The National Socialists of Germany were anti-capitalists par excellence. They actually spelled it out in the 13th plank of their 25-Point program of 1920, demanding “nationalization of all businesses which have been up to the present formed into companies (trusts).”
Adolf Hitler was adamant about eventually expropriating all privately-owned companies in one fell swoop. During one of Hitler’s tirades against capitalists and their unearned income, he declared to Albert Speer, his WWII Minister of Armaments and War Production, “One of these days I’ll sweep away this outrage and nationalize all corporations.”
Near the end of World War II, even Albert Speer worried about a complete government takeover of the private sector in Germany, warning that “a kind of state socialism seemed to be gaining more and more ground, furthered by many of the [Nazi] party functionaries.” He was fearful that Germany’s industry and “war production could easily become the framework for a state-socialist economic order.” This was a legitimate concern that dogged German industrialists since many Nazi party radicals favored “nationalization of industry,” or what was also regarded as “state socialism.”
Early on, Hitler had declared war on capitalism, proclaiming during an April 12, 1922, speech, “Capitalism as a whole will now be destroyed… We are not fighting Jewish or Christian capitalism, we are fighting very capitalism: we are making the people completely free.” In the same year, Hitler berated Jews as “capitalistic people, which was brought into existence by the unscrupulous exploitation of men.”
In several interviews, Hitler railed against the bourgeoisie and threatened to crush them. In one 1931 interview by journalist Richard Breiting, Hitler reaffirmed his new world order, revealing, “we will do what we like with the bourgeoisie… We give the orders; they do what they are told. Any resistance will be broken ruthlessly.” In another conversation bashing the bourgeoisie, Hitler declared that capitalists “know nothing except their profit,” and that these money-grubbers were “cowardly shits.” One of the Nazi’s first acts in taking power in 1933 was to issue a threat to “raid business houses that don’t contribute sufficiently to party funds.”
Hermann Rauschning, an elected Nazi senate leader in the Free City of Danzig, revealed that Hitler promised to seize the property of the bourgeoisie after he took power, declaring, “The expropriation of the property will inevitably follow, as well as the complete abolition of private enterprise.” Rauschning renounced the Nazi Party in 1934 and spent the rest of his career fighting National Socialism, anti-Semitism, and anti-Christianism.
The Nazi’s hatred of capitalism
Hitler’s hatred of capitalism and admiration for socialism was no secret. He saw himself as a man of little wealth. In a March 27, 1936 speech to Krupp Locomotive factory workers, der Führer lamented, “Whenever I stand up for the German peasant, it is for the sake of the Volk. I have neither ancestral estate nor manor… I believe I am the only statesman in the world who does not have a bank account. I hold no stock, I have no shares in any companies. I do not draw any dividends.”
In other speeches, Hitler claimed to be a plebeian comrade of little means. He told workers in Berlin, “All my life I have been a ‘have-not.’ At home I was a ‘have-not.’ I regard myself as belonging to them.” A true Marxist could not have been more elegant than Hitler’s assertion of his self-pity and poverty.
On April 6, 1941, Hitler bragged about his victorious 45-day battle against the western Allies, declaring, “It is already war history how the German Armies defeated the legions of capitalism and plutocracy.”
Hitler repeatedly pledged loyalty to socialism as his guiding light, advocating a collectivistic foundation in his worship of “The common good before the individual good.” In fact, in one speech in 1941, he brazenly proclaimed, “I am a fanatical socialist, one who has ever in mind the interests of all his people.”
George Orwell of Nineteenth Eighty Four fame understood the dangers of Hitler’s anti-capitalist economics, asserting in 1941, “The State, which is simply the Nazi Party, is in control of everything. It controls investment, raw materials, rates of interest, working hours, wages. The factory owner still owns his factory, but he is for practical purposes reduced to the status of a manager. Everyone is in effect a State employee.” In another article, Orwell spells it out plainly. “National Socialism is a form of Socialism, is emphatically revolutionary, does crush the property owner as surely as it crushes the worker.”
Joseph Goebbels, Hitler’s Propaganda Minister, considered himself a “Revolutionary Socialist. He represented the essence of socialism and collectivism. He believed that “To be a socialist is to submit the I to the thou; socialism is sacrificing the individual to the whole.”
