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Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State

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German author Gotz (Goetz) Aly describes National Socialism as a form of populist wealth-redistribution welfare-state socialism. One-third of German taxpayers paid more than two-thirds of the tax burdens of war (p. 293), and businesses were heavily taxed (pp. 60-68). Hitler favored social equality for all Germans (p. 300), and worked to correct social inequities, notably in education (p. 322).

Pointedly, National Socialism massively transferred wealth from non-Germans to Germans: "In terms of wartime revenues, internal and external, low- and middle-income Germans, who together with their families numbered some 60 million, accounted for no more than 10 percent of the total sum. More affluent Germans bore 20 percent of the burden, while foreigners, forced laborers, and Jews were compelled to cover 70 percent of the funds consumed every day by Germany during the war." (p. 292). Consequently: "On average, the vast and not particularly affluent majority of Germans enjoyed more disposable income during the war that they had before it." (p. 293). Nazism also appealed to those opposed to traditional moral conventions, and to those inclined towards anticlericalism and anti-elitism (p. 319).

Not surprisingly, once voted into power by the German people, Hitler never needed draconian methods to maintain power until the end. Nearly 90% of the German dissenters executed lost their lives after 1941 (pp. 303-304). Unlike Communism, Nazism never demanded absolute devotion (pp. 23-24). In 1937, merely 7,000 Gestapo employees sufficed to handle 60 million Germans, while, in later East Germany, 190,000 surveillance experts controlled 17 million people (p. 29).

Jews weren't the only victims of larcenous Nazi policies--far from it: "This land of milk and honey in Eastern Europe was to be conquered not for the benefit of landed Prussian Junkers and powerful industrialists but to provide ordinary people with a real-world utopia." (p. 31).

Aly breaks new ground by showing that virtually ALL sectors of German society were involved in the expropriation of conquered peoples' wealth. German soldiers not only sent a considerable amount of looted goods back home (p. 178), but were encouraged to do so (p. 311). Later-writer Heinrich Boll (Boell) wrote much about this (p. 110, etc.). Not mentioned is the fact that, in German-occupied Poland, any German could enter a Polish or Jewish shop at any time and take anything at will without paying.

Poles targeted by the Germans for deportation, imprisonment, or execution immediately lost all their properties to the Reich (p. 197, 236). The 8-12 million forced laborers in the Reich, most of whom were Eastern Europeans, toiled under inhumane conditions. They were paid a wage in order to forestall resistance back home, but then the earnings were recouped by the Germans in various creative ways (pp. 156-157).

German-occupied Poland actually had to pay Germany for being occupied (pp. 76-77) "...with the result that the local population endured acute shortages of grain, potatoes, meat, and other necessities." (p. 77), leading to famine (p. 170). (This enables the reader understand why some Poles didn't aid fugitive Jews and why Poles sometimes betrayed or killed Jews known or suspected of stealing from them). Polish guerilla resistance eventually forced the Germans to slightly reduce the harshness of their exploitation of Poland (p. 160).

The Wehrmacht invaded Russia under orders to live off the land, placing 21.2 million Soviet citizens in starvation mode (p. 178). Additionally, millions of Soviet POWs were starved to death by the Germans (p. 175). Aly touches on the eventual Nazi extermination plans against Slavs: "...the most extreme proposal envisioned forcibly relocating 50 million Slavs to Siberia. (For years, the German Research Foundation also supported the development of technocratic plans for the slaughter of millions of people. Funds for research in this area were still allocated in the Nazis' final budget for the fiscal year 1945-46)." (p. 30). Yet the term "relocation" had itself already become a euphemism for extermination.

One Holocaust myth would have us believe that the destruction of Jews had been so uniquely irrational that the Germans would rather sacrifice themselves than leave Jews alive. In actuality, the deportation of the Jews from the island of Rhodes never did challenge the Wehrmacht's transport needs (p. 268), and there wasn't even talk of German retreat at the time of the Rhodes Jews' deportation (pp. 269-270). Once it did occur, the Rhodes Jews' deportation was itself governed by economic considerations (p. 273).

