Everything seems clear to the citizens who are attempting to participate in today’s US political discourse: the ‘left’ believe that ‘social justice’ is their aim, the ‘right’ believe that the fight is on to save the nation from an alien onslaught and an international economy that has shorted the US in trade. Those on the ‘street’ level – the people duking it out at political gatherings and on ‘social media’ – passionately argue their sides. These people run on automatic. Their slogans and positions are ‘meme’-like catch phrases and their dialog is on point. One could argue that this is the tradition in politics – but if one looks a bit deeper, one would find that the current version is something altogether different.
Until the ‘internet age’ people took positions based on their independent wishes of government. When they went to a union meeting – for example – they went to form a front for their shared interest in labor related issues. They were consciously aware about the policies that would affect their lives. Today, the ‘left’ and the ‘right’ only have a generalized opinion of the state of things – and their opinions are shaped and formed by those controlling both sides through ‘social’ and other forms of media. When one idea pops up – seemingly out of nowhere – it goes ‘viral’ and becomes the cause célèbre talking point of the day. Both ‘sides’ run with it. When the day’s slogan changes the next day, that becomes the point of argument. In other words, the people duking it out are simply moving on an instinctual impulse – they’re being ‘played like a fiddle’.
Those who are running the show sit back and no doubt smile as chaos rules the day.
But this entry – and the one to follow – isn’t going to go in more depth regarding this issue. It was explained in order to set-up what’s to follow.
On the ‘right’, the most persistent trigger concept is ‘social-democrats’ and ‘cultural marxism’. And while this characterization is actually quite astute, the ‘right’ are perpetually confounded about the term ‘socialism’ itself. One of the more surprising developments in today’s US political climate is the growing number of younger people who are discovering the virtues of early-20th century National Socialism as defined and put into practice in Germany under the leadership of Adolf Hitler. These young people attempt to argue their points from the National Socialist perspective. They typically state their ideas on ‘right’ oriented ‘social media’. What happens is quite interesting.
The followers of the Republican party inevitably disregard anything these young people have to say without even considering the value of the points. The first reason is the obvious: Hitler was a terrible dictator and ‘we kicked his ass’. Gung ho Americanism. The second is more absurd: National Socialism is ‘socialism’ and socialism is a failed ‘economic’ system that didn’t work, and never will. These uneducated people on the ‘right’ say this with such absolute certainty that it becomes obvious that they are merely parroting the same propaganda narrative that has pervaded the West since 1945. The younger people attempt to illustrate why this is inaccurate, but they are tossed aside as ‘nazi’ morons who should go ‘back in their basements and clean their guns’. No attempt is made to even try to refute what these young people have to say – because when a few have tried, they find that their previous beliefs are indeed very wrong. Most will run like they never found this out – sub-consciously they fear what would happen to them if they openly expressed this new understanding. But some become believers – and they join the ranks of the few who have the courage to state their findings.
So, this post will be used as a sort of primer. It’s a ‘for the record’ reference for those who are curious enough to actually look at some of the facts regarding National Socialism. The first fact is that National Socialism is NOT marxism. National Socialism does not equate with marxist ‘socialism’. In other words, contrary to the predominant thinking on the ‘right’, ‘socialism’ is not a blanket description that defines itself within that term. This writer prefers to refer to National Socialism as ‘Aryan’ Socialism – as opposed to marxism. Aryan Socialism & marxism are diametrically opposed: marxism sees people as cogs in the machine, Aryan Socialism sees people as ethnic builders of civilizations. The first only tears down, the later seeks to raise up.
The second fact is that National Socialism did not ‘fail’ – it was incredibly successful. So successful in fact that it had to be utterly destroyed before it caught on anywhere else. World War II was a war of ideology. It was indeed a war of ‘freedom’ v. ‘tyranny’ – but the West was completely confused about which side was fighting for which. Germany fought for economic independence and national sovereignty. The US and Great Britain fought for an internationalist financial empire that continues to terrorize the world to this day.
Without further ado, we’ll proceed with the record. The material for this post – and the following – was compiled by Der-Himmelstern, at DeviantArt. For those who prefer a visual presentation, a video will be found at the top – this video has been banned on YouTube, for obvious reasons, but it is posted and re-posted by various users in order to keep it alive. For those who prefer a good read, text will be found below. This contains references from a few scholarly works, but two in particular: Hitler’s Revolution by Richard Tedor, and The Wages of Destruction by Adam Tooze. The reader will find many facts about National Socialism that have been obscured form the light of day for over 70 years – facts that a new generation are discovering with great enthusiasm. What will become of these young people is unclear, but they certainly stand apart from the ‘left’ and the ‘right’ with their eyes wide open and free from the herd.
