Review of Hitler’s Economy: Nazi Work Creation Programs, 1933-1936 (Hardcover)

According to conventional wisdom, as a result of military expenditures,Hitler's economy went from 34%unemployment when he entered office in early1933 to virtually full employmenr by 1936. Professor Silvermanargues, asa result of impressive research in Nazi archives, that it was work creationprograms that account for this "miracle" and it was the 4-yearPlan announced in 1936 that represented an emphasis on autarky and arms anda seller's market.It is surprising how conservative Hitler's initial planswere since they relied on the expertise of Hjalmar Schacht, who wasreplaced by Walther Funk after the announcement of the 4-year plan.byGoebbles. The early years represented continuity with the Bruning policy,particularly the Todt plans for motorization and the famous autobahns, oneof the positive legacies of Hitler. Silverman's account of sharp regionaldifferences is also interesting with East Prussia getting back to fullemployment at an early dater and Aachen lagging. It is natural to compareHitler's achievements with FDR's New Deal which initially had to deal withonly 25% unemployment. Generally speaking, Hitler was the more successful,particularly in view of FDR's attempt to balance the budget in 1937 therebyproducing the Roosevelt recession and the rise of unemployment from 14% to19%. While Currie and Eccles managed to achieve the Keynesian euthanasia ofthe rentier in the late thirties, Roosevelt was overall a timid Keynesianuntil Wprld War II and was plagued by double-digit unemployment until1941.FDR devalued the dollar in 1933 by about the same percentage asBritain in 1931 but Hitler and Schachr ruled out currency devaluationbecause of fears that it would be inflationary. Policies under Bruning hadbeen brutally deflationary with workers taking a 10% wage cut, but thr 1923hyperinflation (and Schacht's role in stopping it) was still fresh inpolicy-makers' minds. Workers in voluntary labor camps which absorbedunemployment were paid very low wages and lost their unemploymentcompensation which helped maintain price stability. Strangely Silvermanhardly mention the USSR as a source of ideas in the Hitler years lthoughthe 4-year Planitself was inspiredby the Soviet FYP, the second ofwhich was being completedby the time Goebbels began administering theGerman equivalent. Earlier (February,1935) Soviet-type "workbooks" necessary for employment were introduced. Ther Russian economytoday would seem to have more to learn from the German experience after 7years of Yeltsin's brutally deflationary monetarist policy than from FRD'sfiscalbungling. The non-payment of wage and pension arrears is a historiclow in the application of the neo-classical notion that attrbutesrecessionary unemployment to exhorbitant wages.



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