The Nazi Germany economy

[The Man]

People keep telling me that they had a "Corporatist" Economy. What does that exactly mean? How did it work for them?

[Dimentio]

Italy had corporatism.

Germany utilised dr. Shacht's programme for economic recovery and then started to slowly move towards a planned economy in 1938, with four year plans for the national corporations (the corporations remained in private hands though).

[bailey_187]

corporatism was able all classes working together in their part of the economy, i guess subordinate the "nation"

the economy was guided by the state, but alot of property stayed in private hands

Nazi Germany also had a welfare state, albeit a racial one

[thälmann]

the economy in fascist germany was corporatist is the way that capitalists and workers were in one single organisation, named "deutsche arbeitsfront". but in reality of course corporatism means that the working class has totally nothing to say. the same in the third reich.
most of the economy was in private hand, their were also privatization of banks etc.

the welfare state was their, but on a very low base. if you were poor, they gave you something to eat and bad work. but wages in industry and so on decreased i think.

[agnixie]

corporatism was able all classes working together in their part of the economy, i guess subordinate the "nation"

the economy was guided by the state, but alot of property stayed in private hands

Nazi Germany also had a welfare state, albeit a racial one

I'll dig in my info, but there was an interesting spanish paper I found a while back mentioning that surprisingly large parts of the german welfare state were actually privatized (the author argued it wasn't really for ideological reasons, though, so much as that they needed the cash to pay a military build-up; I'd argue the military build-up and the reason they preferred to sell public property for it was probably ideological in that they didn't have to turn Germany into a large scale Prussia, but yeah)

[Jose Gracchus]

Pre-war? A kind of bastard Keynesianism and military Keynesianism. All spheres of social, cultural, and economic life were consolidated into "Reich Chambers", involving a good deal of ideological interference, but in fact nothing of the fascist "corporativist" substance was involved. At first there was a pretty rational economic stimulus under Hjalmar Schacht. The major substance was a kind of economic nationalism, trying to manage a trade deficit while also not allowing hard currency reserves to be sapped. During the pre-war era, the main contradictions were between the Hitler and the Nazis' desire for an autarkic economy which would leave Germany less vulnerable to the naval blockade that starved her out in the First World War, and their desire to rearm at any cost. Eventually the contradiction could not be stretched in the sphere of the economic mainstream, and Hermann Goering stepped in as Reich Plenipotentiary of the Four-Year Plan, leading to Schacht's resignation. I recommend Richard J. Evans' The Third Reich in Power on this phase.

After the war began [and some argue it had to in 1939 due to the depth of the Nazis' foreign reserve crisis], Germany increasingly became sustained according to a pure plunder economy. The Third Reich literally stripped the conquered states of every economic resource: raw materials, labor, food, railroads, factories, art museums - all seized and shipped off to the Reich. The canonical text on this phase of the Nazi economy is Wages of Destruction.

[Nolan]

Corporatism comes from some root meaning "guild."

That sums it up. Guilds of capitalist firms. These guilds work with the state to plan economic growth.

Fascists are against any sort of class struggle, so these include labor organizations as well. Their vision is that all classes and the state work together so that the nation is one unit with no social friction.

Historically corporatist economies are geared to war.

Regardless what some Paulbots tell you, the US does not have a corporatist economy. It is a neoliberal economy oriented to laissez-faire economics in a liberal democracy.

[Nolan]

Italy had corporatism.

Germany utilised dr. Shacht's programme for economic recovery and then started to slowly move towards a planned economy in 1938, with four year plans for the national corporations (the corporations remained in private hands though).

Italy's corporatism was never quite as thorough as Germany's from what I understand. Italy under Mussolini even went through a period of liberal economics.

[Nolan]

I'll dig in my info, but there was an interesting spanish paper I found a while back mentioning that surprisingly large parts of the german welfare state were actually privatized (the author argued it wasn't really for ideological reasons, though, so much as that they needed the cash to pay a military build-up; I'd argue the military build-up and the reason they preferred to sell public property for it was probably ideological in that they didn't have to turn Germany into a large scale Prussia, but yeah)

http://www.ub.edu/graap/nazi.pdf

:cool:

[Sperm-Doll Setsuna]

Italy's corporatism was never quite as thorough as Germany's from what I understand. Italy under Mussolini even went through a period of liberal economics.

It was quite the other way, albeit not for particularly ideological reasons. It was more about opportunism.

Mussolini initially pursued a liberal economic policy during the early 20's as thanks to his economic backers in private industry, but as the depression struck failing industries were taken over by the state and re-organised on corporatist grounds, and this was done to a larger extent than in Germany, where this merger into corporatist structure was not carried out to any large extent but more involved mutual cooperation between private industry and the state (as opposed to actual corporatist mergers, because the German private industry remained strong and did not face the kind of disaster that Italy faced in terms of bankruptcies). By the mid 30's the Italian state owned 70% of industry.

[Jose Gracchus]

Regardless what some Paulbots tell you, the US does not have a corporatist economy. It is a neoliberal economy oriented to laissez-faire economics in a liberal democracy.

I find this pretty specious if by "neoliberal economy" we mean what has been pushed abroad for the last thirty years or so on hapless less developed economies. The U.S. remains substantially a state-interventionist economy, as it always has. Ronald Reagan's Commerce Secretary actually bragged to the National Association of Manufacturers that his administration had offered more "import relief" than the previous administration [actually all prior post-war administrations combined]. There were substantial protections for the high technology and especially microprocessor sector. Today the American public remains obliged to provide massive state support via principles of indicative planning for high technology research and development and industry, primarily through the military sector, but increasingly through other state security sectors as well. This economy is neoliberal only in its orientation on state expenditures for social or public purposes; in no other way does it resemble the other "neoliberalized" economies in the Global South and Latin America and the ex-Eastern Bloc in particular. Compare and contrast, for instance, the reaction of the United States to its massive credit crunch and financial crisis to the IMF and World Bank prescriptions for other economies so afflicted. The differences could not be more stark.

