Hitler DID get the credit for the relative flush that comes from stabilization a few years after serious hyper-inflation. But we have seen the same transient rebound effect in our times in the 3rd world hyperinflation -- with credit going to IMF stabilization programs. It is a spurious economic association. In fact, mostly Nazi economic growth came from breaking the unions and wage repression. Of course there were some high profile Nazi govt initiatives: rearmament and, the much smaller autobahn program, but the net effect of govt actions was not to stimulate aggregate demand nor to promote accumulation\technological transformation. The Nazis really used the 'tried and true' formula.
The ephemeral nature of growth through wage repression AND without technological transformation came home to roost during WWII. Having repressed working class wages (and people!) for so long the Nazis had little ability to impose adequate sacrifices for the war effort and yet did not have a deep enough transformed industrial base to provide both 'guns and butter'. They had frittered away their good years (tax cuts for the rich?). JK Galbraith studied this at length in the famous Strategic Bombing Survey (composed of the all-stars of post war progressive economists) and writes about it in his memoirs 'A Life in Our Times'. I believe Kaldor and Baran have also made this point.
Paul
Louis P. cross posts from Jim F.:
I think that what has often been forgotten about Hitler's regime was that during the 1930s, in domestic policy at least, it out-social-democratized the Social Democrats. Under the Weimar Republic, the SPD either participated in governments or supported governments that responded to the economic downturn by following strictly orthodox fiscal and monetary policies, which needless to say exacerbated things. The Nazis after they took power in 1933 rejected orthdodox economic policies in favor of cutting taxes, increasing expenditures on public works, and later on rearmament, and increasing spending on social welfare.
John Maynard Keynes noted that the economic policies of Hitler's regime for dealing with the Depression, were close to the sort of policies, that he himself favored. In 1936, in a forward that he wrote for the German edition of his *General Theory*, Keynes noted that:
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The theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that justifies the fact that I call my theory a general theory. Since it is based on fewer hypotheses than the orthodox theory, it can accommodate itself all the easier to a wider field of varying conditions. Although I have, after all, worked it out with a view to the conditions prevailing in the Anglo-Saxon countries where a large degree of laissez-faire still prevails, nevertheless it remains applicable to situations in which state management is more pronounced. For the theory of psychological laws which bring consumption and saving into relationship with each other, the influence of loan expenditures on prices, and real wages, the role played by the rate of interest�all these basic ideas also remain under such conditions necessary parts of our plan of thought. http://tmh.floonet.net/articles/foregt.html
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Of course, as Goetz Aly points out in his book, all these generous expenditures were ultimately paid for through imperialist conquest and open thievery, but then again the same has been true for the US and other Wester countries that more or less successfully implemented Kenyensian economic policies after WW II.
