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Many point to improvements in Germany's economy that took place under Hitler prior to WW2. To a certain extent, some of this must have been attributable to theft of Jewish property and the jobs in well-paid professions that because Jews were expelled from such positions. I am saying that two things: taking Jewish assets certainly nominally helped the state; freeing up jobs for "aryans" would contribute to the perception that Hitler was creating jobs.

My question is, did Germany require continued theft (that certainly took place during WW2) and I guess the economic benefits of war production (which ultimately are a waste without war) in order to thrive economically or could they have stopped prior to the war?

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    No research. Invited assertions. Who is "many"? What is the context for these claims? Is this question a hypothetical? – Mark C. Wallace♦ Aug 12 '19 at 9:01
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    It may be involuntary, but: "improvements in Germany's economy … and the jobs in well-paid professions that because Jews were expelled from such positions" is a big big problem here! Jews contributed to German economy before, the jobs stayed within that eco-system –– or is this asserting that Jews substracted from GDP, worked 'against' Germany, weren't part of it? – LаngLаngС Aug 12 '19 at 9:14
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    Well, I hoped it to be sth like that. But it is a difference between improving economic situation for a subset of ('Aryan') 'Germans' or for 'Germany'. But in any case, do not argue or explain in comments, but edit the question to make it clearer (and here probably also less offensive in its wording). – LаngLаngС Aug 12 '19 at 10:12
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    The question appears to confuse a number of issues. "economically necessary" isn't defined. Does that mean "Could Germany have survived without WWII?" or, "Were there economic interventions other than war that could have salvaged the German economy?" But the underpinning assumption that expropriating Jewish assets somehow helped the state and the notion that punishing a minority improved the perception of the state shifts the question out of the realm of economics and into an uncomfortable racist/political sphere. This question is unclear. Please edit the question to address the issues. – Mark C. Wallace♦ Aug 12 '19 at 11:21
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    @LangLangC I'm just trying to help with possible sources. I assume the asker is interested in far more detail on Schacht's views than my poor memory can supply. – C Monsour Aug 12 '19 at 18:54
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The question could use some clarity, but is not unreasonable.

In fact, a book was written pretty much on this subject. The Wages of Destruction. Haven't read it, plan to.

As a 50-ish French guy, no, it wasn't uncommon to hear older French people say something like "well, he was batshit evil but did fix their unemployment". By people who were not in the least sympathetic to Nazis. My mother, among others, who was a lieutenant nurse in the Resistance (I have seen the papers for it).

Think about it from an economically naive contemporary's point of view: Germany is facing massive economic crisis in the early 30s and is then humming along by 38. Everyone has a job. The country is even able to build a massive army. Miracle, no?

Well, no. It turns out that the Nazis massively overspent, using borrowed money (spending skyrocketed, German tax revenues didn't budge much). So, yes, I'd argue that, having made his choices from '33 on, one way to avoid default was to go pillaging.

Showing economic incentives is not being sympathetic to Nazism. If you gamble and then go on a murderous robbing spree to pay for it, then people will identify your debts as being a factor, but need not forgive you in the least.

And, going back to my remark that it wasn't (and probably still isn't) an uncommon statement by people, that makes it all the more important to debunk the fact that "there was NO German economic miracle from '33–'38". They borrowed massively and overspent. But the Nazi system most certainly did not magically "solve" the economic problems that plagued everyone else during the Great Depression.

It's also an interesting coincidence, that just around that time, FDR decided on his Keynes-inspired deficit spending "pay them to dig holes, pay them to fill them back in". This was a novel approach at the time, I wonder if anyone in the Nazi camp was tracking Keynes as well.

Yet, the nature of FDR (and subsequent stimulus packages) and the Nazis was very different, mostly due to the Nazi extreme emphasis on arms. Imagine two destitute men, both getting loans from a bank. One gets a shave, some new clothes and goes job-hunting while taking night classes. The other gets a spiffy new suit, goes partying on the town and buys himself a very expensive gun so he can rob people. All that money spent on rearmament by the Nazis was going to be wasted if they hadn't gone to war.

And then one way to pay for the "miracle" was to go to war, pillage and steal. Ask the Dutch, who suffered a massive famine in late '44, how good the Nazis were at sucking up money and goods, in this case without any racial motivation, just greed.

"Guns and butter" was always the Nazis' easy way out, that's how come they didn't even really go onto a full war economy until much later, around the time Speer took over.

The Nazis didn't have to embark on their atrocities, no. And the end result was massive impoverishment for Germany. But they did lay the foundations for needing to either plunder or default by their own early choice of economic policies. And in fact by concentrating so much on military spending.

So a question asking whether they were facing, self-imposed, economic pressures to go to war in 38 or 39 is not unwarranted and is in fact a glaring indictment of all their economic policies up to that point. Policies that made them popular.