The case for Aly's premise that the Holocaust can't be properly understood without the larceny behind it (p. 285) can be strengthened (see: INTO THAT DARKNESS). Treblinka Kommandant Franz Stangl rejected the presumed Nazi obsession with killing all Jews, citing the creation of "honorary Aryans". Stangl asserted that the Holocaust was actually motivated by financial gain. When confronted with the obvious fact that most Jews weren't wealthy, Stangl retorted with the comment that almost every Jew had some worthy possession that could be confiscated--and that the booty added up.

Nobody will be surprised to learn that the Nazis robbed the Jews and other nations in Europe. But some of the detail will be new even to those who are well read in the voluminous literature on the Nazi period, and for that we must be grateful to the author. But it must also be said that he relied on the published work of others for some of the most interesting detail even in this narrow area.

Where the author is original is in his reading of the data of Nazi robbery. He argues that the German people benefited from the Nazi thievery, and, he says, for that reason (among others) they gave their enthusiastic support to the regime. He is careful not to dismiss other factors altogether, such as anti-Semitism, but he stresses the importance of the economic benefit to the population.

There are a number of problems with this thesis.

First, the evidence for happiness with economic conditions during the Hitler regime is totally anecdotal. The author has talked with members of his own family and other acquaintances, but there is no assurance that such haphazard interviewing has resulted in a representative picture. The same goes for his unsystematic reading of published memoirs by famous writers.

Is it simply common sense to assume that people are happy when they reap economic benefits? Not in the absence of other considerations. The German people, after all, underwent great hardship under the Nazi regime, especially in wartime. Aly does not mention that, from the point of view of material comfort, they had as many reasons to be unhappy with the Nazis as to be happy. Their taxes were low during the war, says Aly, because the Nazis robbed the Jews and the occupied countries to pay for the war. And low taxes make people happy. Even if your cities get bombed and your sons and husbands die on the battlefield? If, as Aly suggests, it is material benefits that motivate people above all else, the Germans might have been expected to oppose Hitler.

In my view, writers who have assigned greater weight to non-material motivating factors, such as the Nazi theology of anti-Semitism, have given more satisfactory answers to the puzzle of the Germans' wartime approbation of Hitler.

The Germans' happiness with the Nazis, moreover, began long before Jewish properties were expropriated. Why were the Nazis so popular in 1933, 1934, 1935 - before the program of looting was put into effect? On this point, Aly is totally ahistorical. His thesis is one of cause and effect - Nazi robberies having the effect of Nazi popularity. But what if the effect began before the putative cause?

To this reader at least, Aly's thesis lacks logic.

Until recently, histories of the Third Reich have focused on Hitler and anti-Semitic ideology. The Holocaust and Hitler's military adventures have been granted an enormous number of pages. A few historians have placed some emphasis on his incompetent dabbling in military strategy. That picture is overfocussed, and misleading. Goetz Aly addresses a wider scope in this fascinating study of how the Reich was able to perservere in the face of what should have been sufficient cause for its early demise. With extensive research applied to the Reich's economic practices, he ably demonstrates what kept it functioning and accepted by the German population.

The term "Nazi" means National Socialist Workers' Party. That seeming innocuous phrase has been omitted from the consideration of its meaning, according to Aly. "National" and "Socialist" are the key terms. "National", meant just that - policies were aimed at benefitting Germany. "Socialist", of course, is a philosophy designed to benefit the most people - particularly those of the lower economic classes. Aly argues with detailed evidence that this is precisely what the Nazis achieved during the 1930s and through the war years. That it succeeded right up to the end of the Reich is testimony to the effectiveness of the Nazi economic methods. The average German began, and remained the "beneficiary" of a highly manipulated financial system.

It was a complex system. Aly begins by explaining how the Nazi leaders were a group of youthful, dynamic characters. They represented change, particularly in a restructering of the class system. The deprived were to be granted first priority in social benefits. While the 1930s witnessed a slow improvement, the onset of war allowed sweeping economic and social change. This was accomplished primarily by shifting the burden of war costs to the occupied nations. France was the testing ground for many new fiscal techniques designed to maintain a comfortable lifestyle in Germany, while bleeding the local populace of essential goods by imposing "occupation costs". One technique was simply to issue a military scrip to buy local goods. Soldiers were able to ship home foodstuffs and other goods not readily obtainable in Germany. The method worked less well in Russia where the "scorched-earth" policy reduced available foodstuffs and other goods. By the time the Wehrmacht entered the Balkans, however, it had numerous finacial tactics available to apply there.

