Some minor points... Paul writes: > People do often say that the Nazis took conscious policy measures that were proto-Keynesian, but I believe it is a bit of an urban legend. [Although, of course, a budget deficit does not a social democrat make (ask GW)....<
It's not an urban legend, though I would say that a lot of their proto-Keynesianism was dumb luck. The NSDAP was in no ways social-democratic, since the SDs don't usually use violence to suppress peaceful opposition parties and labor unionism. And when I looked at the data years ago, I found that the distribution of income in Germany shifted hard to the right (in favor of profits) during the NSDAP's 1930s. > 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 NSDAP didn't come to power in the wake of hyperinflation (which occurred approximately a decade earlier) but in response to the steep fall of GDP and employment, as Germany had one of the worst experiences with the early Depression. Their proto-Keynesian policies were thus applied in an appropriate context (as were the Swedish SD proto-Keynesian policies of the same time). Their "tried and true" formula was in many ways similar to that applied by other capitalist countries during wars (e.g., the US during WWs I and II), though they started it before the wars began. > 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?)....< Part of the Nazi problem was that they organized much of production as a large slave-labor camp (involving many actual slave-labor camps, of course). That's very good for promoting a sudden increase in production, but not good in the long run. It makes "technical transformation" very difficult to arrange. Jim Devine
