169
1/0
ADAM TOOZE
172
ADAM TOOZE
1932
1933
3934
43 1
46.3
51-5
57-8
0.3
0.5
2.9
5-5
1.3
2.1
2.8
2.O
4.7
5-5
5-7
5-2
39-O
37.6
38.2
40.5
i.l
3.6
5-5
7.0
-3.2
-2.9
-3-6
~2-4
Private consumption
Private investment
Foreign account
1935
3-2
5.2
6.2
0.1
2-5
2.6
0.9
0.7
-0.8
0.8
0.2
-0.5
Change in consumption
-1.5
0.6
2-3
Change in investment
2.5
2.0
1-5
0.4
-0.7
4.2
47-0
41.6
27.0
13.1
-13.1
24.6
1.1
Share of consumption
4-1
-7-4
-45-9
"-7
37-1
Share of investment
79.0
37-4
23.6
11.2
-13-4
18.2
55-7
64-3
21.1
44-3
35-7
78.9
Source: A. Ritschl, Deiitschlands Krise und Konjtmktur (Berlin, 2002), Anhang. A. Ritschl.
Institute for Empirical Research in Economics, University of Zurich, Working Paper,
68: Deficit Spending in the Nazi Economy.
an appropriate position in the blue-collar hierarchy for the principal 'breadwinner', the crucial determinants of living standards
in working-class households were family size arid the opportunities for labour-market participation by women and young people.
Though the regime publicly espoused a gendered division of labour
that confined women to the home, this was never realistic for the
majority of working-class families, which constituted well over
half the German population. As demand grew, German women,
both young unmarried and older married women, returned to
the paid labour market in considerable numbers, though not to
the record level that had prevailed in the late 19205. The outlook
for working-class families was further improved by the brighter
prospects for young people. The tight labour market and the
regime's considerable investment in training encouraged social
mobility where it really counted, within the skill hierarchy of
the blue-collar workforce. By the late 19305, the norm was firmly
established that all boys should aspire at the very least to the status
of semi-skilled workers, with apprenticeships defining the gold
standard of German 'quality work'.
One should not jump to the conclusion that the restoration
of full employment was by itself a guarantee of mass support for
Hitler's regime. The evidence on working-class attitudes towards
Hitler's regime is surprisingly ambiguous. Public confidence in the
regime's handling of economic affairs was severely shaken by the
currency crises of 1934 and 1936. The restriction of consumption
opportunities after 1934 was sorely felt. And by the late 19305
severe shortages of labour resulted in complaints of overwork
and rancorous discrepancies in wage and salary scales, not to
mention the discomfort of overcrowding in the boomtowns of
the armaments drive. Nevertheless, it is undeniable that once the
regime had weathered the storms of 1934 it was able to avoid major
setbacks, while satisfying at least the basic material aspirations
of most German workers. And there can be little doubt that
this contributed to winning over the active support of at least a
substantial minority of the population, perhaps particularly among
the younger generation.
National Socialist rhetoric, of course, suggested that something
far more dramatic was happening in the construction of a classless
Volksgemeinschaft. And some historians have been willing to give
174
ADAM TOOZE
1/5
176
ADAM TOOZE
177
1/8
ADAM TOOZE
(people's housing). For reasons of cost, however, only the Volksempfanger ever had truly popular appeal. In Nazi Germany as
elsewhere, it was the upper middle classes who were the pioneers of 'modern living'. It was they who provided the main
market for innovative consumer durables and the new infrastructure of electricity, coal gas, and petrol supply that followed in
their wake.
O K
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.32
9- 0-,
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I I
Managing rearmament
In summary, therefore, if one credits the National Socialists with
a genuine project of social and economic transformation, the
19305 were in large part an era of frustration. To a conventional
economic mind this is hardly surprising. To make good popular
visions of affluence, what Germany 'needed' was at least a decade
or two of accelerated macro-economic growth. If this is one's
starting point, it is tempting to read the failed consumer programmes of the Third Reich as one more instance of the regime's
irrational voluntarism and its failure to get to grips with the
real material possibilities of inter-war Germany. This, however,
is wide of the mark. The impossibility of realizing his dreams
of mass consumption came as no surprise to Hitler, certainly
under Germany's circumstances in the 19305. As far as he was
concerned, economic advancement could be secured in the long
term only through the conquest of additional Lebensraum. To
us, in light of Germany's happy post-war experience as a linchpin in the global capitalist economy, this may seem far-fetched.
