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The Wages of Destruction: The Making and Breaking of the Nazi Economy

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What does this book say that is different than what has gone before? Heaps. In recent years it has become clear that Germany lost the second world war because the Soviet Union was able to out produce them in the making of armored vehicles. Britain and the United States were able to produce huge numbers more aircraft. The conclusion has been that Hitler's gamble in invading the Soviet Union was the key behind the loss of the war.

What this book suggests is that Germany had lost the war before it invaded the Soviet union and its success up to 1941 had been a lucky break. The author even suggests that Britain alone had some chance of over time developing a preponderance of military force. It also puts paid to what must be now seen as the myth of Munich. Previously it was thought that Britain and France failed to re-arm in time to fight Hitler effectively. What this book shows is that by 1940 Britain and France had armies that were superior in both numbers and equipment. Their navies were vastly superior to Germany's and their air forces at least equal. When France fell, although Britain lost its field army its air force was equivalent to the German in numbers and quality and its Navy vastly superior to anything the Germans and Italians could put to sea. More over the British were able to out produce the Germans in aircraft even prior to the German invasion of the Soviet Union.

The success of the German armies in 1940 was due to the allied command failing to respond to the German strategy. If the allies had been a bit more aggressive they could have fought it out to at least a draw and Germany did not have the resources to fight anything more than a short war. The idea of blitzkrieg was an invention of allied generals seeking to rationalize their defeat rather than a meaningful analysis of what happened. The French never even fully committed their air force to the struggle and most of it was captured on the ground.

The problem was that although Germany had access to the industrial plant of Northern Italy, France, Germany, Belgium and the Netherlands they were not able to use it to match either the Soviets or the British in war production. The reasons are complex but relate to the patterns of European trade and the success of the European blockade. If we take aircraft for example the French production which flowed to Germany was miniscule. France had access to manufacturing plant and supplies of bauxite but it was not able to produce. The reason was that it used to import coal from Britain for its electricity production. With the British blockade the main source of coal became Germany. However Germany was not able to increase its production sufficiently to overcome the short fall. In addition the amount of food produced in Europe fell. Previously the production of meat and dairy products in countries such as Denmark had been dependant on the import of grain and stock feed from South America. That was not available and the amount of food available for the dairy industry collapsed as did food production. In the rest of Europe food production had been based on the widespread use of chemical fertilizer. Apart from the issues of the blockade huge amounts of the chemicals used for fertilizer production was diverted to the making of explosives. In addition to the fact that French workers were moved on to subsistence rations and there was no power available the country had been dependant on motorized transportation. Again most of its oil imports came from abroad. With the outbreak of the war the only available oil products came from Romania or from synthetic oil made in Germany. This was barely enough for the needs of the armed forces (there was in reality not enough to keep the Italian Navy operational) and France reverted to a pre-petroleum transport economy.

It is this economic background that gave rise to Hitler's decision to invade the Soviet Union. The Soviet Union had the natural resources that would enable European industry to out produce Britain and America. Rather than rashly starting a two front war Hitler knew that he could never develop the naval might necessary to conquer Britain simply by the occupation of Western Europe. The conquest of the Soviets was a key step in Hitler's strategy and not irrational. Of course none of the German general staff thought that the Soviets could stand up to an invasion of over 3 million men. However the Soviets were able to do so and then they were better able to marshal their resources so that they could outlast the Germans.

This is a very good book which will force everyone to re-think their attitudes to not only the second world war but the historical run up to it. It is unusual to have a book which is of such significance.

Tom Munro's review has an excellent summary of the arguments in the book, so I shan't add to it.

I would encourage students of the Second World War to buy this book. This is a rare book that looks at the war entirely from the economics perspective, resisting the temptation to discuss military matters as many were wont to do. This results in a remarkably clear picture of the homefront picture.

This is important as it helps to address some of the myths of about the Second World War, especially with regards to the German economic performance vis-a-vis the other economies. These myths gave rise to puzzles that were usually not addressed.

For example, if it were true that the Germans lost because they had a smaller economy than the US, the British Empire and the Soviet Union, and the Germans knew this, then why did they launch a war in the first place, not against one, but all of the great economic powers? This was usually explained unsatisfactorily by the 'irrationality' of the Nazis.

As the author demonstrated, there was logic to the madness. The Nazis operated under a flawed assumption about how economics work, and believed that it was only by having a large economy that Germany could compete - and survive as a great power - against the other great powers, especially the United States. Thus, by this logic, Germany had to expand and conquer to build up its economic strength. The more likely war was to become with the US, the more Germany must throw everything into a 'do-or-die' gamble to grab enough economic resources to survive.

