Thursday, March 05, 2015

Were the Nazi's (the National SOCIALISTS) Socialist?

I faced a problem.

I had found another one of those "universally known economic assumptions" that everybody assumes is true, but did not know for a fact whether or not it was.  We all know these economic assumptions, and even we are guilty of assuming they're true every day:

Capitalism is the best economic system there is (proven true)
"The rich don't pay their fair share" (proven false)
"Sexism is causing the wage gap" (proven false), and
"Housing always goes up" (absolutely proven false)

However, this one was going to be a little bit harder to prove:

Whether the Nazis (the National SOCIALISTS) were indeed socialist.

The reason I was interested in proving this right/wrong is because it often surfaces when people are debating ideologies and many conservative/libertarian/freemarket types will point out that the "Nazis were socialist" in order to show that not all socialists are "nice" and that Hitler wasn't "right wing".  However, it wasn't simply going to be a matter of going to the FRED database, pulling two data series, correlating them in Excel and then giving the proverbial statistical finger to the left.  It was going to be more problematic.

First, I'll buy you a beer if you can find the actual Nazi's budget.  And I'll buy you a chaser if you can find them going back to pre war Germany.  AND I'll buy you a martini if you can get me their GNP/GDP figures!

They just don't seem to exist. 

It's either been too long ago or the actual documents have been destroy or they're buried in some CIA warehouse next to the Ark of the Covenant.  So I couldn't conclusively point at numbers and had to find some other means.

This brought up the second problem.  Without actual budget figures, I had to rely on academic research.  Unfortunately, this academic research largely focused on military spending and not non-military spending or the overall political-economic philosophy of the Nazi party.  However, it did provide some great insight into what Hitler was "thinking" in terms of economics, as well as precise and specific actions the government took during pre-war and wartime Germany.  Some of these actions included:

Price controls
Establishing a national labor group
Massive deficit spending (however no obvious data was available)
Massive public works (like our CCC, the autobahn, and other Keynesian things)
Rationing
Nationalizing industries
Banning large retail stores (though due to their primarily Jewish ownership)
Government issuance of securities rising to 90% of total securities issued (ie only 10% private sector)
And a corporate tax reaching 98%

All of these are obviously and blatantly socialist, and conservatives may think they've won the debate about whether the Nazis were socialist here.  But you know the left and you know merely citing actions Nazis took is NOT going to convince them.

You need data.
You need charts.
You need irrefutable proof.

That's the only way to get leftists to stare blankly at your data, be speechless, then shrug their shoulders, dismiss your data, and call you a racist (which is the only form of victory you can get over leftists because they are so delusional they think they can never be wrong). 

So inevitably, I knew I would have to find data.  And after a solid hour of researching, I found two datasets, pre-war Germany, that though NOT GDP and the actual Nazi federal budgets, still allowed me to do a little bit of Algebra (that's "math" for you liberal arts majors) and come up with the precise numbers I was looking for:

Nazi military expenditure as a % of GDP

and

The pre-war budget of the Third Reich

When I put them together I could infer the dataset I universally use to determine whether or not a country is "socialist" or "capitalist."

Government spending as a % of GDP


And when we look at the actual numbers we can conclusively say that the Nazis were indeed socialists.

Government spending as a percentage of GDP averaged around 40% pre-war.  Additionally (at least in the beginning) 80% of the budget was spent on social programs, not the hallmark of an "evil, right wing, capitalist economy."  And when combined with the blatant socialist moves of nationalization, government work projects, price controls, and other forms of government intervention it is very clear that the effective economic philosophy of the Nazis was socialism.

However, in intellectually honesty (as well as intellectual interest) there are some interesting observations that need to be pointed out.

One, there was not much time to witness or study Nazism's economic policy that wasn't obscured or masked by Hitler's war ambitions.  Matter of fact nearly all of the academic research on "Nazi Economics" was about Hitler's drive for re-armament.  Ergo, to see the default state of a "peace time Nazi economy" you maybe get that in 1935 before Hitler ramps up the military spending.

Two, the "Nazi miracle" (where Hitler gets Germany to full employment faster than any other western nation out of the Great Depression) is actually quite misleading.  Yes GDP was growing at double digit rates.  Yes, "full employment" was attained.  But it was all due to an overly aggressive rearmament.  So "overly aggressive" that actual standards of living decreased.  The military took so much in terms of resources civilians had to suffer rationing, consume less consumer goods and in general sacrifice for the military.  And this was NOT even during the war.

