THE NATIONAL SOCIALIST ECONOMY (part 2/2)

https://www.bitchute.com/video/Ld8fxzEXZ2Qz/

DOWNLOAD THIS EXCELLENT VIDEO ABOUT THE ECONOMICS OF THE THIRD REICH BEFORE IT GETS CENSORED. Main secondary sources used for this video (click images for links to these two excellent archived books) 

https://archive.org/details/HitlersRevolutionByRichardTedor_383

https://archive.org/details/ToozeAdamTheWagesOfDestruction

Part 1 here ; https://www.minds.com/DerHimmelstern/

3) BATTLE FOR WORK

In general, the housing policy of the Third Reich in its early years consisted of shifting responsibility back towards private sources of funding. Whereas under the Weimar Republic 42,4 % of all housing finance had been provided by the public authorities, by 1936 this had fallen to 8 %. [...] the Volkswohnungen were to provide no-frills urban housing for the working class, built according to the first projections for as little as 3.000-3.500 Reichsmarks. Hot running water, central heating, were all ruled out as excessively expensive. Electricity was to be provided for lighting. Each housing unit was to be subsidized by Reich loans of a maximum of 1.300 RMs. Rent was to be set at a level which did not exceed 20 % of the incomes of those at the bottom of the blue-collar hierarchy, or between 25 and 28 RMs per month.

Wages of Destruction - Adam Tooze

Hitler did not take questions from his audience, nor did he spell out exactly what was expected of the business leaders. Hitler had not come to negotiate. He had come to inform them of his intentions. And his audience can have been left in no doubt. Germany's new Chancellor planned to put an end to parliamentary Democracy. [...] It was also clear that many leaders of German business thrived in this authoritarian atmosphere. Hitler's regime promised to free German firms to manage their own internal affairs, releasing them from the oversight of independent trade unions. In future, it seemed, wages would be determined by the productivity objectives of employers, not the dictates collective bargaining. [...] And for those businessmen who operated in a small, National of local compass, the years after 1933 were clearly a golden age of authoritarian 'normality'. [...] The distribution of profits to shareholders was not to exceed a rate of 6 % of capital. Industrial investment would be funded out of the profits not distributed to shareholders. Access by corporate borrowers to the long-term capital market-replenished out of household savings flowing through the banks, savings banks and insurance funds - would be restricted, reserving these funds for use by the state. For the first time, the Reichsbank was given the power to define basic reserve requirements and to fully regulate the deployment of private banking assets. The Great Banks of Berlin were thus saved from Nationalization. The evidence suggests, however, that they never really recovered from the damage done to them by the financial crisis of 1931. In purely commercial terms the Berlin Great Banks were amongst the chief 'losers' of the Nazi economic recovery. Between 1932 and 1939, in which period German output more than doubled, the total assets of the Berlin Great Banks rose by only 15 %. By contrast, the assets of the savings banks, the main vehicle for what one might call 'popular liquidity', rose by 102 % over the same period. At the same time, the international business of the Great Banks was sharply curtailed by the collapse in Germany's foreign trade. But, contrary to the view that the Great Banks were the ultimate string-pullers of National Socialism, it is in fact hard to think of any other period in modern German history in which these institutions had less influence than the period between 1933 and 1945. [...] What Hitler's regime positively enabled German business to do was to recover from the disastrous recession, to accumulate capital and to engage in high-pressure development of certain key technologies: the technologies necessary to achieve the regime's twin objectives of increased self-sufficiency (autarchy) and rearmament.

Wages of Destruction - Adam Tooze

So Schacht made a direct appeal to the mining interests. They had earned good profits and gained great advantages from natural resources that actually belonged to the general public. Now they would be expected to make a contribution. [...] Having failed to obtain voluntary agreement, he had the Ministry draft a Decree for the Creation of Compulsory Economic Associations in the Brown Coal Industry. Each was instructed to make out a cheque for at least 1 million RMs for immediate use. When more coal companies were added in November, Schacht threatened both unlimited fines and imprisonment of anyone refusing to cooperate.