Main secondary sources used for this video (click images for links to these two excellent archived books):
“The scale of the Nazi economic achievement should not be underestimated, it was real and impressive. No other European economy achieved such a rapid recovery. To most people in 1930s Germany it seemed there had been an economic miracle. The Volksgemeinschaft [National Community] was more than mere rhetoric; it meant full employment, higher wages, stable prices, reduced poverty, cheap radios and budget holidays. It is easily forgotten that there were more holiday camps than concentration camps in Germany between 1935 and 1939. Workers became better trained, farmers saw their incomes rise. Nor were foreigners unimpressed by what was happening. American corporations including Standard Oil, General Motors and IBM all rushed to invest directly in the German economy.”
“No objective observer of the German scene could deny Hitler’s considerable exploits, noted American historian John Toland. If Hitler had died in 1937 on the fourth anniversary of his coming to power […] he undoubtedly would have gone down as one of the greatest figures in German history. Throughout Europe he had millions of admirers. […] In January 1938, the Soviet diplomat Kristyan Rakovsky commented on the German money system. Rakovsky had held posts in London and in Paris and was acquainted with Wall Street financiers. He explained, “Hitler, this uneducated ordinary man has out of natural intuition and even despite the opposition of the technician Schacht, created an especially dangerous economic system. An illiterate in every theory of economics driven only by necessity, he has cut out international as well as private high finance. Hitler possesses almost no gold, and so he can’t endeavor to make it a basis for currency. Since the only available collateral for his money is the technical aptitude and great industriousness of the German people, technology and labor became his ‘gold’.“
“In its fifth year, Hitler’s regime could present itself as the model dictatorship. Unemployment had fallen to negligible levels. The economy was booming. Life for millions of German households was returning to something like normal.”
1) Setting the Stage
“In 1931 alone, 13.736 companies filed for bankruptcy. An average of 107.000 people per month lost their livelihood. In mid-1932, almost 23 million Germans (36 percent of the population) were receiving public assistance.”
“In January 1933, Germany still owed 19 billion RMs to foreign creditors, of which 10,3 billion were long-term bonds and 4,1 billion were short-term loans. […] At least 8,3 billion RMs were owed to the United States, by far the largest creditor. […] To service its debts Germany faced the need to transfer abroad interest and principal totaling something close to 1 billion RMs per annum, and, given the unavailability of new credit, in the 1930’s unlike in the 1920’s Germany faced the prospect of having to make ‘real transfers’. It could not simply borrow afresh to repay its creditors. If Germany was to service its debts, exports would have to exceed German imports by at least 1 billion RMs. This meant a substantial reduction in the standard of living.”
“At the NSDAP congress in September 1935, Hitler defined the RAD’s (Reich’s labor service) social purpose to 54.000 assembled members: “To us National Socialists, the idea of sending all Germans through a single school of labor is among the means of making this National community a reality. In this way, Germans will get to know one another. The prejudices common among different occupations will then be so thoroughly wiped away as to never again resurface. Life unavoidably divides us into many groups and vocations. […] This is the primary task of the labor service; to bring all Germans together through work and form them into a community.” […] The structure supported the goal of eliminating strife within industry by encouraging mutual respect, based not on position but on performance. As defined in one publication, “There is neither employer nor employee, but only those entrusted with the work of the entire nation […] Everyone works for the people, regardless of whether a so-called employer or so-called employee, as it was in the previous middle class order.” This represented a revolutionary departure from the Liberal Democratic perception, as another German study maintained: “In the Capitalist system of the past, money became the goal of work for the employee as well as for the employer.” It was the individual’s wages that appeared to give work a sense of purpose. The employee saw the employer simply as someone who ‘earns more.’ And the employer regarded the staff of workers in his firm only as a means to an end, an instrument for him to earn more. The consequences of this thinking were ominous. Should the working man have any ambition to work anymore when he says to himself, ‘I’m only working so that the man over in the office can earn more?’ Can a business deliver quality work if everyone thinks only of himself? Labor -its purpose, its honor, the creative value, the German worker as a master of his trade and a proud, capable working man, all this became secondary. Reorganizing labor does not just mean removing the crass material deficiencies of life. It must penetrate the relationship of person to person.”
