Germany was dirt poor after WWI but Hitler somehow managed to get enough cash to completely transform the country. He had huge infrastructure programs all of which had to be paid for. He developed an enormous military machine. Where did all this money come from? If there had never been a WWII would Germany have collapsed economically?
Well, the scenes we commonly associate with the economic pandemonium in Germany during the interwar years (e.g. workers being paid twice a day because their money was worthless by the end of the week) were over ten years before the Nazis came to power. The Weimar Republic had restored a good degree of economic stability when the Nazis came onto the stage. Inflation was tamed and industrial investment was growing at a good clip, although unemployment got to be a problem in the final years of the Republic.
As for how the Nazis funded their war machine, Wikipedia has a good overview.
Sorry, but still don’t get it. This basically says they borrowed or printed more money. I don’t see how they got away with it. This doesn’t sound like a solid, long term economic policy. I guess this implies that they knew they would be going to war. But then what? Did they plan a long term economy based on stealing the wealth of the countries they invaded? In the meantime, did they basically threaten anybody who complained? I mean, some people were basically not getting paid. The Weimar may have had a stable economy but the things the Nazis did required tons and tons of money. If they got it through deficit spending, there economy would eventually have collapsed anyway. Right?
I don’t think the Nazis were really thinking long-term about anything, despite the “thousand-year reich” rhetoric.
That was the general idea. It was a huge gamble. Had they won the war, they probably would have found a way to make money from the new colonies. At the minimum they might have paid creditors in Russian land, mining contracts or oil wells etc. After a defeat the question became irrelevant anyway.
The official answer was that everything will be repaid after the victory. In an environment where people were executed for undermining the war effort when they listened to the BBC, you thought twice before you mentioned that you didn’t believe in this whole victory thing.
We talked about this a while ago. It was a very circular system, a shell game.
To start off, the Nazis nationalized darn near everything. It was illegal (well better to say impossible) to own stocks or bonds, to loan money on real estate or generally put your money anyplace but government bonds.
Government bonds sucked up extra capital, preventing inflation (if that had been possible in such a controlled environment) and were used to fund business. The businesses then paid workers who bought government bonds, which were used to fund business. Around and around it went.
Well, besides his army pension, Goering married a rich girl.
Twice.
The Nazis stole most of the hard assets of the Jews- that was billions of DM. Then each nation they conquered- France, Netherlands, Belgium, Poland, Denmark, Norway, and so forth, had millions of $$ is gold bullion in the treasury, which Germany looted. In some cases, some of the gold was spirited away, but still that was billions.
That’s how all empires pay for their armies. How do you think Caesar could afford to invade Gaul? If you look at history, you’ll see that many martial empires start to enter economic stagnation or decline as soon as they stop expanding - look at the Ottomans after they failed to take Vienna. Their economy was based on conquest, and as soon as that ended they had nothing to fall back on.
Here’s a better question - What stops other countries from doing the same thing? I can think of many poor African countries that would love this short term gain in wealth. Why did it work for Germany and not for modern countries?
But it didn’t work for Germany. Eventually the Red Army rolled into Berlin, Hitler blew his brains out in a bunker, the country was pounded flat, tens of millions of people were dead, the country was ruined economically, and destined to be occupied and under the thumb of foreigners for decades.
Yeah, but people voted this guy (Hitler) in (sort of) and Germany was a power for a decade. Do you think the people of Uganda would reject this idea outright because it almost worked in Germany. The people of Germany weren’t stupid. They thought they were on to something. Why hasn’t this been repeated? Or has it?
Well, I cannot explain all the complexities of it, but studies of Nazi economics talk about ‘camp script.’ (This is the play money prisoners use in some jails.) The Nazi system was closed to outflow. Their money was pretend, it had no value outside the system. It was a form of a rationing coupon.
Not mentioned up to now was the way the Nazis looted other countries. They rigged the value of the currencies of occupied countries in their own favor. The Germans could buy French stuff for a few RM, which transformed into a pile of FF.
Darn clever.
You’ve got to have an economy to plunder. Germany already had a decent economic base for the Nazis to use and abuse when they took power in 1933.
And one little illustration of the lengths the Nazis would go to in saving money, I belive it’s “Rise and Fall of the Third Reich” that tells that they got layaway deposits and payments from common workers for Volkswagen cars, and then eventually just refused to deliver product.
You might think I’m crazy, but what I’m about to tell you is 100% true. the nazi war machine was funded by American banks like JP Morgan Goldman Sachs and other wall street banks. The mechanical aspect was given a boost by ford motor company, and the chemicals needed to make bombs and other things ( like the gas for the death camps ) was given aid by Dow chemical. Did somebody say NEW WORLD ORDER!?!
You revived a seven year old thread for that same old tired bullshit?
[Moderating]
If you want to discuss this idea, you may open a new thread in our Great Debates forum. Since this thread is so old, I’m closing it.
Colibri
General Questions Moderator