This is not a wholly novel argument, but I have never seen it argued so clearly and backed by so much economic and historical data.

The same could be said for the genocide of the Jews and other peoples by the Nazis. On the surface it seemed nothing but insane cruelty and barbarism. Yet again, Tooze demonstrated that there was logic in the madness, that once again, the Nazis, operating from their flawed picture of the world, chose a perfectly rational solution by their light. As food was one of the most critical items in shortage in the Nazi war economy, and enough must be provided for the German people, then the lesser people must be starved or killed outright. The less worthy would be killed off earlier, while the more able would be worked to death as slave labour. It was a perfectly economical solution in Nazi eyes.

Finally, I found Tooze's examination of "Speer's Miracle" to be absolutely enlightening. I was under the impression that Speer's efforts after the death of Todt helped to economise the German war effort and pushed it towards greater productivity, allowing Germany to survive longer. The author showed that this was not the case, that most of the measures attributed to the productivity increase was put in place before Speer's appointment. What happened was Speer repeated the traditional pattern of Nazi war production, where much resources were at first pump into one area, then another, according to perceived needs of the Nazi leadership. Thus, resources were first flooded into tank production, then withdrawn and poured into U-boat production, then finally, pulled again and put into aircraft production. This resulted in short bursts of great productivity in one arm or the other. But Germany never really became stronger overall, and Speer's Miracle was nothing more than a facade.

To add to this, Tooze launched a devastating indictment against Speer's claim that he did not know about the Nazi genocide and slave labour programmes, pointing out that much of the labour used in Speer's armament programmes came from concentration camps or slave labour camps.

In the end, the greatest strength of his book was the straightforward assembly of many facts and events into a single timeline showed clearly the mad logic that drove the Nazi relentlessly towards war, and then equally inevitably towards brutality and genocide.

I studied this exact topic (Veimar Germany, the rise of Hitler and then WWII) in high school and have since read extensively on WWII. I would have said I knew most of what there was to know about the subject. Very soon into this book, I realised I was mistaken. "Wages of Destruction" is a real eye opener, and makes for a far more coherent story than you may have seen in TV documentaries or been taught in school.
One thing that bothered me in the usual telling of the WWII story is the motivation behind Germany's aggressive actions, which in the traditional telling of the story begins and ends with "because Hitler was insane". This is a great attempt to look at the 20th century from a German perspective and to explain the strategic logic behind many of Germany's actions during the period; the invasion of France, the treaty with the Soviets, Barbarossa, the concentration camps. All take on a different light when viewed through the lense of grand economic strategy.

The writing is absolutely top notch; fluid and imminently readable. And despite the often dry subject matter, I found I truly couldn't put this book down. There are some dull passages on fiscal policy, and on the personal politics of some of the Nazis, but these often lead on to a hard hitting conclusion.
The author seems a bit too keen to "shatter myths", which grates after a while. Sometimes it felt like you were intruding into a private argument between the author and some other history professor. Struggle on through these passages and you will find a thrilling story.

There are few books I would call essential reading on WWII. This book is one of them. "The Forgotten Soldier" is perhaps another.

This book explains a lot. I have read 150 books on WWII but looking at events through the economic lenzes helps explain a lot of why certain events played out like they did. For example, I knew that money was tight for the Nazi govt but I did not know how pervasive it was with the citizens. Germany was 40% agricultural but couldn't raise enough of its own food. Although they had plenty of farms and animals--pigs, cows, horses--they were dependant on imported feed for the animals. Could not raise enough feed for the animals they had. The naval blockade by the British played a much bigger role than I realized. Germany had low grade iron ore and were thus very dependant on the "neutrality" of Sweden who supplied them with 80% of their iron ore needs. Because foreign exchange was so tight for the Nazis and the gold reserves were totally gone it explains why the Nazis stole the gold stocks within 3 days of overrunning each of the 11 countries they took over. When they started to overrun the 11 countries they got control of much more raw material for war. Since the Germans had little money they could not expand the ore processing facilities within Germany so taking over the iron making furnaces of other countries helped a lot.
I always assumed Germany started the War because they were fully prepared but this book explains why they were not. Although Germany had plenty of coal mines the rail network was inadequate for transporting the coal to the cities for the people to use for heating or the iron works for smelting ore--not enough tracks or boxcars to haul it. Nothing seemed to be adequate, there was even a shortage of ammunition--unbelievable if you are going into a shooting war. In short, nothing was what you might expect in a country readying itself for war. It's a miracle Germany lasted so long in war with the level of preparation they had. All in all, this book is like drinking from a firehose but with patience and slow reading it will expand your understanding of what was going on behind the scenes and the role that money played, or the role that the lack of money played.
As you read the book there is mounting evidence that there were no neutrals in Europe--all were in bed with the Nazis either out of fear or for the money, including: Sweden, Switzerland, Turkey, Romania, Hungary, Italy, and some even became combattants to ensure a share of the spoils they had come to expect but later switched sides when their judgement was proven wrong.

