Capitalist support for fascism....

Henry C.K. Liu hliu at mindspring.com
Sat Feb 13 14:23:09 PST 1999


Doug,

Other governments with dictatorial powers, Italy and Spain of the 1930s and several Latin American governments, try the same formula with less impressive results. Government spending is not that simple. How did Hitler managed to to print money without inflation? Repression of labor is too broad an explanantion. By definiton, capitalism also engages in reperession of labor. Today, a US court just ruled against striking American Airlines unions. Still, Hitler had to create real jobs in real productive factories, built real autobahns and steel mills. Germany was restricted by the Versailles Treaty to hide rearmament projects so the early economic development measure had to concentrate on civilian sectors of dual use. It was controversal whether the average German worker felt very repressed during the period between 1933 and 1936, compared to the social pathology of high unemployment. The Reinhardt program was not a sham. In January 1933, 34% of Germany's work force was unemployed, and virtually full employment was achieved by 1936. Silverman suggested that it was work creation programs that account for this "miracle". Hitler's initial plans relied on the expertise of Hjalmar Schacht. The early years represented continuity with the Bruning policy, particularly the Todt plans for motorization and the famous autobahns, one of the positive legacies of Hitler. Silverman also noted sharp regional differences with East Prussia getting

back to full employment at an early dater and Aachen lagging. Comparing Hitler's achievements with FDR's New Deal which initially had to deal with only 25% unemployment, Hitler was the more successful, particularly in view of FDR's attempt to balance the budget in 1937 thereby producing the Roosevelt recession and the rise of unemployment from 14% to 19%. and was plagued by double-digit unemployment until 1941. FDR devalued the dollar in 1933 by about the same percentage as Britain in 1931 but Hitler and Schacht ruled out currency devaluation because of fears that it would be inflationary. Policies under Bruning had been brutally deflationary with workers taking a 10% wage cut, but the 1923 hyperinflation (and Schacht's role in stopping it) was still fresh in policy-makers' minds. Workers in voluntary labor camps which absorbed unemployment were paid very low wages and lost their unemployment compensation which helped maintain price stability. Yet they generally felt better off than beng unemployed. The USSR was undeniably a source of ideas in the Hitler years, thought he Nazis obviousy denied it. Political idelogy aside, what made Hitler policy work? What are the lessons for Rusian, China, Indonesia and Brazil?

Henry

Doug Henwood wrote:


> Henry C.K. Liu wrote:
>
> >Do you, or any one else on the list, have any views on how Hitler managed
> >to turn
> >in 4 short years a war-torn economy that the Weimar's permissive and
> >capitalisti
> >policies left in a sorrowful state not much different than the Russian
> >economy of
> >today, into a full employment, full production economy that was the envy
> >of the
> >world.
>
> I thought it was a combination of government spending and fascist
> repression of labor. Fascism is a great inflation-fighter in a
> full-employment economy.
>
> Doug



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