The Wages of Destruction: The Making and Breaking of the Nazi Economy [Paperback]

It was Watergate that taught us to Follow The Money. Strangely, few people have done this with the Nazi regime. Although the Third Reich was a major military power by 1939, all the guns, bombs and planes had to be paid for and just because it was a murderous dictatorship, this did not mean that it didn't have to follow a fiscal policy. For instance did you know that Germany stayed on the Gold Standard longer than the USA?

Adam Tooze has authored (I believe) the first major work on the Nazi economy since Alan Millward's of the 1960s/70s. He opposes Millward's thesis of the 'Blitzkreig' economy, geared to fight short continental wars and instead shows an economic policy that lurched from crisis to crisis, that was subverted to one man's wish to dominate the world.

Hitler started rearming Germany from the first day he took office and Tooze shows the remarkable feat that took place in such a short time. Germany, for all its ideology and violence, remained a capitalist economy and apparently the rate at which it rearmed was unprecendented. It is this sheer quantity of armaments that secured victories up to 1941.

Of course all the effort was doomed. Tooze demonstrates that all Hitler did was to start a global arms race. He also shows that Germany was constrained in how much it could rearm by critical shortages of material and workers. Although Germany started first, it would have been overtaken by Britain, France, USA and USSR by the mid-forties. Thus Hitler had no choice but to start his war in 1939. If he had delayed by even a year, then it would have taken less time to defeat him..

Tooze also shows, as have many others, that Albert Speer should have been hanged at Nuremburg. A rising star throughout the existence of the Third Reich, Speer wielded almost supreme economic power towards the end. However this power was build on the broken bodies of millions of slaves. He appears essentially to have been Europe's biggest slavemaster. Although Himmler may have been responsible for the violence and the death, it was to maximise Speer's production figures that it was all done in the first place.

This is a economic history first and foremost, but Tooze also revises the conventional view of the fall of France in 1940. Rather then being a masterstroke of strategic design and the application of the Blitzkreig, he demonstrates that it was a simple application of sheer weight of numbers. The Wehrmacht had no reserves and other sectors of the front were stripped to the bone to make up the numbers.

For me, a curious omission was the 'Bomber B' saga. Although Germany's failure to produce a strategic bomber is touched on with reference to the Heinkel 177, Tooze could have explored in greater detail the Luftwaffe's efforts to build a rival to the Lancaster and how they completely failed to do so during the 12-year life of the Third Reich.

Also it would have been useful to have a comparative study of the economic effort needed to produce the V1 and V2 compared to the Lancaster et al versus the impact these weapons had. Apparently more people died building the V2 than were killed when it landed on its targets.

Tooze does however validate the Area Bombing policy advocated by Harris and shows that if it had not had shifting priorities then it may have ended the war sooner. A demonstration of this is that by 1944/45, the Rhine and Ruhr were the cleanest it had been for decades as there was no industry there to pollute them. Since these still remained behind the lines then credit must be due to the aerial campaign.

A minor critique is that the book takes no prisoners on the economics front. You need to have a basic grounding in capital flows and foreign exchange to be able to follow some of the intricacies. Perhaps Tooze could be persuaded to include a brief guide in the second edition of what is sure to be a very popular book.

The author has produced what is surely the last word in explaining the rise and fall of Nazi Germany. This is an economic history, and this allows the real story of the Third Reich to be told. Like all history, the prosecuting of war really depends on the ability to raise and sustain a war machine - this has been the case for most of history. By concentrating on this fundamental fact, the book clarifies the actions of the Third Reich and it's leaders. Essentially, Germany in 1920 had the choice of either accepting it wasn't a major power and becoming a satellite state of the US, living as an exporting economy, or going down the road of war and becoming a world power and exploiting Europe as a conquered empire. Many in Germany at the time refused to accept the former, and through Hitler they made there bid to change the course of history. The author is careful to point out that although this course was fundamentally unsound in view of Germany's real position, there was a lot of logic behind the Nazis world view. Germany was critically dependent on imports of food and materials, it owed huge amounts of money to the US, and had foreign troops on it's soil. Hitler offered what looked like a credible alternative to the man in the street.
The book carefully explains how the Nazis built their war economy, and why it was used at the time and the way it was. Whenever it looked like Germany was losing it's advantage through early mobilisation, war was the only alternative to slow strangulation by naval blockade and air warfare.
After the entry of the US into the war in 1941 by offering aid to the UK, the Nazi leadership knew it had to win the war by 1942. (This thinking made the invasion of the USSR inevitable to the Nazi leadership, who were all to aware of the potential of strategic bombing).
To the Nazi leadership, a showdown with the US/UK was always going to happen, and it was better to happen on their own 'best terms' - i.e. before the US and UK could build an air fleet to destroy German industry. If all potential threats on the continent could be eliminated first, the Luftwaffe could then be built up into a force to protect the air over Europe.
One interesting thing the book also points out is the importance of the UK's blockade of Europe. Basically, Europe is dependent for imports of everything - food, materials etc. With the UK's naval blockade the economy of France (and most of Europe) basically collapsed by the end of the war, with Germany relying on the plundering of conquered countries (and slave labour) to keep financing the war. The rules of war in Europe have not changed since Napoleons time. An effective blockade of the continent soon causes huge problems, forcing Germany or whoever to look at desperate measures (invading Russia) to 'break out' of the blockade and find alternative sources of food/materials.
The author also explains the timing of the holocaust, and the timing of this too has an economic basis - food. In 1941/2 Germany found itself with too many mouths to feed and blockaded. The Nazis decreed that Germans would be the last to starve (as they had in 1918).
Unbelieavably it decided to kill millions of people in Poland to free up food, and then to mass starve the population of the western USSR. There was a plan to starve to death 20 million people as the policy of the German armed forces. This was planned and coordinated at the highest levels of both civilian and military authorities. A terrible story.

Adam Tooze has written the definitive masterpiece book on the Nazi economy. Throughout he demonstrates the inter relationship between ideology,impending events, and how the Nazi economy functioned and reacted to those events. His thought provoking detail on Albert Speer casts new light on the man. His analysis of the Allied bombing campaign both of area bombing and strategic bombing shows how the western allies progressively pulverised Germany to the point of eventual defeat. A fantastic book, highly recommended.