To the National Socialists, wealth inequality was a horrendous injustice that had to be solved. Both German National Socialists and Italian Fascists attempted to strengthen and enlarge their socialized safety nets via social justice programs. This is why Goebbels applauded the generosity of Hitler’s welfare state, boasting in a 1944 editorial, “Our Socialism,” that “We and we alone [the Nazis] have the best social welfare measures. Everything is done for the nation… the Jews are the incarnation of capitalism.”
After Nazi Germany invaded Poland in 1939 from the west and the Soviet Union’s onslaught from the east, Goebbels interpreted the political divide between England and Germany as “England is a capitalist democracy. Germany is a socialist people’s state.” Goebbels condemned the capitalists in England as the “richest men on earth.” In his “England’s Guilt” speech, he compared England’s anti-socialist plutocracy to Nazi Germany’s lavish social welfare programs, declaring, “It is also why English capitalists want to destroy Hitlerism. They see Hitlerism as all the generous social reforms that have occurred in Germany since 1933”, which “could endanger English capitalism.” In years before the war, Goebbels confessed that he was frustrated that National Socialists and the Communist Party of Germany (KPD) had to be rivals, forced to go after the same constituency, like “two rabid dogs fighting for one bone.”
Hitler echoed Goebbels’ “social justice”, “social equality”, and pro-labor messages, declaring to “party comrades” on Nov. 8, 1939, that Western powers hated the Nazis because they were setting “a dangerous example for them, this social Germany.” Hitler proclaimed, “It is the Germany of social welfare, of social equality, of the elimination of class differences—this is what they hate!… They hate this Germany which has eliminated unemployment, which, in spite of all their wealth, they have not been able to eliminate… They hate this Germany of social legislation, this Germany which celebrates the first of May as the day of honest labor.”
Socialist Economic Policies
As for Nazi economic policies, Cambridge University historian R.J. Overy asserted that after Hitler’s rise to Chancellor in 1933, “the role of the state in regulating and directing economic life increased sharply” and that its control of Germany’s economy was “not unlike the system that had already been built up in the Soviet Union.”
For instance, from 1933 to 1943 the number of state-owned firms had expanded to over 500, mostly in key industries. When Hermann Göring, one of the most powerful leaders in the Nazi party, wanted additional industrial capacity or raw resources, he simply established state-owned companies or expropriated private industrial companies. As an example, in 1937 Göring decided to nationalize private deposits of iron ore, “taking control of all privately owned steelworks and setting up a new company, known as the Hermann Göring Works.”
As R.J. Overy explained in War and Economy in the Third Reich, Göring and the Nazis’ military-industrial empire represented “one of the major steps towards restricting private industrial capitalism and substituting a ‘völkisch’, state-run industrial economy.” A state-owned holding company, Göring Works (Reichswerke) was able to obtain “huge sums of money” in efforts to seize, organize or forcibly merge industries, whereas funding for private-sector companies was “curtailed.”
Hitler’s socialist policies advanced a command economy where politics had overwhelming priority over the interests of consumers or business owners. In this context, R.J. Overy identified Hitler as “an enemy of free-market economics.” He further contended that “Nazi political hegemony in the end prevented German capitalists from acting as capitalists.”
And what was so odious about Nazi Germany’s economics? As William L. Shirer, author of The Rise and Fall of The Third Reich, asserted, the German businessman was buried under “mountains of red tape,” and ordered by the “State as to what they could produce, how much and at what price, burdened by increasing taxation and milked by steep and never-ending ‘special contributions’ to the party.” In short, the Nazi’s economic policies could be easily identified as variants of current-day market socialism and interventionism found among communist nations that retain some market mechanisms.
The National Socialists, like all the other ideological dictatorships of the Twentieth Century, engaged in confiscatory taxation, expropriation, debt expansion, and a rapine economy as a means to redistribute wealth within society that greatly benefited the bureaucratic apparatus and the party-based political elite. Under this kleptocracy, the Nazis developed an entrenched deep state that elevated “the party machine” to a state-within-a-state, preserving the vested power of its leadership.
One Nazi decree imposed in July of 1933 authorized the “confiscation of property of enemies of the people.” By 1939, over 400 decrees and regulations lead to a massive program of state-sponsored theft, to which the Nazis dutifully attempted to give the appearance of legitimacy.