Throughout the Reich's conquered territories, it was the Jews who bore the greatest of these burdens. A number of new laws allowed financial institutions and tax collectors to fill their coffers. Heavily taxed, then dispossessed of belongings, savings, homes and, of course ultimately their lives, the Jews "contributed" to the Reich's ongoing success in several ways. Their homes and belongings were taken and sold, often to the refugees from Allied bombing campaigns. Resettlement in real homes and apartments, sometimes fully furnished, instead of being sent to refugee camps, maintained German morale. The technique provided the gloss of "successful" government policies. Instead of being swayed by charismatic leadership or effective propaganda, Aly argues successfully that personal comfort bound the populace to an adventuresome regime. As he describes it, the Holocaust will never be properly understood until it is seen "as a campaign of murderous larceny". This book makes a major contribution to that understanding. [stephen a. haines - Ottawa, Canada]

Why is it that there never developed an underground resistance in Germany during WW2? According to this well researched book by Gotz Aly, it was because the Nazis spent like drunken sailors to keep the average German fat and happy during the war. The Nazis understood (from what happened in Germany during WW1) that as long as people were happy on the home front, their Armies wouldn't have to worry about their families and could concen- trate on fighting. They also mad sure that those soldiers who were not directly in battle would have ample resources with which to buy luxury goods that they could then send home.

Using all types of creative accounting, they never had to raise the tax rate that most Germans had to pay, even during the war. They were conspicuous in raising the tax rates on the wealthy and creating a war profit tax on businesses making enormous profits from the war. It's hard not to make money when your help practically works for free (force labor) and you never intend to pay for the raw materials that you purchase (steal).

So where did all this money come from? Well first of all it came via the Wehrmacht who shipped home multiple packages filled with stolen jewelry and other like items. The Wehrmacht paid it's soldiers with money extorted from the occupied nations as well as paying them in local currency that was converted at ridiculous rates. With all the extra money they had, the Wehrmacht was able to buy up anything that wasn't nailed down and strip most of the occupied nations of goods paid for with money that was inflated on the German side of the equation.

The Ministry of Finance took great pains to collect (with the help of the Wehrmacht and local collaborators) and occupation tax that was then used to pay their soldiers. In other words the occupied nations paid to be subjugated by the Nazis. They also looted the treasuries of not only the occupied nations but also those of their allies. They shipped home as much food stuffs as possible without worrying about starving the people of the occupied territories, since they were to be eventually eliminated. Goering said that, 'if some one has to starve, there's not reason that that person has to be a German'.

Lastly, not only did the Nazis (with the help of the Wehrmacht and German social agencies like the Red Cross) steal/confiscate/rob those Jews who were sent to the gas chambers; they also gave away their real estate, businesses, furniture and even clothing to the German public. You won't complain about your government if after you are bombed out, they give you a new place to live, furniture, clothing and even bed linens that might even be better than what you had before. It also costs the government nothing if these items have been stolen from people it plans to kill.

Aly estimates that overall, the money that was extorted from the occupied territories and allies, as well as the revenues collected from the liquidation of six million jews, half a million gypsies (Romi) not to mention 'other' enemies of the German people; covered almost 50 percent of the costs of the war. These costs included the manufacture and production of war material (much of it done by forced slave labor) and the salaries of the Wehrmacht and associated armed forces. Germany never saw bond drives like they had in Britain and the US because of this pool of money that they were able to extort. The saddest part of the story is that many of the financial people who helped the Nazis organize this shell game to pay for the war; ended up working for the Federal Republic after the war.

I have read hundreds of WWII books but never one like this that showed how Germany financed their war efforts through making the conquered countries pay for Germany's army stationed in their country and with the conquered country's currency so as not to inflate Germany's currency. There was no drain on Germany's finances since each conquered country paid for their own conquest so that the German army in each conquered country was self sufficient. Also, how German troops sent millions of packages home from conquered countries with items short in supply in Germany, increasing the average German's standard of living. Very interesting book--highly recommended. Read this book and you will understand why the average German citizen was totally behind the Nazi government and willing to back Hitler and praise him.