But one must not forget the contrasting experience of those living through the period between 1913 and 1933. In the context of
the depression, hyperinflation, and the First World War, which
contemporaries widely blamed on imperial competition, Hitler's
impatience with the liberal gospel of progress through hard work
and international trade was widely shared both in Germany and
elsewhere. After all, the progress of Germany's GDP per capita since
the late nineteenth century hardly gave grounds for exaggerated
optimism.
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ADAM TOOZE
Germany
Soviet Union
USA
1933
1934
1935
1936
11
1937
12
1938
17
1939
16
25
1940
48
44
1941
55
56
1942
54
69
75
36
1943
57
76
76
47
1944
56
69
47
1945
47
1
20
i
13
carried forward despite the fact that, from 1933 onwards, Germany
was operating under a severe balance-of-payments constraint and
a compelling need to increase its exports.
The Third Reich inherited from the Weimar Republic a chronically weak balance of payments that severely limited its freedom
of manoeuvre. The First World War had stripped Germany of its
foreign capital assets and replaced them with the liability of reparations. From the stabilization of 1924 onwards, the Reichsmark
was chronically overvalued, making exports uncompetitive and
imports unnaturally cheap. The Weimar Republic avoided painful
adjustment, but only by contracting 21.5 billion RM in foreign
debts, owing principally to the United States (8.4 billion), but also
to Britain, the Netherlands, and Switzerland. When reparations
were abandoned in the summer of 1932, Germany's foreign debts
remained. After 1933, servicing these debts would have required
182
ADAM TOOZE
183
184
ADAM TOOZE
on Albert Speer, as the key figure who took charge of the German war economy in February 1942 and produced a dramatic
turnaround.
There are several problems with this account. It is ahistorical
in its treatment of the economic administration. The Reich's economic administration in the 19305 was not a well-formed Weberian
bureaucracy waiting for Goring to dismantle it. From the Weimar
Republic, the Third Reich inherited a ramshackle system of national economic governance that was no more than fifteen years old
and was riven already in the 19205 with multiple lines of conflict. Nor should it be surprising that the huge expansion in state
spending after 1933 was accompanied by bureaucratic proliferation. Far from being peculiar to the Third Reich, an 'alphabet
soup' of administrative agencies was common to both Franklin
D. Roosevelt's New Deal in the US and Stalin's Five Year Plan
apparatus in the USSR. Furthermore, the principal sources used to
characterize the armaments effort of the Third Reich in terms of
'waste and inefficiency' are the records of General Georg Thomas,
the economic expert of the Wehrmacht. Thomas was one of the
main losers in the bureaucratic battles of the late 19305 and early
19405. Not surprisingly, the records of his office tell a one-sided tale
of disappointment and frustration. Finally, the statistical evidence
used to support the inefficiency thesis is fragile, to say the least.
To assess the impact of the bureaucratic in-fighting, historians
have relied almost entirely on the industrial indices compiled by
Rolf Wagenfuhr, Albert Speer's chief statistician. Between 1939
and 1941 these appear to show both a low level of armaments
production and a catastrophic collapse in labour productivity. But
both these findings are open to serious technical criticism. New
data reconstructed from hitherto unused archival sources suggest
a far more optimistic account of the mobilization of German
industiy.
Chronic inefficiency was not the central problem of the German
war economy. The real problem was the glaring disparity between
Germany's extremely difficult strategic situation and the material
resources at Hitler's disposal. From 1937 onwards, Hitler was
envisioning wars against vastly superior economic forces. It was
this, not Goring's tangled office politics, that made it impossible
to devise a coherent armaments programme. Viewed from an
186
ADAM TOOZE
Revised
figures
Per capita labour
productivity
in armaments
sector
Share of
armaments
in industrial
production
Hourly labour
productivity in
metalworking
industry as a whole
1939
1940
1941
100
17
100
16
88
24
H3
15
76
30
123
1942
22
100
34
129
1943
31
132
38
138
1944
40
160
43
148
Source: A. Tooze, 'No Room for Miracles: German Industrial Output in World War II
Reassessed', Geschkhte und Gesellschaft, 31:3 (2005), 438-64.