“Hitler wanted Germans to have “the highest possible standard of living,” he said in an interview with an American journalist in early 1934. “In my opinion, the Americans are right in not wanting to make everyone the same but rather in upholding the principle of the ladder. However, every single person must be granted the opportunity to climb up the ladder.” In keeping with this outlook, Hitler’s government promoted social mobility, with wide opportunities to improve and advance. As Prof. Garraty notes: “It is beyond argument that the Nazis encouraged working-class social and economic mobility.” To encourage acquisition of new skills, the government greatly expanded vocational training programs, and offered generous incentives for further advancement of efficient workers. Both National Socialist ideology and Hitler’s basic outlook, writes historian John Garraty, “inclined the regime to favor the ordinary German over any elite group. Workers had an honored place in the system.” In accord with this, the regime provided substantive fringe benefits for workers that included subsidized housing, low-cost excursions, sports programs, and more pleasing factory facilities.“
“The crisis of corporate Capitalism in the course of the Great Depression did permanently alter the balance of power. Never again was big business to influence the course of government in Germany as directly as it did between the outbreak of World War I in 1914 and the onset of the Depression in 1929. Hitler is famous for having said that there was no need to Nationalize German business, if the population itself could be Nationalized. The Third Reich celebrated the German workers and their contribution to the racial community like no previous political regime. In this respect the official language of Nazi Germany set standards quite different from those of the Weimar Republic, let alone the Wilhelmine Monarchy. Hitler’s dream was undoubtedly collectivist at its core.“
3) Battle for Work
“After taking power, writes Prof. John Garraty, a prominent American historian, Hitler and his new government “immediately launched an all-out assault on unemployment. […] They stimulated private industry through subsidies and tax rebates, encouraged consumer spending by such means as marriage loans, and plunged into the massive public-works program that produced the autobahn [highway system], and housing, railroad and navigation projects.”
On the initial finance package
“He immediately agreed terms with the finance Ministry (RFM) on a one-billion RM work creation package. […] A little more than a year after Gregor Strasser’s famous address to the Reichstag demanding action to address the unemployment crisis, the Nazi party had delivered on its promise. The package was so large. One billion RMs was a very substantial sum when compared to the Reich’s regular expenditure on goods and services, which during the worst years of the crisis, 1932-3, had fallen to as little as 1,95 billions RM. Funds were directed towards precisely the priorities outlined before 1932 by Strasser and other advocates of work creation. The money was to flow into ex-urban settlements, road works and housing, appealing to a wide spectrum of both Social and National interests. Above all the package was to be credit-financed. The art of economic policy was to provide the correct dose of credit-financed stimulation, sufficient to restore full employment, but not an excessive amount that would push the economy beyond the limit of full employment and unleash an inflationary free-for-all. The Reichsbank thus ended up holding the work creation bills, in exchange for new cash. To make this acceptable to the Reichsbank, the RFM promised to redeem the bills according to a fixed timetable. Once recovery had been achieved, the RFM would raise the necessary funds through the additional flow of tax revenue generated by economic revival, or by floating long-term government loans, once the financial markets had recovered and savings were buoyant. The Reich Ministries began to prepare a new programme specifically designed to see the building trades in the urban areas through the difficult winter months. The second Reinhardt programme of September 1933 was a return to a less ambitious ideas of work creation relying not on the direct effect of credit-financed government spending, but on indirect subsidies to private activity. It was also more modest in scope. 5 hundred million RM were set aside for subsidies for repair work to building and a further 300 million were earmarked for an interest rate subsidy on mortgages taken out by the end of the 1933-4 tax year. Both these programmes had a measurable effect.”
On limitations on financial speculation, unfair competition and labor organisations
“Beginning in 1934, dividends for stockholders of German corporations were limited to six % annually. Undistributed profits were invested in Reich government bonds, which had an annual interest yield of six percent, and then, after 1935, of four and a half percent. This policy had the predictable effect of encouraging corporate reinvestment and self-financing, and thereby of reducing borrowing from banks and, more generally, of diminishing the influence of commercial capital. […] Taxation of National Socialist Germany was sharply “Progressive,” with those of higher income paying proportionately more than those in the lower income brackets. Between 1934 and 1938, the average tax rate on incomes of more than 100,000 marks (yearly) rose from 37,4% to 38,2%. In 1938 Germans in the lowest tax brackets were 49% of the population and had 14% of the National income, but paid only 4,7% of the tax burden. Those in the highest income category, who were just one percent of the population but with 21% of the income, paid 45% of the tax burden.“
(It should be noted that these taxes are performed on salaries and NOT on companies, as it would be counter-productive.)