Wages of Destruction - Adam Tooze

It is commonplace to describe Germany's trade policy from the summer of 1934 onwards as autarchic - a generalized effort to restrict imports and achieve self-sufficiency. A close look at the trade statistics reveal that "autarchy" in fact amounted to a selective policy of disengagement directed above all against the United States, the British Empire and, to a lesser degree, France. In 1928, American exports to Germany had been worth 2 billion RM and exports from Germany to the United States were valued at 796 million RM. By 1936, this trade had shrunk to derisory levels. American exports to Germany were worth no more than 232 million RM and German exports amounted to less than 150 million RM. So being that the import-export business with America took a major hit, Germany looked in other places to find the natural resources. Namely, South America and Southern Europe. [...] What saved Schacht were three things: the continuing recovery of the global economy, which produced a resurgence in demand for German export, the willingness of countries other than the United States, most notably Britain, to comply with Germany's new trading system; and the sheer determination and effectiveness with which the New Plan was imposed. As-of May 1935 a progressive tax was levied on the turnover of German industry to raise the tens of millions of RMs needed every month to maintain the competitiveness of German exports. In effect, the profits of the domestic armaments boom were being recycled to assist the ailing export sector. For most industries the levy was assessed at rates between 2 and 4 % of turnover. [...] From June 1935 until the spring of 1938, steady growth in exports was vital to sustaining the momentum of Hitler's economic recovery. [...] From the spring of 1934 onwards, the RB and the RWM squeezed down hard on all aspects of household consumption that were dependent on imported raw materials. The result was to split the German economy in two. Whilst the investment goods industries and all sectors associated with the drive towards self-sufficiency continued their surging recovery, the upswing in the consumer sectors, above all textiles, was suddenly stopped in its tracks. For more than two years, starting in the spring of 1934, Hitler's Germany saw virtually no growth in the output of consumer goods. In order to (since they did not have abundant of the imported materials needed) they pretty much let textiles, surely with engorgement, be one of the items that were to avoid lower price setting and instead raise a bit more, making the products a bit more expensive to buy, thus, ideally being bought less by the public. Though exports were of course to be encouraged, the government's refusal to devalue meant that most German exporters were only competitive if they first applied for a subsidy. This too required considerable paperwork and more bureaucracy. And the export subsidy in turn was financed by a severe redistribution tax levied on all of German industry. [...] In each sector, the existing multiplicity of voluntary associations was fused together into a hierarchy or Reich Groups (for industry, banking, insurance, and so on), Business Groups (for mining, steel, engineering and so on) and Branch Groups. Every German firm was required to enroll. [...] Since this entire apparatus of control was designed to limit German imports, it had the effect of virtually eliminating foreign competition from German markets. Nothing was imported that could be produced domestically and that meant virtually all manufactured goods. Combined with rising levels of domestic demand this enabled German producers to put an end to deflation and to push through a marked increase in prices. After years of deflation, the consumer price index rose by almost 6 % between the spring of 1933 and August 1934, enough to spark fears of inflation. To prevent this getting out of hand, the RWM enacted a series of decrees on prices, culminating in November 1934 with the reappointment of Carl Goerdeler as Reich commissioner for price control. [...] the result by the end of 1935 was the creation of a comprehensive system of state supervised price setting. The compulsory cartels had the power to control investment in their sector and to rationalize the existing structure of the industry through systematic 'buyouts'.

Wages of Destruction - Adam Tooze

The problem that now posed itself with ever greater urgency, however, was how to sustain German exports without a devaluation. A solution was found in the autumn of 1933 through a variety of schemes, all of which made use of the advantage that Germany had gained through the moratorium on its foreign debts. Either through a complicated system of buy-backs, or through manipulating the blocked accounts of the foreign creditors in Germany, the Reichsbank found ways of subsidizing Germany's exporters at the expense of its creditors, earning Hjalmar Schacht his dubious reputation in the 1930's as the dark wizard of international finance. The tension reached its climax in the 2nd half of June, with Schacht's announcement on 14 June of a complete moratorium on foreign debt repayment and the imposition of a new regime of daily foreign exchange allocation.

Wages of Destruction - Adam Tooze

In April 1933 the cabinet gave Schacht carte blanche to instigate a moratorium on Germany's international debts, at a moment of his choosing. At first, Schacht hoped to exploit the confused situation in the United States by announcing an immediate default. He gambled that Roosevelt's administration, preoccupied with the agricultural depression at home, might be willing to sacrifice the interests of Wall Street in exchange for a German agreement to increase raw material imports. Schacht's first interview with the President seemed to confirm this hunch. But, before Schacht could take irrevocable action, the US State department intervened, issuing a brusque communique stressing that the new administration expected Germany to honour its debts. [...] On June 8th the cabinet gave its approval for a unilateral moratorium on Germany's long-term foreign debts, to begin as of 30 June. As a sign of 'good faith', German debtors would go on making payments in RM into accounts administered by the Reichsbank. However, the RM accumulated in the creditors' accounts would no longer be transferred into foreign currency. Payment in foreign currency would only resume once Germany's foreign trade position was resorted to a healthy surplus. This ultimately depended on the creditor countries. If they wanted repayment of their debts, they would have to purchase German goods. If Germany could not achieve the required trade surplus, it could not be expected to engage in large-scale foreign debt service. [...] At precisely the same moment as Germany announced the moratorium on its long term debts, Hitler's government also took the decisive steps towards rearmament. [...] The figure approved by Schacht was 35 billion RM, to be spent over eight years, at a rate of almost 4,4 billion RM per annum. To put this in perspective, annual military spending by the Weimar Republic was counted not in billions but in hundreds of millions of RM. [...] Schacht's programme called for between 5 and 10 % of Germany's GDP to be devoted to defense for the next 8 years. Given the parlous state of the German economy in 1933 and the shell shock in the financial markets, raising even the first installment of the 35 billion RM through taxation or conventional borrowing was out of the question. So over the summer of 1933 Schacht initiated a military version of the off-budget financing system first used for civilian work creation. [...] A few weeks after the meetings of early June, special account offices were set up to channel the off-budget funds that were now to flow to the military. As of April 1934, armaments contractors were paid in IOUs issued in the name of the Mefo GmbH (Metallurgical Research Corporation). This company was formed with a capital of 1 million RM, provided by major armaments producers. [...] For a small discount, contractors to the rearmament drive could cash in their Mefo bills at the central bank.

