How socialist was National Socialism, and what role did private property and free enterprise play under Hitler? In this interview, Rainer Zitelmann examines Nazi economic policy, its relationship with business, and the material conditions of ordinary Germans. We also compare Nazi economic policy with Stalin’s Soviet Union and Roosevelt’s New Deal.
About the Guest
Rainer Zitelmann holds doctorates in history and sociology and has authored or edited 32 books, translated into 35 languages. His books include In Defense of Capitalism, How Nations Escape Poverty, The Power of Capitalism, and The Wealth Elite. His writing and interviews have appeared in The Wall Street Journal, Financial Times, Forbes, Newsweek, The Daily Telegraph, The Times, Le Monde, and Neue Zürcher Zeitung, among other international media outlets.
Interview
Simon Sarevski: National Socialism has socialism in its name. But how socialist was it really? What were the core economic and social beliefs of the Nazis, and what kind of society did they want to create?
Rainer Zitelmann: Socialism encompasses many different movements, and Marxism is only one of them. The fundamental difference between traditional socialism, as advocated by Marxists, and National Socialism was that, instead of nationalizing the means of production, as the communists did, the National Socialists left them largely in private hands. But private ownership increasingly became little more than a formal legal title, because the state dictated how property was to be used.
Today, we “hate” the rich, big business, and economic inequality. What did Germans in the 1930s resent about their society? Are there meaningful parallels with attitudes we see today?
Rainer Zitelmann: In parliament, the National Socialists often voted together with the left-wing SPD and KPD on social policy issues. The National Socialists introduced motions in parliament demanding the nationalization of all major banks and the prohibition of trading in securities. The party’s deputies also introduced motions calling for the confiscation of “the fortunes of the princes of bank and stock market” and all “profits derived from the war, the inflation and – later – the depression.”
In the face of such demands, the business-affiliated Deutsche Bergwerk-Zeitung commented that the National Socialist Party represented a threat to private property and differed only marginally from the communists. Walter Rademacher, a leading figure in the Saxon coal industry who had formerly served as a German National People’s Party (DNVP) deputy, recognized that the National Socialists’ commitment to private property was not worth much. The National Socialists qualified that commitment with the proviso that private businessmen’s activities were acceptable only so long as they served the public interest. The authority to determine what served that public interest, Rademacher observed, seemed to rest wholly with the state. If the state could contravene entrepreneurs’ rights at any time simply by declaring that they had used their property improperly, he concluded, nothing would remain of private enterprise or the entrepreneur’s control over his property.
To what extent was Nazi economic policy driven by ideological convictions, and to what extent by pragmatism, rearmament, and economic recovery?
Rainer Zitelmann: It was both. On the one hand, Hitler was not a dogmatist like Gottfried Feder, who was regarded as the NSDAP’s leading economic ideologist in its early years. But the once widespread view that Hitler was not interested in economics and had no economic ideas of his own is completely wrong. I demonstrate this in detail in my book “Hitler’s National Socialism.” Many of Hitler’s central ideas, such as the conquest of new Lebensraum in Eastern Europe, were clearly motivated by economic considerations.
How successful were the Nazis in achieving their economic goals? What were their main achievements and failures?
Rainer Zitelmann: In the eyes of most Germans, Hitler was initially very successful because unemployment fell dramatically and living standards improved for many people. Sociologists Ralf Dahrendorf and David Schoenbaum showed decades ago that social mobility also increased under National Socialism, meaning that workers had greater opportunities for upward mobility. But these policies were not sustainable. Over time, they became increasingly destructive as the state intervened more and more in the economy, and ultimately the war turned the economy into an instrument of destruction.
What was economic life like for ordinary Germans under Nazi rule before the war began? Did workers and households become materially better off?
Rainer Zitelmann: For many people, living conditions initially improved, partly because of the decline in unemployment. Of course, this applied only to those who belonged to what Hitler called the German “Volksgemeinschaft” (national community), from which many people were excluded, above all, of course, the Jews.
Götz Aly explains that social equalization on the one hand and brutal Aryanization on the other corresponded and describes the enthusiasm with which the property of European Jews was nationalized in favor of the German majority: “Indeed, such enthusiasm can generally be observed whenever a part of society claims the right to nationalize other people’s property, justifying that act with the rationale that the beneficiaries make up a homogeneous and therefore underprivileged majority, the ‘people’ itself. The eagerness with which individuals have assumed this position is a fundamental element in the history of twentieth-century violence.”
Aly also demonstrates that the National Socialists pursued policies that redistributed the tax burden toward businesses and the wealthy. During the war, companies and high-income earners contributed 75 percent of the additional domestic tax revenue. Lower- and middle-income Germans were largely protected from additional war taxes. In 1942 alone, the real estate inflation tax imposed a burden of 8.1 billion Reichsmarks on property owners. Between September 1939 and March 1942, the regime collected 12 billion Reichsmarks in additional war taxes, while taxes on tobacco, alcohol, and beer, which affected the broader population, accounted for only 2.5 billion Reichsmarks.
Could entrepreneurs succeed on their own terms under Hitler, or did their success increasingly depend on serving the regime?