“Men who had been out of the work the longest or were fathers of large families received preference in hiring. The law stipulated that German construction materials be used.“
(As opposed to open markets where people buy in other, less costly countries, generating capital loss in your own country.)
“The Motor Vehicle Tax Law of April 1933 abolished at one stroke all operating taxes and fees for privately purchased cars and motorcycles licensed after March 31 of that year. The reduction in consumer costs to own and operate a car was so dramatic as to significantly boost sales. While the industry produced just 43.430 passenger vehicles in 1932, the number rose to 92.160 during Hitler’s first year in office. New car production increased annually. The number of people employed in automobile manufacture climbed from 34.392 in 1932 to 110.148 in less than four years. From 1933 to 1935, the industry built 15 more assembly plants.The government recovered the revenue lost from repealed automotive taxes through reduced payments of jobless benefits, income tax from newly employed auto workers, highway tolls and corporate tax.“
(Ford had a personal contribution in advising his industry model to the Germans)
“Despite objections from Hjalmar Schacht, president of the Reich’s Bank, Hitler withdrew Germany’s money system from the gold standard. Gold was the recognized medium of exchange for international commerce. Over centuries, it had become a commodity as well. Financiers bought and sold gold, speculated on its fluctuations in price, and loaned it abroad at high interest. Hitler substituted a direct barter system in foreign dealings. German currency became defined as measuring units of human productivity. The British General J.F.C. Fuller observed, “Germany is already beginning to operate more on the concept of labor than on the concept of money.” After Hitler nullified the unions, workers came under the newly established Reich’s Institute for Labor Mediation and Unemployment Insurance, the RAA. A common procedure of the RAA was to redistribute manpower where it could better serve National interests. The institute not only possessed the authority to transfer workers to critically distressed areas, but to prevent others from relocating.”
(Former labor unions divided the workforce and would incite the workers to strike, which would sabotage any attempt to set the economy back in motion, therefore no strikes were allowed and all labor unions were centralized as one under state direction.)
“Hitler resorted to equally undemocratic methods to protect the working population from exploitation. He forbade speculation on Nationally vital commodities such as agricultural harvest and energy. The stock exchange, which Reinhardt dismissed as a “gangster society,” suffered increasing limitations to its freedom of operation. Only rarely, and then with difficulty, could novice applicants obtain a broker’s license. The government also protected smaller and newer businesses by banning the practice by established enterprises of ruining retail competitors by underselling their products. The state appointed the Price Oversight Commission to stop businesses from decreasing production or delivery of certain commodities, especially foodstuffs, for the purpose of creating artificial shortages to inflate prices and overcharge consumers. An important organization for promoting National Socialist community values was the Volunteer Labor Service (FAD). Founded in August 1931, the FAD recruited the unemployed for public works. Paying volunteers two RMs a day, a primary purpose of the FAD was to improve the physical and mental well-being of unemployed and unoccupied young Germans. Upon assuming power, Hitler expanded the organization and raised the pay scale. It numbered 263.000 members by mid-1933. The Führer considered it “superbly suited for conscious instruction in the concept of a Volksgemeinschaft (National community).” Membership in the FAD declined as more jobs became available. In June 1935, Hitler enacted a law making six months’ labor service compulsory for teenagers upon high school graduation. No longer voluntary, the FAD became the RAD: Reich’s Labor Service. Members assisted in Autobahn construction, drained swamps, planted trees, upgraded poorer farms and improved waterways.”