Wages of Destruction - Adam Tooze

A September 1933 law established the Reichsnährstand (Reich's food Producers), an organization to promote the interests of people in the agrarian economy, fishermen and gardeners. [...] the organization gradually raised the purchase price of groceries by over ten percent by 1938. This measure was not popular among the public, but greatly assisted planters. The Reichsnährstand not only arranged for a substantial reduction in property taxes for farms, but wiped the slate clean on indebtedness. This gave heavily mortgaged farm owners a fresh start. Another organization, the Landhilfe (Rural Assistance) recruited approximately 120.000 unemployed young people to help work farms. The government financed their salaries, training and housing. [...] During World War I, his country had suffered acutely from Britain's naval blockade of food imports. He considered a thriving agrarian economy vital to making Germany self-sufficient in this realm.

Hitler's Revolution - Richard Tedor

And if Germany were ever to emerge as a serious trade competitor, it would be at mercy of the British and the Jewish propagandists of global Liberalism, who would not hesitate to unleash a second, ruinous world war, whilst crippling the German home front by means of blockade. [...] In June 1933 German farm debtors were effectively removed from the ordinary credit system, being provided with complete protection against their creditors. Imports were subjected to quotas, as the agricultural lobby had long demanded.

Wages of Destruction - Adam Tooze

It is hard to believe that by Lebensraum Hitler really meant mere land, rather than something more valuable such as industrial raw materials. But in making such assumptions we are in danger of ignoring the fact that 'land shortage' was in the 1930s still one of the chief afflictions of German society. [...] For the purpose of protecting the peasantry as the 'Blood Source of the German People', the law proposed to create a new category of farm, the Erbhof (hereditary farm), protected against debt, insulated from market forces and passed down from generation to generation within racially pure peasant families. The law applied to all farms that were sufficient in size to provide a German family with an adequate standard of living, but did not exceed 125 hectares in extent. [...] By the same token, it also imposed constraints. Erbhoefe could not be sold. Nor could they be used as security against mortgages. [...] Erbhoefe were to have a single male owner, who was required to document his line of descent, at least as far back as 1800, the same requirement as for civil servants. [...] The mechanism of price-setting was the key. The RNS made use of prices to regulate production. Higher prices were used to encourage production. Lowering a price in relative terms served to divert production into other lines. But the prices themselves were no longer freely determined by the balance of supply and demand. [...] What the RNS was able to achieve was not only a substantial increase in domestic food production, but also a substantial improvement in the resilience of German agriculture in the face of shocks. [...] In managing these setbacks the RNS's most important resource was the large grain reserve accumulated during the bumper harvest of 1933. Shortfalls in 1934 and 1935 were covered by running down the stock accumulated in the first good year of the Third Reich. This, however, was by its nature a short-term solution. [...] To dole out the scarce supply of butter, a discreet system of rationing was introduced in the autumn of 1935, in the form of customer lists kept by the retail outlets. The meat supply could not be completely insulated from the impact of the disastrous potato famine in 1935. To ensure that there were sufficient potatoes for human consumption, the RNS culled the pig population and pushed through a sharp increase in the price of pork products. In Berlin, the price of cooked ham was raised by almost 30 % between 1934 and 1936. From 1937 onwards German production was more than adequate to meet domestic demand. Imports were used, not to support current consumption, but to rebuild National grain stocks, which by 1939 were sufficient to cover the population's bread supply for an entire year. [...] Probably the most onerous restrictions imposed by the RNS were those requiring farmers to deliver quotas of milk to licensed RNS dairies. [...] In return for the exclusion of foreign competition from home markets, peasant smallholders had to accept comprehensive regulation and control. Farming in Germany, as in Europe generally, from the 1930s onwards resembled less and less a market-driven industry and more and more a strange hybrid of private ownership and state planning. According to figures calculated by Germany's most authoritative economic research agency, total farm income, of which animal products accounted for more than 60 %, rose by almost 14 % in 1933-4 and by another 11,5 % in 1934-5. At the same time the burden of taxes and interest payments on agriculture fell significantly.