Author Tooze has truly contributed a new perspective on the German economy and Hitler's actions based on material always present in German archives, but less interesting and obvious than military efforts and racial policies. He has done us all a very great service in analyzing a plethora of somewhat mundane details and making his treatise intelligible to all. This is a well-researched and rather large tome, at times somewhat tedious, but absolutely required reading for the World War II historian.

Other reviews have given the outline of this volume, but I wish to add several points that the author points out that may be especially germane to a decision on purchasing and reading this book.

First, the author shows how Germany's drive to expand and Hitler's policies with respect to expansion in the East were the logicial continuation of German expansion from the 19th and early 20th centuries. In some respect it actually goes back to the 13th century, but that is another story. Nonetheless, this expansion was similar to and could be understood by the other imperial powers; Britain, France, the Netherlands, and Italy. By the time Hitler assumed power, Germany possessed no colonies (while all the other listed powers did) and many citizens, Nazi or otherwise, saw this expansion as their country's right and even obligation to spread German culture. That the lower-cultured (in German eyes) Slavs might object, was seen as a problem to be surmounted for their own good.

Hitler then took this position to an extreme where the lower cultured populations were to be eliminated or assimilated. Star Trek fans will understand this as the Borgs' policy. The Germans needed the East's raw foodstuffs, oil, and other natural resources in order to become a great power. The only way to gain them was to destroy the political entities under whose control they were at the time. Ergo, the invasion and destruction of the Soviet Union was a given to have to happen sooner of later. In this respect, Hitler was not so much crazy as merely taking German policy and aspirations to their logical extreme.

In many respects, Germany was not prepared for war with the major powers at any time during Hitler's fuehership. The economy was never actually put on a full wartime footing and competing organizations were granted priorities back and forth based on their success or failure in turf wars.

Germany never achieved mass production of anything -- as soon as a level of production was achieved that seemed to satisfy an organization, its priority was withdrawn and some other project was pushed. Even with successful products such as certain tanks and aircraft, the Germans never stopped tinkering to make them better at the cost of being able to mass-produce them and supply standard spare parts. The result was that much of the German Wehrmacht's equipment was superior to the Allies', but they never possessed them in sufficient quantity to achieve their aims.

The author discusses the efforts by Speer to increase Germany's industrial output and concludes his efforts were only partially successful in spite of seemingly having a great impact. This entire presentation was highly interesting and worth the price of the book by itself.

In conclusion, this is an important work that concludes that Germany was never able to compete effectively with the Allies in war production, even with the captured territories and the use of slave labor. The difficulties it faced and the internal competition that ensured that the resources it had would not be effectively employed contributed in no small measure to its eventual defeat in spite of its efforts on the battlefield.

I recommend the purchase and reading of this work.

This outstanding and systematic book adds a new dimension to our understanding of the Third Reich. The core of this book is a careful and well documented economic history of the Third Reich. What makes this analysis outstanding is Tooze's integration of the economic history with the political, military, and social history of the Nazi regime. Tooze's success is the result of a prodigious amount of work, including significant primary research and a remarkable command of the enormous secondary literature on the Third Reich.
The core of Tooze's analysis is his explication of the role that economic constraints played in the formation of Nazi decisions. Tooze makes a series of important points that overturn conventional impressions of the Nazi regime. Perhaps the most important point is his cogent argument that Germany was relatively weak economically. Tooze points out that despite Germany's considerable industrial power, important aspects of German society remained relatively backward. Germany had a large and relatively primitive agricultural sector, and a large handicrafts industry. Per capita GDP was actually relatively low compared with the USA and Britain. Just as important, Germany lacked both important natural resources other than coal and was dependent on food imports. In the 30s, balance of payments problems would limit Nazi reararment and industrial development. In the war years, these constraints would impose enormous limitations on the Nazi ability to compete industrially with the Allies.
Tooze argues plausibly that Hitler and the Nazi regime were obsessed not just with European domination but with world domination and that Hitler's social Darwinist vision led him to conclude that conflict with the USA was inevitable. Combined with the Nazi's bizarre racism/anti-Semitism, the result was a self-fulfilling prophecy that led inevitably to conflict. Tooze presents a masterful analysis in which he shows that the conjunction of Hitler's bizarre ideas and the economic constraints of Germany led to strategic decisions that were much more rational than has been thought previously.
Tooze introduces additional important points. He shows that far from being a "guns and butter" economy prior to the invasion of the Soviet Union, Germany under the Nazis had begun intensive moblization in the early 30s. He rebuts the prevailing impression that Albert Speer, the subject of a particularly scathing analysis, was responsible for greatly boosting German industrial production after being assigned a primary position in German economic management. He provides a convincing analysis that the Allied bombing campaign was very important to defeating Nazi Germany. He has an excellent analysis of the role economic considerations played in the genocidal policies of the Nazis.
This book is written very well. Unlike many historians, Tooze makes good use of tables and graphs. My only minor complaint is that there is not a complete bibliography. The complete bibliography can be found on Tooze's website at Cambridge University.

