far as economic policy is concerned, but more mistakes must have actually occurred in the United States than in Germany.

3:22First, as the most important indicator of success in the mind of the public, the subject of unemployment. From 20% in 1933, unemployment in Germany fell to 12.5% in 1934, to 9.6% in 1935, to 5.7% in 1936, to 2.5% in 1937, and to less than 1% in 1938. By then, obviously, full employment was reached and indeed a shortage of labor emerged and services became partly compulsory.

4:11In contrast, in the United States, unemployment fell only slowly from 24.9% in 1933 to 14.3% in 1937 and then actually rose again to 19% in 1938 and still stood at about 15% at the beginning of the war. Now, what can account for these differences? Both governments continue to inflate, made the same mistake. But as judged by price indices, at least Germany did less so than the United States. The consumer price index, for instance, in Germany from 1932 to 1938 rose only by 4 percent and the wholesale price index increased by 12% during the same period. In the United States during the same period the consumer price index increased by more than 10% and the wholesale price index by more than 20%. So this would indicate that more inflation actually was engendered in the United States than in Germany. Both governments increased the public debt in order to finance many and massive public works programs. But it appears that more of this debt was financed by genuine, even though forced, savings rather than artificial fiduciary credit in Germany than in the United States.

5:50Hoover and also Roosevelt hampered the liquidation of malinvestment by strengthening bankruptcy laws. Hitler did no such thing. Hoover and Roosevelt both increased various taxes and thus stimulated consumption, construction, whereas Hitler actually lowered various taxes, namely on automobiles, on property taxes and on housing construction, so in this way stimulating savings rather than consumption. Roosevelt significantly strengthened the power of the unions, thus preventing a fall in wages and Hitler in contrast broke the power of the unions, not exactly in the nicest way, but in any case the effect was clearly that the fall in wages was facilitated by his measures.

6:57Roosevelt believed, like a crazy man, that lower prices were actually the cause of the crisis instead of being simply the consequence or the symptom of the crisis. In order to keep prices up, he took great pains, especially in agriculture, to lower the supply by no less a perverse policy than destroying large quantities of agricultural products. In contrast, Hitler aimed at keeping prices down by increasing the productive output. The following quote is revealing. Although both Roosevelt and Hitler were opponents of the gold standard, Hitler had significantly more enlightened views concerning monetary affairs than his American counterpart.

7:50Thus, Hitler declared, for instance, the value of a currency depends on the volume of production standing behind it. Falling production weakens, rising production strengthens it. Money is only a matter of paper production. The real task is to increase production to the extent that money is increased. That sounds almost monetarist. Friedman would have been proud of that statement, I guess. Now, apart from the greater success in the area of unemployment, then Hitler's economic policies were also more successful in other regards. In the United States, GNP per capita reaches the level of 1929, that is the level before the Great Depression, only again in 1940, and in 1940 statistics are very unreliable already.

8:55already. And personal consumption expenditures in 1940 in the United States were still 8% below personal consumption expenditures in 1929. In Germany, on the other hand, from 1933 to 1938, GNP grew by 9.5% per year, industrial output by 17% and Private Consumption by 3.6%. From 1932 to 38 real wages increased by 21% and per capita income by 40% and 1928 income levels were reached again already in 1936.

9:42Now, let me come to Hitler's economic philosophy, if you may call it that. I mean, obviously, he was not a trained philosopher, that he has in common with Bush. So Hitler sees himself as neither left nor right. The nationalists on the right, he said, they lack a social consciousness. The socialists on the left lack a national consciousness. To the right, I say, if you want to be national, National, then join the people and give up all pride of place. To the left, I say, you who declare your solidarity with all of mankind, first show your solidarity with your own people. Be German first.

10:41National Socialism, in Hitler's view, had to unite the dispossessed and the disinherited from the right and from the left, and had to attract the most active and feisty elements from the extreme right and from the extreme left. His movement was definitely socialist because socialism means in Hitler's words that he repeated over and over again in German, Gemeinnutz geht vor Eigennutz, public interest beats Trump's individual interests.

11:26And this was indeed Hitler's core belief, which he expressed over and over again. Subordination of the individual and his selfish sentiments to the greater good, namely the community. In particular, the antagonism between the bourgeois and the proletarian must be overcome are overcome within the community of the national socialists. Gemeinutz geht vor Eigennutz means in particular also politics dominates and trumps economics. That's also something that we find of course prominently expressed by some American politicians such as our friend Pat Buchanan I also believe that politics, of course, always trumps economics. As Hitler formulated it, he said, the people are at the top.

12:30The economy is the servant of the people, and capitalists and capital are the servants of the economy, not the other way around. The interest of the state becomes before that of the private individual. In order to reach that goal of the primacy of politics over economics, Hitler emphasized over and over again that government employees should not have any position as boards of directors or similar positions in business enterprises. They should not even own stock, but if possible only government bonds or land to have the right loyalties.

