June 10, 2019

Yes the Nazis were Socialists

Timothy Birdnow

Why Nazism is Socialism.

From the article by George Reisman:

The basis of the claim that Nazi Germany was capitalist was the fact that most industries in Nazi Germany appeared to be left in private hands.

What Mises identified was that private ownership of the means of production existed in name only under the Nazis and that the actual substance of ownership of the means of production resided in the German government. For it was the German government and not the nominal private owners that exercised all of the substantive powers of ownership: it, not the nominal private owners, decided what was to be produced, in what quantity, by what methods, and to whom it was to be distributed, as well as what prices would be charged and what wages would be paid, and what dividends or other income the nominal private owners would be permitted to receive. The position of the alleged private owners, Mises showed, was reduced essentially to that of government pensioners.

De facto government ownership of the means of production, as Mises termed it, was logically implied by such fundamental collectivist principles embraced by the Nazis as that the common good comes before the private good and the individual exists as a means to the ends of the State. If the individual is a means to the ends of the State, so too, of course, is his property. Just as he is owned by the State, his property is also owned by the State.

But what specifically established de facto socialism in Nazi Germany was the introduction of price and wage controls in 1936. These were imposed in response to the inflation of the money supply carried out by the regime from the time of its coming to power in early 1933. The Nazi regime inflated the money supply as the means of financing the vast increase in government spending required by its programs of public works, subsidies, and rearmament. The price and wage controls were imposed in response to the rise in prices that began to result from the inflation.

The effect of the combination of inflation and price and wage controls is shortages, that is, a situation in which the quantities of goods people attempt to buy exceed the quantities available for sale.

[...]

As Mises showed, to cope with such unintended effects of its price controls, the government must either abolish the price controls or add further measures, namely, precisely the control over what is produced, in what quantity, by what methods, and to whom it is distributed, which I referred to earlier. The combination of price controls with this further set of controls constitutes the de facto socialization of the economic system. For it means that the government then exercises all of the substantive powers of ownership.

This was the socialism instituted by the Nazis. And Mises calls it socialism on the German or Nazi pattern, in contrast to the more obvious socialism of the Soviets, which he calls socialism on the Russian or Bolshevik pattern.

Read the whole article at Von Misses; he explains quite clearly that the Nazis were more than socialists in name only.

Posted by: Timothy Birdnow at 08:08 AM | Comments (2) | Add Comment
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1 "The Nazi regime inflated the money supply as the means of financing the vast increase in government spending required by its programs of public works, subsidies, and rearmament."
Gee, that sounds familiar. Only we called it "quantative easing" and we omitted the public works and subsidies parts.

Posted by: Bill H at June 10, 2019 10:16 AM (vMiSr)

2 Very astute of you, Bill H.!  Yes, we follow an economic policy very similar to that of the Third Reich, and have for a while; certainly during the Obama years.

The Bolsheviks had a saying before Hitler turned on them "First Brown, then Red" meaning the Communist Revolution had to follow the Fascist revolution. They changed their tune after Hitler attacked them, but they believed that before then (and rightly understood Hitler and the Nazis were socialists, just not THEIR kind of socialists.)

Posted by: Timothy Birdnow at June 13, 2019 09:35 AM (/COO4)

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