Bryan Caplan  

The Führer of Anti-Market Bias

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School Choice... The Humanity of the Economist...

Economic historians have long known that a key plank of Nazi economic policy was autarky. They took the usual nonsense about the dangers of foreign trade seriously, and tried very hard to eliminate Germany's "dependence" on the rest of the world. What I only learned recently, however, was that by 1940 Hitler had had a change of heart:

The course of the war shows that we have gone too far in our efforts to achieve autarky. It is impossible to try and produce everything we lack through synthetic processes or other measures. (Hitler to Minister of Munitions Fritz Todt, June 20, 1940, reprinted in Nazism, 1919-1945, vol. 3)

Of course, this doesn't mean that Hitler decided that Bastiat was right after all. No, Hitler's epiphany was that the real danger was not "depending" on foreign products, but paying for them!

We must follow another path and must conquer the things we need but lack. The one-off commitment of man-power which that will require will not be as large as the manpower which will be continuously needed for the synthetic plants. Thus, our aim must be to secure all those territories which are of special interest to our defence economy through conquest.

I've been reading about the history of Nazi Germany for decades, but statements like these still astonish me. The bounty of the world was on sale at bargain prices, and people like Hitler couldn't help thinking "There must be an easier way. I know - let's kill each other."


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The author at Asymmetrical Information in a related article titled Let's do it the hard way writes:
    Bad economic thinking is hardly the main sin of the Nazi party, but it's still mind boggling, as Bryan Caplan reports: Economic historians have long known that a key plank of Nazi economic policy was autarky. They took the usual nonsense about the dang... [Tracked on December 3, 2005 7:14 PM]
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Dog of Justice writes:

The problem is that Hitler wanted more than just goods produced elsewhere; he wanted lebensraum for the German people. And the land he wanted wasn't for sale.

To maximize the chance of successfully seizing and keeping the land, some level of autarky was necessary. So his (or more precisely, Hjalmar Schacht's) economic policies were not irrational.

The good news is that autarky is so inefficient that no matter what he did, his chance of ultimate success was small.

Oskar Shapley writes:

If Germany was sitting on oil fields the size of Saudi Arabia's, like the US and Russia do, we wouldn't have this empty discussion whether autarky is efficient or not.

Dog of Justice writes:

If Germany was sitting on oil fields the size of Saudi Arabia's, like the US and Russia do, we wouldn't have this empty discussion whether autarky is efficient or not.

While a lack of oil did in fact play a large part in shaping Japan's actions (all the way back to the attack on Pearl Harbor), I don't recall it being nearly as fundamental to Germany -- they had enough that I really doubt the Nazis would have been likely to win if they just had more oil. Other factors mattered more.

James writes:

Bryan writes:

The bounty of the world was on sale at bargain prices, and people like Hitler couldn't help thinking "There must be an easier way. I know - let's kill each other."

Think about it. If you buy other people's goods, then they get the money. If you believe in some form of economic analysis that is zero sum and considers monetary holdings to be the sole measure of material well being, then the violent approach is the course of action that best serves your interests. Not like any such views could ever come back into vogue though...

jaimito writes:

I always wondered about the lebensraum concept, since Germany is a fairly big country and its population even then was not growing. Moreover, Russian steppes were open to German settlers since the seventeenth century, and large areas had been peopled by Germans.

The autarky thing should be considered within the framework of a war going on, and the Allies trying to negate Germany's access to raw materials. In that context, autarky was not crazy. The war itself was insane.

Eric H writes:

Change of heart?! He said as much several times in Mein Kampf (see the chapters on dealing with people in the East), Mises points this out in Omnipotent Government, and Shirer points it out in Rise and Fall.

Actually, Hitler didn't say, "let's kill each other." He said, "let's kill one specific group of people, enslave others, and rule the world with people who look and think a lot like us." It didn't seem to bother him that he didn't look much like the people to whom he referred as "us".

daveg writes:

Cleary, taking goods or land by force is wrong. This is not a controversial view.

The good news is that I can't think of many countries that are attempting this type of forceful taking. Iraq was on example more than ten years ago.

The only other one I can think of is Israel. For some reason we don't seem so worried about this tho.

Barkley Rosser writes:

There is a mischaracterization of Nazi trade policy in the 1930s here, irrespective of what Hitler himself was saying or not saying. They were not autarkical, but did go for a very controlled and directed form of trade. Links with Britain and France were reduced, while they were increased with much of Eastern Europe, which was seen to be subordinate. So, trade could occur, but it was to involve a condition of dominance by Germany. See Gustav Stolper (yes, of the Stolper-Samuelson theorem), Karl Hausen, and Knut Borchardt, _The German Economy: 1870 to the Present_, 1967, Harcourt, Brace & World.

Regarding oil, while it was not as big a problem for Germany as for Japan, it was a problem. The Battle of Stalingrad arose from a drive by Hitler towards the Caucasus region, with the ultimate goal being the oil fields of the Caspian in Azerbaijan.

Peter writes:

I recommend you read the book "You Can't Do Business With Hitler." There are usually several dozen copies for sale on abebooks.com (106 copies for sale tonight - 12/6). It was written by the US trade representative as an economic reason that the US should go to war with Nazi Germany (and that such a war was inevitable). The economic policy of the Nazis wasn't autarky, it was that if you wanted to sell them stuff, you had to buy a larger amount of trade goods. They wanted to always end up with a trade surplus. Especially after the reparations required by the Treaty of Versailles (ToV).

Marching into the Sudetenland? That was spun as recovering territories stripped away by the ToV. Like several other territories. The ToV promised elections for these regions: rejoin Germany/Austria or not. After the first few elections were held, the results were overturned and no further elections were held in the disputed territories.

Fascism is also about appearing to be a strong nation, and how "will" creates "reality." And that strong nations invade, conquer and dominate other nations. Which is why Mussolini invaded Ethiopia, not because it was important at all, but because they had to beat up someone just to look big. Ethiopia was just a prop in Mussolini's fantasy of power.

One could also use "bush" and "iraq" in the previous paragraph.

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