Three, ironically the same could be said about the US.  Once we entered the war we essentially did what Nazi Germany did during pre-war.  Build up our military at all costs.  Food and fuel rationing.  But in a Keynesian dream come true we "got that dem der GDP figure nice and high and got dat dem der employment rate to full" even though people will still sacrificing.  About the only thing that could be said that was better in the US was that pre-war we were getting out of the depression by supplying the Europeans the materials they needed to kill each other.  This once again shows the obfuscating effect war has on an economy making it difficult to discuss whether that economy is indeed "capitalist" or "socialist."

Finally, the father of Nazism himself, Hitler, actually didn't seem too interested in economics.  He was not consistent in different economic stances, first claiming one thing, then contradicting in another.  And though I did not read Mein Kampf, his overall effective actions (in my research) were to outsource the economics of Nazism to his financial leaders (Schacht, Funk, and Goering).  Here (once again) the focus shifted almost immediately from rebuilding Germany to preparing it for war.

In the end, however, whatever Hitler's and the Nazi's ultimate philosophical economic aims were, the actions and numbers were effectively socialist.  Certainly during "peacetime" and especially so during war (as military spending is still state spending, akin to North Korea).  Thankfully, it is a theoretical debate about what a post-WWII Nazi economy would look like.

23 comments:

Anonymous said...

The Nazis were the only government in Europe to privatize previously nationalized assets at that time.
http://www.ub.edu/graap/nazi.pdf

Anonymous said...

Yes, and the social aspects were for the "Volk" rather than the masses of immigrants from all over living hell as we have in the "West" today.

Good job, no, "Great Job" on the research, though an absolute certainty is that the National Socialist experiment did not last long enough to see if their ideas would work in that environment over the long-term. Further research in the political realm will clearly demonstrate that there were external factors heavily in play that had to do with rearmament as well as those internal. Which superceded the other is another debate.

Bob Wallace said...

Erik von Kuehnelt-Leddihn, who was Austrian and already an adult when the Nazis came to power, extensively documents in "Leftism Revisited" that the Nazis were, indeed, socialists.

Russell Hollander said...

Captain, you might want to check out two books for more information, one of which is free to download: The Vampire Economy (https://mises.org/library/vampire-economy) and The Third Reich in Power (http://www.amazon.com/Third-Reich-Power-Richard-Evans/dp/0143037900/ref=sr_1_1?ie=UTF8&qid=1425584741&sr=8-1&keywords=the+third+reich+in+power).

Might not have all the specific data you're looking for, but definitely speaks to the topic.

Omega Man said...

Another bit of proof that the National Socialists were "socialists" is their emphasis on Group Rights, that is the rights of the Volk over the rights of the Capitalists (Jewish) oppressors.

When you compare that to Communism, it was the rights of the peasant class over the rights of the Capitalist oppressor class.

In the United States of Obama, it is the rights of the minorities (pick your victims du jour) over the rights of the 1% (Capitalist) oppressor class.

A true "right wing" ideology on the other hand celebrates the rights of the individual and is against no one.

Academia, which has largely been infiltrated by leftist whack jobs, has perpetrated the lie that equates National Socialism with a right wing ideology. That's like saying that 1=2 and having people believe it wholeheartedly.

Doubting Richard said...

Hitler himself did say that he took his economic inspiration from Karl Marx, although he felt he had improved on it by realising that a totalitarian government need not own business to control it. Although this was said in private (because Communists were an enemy) it was recorded, as was much in Germany. In public speeches he often proclaimed socialist ideals.

So even had you not been able to show Nazis as implementing socialist policies, Hitler himself was a socialist by philosophy.

Bluntobj Winz said...

Cappy,

They are socialists from the other side of the coin. Where communists said "All your property belongs to us, and we'll tell you what to do with it;" Nazi's said "You own your property and we'll tell you what to do with it."

They maintained the facade of ownership while exercising control by bureaucracy.

A decent work on the economic conditions of Nazi Germany in your context is "The Ominous Parallels" by Leonard Peikoff. He is an objectivist, so it's a bit slanted, but he does do a good job documenting how the economic system was subverted.

Michael said...

Influenced by the just released trailer for Wolfenstein: The Old Blood, perhaps? Bill Bonner did a little series of articles on the Nazi economy last year, btw. No numbers, though it was part of a greater theme of his writings at the time that essentially all the numbers are wrong, all the time, forever. His figure for -25% Germany's unemployment by the end of the war got a giggle out of me, for sure.

Xopher Halftongue said...

We have national socialist states today... So if you want to look at what a National Socialist country would look like, look at non-coastal Red China, Vietnam, North Korea, and South Africa (Apartheid and Post-Apartheid).

JK Brown said...

Orwell, in 'The Road to Wigan Pier' had this to say of fascism:

The choice is not, as yet, between a human and an inhuman world. It is simply between Socialism and Fascism, which at its very best is Socialism with the virtues left out.
The job of the thinking person, therefore, is not to reject Socialism but to make up his mind to humanize it.


