When the average person thinks of the Nazis, what often comes to mind is World War II, the Holocaust, and rousing speeches of hate. However, the National Socialists also had economic and political policies, policies many just assume were either free market or New Deal–style public works projects like the Autobahn. But Nazi policy was not so cut-and-dried.
The Nazis were socialists, and it showed in many of the policies they implemented after coming to power in 1933. First, like the Soviets, the Nazis initiated a war on private property. Not surprisingly, property rights were severely curbed by National Socialism in the name of public welfare.
How did the National Socialists combat private property in Germany? The first step came shortly after the Nazis took control, when they abolished private property. Article 153 of the Weimar constitution guaranteed private property, with expropriation only to occur within the due process of the law, but this article was nullified by a decree on February 28, 1933.
With this, the new National Socialist government had complete control of private property in Germany. While they did not take complete control of the lands like the Bolsheviks did in Russia in 1917, the Nazis issued quotas for industries and farms, and later they reorganized all industry into corporations run by members of the Nazi Party.
The War on Business
Peter Temin wrote about this in Soviet and Nazi Economic Planning, stating:
Both governments reorganized industry into larger units, ostensibly to increase state control over economic activity. The Nazis reorganized industry into 13 administrative groups with a larger number of subgroups to create a private hierarchy for state control. The state could therefore direct a firm’s activities without acquiring direct ownership of enterprises. The pre-existing tendency to form cartels was encouraged to eliminate competition that would destabilize prices.
The Nazis, ironically, called this reorganization “privatization,” although the owners of these corporations were either removed from board positions and replaced by Nazi Party members or sold out and became Nazi Party members. They included IG Farben and the Junkers airplane factory. IG Farben was a chemical company founded in 1925 by Carl Bosch and Carl Duisberg, who were both Jewish, and had a capitalization of around a billion marks by 1926. By 1938, all of the company’s Jewish workers had been purged and the supervisory board replaced by Nazis (see Joseph Borkin’s book The Crime and Punishment of I.G. Farben).
IG Farben was a clear example of the reorganization of industry the Nazis undertook for their benefit. Sybille Steinbacher, a professor of Holocaust studies, wrote about the public-private partnership in her book Auschwitz, stating:
Otto Ambros and IG Farben director Fritz ter Meer held a board meeting in Berlin with Carl Krauch who was not only a member of the board of directors of IG Farben, but also a member of the circle of industrialists around Reichsfurhrer-SS known as Himmler’s “Circle of Friends.”
After the Nazis took power, this kind of cooperation was common. Private businesses became merely public entities, and industrialists who resisted the Nazi commissars and their policies were removed from their positions and their businesses seized.
Junkers airplane factory did not fare much better, according to Temin, who wrote:
Prof. Junkers of the Junkers airplane factory refused to follow the government’s bidding in 1934. The Nazis thereupon took over the plant, compensating Junkers for his loss. This was the context in which other contracts were negotiated.
This Nazi war on business left industrialists and other businessmen worried that they would have their livelihoods stolen from them, as Günter Reimann explains in The Vampire Economy.
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Reimann quotes a letter from a German businessman to an American businessman:
The difference between this and the Russian system is much less than you think, despite the fact that officially we are still independent businessmen.
The letter continues:
Some businessmen have even started studying Marxist theories, so that they will have a better understanding of the present economic system.
This German businessman also complained of “arbitrary government decisions concerning quantity, quality, and prices of foreign raw materials.” But businessmen were not the only members of the private sector who faced mass amounts of bureaucracy and control. The farmers faced it as well.
The War on Agriculture
When the Nazis came to power in 1933, a major interest for them was Lebensbraum (living space) for the “pure” German citizen. Professor Adam Tooze talks about the “hereditary farm” in his book Wages of Destruction:
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For the purpose of protecting the peasantry as the “Blood Source of the German People,” the law proposed to create a new category of farm, the Erbhof (hereditary farm), protected against all debt insulated from market forces.
These farms were to be passed down from generation to generation to keep the soil “pure,” and Reich officials even thought that “Erbhof farmers should assume collective responsibility for each other’s debts.” This policy was introduced and supported by the Reich central bank and Reichsnährstand (RNS, State Food Society) officials.
Farming price subsidies were also common in the Nazi Reich even before World War II broke out. The RNS was created to fix prices and create production controls in agriculture. In his book Hitler’s Beneficiaries, German historian Götz Aly describes the measures the German government took in the farming sector.
Götz states, “The prices producers were paid for milk and potatoes were raised by 25 to 35 percent in the course of the war.” These subsidies would cause shortages as early as August 1939, when meat and eggs rationing was imposed to keep the industry focused on grain production.
Life in Prewar Germany
In high school history textbooks, very few pages are dedicated to prewar Germany (1933–39). However, two details are always covered: the Night of Broken Glass (Kristallnacht), which saw thousands of Jewish businesses vandalized and destroyed, and the Autobahn, a massive public works program that improved many lives and made travel easy.
Because of this, people may reach the conclusion that prewar life was bad for the Jews, but beneficial for non-Jewish citizens. It is true that Jews suffered immensely, not only socially but also economically. At the start of 1933, there were an estimated hundred thousand Jewish businesses; by 1938, only 39,552 remained. In the same year, a capital levy was put on Jews; they needed to register all their assets with the local tax office, which placed a 20 percent and later a 25 percent capital levy on them.
But for ordinary non-Jewish citizens, life was also hard. Private sale negotiations were subject to official rules, these rules being set selling prices for whatever good someone had. If a dealer wanted to increase his prices, he must get a special permit from a price commissar, who needed a detailed statement of necessity and other data such as production and distribution costs.
R.J. Overy’s War and Economy in the Third Reich and Richard Evans’s Third Reich in Power talks about the shortages that came out of the industries at these times. In 1936, Germany steel producers were only producing 26 percent of Germany’s domestic output requirement. The German government in 1937 would encourage citizens to hand in their scrap metal, and in the same year, authorities including the Hitler Youth would search people’s homes for old metal keys.
Metal was strictly rationed, and fines were handed out to building contractors who installed metal central heating pipes. Iron lamp posts and railings were replaced with wooden ones, but this was halted when there was a wood shortage, which also led to a paper shortage.
All of this happened in 1937, two years before the war. Building projects had to cut back on wood and people were encouraged to burn peat instead of wood. Even coal was rationed. All industries under price controls were in the same situation, such as agriculture, where egg and dairy shortages led to the distribution of ration coupons.
Conclusion
The Nazi government took control of the economy, which is what one expects from socialism.
Unfortunately, the US economy today has similarities to the Nazi economy, from vast subsidies to price controls, and “stakeholder” advocates making even wilder demands. History tells us where these policies lead: the road to serfdom.
About the Author
John Kennedy is a recent graduate of Hartford Magnet Trinity College Academy. Economists such as Murray Rothbard, Hans-Hermann Hoppe, and Ludwig von Mises have captured his interest in Austrian economics and inspired him to start writing.
Article cross-posted from Mises.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
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Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
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