Edited by Gavriel D. Rosenfeld

Edited by Gavriel D. Rosenfeld

Saturday, April 25, 2015

A More Economically Rational Nazi Germany?

Although I haven’t read his book yet, Pierpaolo Barbieri’s new study, Hitler’s Shadow Empire, promises to offer some interesting counterfactual ruminations about a Nazi Germany that might have been had Hjalmar Schacht been able to implement his comparatively pragmatic economic policy vision.

At least that is what a new interview with the author in The Huffington Post suggests.  Entitled, “Hitler, Franco, and a Banker: The Path Not Taken in Nazi Germany,” the piece begins with the interviewer, Elizabeth Nicholas, noting:

“Winston Churchill's axiom that history is written by the victors is a cliché drilled into budding historians, hinting to them, perhaps, that alternative histories can be unearthed by imagining what might have happened had the losers won.”

She goes on to observe:

“Barbieri illustrates why history should be written by historians rather than mere victors by vividly and meticulously illuminating the two very different conceptions of a what a strong Germany meant in the Nazi Party's prewar years among the party's leaders.”

“One faction believed that not only did the political acquisition of a territory still matter, but that it mattered most. Mass annexation was considered essential to the future of the German people. On the other hand was a faction defined in Hitler's Shadow Empire by the Führer's one-time Minister of Economics and President of the Reischbank, Hjalmar Schacht, who knew that without successful economic policy, land grabs meant little. Schacht advocated for an informal empire of economic rather than military dominance, similar to the colonial model and motivated by the prospect of new markets and natural resources. It was Schachtian economics, Barbieri suggests, rather than ideological fraternité that led Hitler to lend his decisive support to Francisco Franco on the eve of the Spanish Civil War. Had Schacht not been forced from the party in 1938, Nazi Germany's European expansion might have played out quite differently than it did.”

In proceeding with her interview, Nicholas queries Barbieri as follows:

“Tell me about the divisions within the Nazi Party in the 1930s. It seems there were two very distinct ideas about what kind of might Germany should seek to amass.” Both ideologies shared the goal of a powerful Germany. The faction of the party that eventually won out advocated for a policy based on Lebensraum, the idea that territorial expansion and conquest was essential for German strength and survival. The policy Schacht advocated for was based on a more informal empire, like the kind Hitler established with Franco's Spain, built on expanded access to export markets and resources. Its aims were economic rather than military, and it built on World War I ideas associated with Weltpolitik.”
“Why did the Lebensraum faction win out? 
In writing this book, the most interesting thing was trying to see how things ended up the way they did. If we look at history is a Borgesian garden of forking paths, what different choices might have been made to result in different histories? I think considering all of those possible different choices, rather than saying from 1933 on, Auschwitz was a forgone conclusion, gives a more interesting and honest view of what decision making is in politics and life. There were rational people, Schacht among them, running policy in the Nazi Party's early years, and its interesting to consider what might have gone differently had his more economics-oriented faction prevailed over the one that did.
“For the first four years the Nazi Party was in power, the Lebensraum rhetoric was mainly just that -- propaganda broadcast to the masses while more rational policies were actually being implemented at the top. At times Hitler himself disowned some of the extreme versions of these ideas, particularly support for "autarky" or economic closure. Schacht's fiscal policy and work projects like the Autobohn and the construction of the Luftwaffe worked well economically boosting jobs and growth, and won the party popularity.”
“But when it came time to moderate that policy to make it sustainable, Hitler refused to do so. He fired Schacht and replaced him with someone who would never tell him something wasn't possible. He centralized all decision-making in himself, and the pragmatists were marginalized or left the party on their own. Once those traditional conservative members had left, all that was left were the zealots, who would never tell Hitler no, and for whom rationality was irrelevant.”

These observations seem unobjectionable as far as they go, but I am interested to see how far Barbieri extends his counterfactual ruminations and whether they pass the plausibility test.

To be sure, a Nazi Germany that followed Schacht’s vision would have been vastly preferable and much more moderate.  But then it would not have been Nazi Germany. 

By the late 1930s, Hitler had sidelined or purged all of the comparatively independent “old elites” from key sectors of German institutional life and replaced them with “yes men.”  Schacht with Walter Funk in the economics ministry; Werner von Blomberg, Werner von Fritsch, and Ludwig Beck with Walter Brauchtisch, Wilhelm Keitel and Alfred Jodl in the Wehrmacht, and Konstantin von Neurath with Joachim von Ribbentrop in the foreign office.

Hitler pursued this course as part of his desire to intensify his regime’s ideological direction, which infamously culminated in global war and genocide.

To speculate that Schacht could have done anything to avert this, if this is the thrust of Barbieri’s counterfactual musings, would not be very compelling. 

But the book may be intent on making another implicit point (and maybe once I read it, I will find that it is made explicitly), which is that the Nazi Germany that might-have-been strongly resembles today’s Germany – with Angela Merkel using “soft” economic power rather than aggressive military power to assert German hegemony in Europe through the EU. 

In short, the book may offer a subtle lesson from the Third Reich that could have been for the Fourth Reich that still may be.

I’m looking forward to finding out….

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