When the average person thinks of the Nazis, what often comes to mind is World War II, the Holocaust, and rousing speeches of hate. However, the National Socialists also had economic and political policies, policies many just assume were either free-market or New Deal-style public works projects such as the Autobahn. But Nazi policy was not so cut-and-dried.
The Nazis were socialists, and it showed in many of the policies they implemented after coming to power in 1933. First, like the Soviets, the Nazis initiated a war on private property. Not surprisingly, property rights were severely curbed by National Socialism in the name of public welfare.
How did the National Socialists combat private property in Germany? The first step came shortly after the Nazis took control, when they abolished private property. Article 153 of the Weimar Constitution guaranteed private property, with expropriation only to occur within the due process of the law, but this article was nullified by a decree on Feb. 28, 1933.
The War on Business
Peter Temin wrote about this in “Soviet and Nazi economic planning in the 1930s”:“Both governments reorganized industry into larger units, ostensibly to increase state control over economic activity. The Nazis reorganized industry into 13 administrative groups with a larger number of subgroups to create a private hierarchy for state control. The state could therefore direct a firm’s activities without acquiring direct ownership of enterprises. The pre-existing tendency to form cartels was encouraged to eliminate competition that would destabilize prices.”
“Otto Ambros and IG Farben director Fritz ter Meer held a board meeting in Berlin with Carl Krauch who was not only a member of the board of directors of IG Farben, but also a member of the circle of industrialists around Reichsfurhrer-SS known as Himmler’s ‘Circle of Friends.’”
After the Nazis took power, this kind of cooperation was common. Private businesses became merely public entities, and industrialists who resisted the Nazi commissars and their policies were removed from their positions, and their businesses were seized.
“Prof. Junkers of the Junkers airplane factory refused to follow the government’s bidding in 1934. The Nazis thereupon took over the plant, compensating Junkers for his loss. This was the context in which other contracts were negotiated.”
“The difference between this and the Russian system is much less than you think, despite the fact that officially we are still independent businessmen.”
The letter continues:
“Some businessmen have even started studying Marxist theories, so that they will have a better understanding of the present economic system.”
The War on Agriculture
When the Nazis came to power in 1933, a major interest for them was Lebensraum (living space) for the “pure” German citizen. Professor Adam Tooze talked about the “hereditary farm” in his book “The Wages of Destruction”:“For the purpose of protecting the peasantry as the ‘Blood Source of the German People,’ the law proposed to create a new category of farm, the Erbhof (hereditary farm), protected against all debt insulated from market forces.”
These farms were to be passed down from generation to generation to keep the soil “pure,” and Reich officials even thought that “Erbhof farmers should assume collective responsibility for each other’s debts.” This policy was introduced and supported by the Reich central bank and Reichsnährstand (RNS, State Food Society) officials.
Life in Prewar Germany
In high school history textbooks, very few pages are dedicated to prewar Germany (1933–1939). However, two details are always covered: the Night of Broken Glass (Kristallnacht), which saw thousands of Jewish businesses vandalized and destroyed, and the Autobahn, a massive public works program that improved many lives and made travel easy.Because of this, people may reach the conclusion that prewar life was bad for the Jews, but beneficial for non-Jewish citizens. It is true that Jews suffered immensely, not only socially, but also economically. At the start of 1933, there were an estimated 100,000 Jewish businesses; by 1938, only 39,552 remained. In the same year, a capital levy was put on Jews; they needed to register all their assets with the local tax office, which placed a 20 percent and later a 25 percent capital levy on them.
But for ordinary non-Jewish citizens, life was also hard. Private sale negotiations were subject to official rules, these rules being set selling prices for whatever good someone had. If a dealer wanted to increase his prices, he had to get a special permit from a price commissar, who needed a detailed statement of necessity and other data, such as production and distribution costs.
Metal was strictly rationed, and fines were handed out to building contractors who installed metal central heating pipes. Iron lamp posts and railings were replaced with wooden ones, but this was halted when there was a wood shortage, which also led to a paper shortage.
Conclusion
The Nazi government took control of the economy, which is what one expects from socialism.Unfortunately, the U.S. economy today has similarities to the Nazi economy, from vast subsidies to price controls and “stakeholder” advocates making even wilder demands. History tells us where these policies lead: the road to serfdom.