“(In the Hanoverian town of Northeim) Displaying a new sense of Social solidarity, the Nazi city authorities devoted tens of thousands of man-hours to the construction of apartments for the overcrowded population of the town. The medieval town center was carefully restored. The ring-wall and moat became a public park. New attention was lavished on the surviving half-timbered buildings in the town center. A large open-air theater was carved out of the nearby forest. […] By 1936, the Northeim tourist office was attracting 60.000 visitors annually. Hitler had set out the struggle against unemployment as a three-stage campaign. The first wave had come in the first half of 1933. The 2nd, the Reinhardt programme, was a vigorous holding action aimed to consolidate the gains of the previous year. Indeed, when they made their decision to cancel any further plans for government work creation spending at the end of 1933, the Reich Ministries did so in part because they wanted the recovery in 1934 to be carried forward less by government-financed earth-moving and more by a revival in private consumption. […] From the outset, therefore Hitler’s economic recovery was driven primarily by the public sector. By 1935 German GDP in real terms had recovered to roughly the same level it had stood at in 1928. This was no doubt a rapid recovery. Between March and September 1934 the Nazi regime suffered the closest thing to a comprehensive Socio-economic crisis in its entire 12 year history. From the beginning of 1934 the Reichsbank’s reserves of foreign currency dwindled alarmingly. Since all the most important industries in Germany were dependent on raw materials from abroad, this savage restriction prompted fears of a new wave of lay-offs. Shortages of raw materials spelled not only unemployment; they also implied shortages of supply for consumers, fears that were compounded by the unusually bad harvest of 1934. Popular discontent with the rising price of imported food was widespread.“
On women in the labor force
“From 1934 to 1937, the number of women in the work force increased from 4,5 million to 5,7 million. Despite programs to encourage women to return to traditional family roles, the government did not restrict those choosing a career. They were equally eligible for tax incentives offered for starting small business.”
“Labour market participation of German women in 1939 was higher than that reached by Britain and the United States even at the end of the war. In 1939, a third of all married women in Germany were economically active and more than half of all women between the ages of 15 and 60 were in work. As a result, women made up more than a third of the German workforce before the war started, compared to a female share of only a quarter in Britain. A year later, the share of German women in the native workforce stood at 41 percent, compared to less than 30 percent in Britain. Not surprisingly, over the following years Britain caught up. But even in 1944 the participation rate for British women between the ages of 15 to 65 was only 41%, as against a minimum of 51% in Germany already in 1939. In areas such as Wuerttemberg and Bavaria, with dense populations of peasant farms, female workforce participation rates already exceeded 60 percent in 1939. It goes without saying that by sustaining the food supply, Germany’s farm women provided an indispensable service to the Nazi war effort.“
On Jewish confiscations
“In July 1933 Hitler stated to a key meeting of leading Nazis that the first wave of revolutionary action against the Jews had had to be brought to a halt because of the front it created against Germany in international opinion. […] In so far as the anti-Semitism of Hitler’s regime had a coherent objective in the 1930’s, it was the removal of Jews from German soil. In this respect it was fairly ‘successful’ in 1933, with 37.000 German Jews driven out of the country by the violence of the seizure of power. The Reichsbank was required by its statutes to provide migrants with the foreign currency needed to meet visa requirements abroad. But if prosperous Jewish families had emigrated en masse from Germany in 1933 and 1934, the effects on the Reichbank’s foreign currency reserves would have been disastrous. At a conservative estimate German Jewish wealth in 1933 came to at least 8 billion RM. Transferring even a modest fraction of this amount was clearly beyond the Reichsbank. As it was, the drain was serious enough. According to a detailed account complied by the Reichsbank, the hard currency losses due to emigration between January 1933 and June 1935 came to a total of 132 million RM, of which Jewish emigrants accounted for 124,8 million RM. As of May 1934 the provisions of the so-called Reich flight tax were tightened up, with the lower threshold for liability being cut from 200.000 to 50.000 RM and greater discretion given to the authorities in making the assessment. These measures helped to reduce sharply the outflow of foreign exchange due to emigration. By the summer of 1935 the Reichsbank’s monthly losses had fallen to 2 million RM (when having peaked at as high as 11 million per month in 1933). However, the net effect was profoundly contradictory. Rather than encouraging emigration, the Third Reich was now imposing a severe tax on anyone seeking to leave the country. Once the initial violence of the seizure of power had passed, Jewish emigration dwindled to only 23.000 in 1934 and 21.000 in 1935. From 1934 onwards the lack of foreign exchange was to become the central obstacle to a coherent policy of forced emigration.”
(The National Socialist state was not willing to see Jews leave with the monetary fruits of the labor of German workers, therefore they imposed drastic taxation on leaving capital.)