Not only that, but German tax officials imposed a lien of up to 250,000 Reichsmarks by 1936 on anyone suspected of planning to flee Germany. In July of 1933, the “Compulsory Cartel Laws” empowered the Minister of Economics to forge new cartels or to compel already established firms to enter into cooperative agreements with other cartels or to dissolve any cartel agreement.
Moreover, Hitlerian socialism advanced domestic social policies that “were remarkably friendly towards the German lower classes, soaking the wealthy and redistributing the burdens of wartime to the benefit of the underprivileged,” as noted in Götz Aly’s book Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State. In other words, The German National Socialists secured revenues that “amounted to a state-sponsored campaign of grand larceny.”
To prop up this large welfare state, Nazi Germany had become a redistributive regime that sought to rob the rich to pay the poor to fashion a universal social utopia—a sort of social justice mecca that has been dubbed a “racist-totalitarian welfare state.” Aly wrote, to “achieve a truly socialist division of personal assets, Hitler implemented a variety of interventionist economic policies, including price and rent controls, exorbitant corporate taxes,’ subsidies to German farmers,… and harsh taxes on capital gains.
The Nazis were belligerent toward small businesses and trade associations. On July 15, 1933, the Third Reich made membership in cartels mandatory, while a year later, all business and trade associations were reorganized and put under the control of the state. To eliminate small corporations in 1937, Hitler’s government “dissolved all corporations with a capital under $40,000 and forbade the establishment of new ones with a capital less than $200,000,” which resulted in the quick elimination of one-fifth of all small companies.
Pushing to Abolish the German stock market
By the late 1930s, many regional stock exchanges were subservient to Nazi ideology and had “largely become an instrument of capital mobilization by the state.” In other words, the stock and bond market became the state’s piggy bank. Companies were forced to make loans to the Third Reich. Some Nazi leaders even proposed a ban on any trading of bonds and stocks, attributing international trade and security markets to “Jewish capital.” Nazi administrators discouraged the issuance of new shares of stocks while at the same time delisting some companies’ stocks that were already trading on the German stock exchange. And according to Caroline Fohlin in Finance Capitalism and Germany’s Rise to Industrial Power, the Nazis closed many stock exchanges, reducing them “from twenty-one to nine in 1935.”
Wary of the speculative nature of stocks, the Nazi regime “limited the distribution of dividends to 6 percent.” In 1936, edicts “prohibited the quotations of foreign stocks on German stock exchanges” and later “blocked foreign exchange dealing at the stock exchanges completely.”
Nazi ideologues, especially Gottfried Feder, saw banks as parasitic moneylenders and dividend drawers that had no duties to the community. Not surprisingly, in this anti-capitalist climate, the Nazis “favored public-sector banks, as a less ‘capitalistic’ way of managing money,” according to Harold James, a professor of history at Princeton University.
Some business associations initially refused to cooperate with the new Nazi regime in 1933, prompting Otto Wagner, Hitler’s economic advisor, to “forcibly” occupy “the headquarters of the Reich Association of German Industry, with the clear intention of closing it down.” Most associations and businesses quickly capitulated to stop such “intimidatory extortions.” Up to 30 million Reichsmarks went into Party coffers from industrialists in the first year of Hitler’s chancellorship.
In 1934, the Deputy Commissar in the Ministry of Economics warned an audience of business owners that: “Any organization that represents the interests of the employer will be regarded as illegal and disbanded and the guilty parties will be prosecuted.”
While the Third Reich imposed a myriad of high taxes on businesses, the German citizenry received supplemental benefits for insurance, coal, rent, potatoes, and other daily needs for family maintenance such as dental bills and children’s education costs. Similar to farm policies later enacted in many nations, including the United States, the Nazi state “handed out billions in price subsidies to farmers.”
The National Socialists engaged in a centrally planned, welfare-infused economic model alongside a military buildup. To rapidly advance their generous social welfare programs, the Nazi administration eliminated all private charities so that the state could control the distribution of welfare benefits and thereby socially engineer society. As Hitler had promised in a 1940 speech, his goals for society were “the creation of a socially just state, a model society that would continue to eradicate all social barriers.”