[agnixie]

http://www.ub.edu/graap/nazi.pdf

:cool:

And that would be the exact paper, you're welcome :D

[Nolan]

It was quite the other way, albeit not for particularly ideological reasons. It was more about opportunism.

Mussolini initially pursued a liberal economic policy during the early 20's as thanks to his economic backers in private industry, but as the depression struck failing industries were taken over by the state and re-organised on corporatist grounds, and this was done to a larger extent than in Germany, where this merger into corporatist structure was not carried out to any large extent but more involved mutual cooperation between private industry and the state (as opposed to actual corporatist mergers, because the German private industry remained strong and did not face the kind of disaster that Italy faced in terms of bankruptcies). By the mid 30's the Italian state owned 70% of industry.

In Germany the state formed cartels which worked with the state. That's the essence of corporatism.


By the late 1930s, the aims of German trade policy were to use economic and political power to make the countries of Southern Europe and the Balkans dependent on Germany. The German economy would draw its raw materials from that region, and the countries in question would receive German manufactured goods in exchange. Already in 1938, Yugoslavia, Hungary, Romania, Bulgaria and Greece transacted 50% of all their foreign trade with Germany.[38] (http://www.enotes.com/topic/Economy_of_Nazi_Germany#cite_note-braun1990-37) Throughout the 1930s, German businesses were encouraged to form cartels, monopolies and oligopolies, whose interests were then protected by the state.[39] (http://www.enotes.com/topic/Economy_of_Nazi_Germany#cite_note-38) In his book, Big Business in the Third Reich, Arthur Schweitzer notes that:
“ Monopolistic price fixing became the rule in most industries, and cartels were no longer confined to the heavy or large-scale industries. [...] Cartels and quasi-cartels (whether of big business or small) set prices, engaged in limiting production, and agreed to divide markets and classify consumers in order to realize a monopoly profit.[40] (http://www.enotes.com/topic/Economy_of_Nazi_Germany#cite_note-39) ” As big business became increasingly organized, it developed an increasingly close partnership with the Nazi government. The government pursued economic policies that maximized the profits of its business allies, and, in exchange, business leaders supported the government's political and military goals.[ (http://www.enotes.com/topic/Economy_of_Nazi_Germany#cite_note-bigbiz-40)

[Nolan]

I find this pretty specious if by "neoliberal economy" we mean what has been pushed abroad for the last thirty years or so on hapless less developed economies. The U.S. remains substantially a state-interventionist economy, as it always has. Ronald Reagan's Commerce Secretary actually bragged to the National Association of Manufacturers that his administration had offered more "import relief" than the previous administration [actually all prior post-war administrations combined]. There were substantial protections for the high technology and especially microprocessor sector. Today the American public remains obliged to provide massive state support via principles of indicative planning for high technology research and development and industry, primarily through the military sector, but increasingly through other state security sectors as well. This economy is neoliberal only in its orientation on state expenditures for social or public purposes; in no other way does it resemble the other "neoliberalized" economies in the Global South and Latin America and the ex-Eastern Bloc in particular. Compare and contrast, for instance, the reaction of the United States to its massive credit crunch and financial crisis to the IMF and World Bank prescriptions for other economies so afflicted. The differences could not be more stark.

There is neoliberalism for us and neoliberalism for them.

In any society the state will have to intervene and certain industries will depend on the state. "Pure" laissez-faire is in fact impossible. My point is that the US is oriented that way, rather than to a social democratic or corporatist arrangement.

[agnixie]

In Germany the state formed cartels which worked with the state. That's the essence of corporatism.

This is relatively closer to the way the japanese Zaibatsu functioned; IIRC most of the Zaibatsu were old aristocratic estates repurposed into capitalist corporations during or after the Meiji reforms. Often ruled by the same aristocratic families who pushed for the reforms in the first place - the Satsuma rebellion was more a war of influence between aristocratic families than anything it's been portrayed as in western (and some japanese) media.

[ComradeOm]

I'm just going to second the recommendation for Tooze's Wages of Destruction as it really is a masterful and complete introduction to the Nazi economy. You may also be interested in Mazower's Hitler's Empire: Nazi Rule in Occupied Europe

As for how "corporatist" it was, and I know that this is not the most useful response, such ideological labels do not sit very well with Nazi Germany. In economic matters, as everywhere else, Nazi policy was a hodge-podge of competing interests and practicalities. Hitler wasn't so much concerned with the structure of industry (beyond the basics) as making sure that it delivered the means to pursue his foreign policy objectives. As such I'd consider the German economy to have effectively switched over to a war footing (which Lenin had called 'state capitalism' some two decades earlier) by 1937 at the latest. An exceptionally poorly managed war economy but not significantly different from the later ones of the UK or US

[Jose Gracchus]

To add to ComradeOm's contributions, the confusions continued even on war economy footing. Germany did not commit to total war mobilization until quite late in the war [1942 or 43, I believe], because of again vulgar interpretations of the lessons of World War I. The Allies committed to a more rational war mobilization much earlier. As with everything Nazi, it was a managerial mess of incoherency. It was perceived that the home front would lose faith in the war and rebel as in the German Revolution unless some level of domestic comfort was maintained by refraining from total mobilization and supplemented by loot. Hitler and the Nazis could never really commit to any single position or strategy on the economic front, constantly twisting and turning from the need to court industry, to the need to mobilize for war, to the need to be autarkic, to the need to rearm as fast as possible, to the need to reorient the economy toward the East where it was foreseen that these same markets and resource sources would be made into Lebensraum.