Wages of Destruction - Adam Tooze

4) REARMAMENT

State spending was 70% higher than it had been in 1928 and that increase was almost entirely due to military spending. [...] There can be no doubt that rearmament was already the dominant priority by 1934. In 1932 the German aircraft industry employed 3.200 people and had the capacity to produce no more than a hundred aircraft per year. Less than ten years later, the regime had created a multi-billion RMs aircraft and aero-engine industry. [...] Fundamentally, therefore, Germany's largest new manufacturing sector was not merely state controlled. It was a product of state initiative, state funding and state direction. [...] Given the general recovery of the German economy and the alternative investment opportunities this offered, it simply was not commercially justifiable to invest large quantities of money in an overcrowded industry that was entirely dependent on an unpredictable flow of government orders. [...] Of the growth in total National output in Germany between 1935 and 1938 almost half (47 %) was accounted for directly by the increase in the Reich's military spending. If we add investment, of which a very large part was dictated either by the priorities of autarchy or rearmament, the share rises to two-thirds (67 %). Private consumption, by contrast, was responsible for only 25 percent of the growth over this same period, even though in 1935 it had accounted for 70 % of total economic activity.

Wages of Destruction - Adam Tooze

5) THINGS CAPITALISTS DON'T CARE ABOUT

The Weimar era, the birth rate was steadily dropping "from 36 births per thousand inhabitants in 1901, to 14,7 births per thousand inhabitants in 1933. [...] An important expression of national confidence was a sharp increase in the birth rate. Within a year after Hitler came to power, the German birth rate jumped by 22 percent, rising to a high point in 1938. It remained high even in 1944 -- the last full year of World War II. [...] For every two children born in Germany in 1932, three were born four years later. [...] Germany’s crime rate fell during the Hitler years, with significant drops in the rates of murder, robbery, theft, embezzlement and petty larceny.

How Hitler tackled unemployment and revived Germany's economy - Mark Weber (Institute for Historical Review)

The Labor Procurement Law provided newlyweds loans of RM 1,000 at one percent monthly interest. The loans came in the form of coupons to buy furniture, household appliances and clothing. To be eligible, the bride had to have been employed for at least six months during the previous two years, and had to agree to leave her job. Returning women to the home vacated positions in commerce and industry, creating openings for unemployed men. For each child born to a couple, the government reduced the loan by 25 percent and deferred payments on the balance for one year. For larger families, upon birth of the fourth child, the state forgave the loan. It financed the program by imposing surtaxes on single men and women. [...] The state imposed no property tax on young couples purchasing small single family homes.

Hitler's Revolution - Richard Tedor

The KdF began sponsoring low-cost excursions the following year, partly subsidized by the DAF, that were affordable for lower income families. Package deals covered the cost of transportation, lodging, meals and tours. Options included outings to swimming or mountain resorts, health retreats, popular attractions in cities and provinces, hiking and camping trips. In 1934, 2.120.751 people took short vacation tours. The number grew annually, with 7.080.934 participating in 1938. [...] The influx of visitors boosted commerce in economically depressed resort towns. These activities were only possible because Hitler, upon founding the “Strength through Joy” agency in November 1933, ordered all German businesses and industry to grant sufficient paid time off for employees. Prior to that year, nearly a third of the country’s labor force had no union contract and hence worked without vacations. In 1931, just 30 percent of laborers with wage agreements received four to six days off per year. The majority, 61 percent, received three days. The National Socialist government required that all working people be guaranteed a minimum of six days off after six months' tenure with a company. As seniority increased, the employee was to earn twelve paid vacation days per annum. [...] Few aboard had never experienced a cruise, and they returned to port exhilarated. In well-publicized interviews, travelers enthusiastically described the new KdF fleet as “dream ships for workers. [...] Portuguese and Italian residents of ports of call saw for the first time working class Germans enjoying a recreational activity previously associated with the upper class. During 1935, over 138.000 Germans took KdF cruises. [...] The sports office of the DAF sponsored labor’s involvement in other “exclusive” activities such as tennis, skiing, horseback riding and sailing.

Hitler's Revolution - Richard Tedor

Part 1 here ;  https://www.minds.com/DerHimmelstern/

Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use.