Without having read many other histories of the Third Reich, economic or otherwise, I'm in no position to compare this work with the vast body of literature on the subject. I am, however, able to clarify some aspects of Tooze's argument that other reviews have obscured, and I'm very eager to point out the theoretical sophistication of this book.

It seems that many readers believe "The Wages of Destruction" argues that all (or at least the majority) of the Nazis' political and military decisions were made on the basis of economics. This is both true and false. Tooze argues that Hitler passionately desired to raise the German standard of living to a level worthy of the Aryan race and, furthermore, was desperate to preserve that race in the long run by giving the fatherland enough living space to be economically self-sufficient in the tumultuous global economy. Thus the political decision to begin rearmament in violation of the Versailles treaty was motivated by a desire for economic expansion to the level of autonomy, but that economic expansion was seen as a means of racial preservation. Thus, while Tooze does an exemplary job of showing how economic and logistical rationale repeatedly guided Nazi decision-making on the path towards their ideological objectives, his history does not debunk the powerful role of Nazi ideology.

I do not write this to indicate that "Wages" fails as an economic history. In fact, I do so to highlight that Tooze embraces a theoretical sophistication not usually attributed to historians. It is arguably fair to characterize historians as "atheoretical" - specialists who deal in particulars and resist the urge to generalize patterns in human affairs. Although there is no explicit mention of them in the text, it seems clear to me that Adam Tooze has been influenced theoretically by the British sociologist Anthony Giddens and the Polish sociologist Zygmunt Bauman (Emeritus at Leeds College in the UK). I could not identify any point on which Tooze's account conflicted with Gidden's theorizing in "The Nation State and Violence Vol. 2" or Bauman's in "Modernity and the Holocaust". While I'm unable to provide evidence of this theoretical congruence (if not debt) in my review, I strongly encourage the reader to examine "Modernity and the Holocaust" and discover the connection for themselves. Having done so, "The Wages of Destruction" will reveal its unusual sophistication in addition to its obvious thoroughness.

I have little to add about the excellence of this book reported by other reviewers professional and 'Amazonian'. I think this book takes a huge step to re-establishing the central relevance of economic history as a contributing perspective to the writing of history. This seems to have been lost sight of and an overly individualistic, non-systemic, non-economic, narrative focused history has dominated the last 20 years. Tooze is important because he integrates first class work on the economic sub-structure underlying the war, with considerable insights into the role of ideology and delusional racism and comes up with a formidable narrative underpined by analysis. So he does not force a choice between economic or ideological causes but shows how they feedback on each other in a truly systemic approach.

What this book cries out for from the author is to repeat this approach with the other sides in the picture: the Soviet war production miracle and US history from late 1920s onwards to see how the systems behind the other pieces in the jigsaw worked.

And of course it would be fantastic to see his methodology applied to US history from say 1970 through to the end of the century and beyond. Just what interaction of economic forces and political ideology has driven what we have tended to see so unsystemically. More of this intelligent economic history that is not mere economic determinism please.

In 1945, I was an eighteen year old British soldier stunned by the sight of Germany. I saw an incredibly beautiful almost fairy-story countryside, cities smashed to rubble by war, and starved and frozen people determinedly clearing roads and shoring up living spaces. I wondered then and I still wonder about the causes of the war and how a small country like Germany somehow achieved its victories, bore up under seemingly endless land and air attacks, and amazingly produced from ruined factories the finest tanks and the fastest aircraft in the world, including the first rocket planes, V-1 flying bombs and V-2 ballistic missiles. Since then I have read voraciously everything I could find, English and German, and have learned a great deal. However Adam Tooze's book seems to supersede all that I have read before. It is an amazing achievement which pulls together psychological, political, social and military aspects of the Hitler revolution, even including party personality struggles, within a rigorous economic analysis. I shall spend a long time happily re-reading this book.