I don't particularly go for the economic definition of Socialism. Mostly because in a Christian dominated nation, there will be a mix of socialism and capitalism. The crux being in the percentages of the mix.

A few years back, I came across this definition of the Socialist from the late 19th century, before the Socialists in academia muddied the waters to hide its true nature.

In this sense the advocacy of a socialistic act or measure will not necessarily characterize a Socialist. Socialism will mean, not one, but many things socialistic. Thus, for example, protection is socialistic. Yet the protectionist is not, as such, a Socialist. Most protectionists are not Socialists. Many protectionists are, in their general views, as anti-socialistic as men can well be.

The Socialist, under this definition, would be the man who, in general, distrusts the effects of individual initiative and individual enterprise ; who is easily convinced of the utility of an assumption, by the State, of functions which have hitherto been left to personal choices and personal aims ; and who, in fact, supports and advocates many and large schemes of this character.

A man of whom all this could be said might, in strict justice, be termed a Socialist. The extreme Socialist is he who would make the State all in all, individual initiative and enterprise disappearing in that engrossing democracy of labor to which he aspires. In his view, the powers and rights of the State represent the sum of all the powers and all the rights of the individuals who compose it ; and government becomes the organ of society in respect to all its interests and all its acts. So much for the Socialist.

Anonymous said...

I think the hint is in the name of the party concerned - The National Socialist German Workers Party (Nationalsozialistische Deutsche Arbeiterpartei). Not a lot of Bloated capitalist Old Boys Club hints in that lot ...

Phil B

Borepatch said...

Cappy, there was also the whole scale looting of the Jewish population, starting around 1936 and well under way by 1939. A lot of that went to fund the socialist programs, which helps explain the popularity of the Nazi party.

It was sort of like Rome during the late Republic and early Empire when it was still expanding. A lot of bread and circuses were paid for from looted treasure.

There's a good book on the subject, "Hitler's Beneficiaries" that covers this well. Not a lot of data, but otherwise a good review of the program. Shoot me an email with your snail mail address if you want it and I'll send it to you.

Mark Antony said...

Nice article. I can imagine the left grinding there teeth. The only question of doubt is does a planned economy like Nazi Germany mean a Socialist system. While there are many similarities I do not think this is necessarily the case. Post WW2 Japan, South Korea, Malaysia and Singapore were all at times planned economies but were not Socialist. Also some Scandinavian countries have considered themselves Socialist yet had market economies.

Cheers

Anonymous said...

The term Mussolini used was corporatism. It was organizing private enterprise in a way that would explictly serve the state. I doubt it would work any better than any other form of centralization over the long run.

http://www.publiceye.org/fascist/corporatism.html

Vlaskiach said...

Richard Evans wrote an exhaustive trilogy about the Third Reich. Very interesting. Some of those numbers might be in those books.

it seems that their main economic plan was "coordination," which was orienting the entire economy towards rearming for the purpose of revenge primarily against Britain and France.

Their propaganda makes them out to be both anti-capitalist and anti-communist. They hated communism every bit as much as they hated Jews.

They were socialist in the sense that they had a collectivist ideology centered around the State, like communism does, but it doesn't seem that they followed any real sort of economic ideology beyond revenge.

98abaile said...

You also forgot the part where Hitler was an art school (lol!) radical anti democratic ultra progressive (progressive for the time) totalitarian hell bent on social justice and redistributing wealth from the "privileged" class.

Anonymous said...

One problem for documentation is that the Nazis greatly admired Henry Ford, and vice versa. Ford actually provided financial support for the Nazis until about 1929, and may have been involved afterward.

I have read that the American forces captured the Nazi treasurer, alive and apparently in good condition. After a few months, he just happened to die - before ever having been interrogated.

Ford received recompense from the American government for the bombing of his large truck factory in the South of France.

Anonymous said...

Socialism existed before Marx. Hitler's people did not identify themselves as "Fascists." Although their symbol was an ancient symbol, they altered it and used it to represent crossed "S" letters for their socialism (that is one of the amazing discoveries of the historian Dr. Rex Curry).

Black Poison Soul said...