13:17And even after their retirement, they should not work for business and become lobbyists. Interestingly, for the same reason of keeping a strict separation between state and economy, There should be strict competition and no favoritism in the awarding of government contracts. Aesthetically, the primacy of politics over economics becomes expressed in Nazi Germany in the monumental architecture that Hitler takes a special interest in. not unlike what you find in Stalinist Russia and not quite unlike what you find, of course, in the United States during the same period as well.

14:05Now, how does Hitler see the role of the market and the role of economic planning? Planning. Here one will have to say that there is some sort of significant difference in his opinion that takes place in the course of time. Before 1933, before he came to power, Hitler is significantly more favorable toward competition. The reason for that is his Darwinistic outlook. Now I have to say more about it in a second. After 1933, he becomes increasingly more favorable toward planning in accordance with his overall philosophy of the primacy of politics over economics.

15:00Let me first give you a statement of his that he made in 1930 when he was still in the phase of having severe reservations against a planned economy. There he says, everywhere in life only a few select can rule. Among the animals, the plants, wherever you look, the stronger the better will succeed. In the interest of the people, we cannot want that the productive energy slacks and living standards fall as a result of the uncompetitive nature of communism. Every planned economy suspends the harsh laws of economic selection, of the rise of the better and the elimination of the worse and weak.

15:51It keeps alive or prolongs the life of the weak and mediocre at the expense of the superior and more ambitious. When I consider the idea of collectivism, it appears obvious that it means egalitarianism, something similar to what we find in insane asylums and prisons. In so far the whole idea of socialization as it has been conceived up until now seems to be mistaken. Somehow some mechanism of selection has to be introduced if you want to reach a natural and reasonable solution of the problem. A selection mechanism for those who are entitled to possessions and property and business leadership.

16:40Political democracy is analog in the arena of economics to communism. That's why we do not need representative democracy. That's why we need Führer. There would be a few things that I could say about what Hitler means by Führerprinzip as the real form of democracy. But I realize that Tom Woods has planned something to say about that. If he doesn't say the right things, I might have to jump into the breach tomorrow on that subject. Now, despite Hitler's criticism or his early criticism of communism, the National Socialist Workers' Party is still perceived in the early 1930s by the employers' organization in their various newsletters as a conspiratorial, demagogic and terrorist element.

17:48and the terrorist element of contemporary socialism. So it was very early recognized that his seemingly pro-market statements were not to be taken too seriously. And indeed, from 1934 on, there exists then in Germany import controls, foreign trade is essentially monopolized by the state, currency controls are introduced, investment controls exist, wage and price controls exist and so forth. Still, Hitler's position is that business must not be socialized, only that they may be socialized if they act contrary to the interests of the nation.

18:41As long as that is not the case, and of course he determines whether that is the case or not, it would be a crime to destroy the economy. He says, the individual does not have the right to determine freely over that which has to be invested in the interest of the people. If his decisions were reasonable, that's fine. If not, then the national socialist state must intervene. Land, in particular, is national property which an individual can only hold in trust. And he says, I will no longer tolerate that capitalists acquire title to natural resources and then don't do anything because it is unprofitable to exploit them. If necessary, I will confiscate these resources by the state in order to put them to use.

19:40And he says, family-owned businesses are natural and healthy. Anonymous stock companies, however, belong into the hand of the state. This is also true for energy production and other essential industries such as iron and steel works. For energy production, however, he also pleads for self-sufficiency. Every farmer should use wind energy or water energy in order to supply his electricity. This is his green streak that he has, of which there exist, of course, also many other important indicators such as his vegetarianism, his love for animals, of Animals, Hatred of Smokers, and all the rest of it.

20:33And in according with this increasing inclination towards government economic planning, Hitler establishes in 1937 various nationalized industries, in particular the Reichswerke Hermann Göring in Salzgitter, Gitta, which employs some 600,000 employees in 1940 and that makes it the largest government-owned company in all of Europe and of course also the Volkswagenwerk in Wolfsburg. Now I begin my speech with some comparisons between Hitler and other various famous figures. I want to I would like to end my speech by saying a few things about what Hitler thought about other competing movements that existed.

21:34First, a few remarks about his attitude towards the social democrats. In general, Hitler hails the fight of the social democrats for universal suffrage. And he especially credits them for having brought about the end of the hated monarchy, namely the Habsburgs. And of course, after the November Revolution, they also eliminated the monarchy in Germany. However, he dislikes the Slavo-feel attitude of the social democrats, as well as the dominant role that the Jews play in the social democratic party.

22:21He also criticizes the devolution of the social democrats from originally a revolutionary party to a reformist party. He makes a remark, you can't make a revolution with a party of two million members. Additional criticisms that he levels against the social democrats are their internationalism, their pacifism, their acceptance of parliamentary democracy and the majority principle. In private, in his stable conversation, Hitler always emphasized his preference of the Social Democrats over the bourgeois parties, the Deutsche Volkspartei, Deutsche Partei or the Catholic Zentrum, as mainly responsible for the November crime, that is, signing the Versailles Treaty.