Additionally, “the Nazis also introduced a progressive income tax that shifted a far greater tax burden onto corporations and the very rich,” a policy that has been extremely popular among left-wing social liberals and progressive policy wonks. Taxes were so high and complex that taxes were occasionally based on the gross amount, not on the net profit. One such case was a Berlin hotel owner and wine wholesaler, Lorenz Adlon, who paid “taxes equivalent to 40 percent not of his firm’s profits but of its annual turnover of 5.7 million Reichsmarks.” According to German historian Götz Aly, one levied tax required German property owners “to pay ten years of the tax in advance in a single lump sum.”
High taxes and government subsidies
While the Third Reich imposed a myriad of high taxes on businesses from a “windfall profit tax” to a “real estate inflation tax,” the German citizenry received supplemental benefits for insurance, coal, rent, potatoes, and other daily needs for family maintenance such as dental bills and children’s education costs.
Günter Reimann in his 1939 Vampire Economy repeatedly detailed the negative impacts of state planning by the National Socialists. He was inside Nazi Germany as a Communist underground resister who had to flee by 1934. He documented the harsh conditions that businesses faced under the Third Reich. He revealed that most German proprietors “fear National Socialism as much as they did Communism in 1932” and that “these Nazi radicals think of nothing except ‘distributing the wealth.’” He further asserted that “Some businessmen have even started studying Marxist theories so that they will have a better understanding of the present economic system.”
Besides high taxes, rigid regulations, and forced loans to the Nazi government, hundreds of thousands of small business owners had no choice but to violate the regulatory laws daily while simultaneously paying off an army of policemen who were eager to arrest business “lawbreakers.” In other cases, Nazi administrators fined businesses millions of marks for a single bookkeeping mistake. This was a form of state-sanctioned extortion seen as necessary to finance Nazi Germany’s almost bankrupt welfare-warfare state.
Moreover, in an effort to socialize the economy, Germany was turning into an informant-surveillance state. Small business owners had to provide daily reports to local Nazi officials on what was “discussed in Herr Schultz’s bakery and Herr Schmidt’s butcher shop.” If shopkeepers grumbled too much, they would be considered “enemies of the state,” and could suffer the loss of their business license or lose quotas for often scarce goods. Similar to what the Communist Party implemented after seizing power in Russia, the Nazi Party imposed an administrative program of house watchers (blockleiter and blockwalter). These low-level Nazi officials were encouraged to keep watchful eyes on their assigned commercial or neighborhood city blocks, reporting to authorities anyone who failed to give the “Heil Hitler” greeting, befriended Jews, voiced dissent, or engaged in any anti-Nazi activities.
A host of economic side effects surfaced. After suspending what remain of the gold standard, Nazi Germany pressured its central bank to keep interest rates low and government budget deficits high, causing the economy to overheat and triggering higher prices. By November 1936, the Nazi regime issued a price-stop decree that prohibited increases in prices and wages. Despite the fact that more waves of inflation continued to occur, prices were still kept artificially low. Although Germany’s economy was floundering, the Nazi administration pursued more centralization of its domestic and foreign economies, and international trade continued to slow, which resulted in serious food shortages and rationing of key consumer goods like produce, butter, and many “consumables.” Even gasoline and fuel needed to operate cars were rationed, preventing many German citizens from owning or driving vehicles.
Serious food shortages and reckless spending
As for shortages, one American magazine reported in 1937 that Germany was having the “most serious food shortage” since the first war. German restaurants were ordered to limit their menus. A popular German ditty exposing the discontent went: “Hitler has no wife; the farmer has no sow [seeds]; the butcher has no meat; that is the Third Reich.”
By 1936, Germany’s reckless spending, foreign-exchange controls, and anti-free trade policies had reached a crisis point. This precipitated a shortage of foreign currency and reduced imports of raw materials to the point where manufacturers had in-house supplies “sufficient for only two months.”
Clearly, bureaucratic tyranny, retaliatory regulations, massive welfarism, nationalization, and extortionist taxation are not unique to Nazism. Ironically, many leaders in the Democratic Party, who were dedicated to defeating the National Socialist and Italian Fascist regimes during World War II, now find it convenient to duplicate the socialist economics of National Socialism. Ironically, the modern, statist liberal appears to have far more in common with the socioeconomic policies of National Socialism than with the traditional American tenets of classical liberalism, free-market capitalism, and individualism.
This article is just a short taste of the anti-capitalistic nature of the National Socialists of Germany. My chapter on Nazism in my Killing History book has over 600 footnotes citing dozens of historians, political scientists, economists, and journalists of the era.