Absent war in 39, Nazi Germany was not an economic success story that went rogue. It was a failure and con job from the start and this is a fact that is not nearly well-known enough.

https://en.wikipedia.org/wiki/Economy_of_Nazi_Germany

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    The "Wages" needs an author name and perhaps link. In 33 it wasn't hyperinflation (that came 10 years earlier) And add to your argument that the budget was a state secret and aided and abetted not only by borrowing but also by massive financial fraud. The last link already there, why not spell out the "flight into war" controversy (as the OP should have done in Q)? You may also ref your pillage part with Aly? – LаngLаngС Aug 13 '19 at 9:55
  • It turns out that the Nazis massively overspent, using borrowed money Interesting, also that's exactly what the modern western nations are doing since the 1970s, too. Among those the US is one of the worst offenders. – Bregalad Aug 14 '19 at 9:26
  • @Bregalad, as long as your economy is growing faster than your overspending, you can get away with it. – Mark Aug 15 '19 at 2:20
  • I think it's simplistic to compare budget deficits nowadays with Germany 33-38. The budget deficits we run are nowhere near that magnitude, have been in place much longer so are less extreme, and the economic fundamentals underpinning most Western countries are much better. Greece aside. Don't take this as a me liking persistent budget deficits - I think they are a long term pest. Temporary deficit spending, as in 2008, can be a useful tool, even if, 11 years later, most countries are still running deficits. – Italian Philosophers 4 Monica Aug 15 '19 at 2:39
  • If Hitler had stopped with, say, the conquest of France, would not the deficit spending have been justified or did he need to continue conquests that led to Germany's defeat? – releseabe Jan 28 at 11:30
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Many point to improvements in Germany's economy that took place under Hitler prior to WW2.

That's debatable. Some improvements were made, but generally speaking he overspend massively based on a complete lack of economic knowledge. That overspending doesn't have to become a problem, and can revive a bad economy. But you HAVE to pay it back. His programs didn't do that at all, they made it much worse. So worse that he had to go to war to steal the cash and resources he needed elsewhere.

Germany didn't have an economic problem. Not more than anyone else, that is. Hitler (perhaps unknowingly) created one. He wanted Germany to be an autarchic country. No country in the world can be 100% self supporting. There (usually) is a surplus of something that you can sell to get the stuff you don't have.

In fact, Germany could and very likely would have become the world's biggest economy if both world wars hadn't taken place. They had excellent industry, work ethics, science to offset the raw materials they lacked.

By changing the economy to become self supporting, coupled with massive public work projects and insane spending on the military he drained the treasury. The only way to solve the impending bankruptcy was first to rob the Jews, and when that source was cleaned out, rob neighboring countries of their wealth. Nazi policy was in effect a mugger gone crazy, looking for bigger and bigger victims.

Look at Germany today. It has a bigger population and a much, much stronger economy than ever before. Both WW1 and WW2 were completely unnecessary. Germany could have easily dominated the world economically. The German problem was that their leaders (the emperor, the generals and later a 'böhmischer gefreiter' (lance corporal) knew everything about war, loved it, glorified it -- and knew absolutely nothing at all about economy.

Added later, due to comments and an answer:

Could Germany have been the no. 1 economic World Power? Possibly. If they had concentrated on economy and not on war after the Franco-Prussian war. We cannot know because it never happened. At the beginning of WW1 Germany was economically about the same level as the British empire, or very close to it.

If we look at how (economically) powerful Germany is today, it's not absurd to look at Germany not going to both wars at all, and concentrate on economic conquest instead. It never happened, and is a 'what-if' scanario. Pretty far fetched, I fully admit. Germany had to be totally different for that to happen.

Was war economically necessary for Germany? No. It was politically necessary. It's very likely Germany and the USSR would go to war to each other, but it was not necessary. America (NATO) never went to war against the USSR (after the Russian revolution was over).