On synthetic textiles
“What of the losers in the industrial politics of the 1930s? Nobody would ever describe the textile industry as a beneficiary of Hitler’s regime. However, even here, through a bold exercise in industrial policy, the Nazi regime gathered around itself a cluster of collaborators with a stake in its programme of self-sufficiency and rearmament. This did not involve the spectacular investments that characterized the Luftwaffe or the synthetic fuel programme. But the synthetic fibers programme was to be of crucial significance for a very large part of German industry and it was to be of vital importance in reshaping the clothing supply to the German population. On June 1934 the RWM wrote to the two main producers of synthetic fibers – IG Farben and the Dutch-owned Vereinigte Glanzstofffabriken (VGF) – informing them that: ‘The current state of the Reich’s currency reserves necessitates a most extreme reduction in the import of cotton and wool.’ More specifically, of course, this was required by Schacht’s policy of selective uncoupling from the United States, German’s traditional supplier of cotton. ‘To strengthen the domestic raw material base as quickly as possible, it is the German rayon factories’ peremptory duty not only to exploit their manufacturing capacity to the full, there must also be expanded with haste.’ The Reich authorities wished to see a doubling in the production of viscose-rayon and a huge increase in the production of so-called staple fibers to at least 100.000 tons per annum. The problem, as in the case of oil, was that world prices for wool and cotton were dramatically depressed. Certainly, as far as IG Farben was concerned, synthetic fibers were destined to remain a niche market. Any new capacity created in Germany would be entirely dependent on the state for its viability. In the summer of 1934, however, political involvement in the issue went to the very highest level. In August, Hitler personally inspected samples of fabric woven from IG Farben’s and expressed ‘extreme satisfaction’ at the quality. By 1936, Kehrl could boast of additional production of 45.000 tons of staple fibers in addition to over 50.000 tons of synthetic silk. By 1937, the market share of German produced fibers had doubled to almost 40%. If we are to engage with the everyday lives of ordinary Germans, we need to descend from the abstract heights of comparative National accounting.
On wage disparity and Social ladder climbing
In the 1930s hourly wages for the majority of Germans were counted not in Reichsmarks, but in Pfennigs. Only the most highly paid workers such as skilled machinists or typesetters earned more than one Reichsmark per hour. At the other end of the scale, the lowest-paid male workers in sawmills and textile factories were on hourly rates of 59 Pfennigs. Unskilled women workers in textiles of the food industries could expect no more than 42-5 Pfennigs. In 1936, with the German economy at full employment, 14,5 million people, 62% of all German taxpayers, reported annual incomes of less than 1.500 Reichsmarks, corresponding to weekly earnings of just over 30 Reichsmarks and hourly rates of about 60 Pfennigs. A further 21 percent, or 5 million white-collar and blue-collar workers, reported annual incomes of between 1.500 and 2.400 Reichsmarks (weekly earnings of between 30 and 50 Reichsmarks). Only 17 percent of all taxpayers recorded incomes of more than 2.400 Reichsmarks, or 50 Reichsmarks per week. This income pyramid was sharply divided by class and gender. Male blue-collar workers on average took home 1.761 Reichsmarks in 1936, whilst working-class women 952 Reichsmarks. The average white-collar male earned 3.000 Reichsmarks, almost twice the figure for his female counterpart. From 1933 onwards apprenticeships and on-the-job training were given massive state support. Amongst other requirements, an entirely new workforce of skilled metalworkers had to be created for the factories serving the Luftwaffe. In line with its rhetorical revalorization of German labour, the Third Reich established the norm that every German youth should aspire, at the very least, to the status of a semi-skilled worker. And these were not mere words. In 1939 only 30.000 male school leavers entered the workforce as unskilled labourers, as compared to 200.000 in 1934. For many working-class families, the 1930s and 1940s were a period of real Social mobility, not in the sense of an ascent into the middle class, but within the blue-collar skill hierarchy, prompting one author to speak of the ‘deproletarianization’ of the German working class. It cannot be stressed too strongly, that in the early 1930s Germany looked back on almost twenty years in which economic decline and insecurity massively out-weighted the experience of prosperity and economic advancement. Over the previous decade, international economic integration had brought crisis. Investment had led to bankruptcy. Hundreds of thousands of young people who had embarked optimistically on apprenticeships and university degrees found themselves stranded in unemployment. In light of this experience, one did not have to be a radical right-wing ideologue or paranoid anti-Semite to doubt the efficacy of the Liberal doctrine of progress. Hitler and his acolytes were firmly convinced that the development of the German standard of living had been held back since 1918 by an unholy alliance formed between selfish bourgeois Liberals and primitivist Socialists. This conspiracy of low expectations had benefited only the German bourgeoisie, whilst robbing the majority of the German population of the full benefits of the new technologies of mass-production. Ford had had the entrepreneurial vision to break with the past and to turn what had once been a luxury product into a popular commodity. In Germany, what was required to break the deadlock was an act of decisive political will.