Recently, several new studies have emerged on Nazi Germany and the second war which disregard the military aspects of the conflict, and instead enrich our understanding by focusing upon the economic dimensions of the Hitler regime. One such book is Adam Tooze's "Wages of Destruction"; this is a second example. The author's thesis is articulated in the book's subtitle: "Plunder, Racial War, and the Nazi Welfare State." What does the author mean by the term "Nazi Welfare State"?; I have not seen that one before.

For Gotz Aly, the Nazis recognized the chaos and near successful Communist/Socialist revolution (Rosa Luxemberg and the Spartakists) that Germany experienced in the final stages of WWI and briefly thereafter, when for example Berlin looked like a scene from "All Quiet on the Western Front." The German civil population had suffered mightily during the war, coming close to starvation due to the allied blockade. As a result, the Nazi leadership determined that it would do everything possible to keep the civilian population happy and contented during the second war: low taxes; plenty of food; replacement of apartments and their contents lost due to allied bombing; and lots of financial goodies. The only problem with this tactic was how to finance it all. The answer was easy for the leadership--steal literally everything of value from Jews in Germany, captured areas, and even those resident in allies like Italy. In addition, force captured nations to subjugate their economies in order to make payments to Germany, as well as willingly allow their own consumer goods to be gobbled up by German soldiers who paid with makeshift currency that only led to inflation and near disaster for these economies, and wreaked privation upon civil populations.

So, in short, for the author the German population was not cowed into submission by fear of the Nazi tyranny--rather it was bribed with the proceeds of what can only be described as plundering theft on an enormous scale, implemented by a well organized bureaucracy dedicated to that purpose. This outstanding study documents this process in minute detail--in fact, it is easy to get lost in hundreds of pages of economic data and explanation, so skimming (unless you are a specialist in this area) becomes essential. The key point is that it is all here, in as much detail as the reader can absorb, and it is not a pretty picture. The book reminds us that it takes more to understand military conflict and the oppression of a segment of the population than to study guns and tanks--as usual, the best advice is to "follow the money."

Mr. Aly presents new and somewhat surprising view of the Nazi years and the effort that Hitler et al went through to keep the home crowds happy. His thesis is that Hitler provided 'guns and butter' through the systematic looting of the property of others including the jews and subsequently the occupied lands. He describes and documents that such looting was not just the looting of fine art from museums and factory equipment to the huge German companies but mundane, everyday items like hams and chairs. As Goring said in a speech on October 4, 1942, 'if someone has to go hungry, let it be someone other than a German.'

The book does not explain Hitler's support before 1933, and the book does not spend much time on happenings after February 2, 1943 (Stalingrad) and April 8, 1943 (Tunesia), nor of course on the last year of the war when the British and American bomber forces were finally getting it together.

Hitler's Beneficiaries is a technical look into the economy of the Third Reich before, during and after WWII. If you want to understand this book, it's best to have a good knowledge of the conflict, beyond common knowledge, to keep up with the stages of Hitler's conquest.
This is good reminder that nationalism and socialism are good forces to keep a population behind an unpopular war.
Technical but still a good read for the average economist like and historical mind.

Two aspects of Nazism are well known: the war and the holocaust. Here we see a third angle: the economic angle. Critics of this book say that it overlooks the racist and ideological components of Nazism. But these are things that we already know about. Part of Nazi popularity among Germans was due to their perceived economic success. Hitler was credited for ending the depression in Germany, and he maintained German consumption during much of the war.

Here we see some of the reasons why Nazi economic success was more smoke and mirrors that reality. The Nazis carried out massive transfers from non Germans to Germans. There is a parallel to be dawn between Hitler and Stalin too. From 1928-1940 Stalin increased the consumption of many urban dwelling Soviet citizens, while Ukrainians starved. Clever dictators will transfer wealth for political purposes.

Hitler's Beneficiaries is a good example of the ruthless nature of politics in dictatorial socialism. Such dictatorships are not evil simply because the wrong men got into power. Such systems are evil out of political necessity. Read this book along with The Wages of Destruction and the Road to Serfdom.

An interesting premise and a provocative approach. More an indictment of socialism and the people than of Hitler and his henchmen - "I was just giving the people what they wanted ..."

I'd love to see this topic debated.

Jim Hoerricks
Author - Forensic Photoshop