187
the 'Z Plan' to build a huge new battlefleet for the German navy that
was adopted in January 1939, the superiority of the Royal Navy was
crushing, at least for the foreseeable future. And to make matters
even worse, in early 1939 the German armaments economy again
ran up against the balance-of-payments constraint. With armaments spending running at 20 per cent of GDP and the vast bulk
of investment reserved for military purposes, the mobilization of
German resources had reached a limit under peacetime conditions.
Goring's first response in November 1938 was to demand an even
more comprehensive militarization of German society. However,
the demand for foreign currency was too pressing. Rather than
shifting resources towards rearmament as demanded by mounting
international tension and the huge plans of the navy, airforce,
and army, Hitler's regime was forced to give top priority to
exports. As in 1937, the acceleration of armaments output was
abruptly halted, and by the middle of 1939 the output of both
ammunition and aircraft was falling sharply. Germany did not
face an 'economic crisis', as some have suggested, at least not
yet. With government spending running at record levels, the risk
was of inflation not unemployment. But the need to prioritize
exports blocked any further acceleration of armaments spending
and provoked General Walther von Brauchitsch, commander in
chief of the German army, to speak of nothing less than the
'liquidation' of the Wehrmacht's rearmament effort. As Hitler put
it to Mussolini in the spring of 1940, if war with the Western
powers was inevitable, as they both believed, there was no reason
for Germany to postpone its aggression.
After war broke out in September 1939, the political limits on
peacetime mobilization were lifted. The German war economy was
propelled forward, as were the economies of all the belligerents,
by a ceaseless drive for military output. Already by the spring of
1940, the allocation of steel to all inessential sectors had been cut
to the bone and 4.5 million men had been drafted to the colours.
Given that German women, both in the rural and urban areas,
were already more intensively mobilized in 1939 than they were to
be in Britain by the end of the war, the German war effort from
the outset relied heavily on exploiting its victims. By early 1940,
the population and coal reserves of occupied Poland were already
r
!
188
i.
ADAM TOOZE
being brutally requisitioned for German use. The idea that the
German armaments effort was allowed to slacken between 1940
and 1941 should be set aside as a misleading statistical artefact. The
distinctive feature of the Nazi war economy was not its low level of
mobilization, nor the lack of urgency. The truly distinctive feature
of Hitler's war effort was the repeated shifts in priorities, dictated
by the complexity of Germany's strategic situation.
Not anticipating the success of the Blitzkrieg in France, the
German armaments programme in the first months of the war was
focused on the production of ammunition and medium bombers.
Hitler's main anxiety was to avoid the kind of 'shell crisis' that
had undermined the fighting power of the Kaiser's armies in
1914. The defeat of France in a matter of weeks rendered the
ammunition targets obsolete. In June 1940 priority was shifted
towards the armoured forces, aircraft, and U-boats. The refusal
of Britain to surrender and Roosevelt's ominous mobilization
drive required Germany to brace itself for the possibility of a
future war with Britain and the United States. This involved an
enormous investment in aircraft capacity, synthetic fuel, rubber,
and explosives at the same time as the Wehrmacht prepared itself
for the invasion of the Soviet Union with which Hitler hoped to
end the war. It is entirely characteristic of Germany's strategy in
1940-1 that it committed itself simultaneously to an armoured
onslaught that was to carry it to the oil fields of the Caucasus,
and to an enormous investment at Auschwitz in Upper Eastern
Silesia to manufacture synthetic rubber and airfuel from lowquality coal. What enabled Berlin to square the circle, at least for
a time, was the running down of ammunition production, which
allowed the redeployment of hundreds of thousands of tons of
steel. There was certainly no relief in 1940-1 for the home front.
Civilian consumption continued to be squeezed. The gigantic
housing programmes and a reordering of the social insurance
system trumpeted by the DAF were reserved for the time after the
achievement of final victory.