On goods accessibility for the lowest Social classes
The Third Reich made it its mission to use the authority of the state to coordinate efforts within industry to devise standardized and simplified versions of key consumer commodities. These would then be produced at the lowest possible price, enabling the German population to achieve an immediate breakthrough to a higher standard of living. The epithet which was generally attached to these products was Volk: the Volksempfaenger (radio), Volkswohnung (apartments), Volkswagen, Volkskuehlschrank (refrigerator), Volkstraktor (tractor). This list contains only those products that enjoyed the official backing of one or more agencies in the Third Reich. Private producers, however, had long appreciated that the term ‘Volk’ had good marketing potential, and they, too, joined the bandwagon. Amongst the various products they touted were Volksgramophone (gramophone), Volksmotorraeder (motorbikes) and Volksnaehmaschinen (sewing machines). In fact, by 1933 the use of the term ‘Volk’ had become so inflationary that the newly established German advertising council was forced to ban the unlicensed use of the term.
Hitler made his first radio address as Chancellor on 1 February 1933 within days of taking power. At that point, however, there were only 4,3 million licensed radio receivers in Germany for a population of 66 million. Only a quarter of the German households could hear the Führer speak. The chief obstacle to the wider diffusion of radios was their price. The cheapest radios on the market in the early 1930s were priced at over 100 RM. This was to be cheaper than any radio previously on the market, but would be of sufficient quality to enable listeners to receive regional radios stations as well as high-powered National transmissions. To secure a market niche, the members of the radio cartel agreed to offer no competitor products in this price range. The set was proudly entitled Volksempfaenger (VE) 301 after the date of Hitler’s appointment as Chancellor (30 January 1933). It was priced at only 76 RMs. Clearly, for the average German household purchasing a VE 301 was still a serious financial commitment. So to increase the attractiveness of the sets a number of utility companies offered part-payment deals whereby a customer could acquire a set for an initial payment of as little as 7,25 RMs, followed by eighteen monthly installments of 4,40 RMs. A huge additional order was placed immediately, with more than 650.000 Volksempfaenger being sold in the next twelve months and a further 852.000 in 1934-5. Radios became one of the genuine boom industries of the 1930s, stimulating not only electronics production, but also the manufacture of Bakelite and wood cases. By 1937 economies of scale were such that the price for the standard VE 301 could be reduced to as little as 59 Reichsmarks. By 1938, the penetration of radios in the big cities of Germany had reached 70%. In the countryside, however, radios remained a luxury. A year later a major breakthrough was achieved with the introduction of a new entry-level model, the Deutscher Kleinempfaenger (DKE), priced at as little as 35 Reichsmarks. A million were sold in twelve months and business was buoyant even during the war. In the eight years between 1934 and 1942 radio penetration in Germany almost doubled.
On the cost of cars
For Hitler, there can be no doubt, the car was the great symbol of a modern consumer lifestyle. But in the early 1930s the car was still a luxury reserved for a tiny minority of the German population. In 1932 there were only 486.001 licensed cars in all of Germany. In Berlin, a city of 4 million inhabitants, there were fewer than 51.000 cars. In 1933 only 25 percent of Germany’s major roads had hardened surfaces suitable for high-volume motor traffic. To remedy this deficit, the autobahn project was announced in the summer. In April 1933, the regime also announced the elimination of car tax on all newly acquired vehicles. Prior to 1933 these taxes were amongst the highest in Europe and at least ten times higher than those prevailing in the average State in the United States. Not surprisingly, the result was a considerable surge in car production and ownership. From a total of 486.001 in 1932 the number of registered cars more than doubled to reach 1,271 million by 1938. Compared to average family incomes, cars were simply too expensive. In 1938 a comprehensive found that the minimum cost of purchasing a car and running it for 10.000 kilometers per year was 67,65 RMs per month. A working-class family of four on an income of 2.300 RM per annum would have found that, after allowing for food, housing and utility bills, running a car consumed their entire disposable income.
