Probably the most important and most controversial question we face in the interpretation of Adolf Hitler’s economic concepts is the one about the relationship between market economy and planned economy elements in his thinking.
In fact, to a certain extent we can only speculate on Hitler’s true position before 1933 because Hitler kept his plans strictly secret, primarily in order not to offend the businessmen. In his talks with Otto Wagener, the chief of the economic policy section of the NSDAP, Hitler underlined the importance of keeping his economic plans secret time and again. In September 1931, for example, he said:
“The conclusion from this is what I have said all along, that this idea is not to become a subject for propaganda, or even for any sort of discussion, except within the innermost study group. It can only be implemented in any case when we hold political power in our hands. And even then we will have as opponents, besides the Jews, all of private industry, particularly heavy industry, as well as the medium and large landholders, and naturally the banks.”
In speeches to industrialists before 1933, Hitler presented himself as a supporter of private ownership; in other speeches, he sharply attacked capitalism. Often tactical considerations played a role, and sometimes he was only saying what he knew his audience wanted to hear. One thing is certain, however: Hitler’s main intention was obviously to reconcile the advantages of the principles of competition and selection (in the socio-Darwinistic sense) with the “advantages” of a state-controlled economy.
While the state was to direct the economy according to the principle “common interest before self-interest” and to set the objectives, within this framework the principle of competition was not to be abolished, because in Hitler’s view it was an important mainspring for economic development and technical progress. What was important, however, was that Hitler did not share the beliefs of economic liberalism, according to which the common good would come about as a result of the play of the various self-interests.
This is made clear in a speech Hitler delivered on November, 13 1930:
“In all of business, in all of life in fact, we will have to do away with the concept that the benefit to the individual is what is most important, and that from the self-interest of the individual the benefit to the whole is built up, therefore that it is the benefit to the individual which only makes up the benefit to the community at all. The opposite is true. The benefit to the community determines the benefit to the individual. The profit of the individual is only weighed out from the profit of the community…. If this principle is not accepted, then an egoism must necessarily develop which will destroy the community.”
In view of the successes then achieved by the economic policies of the government, Hitler’s reservations against state planning of the economy gradually diminished. How important Hitler considered the question of state-controlled planning of the economy to be can be seen from the fact that in August 1936 he personally wrote a “Memorandum on the Four-Year Plan 1936.” In this memorandum his admiration and fear of the Soviet system of planned economy were expressed: “The German economy, however, will learn to understand the new economic tasks, or it will prove itself to be incapable of continuing to survive in these modern times in which the Soviet state sets up a gigantic plan.”
Hitler was convinced of the superiority of the Soviet planned economy system over the capitalist economic system. This must be regarded as an essential reason why he so vehemently demanded and enforced the extension of state control of the economy in Germany as well.
Hitler attributed the success of National Socialist economic policy primarily to state control of the economy. From 1940 at the latest, Hitler increasingly became a proponent of the state planned economy – partly because he was convinced of the superiority of the Soviet Union and its economic system. In his monologs to his inner circle (known as “table talks”) on July 27-28, 1941 Hitler said that “A sensible employment of the powers of a nation can only be achieved with a planned economy from above.”
About two weeks later he said: “As far as the planning of the economy is concerned, we are still very much at the beginning and I imagine it will be something wonderfully nice to build up an encompassing German and European economic order.” The statement that as far as the planning of the economy was concerned one was still at the very beginning is important because it shows that Hitler was not thinking at all of a reduction of state intervention – not even for the time after the war – but, on the contrary, intended to expand the instruments of state control of the economy even further.
On July 5, 1942 Hitler expressed the opinion that if the German economy had been able so far to deal with innumerable problems “… this was also due in the end to the fact that the direction of the economy had gradually become more controlled by the state. Only thus had it been possible to enforce the overall national objective against the interests of individual groups. Even after the war we would not be able to renounce state control of the economy, because then every interest group would think exclusively of the fulfillment of its wishes.”
Hitler’s view of the Soviet economic system apparently also changed from skepticism to admiration. In a table talk on July 22, 1942, Hitler vehemently defended the Soviet economic system and even the so-called “Stachanow System,” which it was “exceedingly stupid” to ridicule: “One has to have unqualified respect for Stalin. In his way, the guy is quite a genius! His ideals such as Genghis Khan and so forth he knows very well, and his economic planning is so all-encompassing that it is only exceeded by our own Four-Year Plan. I have no doubts whatsoever that there have been no unemployed in the USSR, as opposed to capitalist countries such as the USA.”
Hitler’s admiration for the Soviet system is also confirmed in the notes of Wilhelm Scheidt, who—as adjutant to Hitler’s “representative for military history” Walther Scherff and a member of the Führer Headquarters group—had close contact with Hitler and sometimes even took part in briefings. Scheidt writes that Hitler underwent a “conversion to Bolshevism.” From Hitler’s remarks, he says, the following reactions could be derived: “Firstly, Hitler was enough of a materialist to be the first to recognise the enormous armament achievements of the USSR in the context of her strong, generous and all-encompassing economic organisation.”
Scheidt writes that in view of such impressions Hitler had recognised and expressed “the inner relationship of his system with the so heatedly opposed Bolshevism,” whereby he had to admit that “this system of the enemy was developed far more completely and straightforwardly. His enemy became his secret example.” The “experience of Communist Russia,” particularly the impression of the alleged superiority of the Soviet economic system, had produced a strong reaction in Hitler and the circle of his faithful: “The other economic systems appeared not to be competitive in comparison.” About the impression of the rational organisation of farming in the USSR and the “gigantic industrial plants which gave eloquent testimony despite their destruction,” Hitler, says Scheidt, had been “enthusiastic”.
The German dictator admitted during a conversation with Benito Mussolini on April 22, 1944, he had become convinced: “Capitalism too had run its course, the nations were no longer willing to stand for it. The victors to survive would be Fascism, and National Socialism – maybe Bolshevism in the East.”
Hitler himself was convinced, as he emphasized in his last radio address on January, 30, 1945, “that the age of unrestricted economic liberalism had outlived itself.” These statements of Hitler’s in 1935 to 1945, but particularly from the beginning of the 1940s on, show that he had become a vehement critic of the system of free enterprise and a confirmed adherent of the system of a planned, state-controlled economy.
This essay is based on the content in Rainer Zitelmann’s new book, Hitler’s National Socialism.
The post How Hitler Became a Believer in the State-Planned Economy was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.