Understanding Nazi Economic Policy: A Mercantilist Approach
Hitler's economic policy during the Third Reich has been subject to much scrutiny and debate. Influenced by Benito Mussolini's corporate state doctrine, which itself drew inspiration from mercantilism, Nazi Germany implemented an economic system that prioritized state control and minimized market competition.
The Corporate State and Mercantilism
Central to Mussolini's leadership was the concept of the corporate state, which laid the foundation for Nazi economic policies. Mercantilism, an economic doctrine championed by mercantilists, advocated for active government intervention in the economy to achieve national wealth and power. This approach aimed to control the means of production and trade, and it influenced the development of colonizing strategies, leading to the American colonies’ rebellion against Great Britain.
Impact on the American Colonies and Great Depression
The mercantilist approach of regulating trade and production was seen as a means to protect domestic industries and facilitate economic growth. In the colonies, mercantilism led to conflicts with the British crown as colonies sought to establish their own trade networks. Similarly, during the 1930s Great Depression, Germany faced severe economic challenges. The decline in worker income resulted in increased strikes, leading to higher production costs and the risk of business bankruptcies. Low wages and high unemployment pushed millions towards homelessness and malnutrition.
Nazi Implementation of Mercantilist Principles
Hitler's government adopted certain mercantilist principles to address these issues. They established state agencies to negotiate labor disputes, aiming to prevent strikes through state intervention. Historical precedents from colonial times show that mercantilist governments actively regulated prices and production, dividing markets and restricting entry to new producers unless necessary. This approach also encouraged state-owned enterprises, as seen in the case of Volkswagen's famous Beetle, which was initiated by Hitler.
Economic Infrastructure and Expansion
The Nazi regime also focused on expanding public infrastructure, drawing inspiration from the German Autobahn. The U.S. Interstate Highway System, built after World War II, bears a striking resemblance to the Autobahn, demonstrating the influence of Nazi economic policies on post-war infrastructure development. Both systems were seen as integral to national economic growth and strategic advantages.
Comparing Economies: Command vs. Market
The debate between command and free market economies continues to this day. While market economies generally perform well under normal conditions, command economies can be more effective in extreme circumstances, such as during depressions or wars. In the 1930s, Germany's economy had largely recovered before Hitler initiated large-scale rearmament. However, the U.S. New Deal, which implemented some command economy measures, did not fully recover until the onset of World War II.
Case Study: German Economy and World War II
Germany's economy, by 1936, was in a position to handle rearmament without significant issues. However, the U.S. production and employment only returned to pre-crisis levels after converting to a command economy during the war. The U.S. transition to a command economy for the duration of World War II highlighted the effectiveness of such an approach in responding to extreme economic demands.
In conclusion, Nazi economic policy, rooted in mercantilism and the corporate state, presents a complex and often controversial economic model. While it may have had short-term success in addressing certain economic challenges, it also contributed to the broader context of World War II. Comparing the effectiveness of command and market economies reveals the importance of context in economic policy decisions.