The title is a little misleading: while Tooze occasionally mentions in passing how companies or individuals benefited from fueling the Third Reich's war effort, his real topics are far broader and more interesting: showing how economic factors drove Hitler's war goals and timing and how the continual feedback between industrial needs and war goals drove war strategy.

Tooze starts by describing the quandary which faced Germany in the late 1920's. Germany was not self sufficient in food or raw materials and thus needed to be able to export in order to finance essential imports. Germany also needed to be able to sell its exports in order to obtain hard currency to pay the reparation demands from the World War I victors. Despite these difficulties, the German finance ministry was managing to navigate Germany through a slow and painful recovery from WWI. Then disaster struck with the Great Depression. First there was an inevitable shrinking in export markets and then, much more seriously, there were conscious protectionist decisions in America, Britain, and France to block German exports in order to protect home employment.

Before reading The Wages of Destruction, I had loosely understood how the Great Depression had been a key factor in Hitler's rise to power, especially due to widespread unemployment. But Tooze clarifies that Germany was facing a much deeper strategic dilemma than a simple economic depression. Germany was dependent on the goodwill of other powers for its export markets and for its essential food and material imports, but those powers were demonstrating that in a crisis they would look entirely to their own interests and would quite cheerfully close their markets and let Germany suffer. Given this behavior, the long-term economic and political future for Germany looked extremely grim. Hitler offered a radical solution to this problem: Germany needed to expand to the East and become self sufficient in resources in the same way as the British Empire or America. Given the depth of Germany's problem, it becomes easier to understand why many thinking Germans either enthusiastically or reluctantly accepted Hitler's solution.

In succeeding chapters, Tooze describes how Hitler rapidly switched the Germany economy to focus on rearmament. He argues that while the Nazi propaganda machine emphasized efforts to increase employment and visionary projects such as the autobahn system, this was really mere window dressing and the regime was massively focused on military preparations for war. More interestingly, he also highlights how the continual shortages of hard currency (and thus of key materials) continually constrained and shaped rearmament. By 1938 lack of currency and other economic constraints were limiting further military expansion. Hitler was thus faced with a situation where Germany could see its own military abilities peaking and simultaneously see other powers starting to accelerate their own rearmament, weakening Germany's relative advantage. Hitler being Hitler, this drove an impatience for war, while Germany had its best relative position. As the war progresses, Tooze revisits this theme from several angles. Hitler was continually faced with situations where enemy military production would quickly eclipse Germany's and he reacted by trying to knock particular opponents out of the war quickly.

Tooze's major focus is on the operations and outputs of the German wartime economy. Overall, he shows us an economy that was reasonably well run and efficient but where production was dominated by shortages of key resources, especially steel and skilled manpower. By making high-level decisions about reallocations of these resources the Reich leadership could cause major leaps (or declines) in production in target sectors such as aircraft or tanks or munitions. Typically these resource shifts would take about six months to work through the system. The lucky Nazi bureaucrat who happened to be in charge of a target sector at the end of the six months would then happily boast of his productivity miracle as his sector suddenly produced startling jumps in output.

Tooze does not shy away from describing and condemning the many darker aspects of the Third Reich's war economy. A major aim of the expansion to the East was to improve Germany's food supplies. But that land was already inhabited and that food was already being consumed. So the Nazi solution was the "Hunger Plan" which quite casually assumed that food would be diverted from Poland and the Western USSR to Germany and that many millions would be deliberately starved. Tooze argues that this appalling plan was widely circulated, understood and accepted among the German political and military leadership in 1941. Thankfully, it proved difficult to execute and while there was widespread suffering, the East avoided the systematic mass starvation called for in the plan. However, in subsequent years the same desire to remove what were seen as "useless mouths" and free up food supplies was one of the many input factors towards the holocaust. In parallel, Germany manpower shortages led to large drafts of forced labor from occupied countries to German factories. Tooze illustrates both the appalling conditions of the laborers and the folly of a regime that for ideological reasons oppressed and starved the very labor it was trying to exploit.

Overall, I found this book a very enlightening read. Tooze's thorough analysis of the details of exports, imports, and production constraints provides a convincing base for his explanation of how the constraints and limits of the German economy drove high level German economic and military planning.