It's an interesting problem. I dug up some information that is tangentially relevant, in that it states "there were no Nazi budgets published" and illustrates why:
===================
Selected Cliometric Studies on German Economic History, by John Komlos
(English version has as co-author: Scott McNeil Eddie or Scott (Ed) Eddie)
Publisher: Stuttgart : Steiner, 1997

pp270-271

The German Budget Data
...
The expenditure data for the Nazi period are incomplete on a number of counts. The Nazis did not publish their budgets. Though these were published after World War II, the figures had not been audited at the time of the expenditure. In particular, it is thought that some spending on public works and rearmament was never fully recorded. Both Hoffman (1965, pp. 719, 806) and Andic and Ververka (1964, pp. 232-233) provide discussions of this issue, and both present budget estimates designed to partially account for this problem. For our purposes, this problem can be partially accounted for by insuring that the government spending series used for the Nazi period includes the largest category of missing expenditures, the rearmament spending financed off-budget through the use of the so-called Mefo-bills. The Mefo (Mettallurgische Forschungsgesellschaft) was an institution set up by the Nazi government that purchased armaments and paid for them by issuing interest-bearing bills.(25) The Nazis used this method because there was a legal ceiling on the amount of Reich treasury bills that could be discounted by the Reichsbank. Bills issued by the Mefo weren't subject to this legal limit; thus, the Mefo system provided a method for the Nazis to engage in additional spending that did not force them to raise taxes or change the legal ceiling on Reichsbank discounting. While the workings of the Mefo-bill system are well understood, not all authors have included estimates of the size of these expenditures in their government spending figures. One accepted source for German government expenditures is Andic and Ververka (1964), but their figures do not include any estimate of Mefo-bill financed spending. Overy's figures are taken directly from Andic and Ververka and thus are not directly suitable for our purposes. James' estimates are more suitable as he adjusts the Andic and Ververka estimates to include the Mefo-bill spending. Hoffmann and Keese construct their expenditure estimates separately from those provided by Andic and Veverka but explicitly include an adjustment for the Mefo-bill spending.
...
===================
So the situation boils down to: it's complicated. Deliberate off-balance-sheet expenditures, cooking the books.

I don't think that anyone is going to be able to definitively claim that beer or martini, though somebody might be able to grab the chaser for hunting down the pre-war Germany figures. It seems the information was never released - or more likely, not compiled properly in the first place.

What a way to lose a war.

ISBN: 978-3-515-06899-4 / 9783515068994

Google Books for an online version, going straight to the above-quoted passage: https://books.google.co.nz/books?hl=en&lr=&id=-POEyX_7QTYC&oi=fnd&pg=PA261&dq=nazi+budget+wwII&ots=SGfN9PqGxc&sig=dVjUvOtBwID-XOubA_138iYFB6E#v=onepage&q=The%20Nazis%20did%20not%20publish%20their%20budget&f=false

Links in the top-left of the Google Books page go to the book on Amazon. The "Find in a library" link takes you to the World Library Catalog. For instance, my closest library with that book is: University of Auckland.

Cheers and enjoy,
BPS

Captain Capitalism said...

Black Poison Soul

OUTSTANDING!!!

Cappy

Cargosquid said...

Those that teach history and political science tend to be invested in the idea that progressivism, and thus, socialism is a good thing. Thus...they CANNOT admit that nazism is socialist.

Anonymous said...

Here's one of the (many) rubs in this "capitalism" vs. "socialism" debate, especially where Germany under Hitler is concerned: the idea of capitalism centers around the idea of trade that is voluntarily taken up for mutually realized benefit, i.e., what do "I" get out of it. The rub then is how one defines "I". In a country such as nazi Germany, "I" may identify closely with my family, my neighborhood, and even all the way up the chain of government. When other people prosper, "I" prosper because I identify closely with them. In the multi-cultural hell of modern western Europe and the US, "I" barely extends beyond one's front door. With the (highly semitic) efforts to dismantle even the family unit, anything beyond what I do with my own hands for my own benefit can be identified as in "my" interest.
Also, how can you say Nazi programs led to a decrease in standard of living? With inflation running at practical joke levels as they were under Jewish domination of German banking, how can ANY conditions not be seen as an improvement?
Whether one pushes for a textbook capitalist, socialist, or national socialist agenda, I'd say the proof is in the pudding where the root of the problem is concerned: a banking system controlled by people who view themselves as a separate and superior people is going to be a problem, whether its ancient Egypt, Wiemar Germany, or the US....

Red Knight said...

The key thing in NATIONAL Socialism is that it was meant to be for the German working-man, and a rejection of the proletarian internationalism of the wider socialist movement. As for what a postwar peacetime Nazi economy would have been, well, probably something like socialism for the Aryan Master Race, slavery for the subhumans.

The Nazis' relation to big business wasn't straightforward. They denounced profiteering when they thought it harmed (what in their opinion was) vital German national interest, but gladly allowed select corporations to benefit from cronyism as long as they'd play ball with the objectives of the Nazi state. That's classical Mussolinian fascist economic policy right there.

Why exactly would any of this be any kind of gotcha! directed at the contemporary political left? The wider socialist movement rejected the Nazis from the start, and was opposed to it way before the Nazis became infamous as the most evil political movement of the 20th century. Ditto for Mussolini's fascist movement, despite Mussolini's background as a socialist hero.