I Need a Land Line!

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Don’t get me wrong — I’m into big tech. I use my pocket-sized computer about nine hours a day, according to Apple’s built-in surveillance report — which I never asked for and would be perfectly happy never to see again. It’s as bad as having to see the calorie count when I’m standing in line at Cinnabon.

But here’s the deal: my cellphone is no longer a phone. I can type on it, write articles on it, make lists on it, communicate with my family all over the world via text message and email on it, watch TV and movies on it – heck, I can even make movies on it. But try to talk on it? Like a phone? Forget about it. A phone needs a tower — a tower that communicates with the phone.

I haven’t been able to talk to my mother for at least five years because she doesn’t do texting or social media and my phone doesn’t do phone. Oh, it tries. But it doesn’t succeed. Halfway through a sentence it cuts out, leaving my mother to think that I just hung up on her. (Not only does she not speak text, she does not understand that cellphones don’t speak phone.) My sister, who lives in the 20th century with my mother, wrote me a scathing letter last year complaining that my kids keep hanging up on Grandma without saying goodbye. I tried to explain, but they don’t get it. Not enough cell coverage? They use a land line.

We want all our perks and benefits, but we want someone else to provide them.

It’s especially problematic in New York, where skyscrapers bounce signals off the walls, and in southern California, where the residents suffer from NIMBYism (among a multitude of other sanctimonious social ills). I have homes in both places, and it’s driving me crazy.

NIMBYism — Not In My Back Yard — is just one of many symptoms of the growing fascination with socialism. We want all our perks and benefits, but we want someone else to provide them. We want our cellphone reception to be clear and constant, but we don’t want an unsightly, and potentially dangerous, cell tower within ten miles of our darlings. (I find it ironic that people don’t want a cell tower installed within ten miles, but they give said darlings cellphones from infancy and sleep with their own phones under their pillows.)

Hence, I need a land line.

So here’s my offer to AT&T. You can put your cell tower in my backyard. I live at the top of a hill overlooking a canyon. People will benefit from my cell tower for miles around. And if you hide it inside one of my majestically towering juniper trees, no one will even see it.

People don’t want a cell tower installed within ten miles, but they give their children cellphones from infancy and sleep with their own phones under their pillows.

All I want in exchange is lifetime phone, internet, and cable service for me and my family in perpetuity. And a new phone every two years for free, as you used to do. That’s it, and you can have the top of my juniper tree. Deal?

I tried to call you with this offer, but my phone kept cutting out. So send me a text. Or better yet, let’s do lunch.




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The Trump Cuba Chronicles

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On April 17, 2019, the 58th anniversary of the Bay of Pigs invasion, John Bolton, America’s National Security Advisor, announced what may turn out to be the death knell for Cuba’s socialist government. (By contrast, at the same time NPR recounted and gushed about the 60th anniversary of Fidel Castro’s appearance on The Ed Sullivan Show and his visit to New York and Harlem in April 1959.)

No matter the ultimate outcome of Bolton’s announcement, this policy change will create the mother of all litigation, securing full employment for lawyers throughout Europe and the Americas on multiple lawsuits of greater length and complexity than Charles Dickens’ fictional Jarndyce v. Jarndyce. Truth is stranger than fiction.

This saga began in January 1996, when José Basulto, head of Brothers to the Rescue, flew into Cuban airspace — twice — and dropped half a million anti-Castro leaflets over Havana. Basulto hated the regime. He was a Bay of Pigs veteran and had spent two years in Castro’s prisons. He had founded Brothers to the Rescue, a group of volunteer pilots, to scour the Florida Straits for wayward “rafts” (crafts often no more than inner tubes cobbled together with twine) overloaded with refugees escaping Cuba — the sort on which Elián Gonzales was found.

No matter the ultimate outcome of Bolton’s announcement, this policy change will create the mother of all litigation, securing full employment for lawyers throughout Europe and the Americas.

But this time his hate got the best of him. Fidel was not amused by the leaflets caper. He ordered the next incursion of Cuban airspace neutralized. The following month, on February 24, Brothers to the Rescue flew a routine search mission. While outside Cuban territorial waters — and without warning — a Cuban Air Force Mikoyan Mig-29UB shot down two of the Brothers’ unarmed Cessna Skymasters, killing 3 pilots. The third Cessna, piloted by Basulto, escaped.