With the failure of Barbarossa (the invasion of the Soviet Union)
in the autumn of 1941, the German war effort underwent a further
dramatic upheaval. It would be inaccurate to describe this as a
shift from a Blitzkrieg strategy to one of total mobilization, since
Barbarossa was only one part of a strategy that also had to take into
THE E C O N O M I C H I S T O R Y OF THE N A Z I R E G I M E
189
account the need for long-term preparation for the coming air war
with Britain and America. In effect, as of the late summer of 1940,
Hitler's Germany was preparing to fight two wars at once. And
this had required a comprehensive mobilization of all available
resources, well before 1942. A large part of this effort, however,
went not into the immediate production of armaments, but into
long-term investments such as the rubber plant at Auschwitz, or
the enormous new tank and aero-engine facilities in Austria. What
was really new after the disaster at Moscow in December 1941 was
the insistent focus on immediate output. In that month Hitler
backed this up with a headline-grabbing decree on rationalization.
However, although the new emphasis on rationalization was no
doubt significant in propaganda terms, it hardly marked a new
departure for German industry. Rationalization had in fact been
the watchword of the German armaments economy at least since
1938. There was simply no other way of squaring the competing
demands made on German resources.
The evidence suggests that across industry, labour productivity
began to increase almost as soon as labour became truly scarce
in the late 19305. Armaments production certainly grew rapidly
after February 1942. However, Speer's ministry never exceeded the
growth rate achieved in the first half of 1940. When examined
closely, it seems that the upsurge in production in Speer's personal
area of responsibilityup to the summer of 1943 confined to the
needs of the armywas driven less by efficiency gains than by
huge injections of steel and labour. In early 1942 Hitler personally
authorized the allocation of no less than 300,000 tons of steel
per month to a new ammunition drive. Where rationalization
mattered most was not in Speer's remit, but in the production of
aircraft, which remained under the control of Goring's air ministry. In Germany as elsewhere, Luftwaffe production benefited
from dramatic 'learning curve effects' as individual factories concentrated on the assembly of long runs of standardized airframes.
This, however, came at the expense of the increasing obsolescence
of Luftwaffe equipment, which began to make itself severely felt by
the end of 1943.
Speer's appointment in February 1942 did not therefore revolutionize the Nazi war economy. The trade-offs were the same
both before and after February 1942, and the discontinuity in
190
ADAM TOOZE
performance was far less dramatic than is suggested by the selfserving data authored by Speer's statisticians. What Germany's
increasingly ominous military situation did require, however, was
a new rhetoric of the war economy. After the military disaster
at Moscow in December 1941 and American entry into the war,
the fundamental problem for Hitler's regime was to justify the
continuation of the war against increasingly overwhelming odds.
In this battle for German public opinion the carefully cultivated
aura of invincibility surrounding Speer's so-called 'armaments
miracle' played a key role. Through a systematic campaign of
'armaments propaganda' Speer and Goebbels drove home the voluntarist message that, with the proper leadership, the will-power
and skill of the German people would be enough to overcome
any enemy, however powerful. In this crucial sense, Speer's supposedly 'unpolitical' armaments ministry served an eminently
political role. The 'armaments miracle' justified the continuation
of the war.
191
192
ADAM TOO7E
193
194
ADAM TOOZE
Conclusion: ideological-pragmatic
synthesis
In the last instance, therefore, although the Reich was clearly
driven forward by the restless imperative of Hitler's will, the
primacy of the political was rarely if ever absolute in the Third
Reich. Certainly, in the period between 1933 and the Wehrmacht's
gravity-defying victory in France in May 1940, the regime's history
is better seen as a precarious balancing act, in which the aggressive
impulses of the Nazi leadership were held in check by a variety of
internal and external constraints. The strongest case for an absolute
autonomy of the political can be made for the two years between
the triumph in France (May-June 1940) and the early successes
of the southern offensive towards Stalingrad (up to the autumn of
1942). This was the period in which Nazi racism ran truly rampant
and wrought the most awful havoc across Europe. However, in
light of recent research it is surely untenable to view this simply as
a campaign of destruction. Precisely at their moment of maximum
autonomy, the planners of the SS conceived of genocide as one
element in a comprehensive campaign of social and demographic
reorganization. And the logic ran both ways. Not only did social
reorganization serve the purpose of creating a racial Utopia. In the
195