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Jack Weber

Nazi War Economy – Some Fiction and Some Facts

(May 1941)

From The Militant, Vol. V No. 18, 3 May 1941, p. 5.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The war economy of fascism has hypnotized many non-Marxists with the idea that German fascism has built a new lurid of social system. These people give Hitler credit for miraculous powers, including the ability to completely control wages, prices, production – and even crises! Dwight MacDonald even calls fascist war economy planning for use!

Hitler was fortunate in coming to power just as the economic cycle of world capitalism was turning upwards. His political victory over the disunited workers permitted the capitalist class to stabilize their economy and to re-establish profits at the direct expense of the wages and living standards of the workers. Hitler “fixed” wages at their lowest level attained during the crisis, and then attempted (without complete success) to keep them there.

He then turned immediately to the rearmament of Germany and to preparations for war. This not only “solved” the unemployment problem by absorbing seven million unemployed, but soon created a shortage of labor. The tremendous speed of rearmament was rendered possible by the complete domination of monopoly capitalism and the utter impotence of the working class.

Forgotten was all Hitler’s tommyrot about women staying at home. Women young and old flocked into the factories. Today there are seven million in factories and offices, not counting those giving forced labor on the farms. A million workers were taken from the farms between 1932 and 1937. This actually resulted in a decline in agricultural output in the latter year. Even handicraftsmen were farced into the factories. As the fascist press felicitously put it: “The handicraftsman must be forcibly led to his happiness.”

“Controlling” Wages And Prices

The wage schemes of monopoly capitalism soon struck a snag in the war economy. Such an economy (in the United States, England, or Germany) demands reduced investments in new capital, the depletion of existing capital in order to supply the vast funds needed by the government from savings and capitalist surplus, and also reduced personal consumption. Carried too far, personal consumption comes into conflict with war’s demand for increased production. However, when labor productivity declined under the terrible strain in Germany, the bosses were forced to raise wages, especially in the speeded-up war industries. Theft the competition for labor, especially skilled labor, nullified all the laws and agreements. Wages had to be bid: up to secure labor – and to prevent slowdowns!

Nazi price control is no different from that of England or of the United States, except that here it is starting later. The boards set up for “planning” and for price control are the same as here. Here Stettinius, Knudsen and Henderson sit with the generals. There Krupp, Schroeder and their confrères not only sit with the generals but have themselves been given the glittering uniforms of generals and named “leaders” of their own monopolist enterprises. Prices are set in the usual manner in which monopoly capitalism sets prices. It would require more than this column to quote the complaints and exposures in the Nazi press itself regarding the methods of price evasion, rendered easy by the private control of production and distribution.

Fascist “Planning” Equals Anarchy

How about “planning”? Marx long ago pointed out the distinction between the ordered planning inside the factory under capitalism – and the resulting anarchy of production in society. Planning for use means planning for the whole of society so as to meet all the needs of people and raise their living standards. In fascist Germany, production by monopoly capitalism for war breeds admittedly increasing misery of the masses. German economy is being wrenched for the purposes of war. The same thing is occurring in England, and will occur here.

In 1935 the share of capital goods to consumers goods in Germany was 55% as against 45%. In 1938 it was 62% as against 38%. In the ten years between 1928 and 1938 total income went up 26%. But the production of consumers goods dropped one-third! The awful fear of inflation inherent in these figures, the vision of another 1923, drove Secretary of State Brinkmann out of his mind six weeks after taking the place of Schacht.

Hitler’s ‘New Order’ Lives By Looting

Hitler has gambled on being able to solve this anarchy of German capitalist economy by robbing the peoples of Europe. Are farm laborers needed in Germany? Then send millions of conquered peoples and soldiers there as slaves. Does Germany. need to replace its badly worn machinery? Then dismantle the factories of the rest of Europe and send the machines to Germany. Are consumer goods needed by the German masses? Then take them away from the inferior races and let them starve! This is the “planning” of fascist capitalism that requires the looting of all Europe to attempt to make good its own anarchy.

So long as the state continues to give orders to German factories, so long as war industry expands, the capitalists need not worry about markets for their goods. But the distorting of German economy in the process, and the mounting of the state debt means not only bankruptcy but a tremendous economic explosion in the future.

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