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    Lots of speculation and opinion; but few facts. Claiming that Germany would have surpassed the U.S.A. as the world's largest economy at any point in the 20th Century or early 21st Century is - absurd. Germany even in 1914 had not the population, the area, or the natural resources to compete with the U.S. Even today the GDP of the entire European Union, at USD $18.8 trillion, is USD $500 billion less than the US GDP at USD $19.3 trillion. GDP of Poland and Germany combined (not far off 1914 Germany) is only a bit more than USD $4.3 trillion, less than 1/4 of the U.S.A. – Pieter Geerkens Aug 12 '19 at 5:13
  • I am not saying Hitler caused improvements -- but certainly many assert that he did. – releseabe Aug 12 '19 at 6:44
  • @releseabe You didn't, and I don't think you asserted it. I don't know why people down vote this very good question, well worthy of answering. – Jos Aug 12 '19 at 6:48
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    @Jos Not a downvoter, but probably the lack of researsh and poor wording. Also any "hitler" question is very likely to be downvoted, in general unless the quality of preliminary researsh is atsounding, which is not the case here. – Bregalad Aug 12 '19 at 9:02
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    Loosing a World War first, then crashing the economy with hyperinflation and then Great Depression plus massive reparations, yet "Germany didn't have an economic problem"? And then this looks again like Hitler acting alone with his "economic knowledge". There were experts doing that for him. And as long as their names don't show up here, it is a bad answer. As the part of this answer that doesn't engage in speculations about alternate histories fails on macro-economic theory and actual, sourced, history, I recommend you either re-write it afresh including such sources – or just delete it. – LаngLаngС Aug 12 '19 at 9:26
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Yes, if they wanted to be great power

If we search for a few words to describe Germany in interwar period, those would be poor industrial country. Enormous cost of WW1, reparations, abolition of Gold mark (with associated devaluation of Papiermark and infamous inflation), loss of colonies etc ... left Germany in pretty bad economic shape. What Germany still had was industrial capacity and industrial know-how . With low wages and skilled workforce, Germany managed to recover somewhat after 1923, mostly on the back of its workers. Essentially, in that period Germany was similar to China in late 20th and early 21st century - good place to outsource your industry. Unfortunately, Great Depression struck Germany hard. Germany was very dependent on influx of foreign capital (mostly from US) and foreign investments. When that dried out, all progress made form 1923 quickly evaporated. Unemployment again rose, prostitution became rampant, chaos erupted on the streets, and whole country entered a stage where radical changes were needed.

Now, as we said before, biggest loser of interwar years was German working class. Consequently, they were natural supporters for any kind of revolutionary political movement. German centrist parties never had much influence on them, as well as traditional monarchist rightist parties. Social-democrats were once influential, but in developing crisis they were seen as too meek and mild. This left only two choices, Communists and National-Socialists .

Communist ideology was relatively straightforward, and therefore unacceptable to majority in middle and higher class, but National-Socialists were a different beast. National-Socialists did promise to improve conditions for the workers (and therefore preempt revolution) but they also didn't push for complete annihilation of private means of production. They also promised to restore German status as great power (and vaguely to restore some lost territories) . And exactly this second point made them much more acceptable to richest parts of German society.

German economic circles were painfully aware that German industry depends on various imported raw materials. Since Germany practically lost whole navy after WW1 (as well as overseas possessions) and had reduced army, it was dependent on goodwill of others for trade. Also, German economy was based on industrial export - for that Germany had to keep prices low and quality high. There was always present danger of others overtaking Germany with their industry. Finally, as foreign economic markets moved from boom to bust, German economy was at the mercy of others.

Solution that National-Socialists proposed seemingly could solve all of these economic problems. In order to keep Germany stable and independent from others, it was necessary to gain living space in the East for agriculture, seize other valuable resources (mines, oilfields, forests etc ...) and compel other countries to become satellites in German block. This way, Germany would not depend on international capital, but to achieve this goal war was a necessity, and large parts of educated and wealthier Germans did agree with this. This is the reason why Hitler did have their support despite their private misgivings about him that started even before the war. One thing to note is that at this historical period international economic cooperation like G7, EU and other various economic blocks was not nearly developed as today. Therefore, Germany could not protect its economy in the same manner it is done today. Basically, in those days, economy was zero-sum game and Germans simply concluded that only way to achieve greatness is to use force to remedy some of their problems at the expense of others.

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  • The League of Nations was certainly developed, although it's true it was limited. It was biased towards the victors of WW1, but today's UN is biased towards the victors of WW2 and people still accept that somehow. – Bregalad Aug 12 '19 at 19:06
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    @Bregalad League of Nations (as well as UN today) are not economic blocks. They were not designed to mitigate economic crisis, instead they suppose to prevent wars. Of course, since lot of wars have economic causes, this is not very successful . – rs.29 Aug 13 '19 at 6:13
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Short answer: Yes, war against Bolshevism was considered unavoidable for the survival of the nation.

The August 1936 Momorandum sets out the reasons why Hitler believed this and his instructions on how it is to be delt with.

Our political situation results from the following:

Europe has at present only two States which can be regarded as standing firm in the face of Bolshevism: Germany and Italy. The other countries are either disintegrated through their democratic form of life, infected by Marxism, and thus likely themselves to collapse in the foreseeable future, or ruled by authoritarian Governments whose sole strength lies in their military means of power; this means, however, that, being obliged to secure the existence of their leadership in face of their own peoples by means of the armed hand of the Executive, they are unable to direct this armed hand outwards for the preservation of their States. All these countries would be incapable of ever conducting a war against Soviet Russia with any prospects of success. In any case, apart from Germany and Italy, only Japan can be regarded as a Power standing firm in the face of the world peril.