23:23As far as the Social Democrats are concerned, Hitler thinks the leaders of the Social Democrats are the problem, not the mass of the party members. And of course, the mass of the party members had, after the takeover of the National Socialists, not the slightest difficulties to shift from one party to the other. Up to the other, by the way, up to this day, districts in which the national socialists had great majorities are still districts in which the social democrats have big majorities up to this last election. His attitude towards the communists, we can say his basic attitude is some mixture of fear and admiration.

24:14He admires that they are fanatics, that they are not opportunistic, that they are courageous, that they have will to power, and that they are willing to eliminate their enemies. He says, the communists and we, those were the only ones who also had women who did not run away when the shooting started. They are courageous men with whom a state can be defended. In the Soviet Union, 470,000 party members rule 138 million. And three groups are composing the communist movement. The first two he admires.

25:05The first one is the idealists, the desperados, those are the ones that he admires. And then, of course, the scum, which he does not want for his party. He also likes, just as with the social democrats, also with the communist, agrees very much with both of them, that they favor equality of opportunity, that people can rise to all positions regardless of what their social background is. A few words about his attitude towards Marxism. The era of Marxism is instead of emphasizing struggle and fight, they are pacifists.

25:58Instead of concentrating on race, they are internationalists. And instead of individual and personality principle, they rely on majority rule, democracy. And he thinks that these are basically also the beliefs of the bourgeoisie, which is Marxist infected. What he sees as positive is their strategy of mass propaganda directed at the lower classes, mostly in an oral way, and he loves red as a color of revolution. The National Socialist as an alternative and competing revolutionary movement, movement, whose main purpose was not the destruction of Marxism, but Hitler views it as something which had to be destroyed, the National Socialists had to destroy Marxism, not in spite, but because of its affinity to itself.

27:10The attitude towards Stalin is very interesting. Officially, of course, a constant attack against the Jewish-Bolshevist conspiracy. But by 1940, Hitler's view on this had changed and his view is that Stalin had become a leader of a Russian nationalist anti-capitalist movement. In 1941, he refers to Stalin as one of the greatest men alive, judgments that he shared with Roosevelt. because he succeeded, though only by utmost brutality, to create a state out of this Slavic rabbit family.

28:04In that, he was forced to make use of the Jews because the thin strata of Europeanized people that had done so before had been eliminated and out of the genuine Russian such force could never regrow. In 1942 he says Stalin deserves utmost respect. In his way he is a genius. He is a tremendous personality, a true ascetic who has united his huge empire with an iron fist. However, if someone claimed that it is a social state, this is BS. It is a state capitalist state.

28:53200 million people, iron, mangan, nickel, oil, petroleum, whatever you want in unlimited resources. On top, Stalin is a man who said, do you think the loss of 13 million is too much for such an idea? So he liked this attitude very much. As I said, there was hate mixed with envy. At the end of his life, for instance, he said he should have cleansed the German Wehrmacht because he could never rely completely on the German Wehrmacht. He should have cleansed the German Wehrmacht as Stalin had cleansed his army from his enemies.

29:42Stalin had eliminated ruthlessly the old elites and he, Hitler, had failed in this regard. His attitude towards fascism. The official attitude was to say, they are very similar, they fight the same struggle, they have the same enemies, they have the same opponents, they use the same arguments. But this was not quite his real view that he had on the Italian fascists. The Italian leadership he considered to be reactionary. There is actually a difference like that between day and light, whether one deals with real fascists or not. The strata with which we have to deal are cosmopolitans as they are at home.

30:40The Dutche succeeded with his revolution one year too early. The Reds would have killed the court, the monarchy, and he would have become head of state and the entire bubble would have burst. Despite all similarities, the Italian province was the remaining existence of three things, the church, the monarchy and the reactionary generals. Many fascists, in Hitler's view, had become corrupted capitalists. Also, what he criticized about Italy and similarly about Hungary was the white gap, the white schism that existed between extremely wealthy people in the country and the impoverished and completely powerless masses.

31:36So, Hitler was clearly egalitarian in this regard. Also, he recommended that the duchess should march in and occupy the Vatican and throw them all out on the street. His coalition with Italy had been a major strategic error because it had prevented a strategic alliance between Germany and the Islamic world. World. Last, his attitude toward Franco. Hitler had given support to Franco and de Falanche from 36 to 39, but later became increasingly critical of this alliance, to the point actually where he regretted that he had not intervened on the side of the In Germany, he said, Franco would not even have made a Gauleiter.

32:41That was a guy in charge of the county. He is in the pockets of the Catholic Church. The Reds, at least, would have eliminated all the papists who want to throw us back into the Middle Ages. In the future, in a new revolution, the Reds and the Fallangists should form a coalition. The Reds had sided with Russia only due to a lack of Western support, not because of genuine Bolshevist sympathies, and he regretted of having not recognized this earlier on. With this, I think I have given you a little bit of a flare of the thinking of Hitler. Thank you very much.