While the Cuban pilot exulted, “We blew his balls off! He won’t give us any more fucking trouble,” the US populace, Congress, and President Clinton were outraged. Two Republican Congressmen, Senator Jesse Helms of North Carolina and Representative Dan Burton of Indiana had, two years previously, introduced legislation to tighten the screws on the Castro regime. But the Helms-Burton Act, as it came to be known, was tabled following Democrat filibusters in support of President Clinton’s efforts to improve relations with the island.

Following the downing of the two private planes on a humanitarian mission, Helms and Burton immediately reintroduced their bill. It was passed by both houses of Congress on March 6, only ten days after the cold-blooded murder.

Fidel was not amused by the leaflets caper.

Helms-Burton was the latest installment on a trade embargo first declared in October 1960 by the Eisenhower administration in retaliation for the nationalization without compensation of American-owned oil refineries on the island. The Cuban regime responded with the nationalization of all remaining American businesses and most American privately owned properties. Again, no compensation was offered for the seizures. Additionally, a number of US diplomats were expelled from Cuba. The US then severed diplomatic relations with the socialist regime.

Title III of the Helms-Burton Act authorized US nationals whose property in Cuba had been confiscated to file suit in US courts against persons who might be "trafficking" in that property. However, the act granted the president the authority to suspend the lawsuit provisions if it was necessary to the national interest of the United States and would expedite a transition to democracy in Cuba.

Private European companies, which had been investing in Cuba through joint ventures with the Cuban government, raised holy hell, creating a serious European Union trade dispute with the US. In response, President Clinton exercised the suspension authority through a nonbinding declaration of intention, approved in April 1997 in order to settle the brouhaha. That suspension has been renewed by every US president since.

And then along came Donald J. Trump. In June 2017, he impetuously declared, "Effective immediately, I am canceling the last administration's completely one-sided deal with Cuba."

The Cuban regime responded with the nationalization of all remaining American businesses and most American privately owned properties. No compensation was offered for the seizures.

But before making any changes, President Trump and Vice President Pence decided to meet with the members of the Cuban exile community in Little Havana, especially the Bay of Pigs Veterans Association. According to Carlos León, the second youngest member of the invasion Brigade 2506 and later to become the Association’s historian and Interim president (he was already this author’s cousin), Trump and Pence met with a select group of the veterans for four hours — much longer than the meeting had been scheduled for.

Very few of the veterans had supported Trump during the election but, according to Carlos, they found Trump and Pence to be good listeners and receptively involved in the give-and-take of the discussions. Most of the vets had supported most of Obama’s Cuba policies. They succeeded in tempering Trump’s proposed changes down to two minor initiatives all could agree upon.

The policy changes tightened US citizens’ travel to Cuba by more closely vetting the already approved travel categories — a step that in practice meant little, especially for the independent travelers flouting US regulations by departing from Mexico, Canada, and the Bahamas. And they sought to curtail American spending on the island to prevent proceeds from benefiting the Cuban military, government, and intelligence services. The latter basically made it illegal for US citizens to stay in government hotels, a change that benefitted the island’s burgeoning private B&B industry. The litigation suspension clause was not mentioned.

Until now.

Proposed policy changes (even under the unconventional Trump administration) are usually discreetly floated, to test reaction. When Carlos heard about the change to Title III of Helms-Burton, he invited John Bolton to officially make the announcement at the Casa de la Brigada in Miami. Ambassador Bolton accepted and, on April 17, the 58th anniversary of the failed invasion, before the assembled surviving veterans of the Bay of Pigs, he opened the floodgates of litigation against entities profiting from the uncompensated stolen properties in Cuba by the Castro regime.

It’s not just today’s joint ventures that are in Helms-Burton’s crosshairs. Past joint ventures and foreign companies with management contracts are potentially liable.

I asked Carlos his impression of Bolton. “For such a giant mustache, I expected a big man. Instead, he’s surprisingly small [5’7”].”

“Coño, Carlos! I mean his character,” I groused.

“The man is a straight-up guy — listening, engaged and transparent,” he answered.

