Why the Nazis Weren't Socialists - ‘The Good Hitler Years' | BETWEEN 2 WARS I 1937 Part 2 of 2 - YouTube (2)
is here that a rift starts forming between Schacht and Hitler. Schacht support rearmament,
but only to the point that it is affordable. Hitler doesn't care about the economy - he
wants to go to war, and believes that future conquests will compensate for the deficits
war creates. When Schacht protests in 1936, Hitler answers by appointing Herman Göring
as a second economic minister. Schacht resigns as Minister of Economy in 1937, partly as
a protest, but also because the MEFO Bill scam is threatening to unravel by this time.
So only three years after starting what was supposed to be an economic miracle, the Nazis
have now drifted into heavy overspending for ideological reasons. They are now on a path
that will, for financial reasons alone, lead to war. When you add it all up, the effects
on the German economy is not great. Hitler and Schacht didn't create growth in GDP
that was any higher than a previous ‘normal year' post WWI like 1927. Before 1927 reparations
were still impacting the German economy and from 1929 the depression pulled it down. There's
a big rally in 1933, though, the year Hitler seizes power, but that year the whole world
economy was moving towards recovery, so this was pretty much average growth that cannot
be attributable to any special economic policy. More importantly, as economic policy takes
time to have any measurable effect on the economy, any growth in 1933 is from von Papen's
programs and cannot be attributed to Schacht and the Nazis.
In parallel, though, they face increasing sanctions and restrictions on trade by the
democratic western powers. To fix this, at least temporarily, they create a kind of
extended isolationism by reducing their trading partners to friendly states in order to avoid
the impact of the sanctions, and falling resource and goods prices in the world. They also artificially
push up national income by inflating prices within that closed trade system. The resulting
international trade system is not sustainable though, especially as it requires these limited
‘trade partners' to be extended at some point and this in turn again leaves them with
no other way than conquest.
The only way you can see it all as being great is if you compare it to the dismal years of
hyperinflation in the twenties, and the dip of the after the 1929 crash. Moreover, as
growth was starting from a heavily contracted economy after the crash, growth in real numbers
was not as impressive as the percentile growth should indicate. And this was growth created
artificially in preparation for conquest of resources and economic might. It is specifically
here that the catch 22 of needing growth to conquer to create growth negates any possible
positive effects.
You really see it in the numbers for 1937 and 1938. Technically these years should automatically
be higher growth years as the economy grows through Anschluss of Austria and the annexation
of parts of Czechoslovakia. Instead we see a slowing GDP growth, which indicates that
without annexation the picture would be grimmer. So already before a war breaks out the Nazi
economic bubble is set to burst under the weight of waging a war they can't really
afford.
But where does the myth of the good Hitler years come from?
Well part of it is probably post fact cognitive dissonance to self-justify why you supported
the Nazis, Another part is the perception of things getting better, because they were
even worse before. But what about all the money they stole? Couldn't that be the reason
for the ‘good Hitler years' at least for those who weren't robbed? Well no, because
although the Nazis systematically plundered people they prosecuted and murdered – in
Germany alone they confiscated more than a year worth of GDP from the German Jews (120
Billion Reichsmark) – this is redistribution of wealth in a very nasty way and redistribution
doesn't create growth, it just moves money around.
Moreover, incarcerating these people, or murdering them, takes them out of the productive economy
so that any effect redistribution could have had is nullified. As they start gobbling up
nations, they use slavery and forced labor to offset this effect, but this too is short
sighted and fairly uneconomic- here, we must not forget that the reason for persecution
and murder of ‘undesirables' is not financial, but ideological. And let's not forget, most
of what they steal doesn't go into the system, the party leaders and Gauleiters keep it for
themselves.
Self-enrichment and ideological fanaticism, two concepts that maybe are not the best basis
on which to run a nation.
Hjalmar Schacht certainly didn't think so - by 1938 he is even a passive supporter of
the resistance and secretly advocating for a coup. And yet he is the very man that has
created this mess by enabling the Nazis. Hitler has once again outsmarted those that think
they can use him to gain political advantage while controlling his fanaticism. Germany
is now an economic steam train headed at full speed into a tunnel, and no one knows where
that tunnel ends. There's no engineer to hit the brakes, and the train just keeps on
picking up speed. Hitler and Göring have created a system of growth that will leave
them no option for armistice. They must fight and win all the way to the oil fields of the
Caucasus, the steel in the north, the factories in the west, and the grain in the East. That's
what they hope is at the end of that tunnel, fuel for their train. But as long as they
are still in the tunnel, they will resort to burning the only fuel they have on board
- the passengers.
If you'd like to see our video on how the Treaty of Versailles did not cause the Nazi
rise to power, you can click right here for that, any second now. Our patron of the week
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It's not the economy stupid, it's the stupid economy. Get it? May you be prosperous,
cheers
Whilst