It is not the aim of this memorandum to prophesy the time when the untenable situation in Europe will become an open crisis. I only want, in these lines, to set down my conviction that this crisis cannot and will not fail to arrive and that it is Germany’s duty to secure her own existence by every means in the face of this catastrophe, and to protect herself against it, and that from this compulsion there arises a series of conclusions relating to the most important tasks that our people have ever been set.

For a victory of Bolshevism over Germany would not lead to a Versailles Treaty but to the final destruction, indeed to the annihilation of the German people. The extent of such a catastrophe cannot be foreseen.

How, indeed, would the whole of densely populated Western Europe (including Germany), after a collapse into Bolshevism [nach einem bolschewistischen Zusammenbruch], live through probably the most gruesome catastrophe for the peoples which has been visited on mankind since the downfall of the States of antiquity.

In face of the necessity of defence against this danger, all other considerations must recede into the background as being completely irrelevant.

Hitler ends the Memorandum with his order, as Reichskanzler, that

within 4 years

  • the army must be prepared for war
  • the economy must be prepared to perform without outside dependencies (needed imports may be blocked by the enemy)

Any person, organization or country who cannot or will not do what is deemed to be needed, will be replaced by the state that will find a way to get the task done, is I believe, a core statement which defines the priorities :

Das Wirtschaftsministerium hat nur die nationalwirtschaftlichen Aufgaben zu stellen, und die Privatwirtschaft hat sie zu erfüllen. Wenn aber die Privatwirtschaft glaubt, dazu nicht fähig zu sein, dann wird der nationalsozialistische Staat aus sich heraus diese Aufgabe zu lösen wissen.

Elsewhere, statements are made that major economic principles

  • prices, economic productivity, balanced bookkeeping

are to be ignored.

This would explain why there is no plan for the day after the winning of the war was completed successfully (it would be delt with then)

  • and when not, they would not be there to clean up the created mess anyway

The base of the German economic policy was the Four Year Plan (in German: Vierjahresplan) which was based on the Memorandum by Hitler on the Tasks of the Four-Year Plan, August 1936

The full (German only) text can be found here: Hitlers Denkschrift zum Vierjahresplan 1936 (pdf, pages 94-100, in German) together with the (German only) wiki page which gives further backgound information.

or

Note: The Israeli source (for the English extract of the Memorandum) references:

Akten zur deutschen auswaertigen Politik 1918-1945 ("Documents on German Foreign Policy 1918-1945"), series E (1933-1937), Vol. V, 2.

Series C (and not E) March 5 - October 31, 1936 - No. 490, dated 1936-08-01 - is the correct version to look for

as it's source of the extract.
To my knowledge an English version exists of the 1918-45 documents, where the complete text of the Memorandum may be available.

An English version, as pdf, could not be found of the Documents On German Foreign Policy Series C Volume V, printed by the United States Government Printing Office.

Full English text of the Memorandum as pdf from the German Historical Museum.

Conclusions:

The Memorandum of August 1936 was the initial blueprint (Plan A) of the war, where

  • the major goals were set
  • the preconditions needed to fulfill these goals were set

In 1938/39 conditions had changed which lead to an adapted Plan B

  • Alliance with the Soviet Union, caused by the actions of the western democracies
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  • Yes, war against Bolshevism was considered unavoidable for the survival of the nation. WW2 started with an alliance with bolsheviks... – Bregalad Aug 12 '19 at 9:02
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    @Bregalad: ...which was from the very beginning a ruse. There can be no doubt whatsoever that everything up to Operation Barbarossa was done in preparation for Operation Barbarossa. Hitler didn't "want" Czechoslovakia, or Poland, or France. He wanted "Lebensraum im Osten" -- the Ukraine and beyond. – DevSolar Aug 12 '19 at 9:18
  • @Bregalad Yes, but had the west (France, UK) not interfered 2 years after the concept has been written, no attempt of a alliance would have been made. The primary goal was to rid the world of the SU, take their land and becomming self-sufficient in food. The western democracies were described as weak and ridden with Bolsheviks in the Memorandum. They are not meantioned again in the concept. – Mark Johnson Aug 12 '19 at 9:34
  • This plan(s) are an important stepping stone. But I guess they are much too late (Mein Kampf + Liebmann-Aufzeichung; Öffa/MeFo) and at the same time too early for what unfolded after 38. – LаngLаngС Aug 12 '19 at 14:35
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    That's exactly my point. Just because Hitler (or anyone) thought something was true does not make it true. The question asks "Was war necessary" not "Did Hitler think war was necessary." – DJClayworth Aug 13 '19 at 12:37

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