On the cost of fuel
The study also revealed the two principal obstacles to cheaper motor travel. The capital cost of purchasing the vehicle accounted for 30 to 35 % of the monthly cost. The price of petrol was the other main factor. By the late 1930s the price of a liter of petrol in the Third Reich stood at 39 Pfennigs (roughly $1,70 in dollars of 1990). Allowing for shipping, petrol could be had at Hamburg for as little as 5,13 Pfennigs per liter. The cost of distribution and marketing added another 13 Pfennigs. The cost price for petrol, in other words, was probably around 20 Pfennigs per liter, the price paid by consumers in the United States. What determined the actual cost of petrol in the Third Reich was politics. In this respect the Third Reich was no different from the Weimar Republic or most European societies today. And this must be borne in mind in any serious analyses of Nazi policy towards motorization. Taxes and the legal requirement to add domestically produced alcohol doubled the price of petrol. If promoting motorization had been the chief priority of Hitler’s regime, it could have cut the operating cost for a small family car by as much as 15%, by forgoing these taxes. This, however, was an impossibility. IG Farben had won its argument. Of far greater strategic importance to Hitler’s regime than popular motorization were the problems of the balance of payments and the related project of fuel autarchy, which required that the price of petrol in Germany be raised to far in excess of world market levels. In the 1930s the cost of petrol produced at IG Farben’s plant was 15-17 Pfennigs per liter, implying a price of at least 30 Pfennigs per liter at the petrol pump. A tax on imported fuel was therefore indispensable to sustain the momentum of the synthetic fuel programme. Taxes on imported oil were a significant source of revenue, bringing in 421 million RM in 1936, a third of the total customs revenue of the German state. And as of December 1936, as pressure on the Reich’s finances mounted, even domestically produced fuel was subject to a tax of at least 4 Pfennigs per liter.”
(The intend was to promote synthetic fuel production instead of oil imports as to not be independent in case of war.)
On the Volkswagen Beetle project
“What Hitler had specifically in mind was a family saloon of 30 horse-power, capable of carrying four people in moderate comfort, priced at the extraordinarily low figure of only 1.000 RM. Not surprisingly, the media reacted excitedly to this bold new project. The motor vehicle industry, however was far less enthusiastic. Given the current state of manufacturing technology and the cost of raw materials, no one could see how it would be possible to produce an adequate vehicle for less than 1.000 RM. In light of the huge excitement in the press, Daimler-Benz and Auto Union felt compelled at least to open negotiations on the Volkswagen project. The two main German-owned producers feared that otherwise the regime might resort to compulsion, or even that a deal might be struck with Detroit. Daimler-Benz and Auto Union therefore agreed with the Association of the German Motor Car Industry to jointly fund a research team, headed by Ferdinand Porsche, to explore the possibility of meeting Hitler’s demands. Porsche was undoubtedly an inspired engineer and he enjoyed and excellent relationship with Hitler based on their shared enthusiasm for motor sport. To expect to produce a high-quality family car for less than 1.200 Reichsmarks was simply unrealistic. Industry gambled that Porsche was the man to persuade Hitler of this incapable economic limit. The car-makers, however, underestimated both Hitler’s bloody-minded determination and the ruthlessness of Porsche’s ambition. Rather than backing away from the Volkswagen, Hitler renewed his commitment in his opening speech at the International Motor Show in February 1935. Later in that year Porsche began road-testing the first Beetle prototype. Predictably, however, Porsche had failed to solve the problem of cost. In confidential correspondence he put the price tag for the VW at between 1.400 and 1.450 RMs, no cheaper. As Hitler assured Porsche, if necessary the VW project would be pushed through by decree even against the resistance of the industry. The price target would be met by imposing a compulsory cut in the price that Porsche paid for his steel and aluminium.“
(If necessary VW producers would get cuts on the price at which they would buy steel and aluminum.)
“To purchase a Volkswagen, customers were required to make a weekly deposit of at least 5 Reichsmarks into a DAF account on which they received no interest. Once the account balance had reached 750 RMs, the customer was entitled to delivery of a VW. The DAF meanwhile achieved an interest saving of 130 RMs per car. In addition, purchasers of the VW were required to take out a two-year insurance contract priced at 200 RMs. But not a single Volkswagen was ever delivered to a civilian customer in the Third Reich. After 1939, the entire output was reserved for official uses of various kinds. Most of Porsche’s half-finished factory was turned over to military production. The 275 million Reichsmarks deposited by the VW savers were lost in the post-war inflation. After a long legal battle, VW’s first customers received partial compensation only in the 1960s.”
(The war broke out, and production unfortunately had to be transferred to military vehicles, for instance tanks.)