Rainer Zitelmann: Hitler repeatedly warned that if private companies were unable to perform the tasks assigned to them by the state, the state would step in and take over. And he did not stop at threats. In 1937, for example, he initiated the creation of the Reichswerke Hermann Göring, which by 1940 employed 600,000 people. The Salzgitter plant eventually became the largest in Europe. With this, the National Socialist state had shown that its oft-proclaimed “primacy of politics” was deadly serious and that it would not hesitate to become active itself and build up state-controlled enterprises in areas where private industry resisted the execution of state directives.
—— Related: Alberto Mingardi on Markets vs. the State——
I would like to quote Ludwig von Mises here, who, in a letter to the editor of The New York Times published on June 21, 1942, very clearly analyzed the role of entrepreneurs under National Socialism: “The German pattern of socialism (Zwangswirtschaft) is characterized by the fact that it maintains, although only nominally, some institutions of capitalism. Labor is, of course, no longer a ‘commodity’; the labor market has been solemnly abolished; the government fixes wage rates and assigns every worker the place where he must work. Private ownership has been nominally untouched. In fact, however, the former entrepreneurs have been reduced to the status of shop managers (Betriebsführer). The government tells them what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. Business may remonstrate against inexpedient injunctions, but the final decision rests with the authorities. … Market exchange and entrepreneurship are thus only a sham. The government, not the consumers’ demands, directs production; the government, not the market, fixes every individual’s income and expenditure. This is socialism with the outward appearance of capitalism – all-round planning and total control of all economic activities by the government. Some of the labels of capitalistic market economy are retained, but they signify something entirely different from what they mean in a genuine market economy.”
How did the Nazi economic system differ from Stalin’s Soviet Union, Mussolini’s Italy and Imperial Japan? Were they more similar than different?
Rainer Zitelmann: Hitler was far more radical than Mussolini, and his goal increasingly became a state-controlled planned economy modeled on Stalin’s Soviet Union. He was convinced of the superiority of the Soviet planned economy system to the capitalist economic system. This must be regarded as an essential reason why he so vehemently demanded and enforced the extension of state control of the economy in Germany as well.
From 1940 onward, Hitler increasingly became a proponent of a state-planned economy, partly because he was convinced of the superiority of the Soviet Union and its economic system. In his monologues to his inner circle (known as Table Talks) on 27/28 July 1941, Hitler said that “A sensible employment of the powers of a nation can only be achieved with a planned economy from above.” About two weeks later he said: “As far as the planning of the economy is concerned, we are still very much at the beginning and I imagine it will be something wonderfully nice to build up an encompassing German and European economic order.”
The claim to be still at the very beginning of the planning of the economy is important because it shows that Hitler was not thinking at all of a reduction of state intervention – not even for the time after the war – but, on the contrary, intended to expand the instruments of state control of the economy even further.
What about comparing Nazi economic policy with Roosevelt’s New Deal and Britain’s response to the Depression? After all, some New Deal advocates admired aspects of Mussolini’s Italy. Where did the similarities end?
Rainer Zitelmann: Yes, there were certainly similarities: distrust of the market and a strong belief in the state. In this respect, Hitler was also a child of his time. During the Great Depression, most people believed that capitalism had failed. Perhaps one could say that Hitler initially pursued economic policies that paralleled Roosevelt’s New Deal.
But during the 1940s, his policies became increasingly radical, as he came to see the Soviet planned economy as a model. Unlike Roosevelt, who preserved private enterprise and democratic institutions, Hitler moved increasingly toward comprehensive state control of the economy.
—— Related: Davies and Harrigan on the Limits of Politics——
Do any ideas associated with Nazi economic policy survive in today’s mainstream politics, even among people who would be horrified by the comparison?
Rainer Zitelmann: In many respects, National Socialist economic policy anticipated developments we have been observing over the past 20 years. In many countries, the market has been increasingly pushed back, while the state has gained more and more influence. I call this modern socialism. Unlike traditional socialism, it does not necessarily nationalize companies, but politicians increasingly determine what businesses can and cannot do.
This trend has been particularly radical in Germany over the past 10 to 15 years. The energy sector has increasingly been transformed into a planned economy, while the automobile industry has been told what kinds of cars it should produce. What we are seeing is the primacy of ideology over economic reality.
Big ideas deserve big books. What books would you recommend to the bookworms reading this interview?
Rainer Zitelmann: I would recommend my own book, Hitler’s National Socialism, Götz Aly’s Hitler’s Beneficiaries, and Henry Ashby Turner’s German Big Business and the Rise of Hitler.
To end on a Strixly note, as always, how to find freedom in an unfree world?
Rainer Zitelmann: Even today, there are encouraging examples of freedom advancing. Look at Javier Milei in Argentina, who is fighting for free-market reforms. Developments in Poland and Vietnam, two countries about which I have produced documentaries, also moved in a positive direction. Or the revolution in the space industry, which I describe in my new book New Space Capitalism. Private entrepreneurs like Elon Musk have achieved things that government space agencies could not accomplish for decades.
But there is another important point: I believe that 80 percent of your life depends not on external circumstances, but on your own attitude toward them. This is also the central message of my book Unbreakable Spirit. Even in an unfree world, you have more power over your own life than you might think.