Foreign private company joint ventures with the Cuban government — which always retains a 51% interest — have roller-coastered since they were first proposed. The 1990s were their heyday, after the fall of the Soviet Union, when Cuba was desperate for cash. In the early 2000s, after Hugo Chávez was elected President of Venezuela and began subsidizing the Cuban economy, Cuba reverted to centralizing its economy, and foreign investment dried up. About 200 foreign joint ventures folded. In 2010, some 300 Spanish firms were begging for the payments they were due. As of 2011, about 250 joint ventures remained viable.

But it’s not just today’s joint ventures that are in Helms-Burton’s crosshairs. Past joint ventures and foreign companies with management contracts — any entities profiting in any way from expropriated properties — are potentially liable.

On May 2, Miami-based Carnival Cruise Line became the first US company sued for using property confiscated six decades ago by Cuba’s revolutionary government.

"There could be up to 200,000 uncertified claims . . . and that value could very easily be in the tens of billions of dollars.”

According to the Washington Post, “The actions, in federal court in Miami, were filed by two U.S. citizens whose parents owned commercial docks in Havana and in the southeastern Cuban city of Santiago. ‘The communist government,’ the claim said, ‘nationalized, expropriated, and seized ownership and control’ of the properties when their families fled the island in 1960.”

Kimberly Breier, assistant secretary of state for Western Hemisphere affairs, told reporters last month, “The most recent estimate we have from 1996, at the time that the law was enacted, [is] that there could be up to 200,000 uncertified claims . . . and that value could very easily be in the tens of billions of dollars.”

With Venezuela imploding and the specter of the liability of billions of dollars facing foreign investment in the island, Cuba faces a second “special period in Time of Peace” that will test the regime’s survival.




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The Two Socialisms

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When I was in college, the selling point of socialism, communism, revolutionary activism, all of that, was something called “participatory democracy.” That’s what the mighty SDS (Students for a Democratic Society) stood for. That’s what the neo-Marxists stood for. That’s what all the “community organizers” stood for. The idea, endlessly reiterated, was that “decisions must be made by the people affected by those decisions.” No one talked about Medicare for all, or government-funded preschools, or government-mandated revisions of the environment. The idea was that centralized “state capitalism” was wrong, not primarily because it was inefficient, or even inequitable in its effects, but because its decisions were not “democratic.” They had not been made by the people affected by them. If it was inequitable or “slow” (i.e., inefficient), that was why.

Now we are witnessing an immense revival of “socialism,” led by Democratic Party opportunists and hacks. And it is all about laws that need to be made to increase the power of the centralized state. It is about giving professional politicians sole power over healthcare, housing, education, transportation, employment, qualifications for voting, and the possibility of self-defense — and all this without the tiniest hint that anyone except the Philosopher Kings who compose the Democratic Majority in the House of Representatives should be consulted. Participation? What’s that?

American “socialism” has shifted, in our time, from a demotic and “participatory” style to a rule-from-the-top dogmatism.

I have to be honest. I am a foe of “participatory democracy.” I do not believe it is optimal, in any sense, to give power over the individual’s existence to whoever happens to be a coworker, a fellow student, or just a guy who happens to turn up at a meeting. I find myself unable to decide whether a regime of little Red Guards is more repellent than a regime of Bernie Sanders bureaucrats arrayed, rank on rank and cube on cube, to decide what the width of my bathroom door should be.

But I think it’s worthy of notice that American “socialism” has shifted, in our time, from a demotic and “participatory” style to a rule-from-the-top dogmatism, constantly twisting in response to the whims of the politicians but always determined to enforce those whims.

I wonder whether any of the socialists have noticed this. Perhaps they are as ignorant of their own traditions as they are of economics or sociology, or respect for anyone except themselves.




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A Train to Nowhere

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The other day I watched Snowpiercer. I have a taste for post-apocalyptic science fiction, and also for stories that illustrate political ideas, and Snowpiercer is both of those. Co-written and directed by South Korean filmmaker Bong Joon Ho, the 2013 movie also has a strong flavor of anti-capitalism. Wondering who had picked up on that, I googled “Snowpiercer, Socialism,” then “Snowpiercer, anti-capitalism.”

The socialists had picked up on it. On a web page called Socialist Action (“In Solidarity with Workers and the Oppressed Everywhere”) writer Gaetana Caldwell-Smith calls Snowpiercer “an original, inventive, futuristic work” that pictures “what might happen in the future if the outmoded and anarchistic capitalist system goes on unchecked for much longer.”

On another socialist web page, Jacobin writer Peter Frase calls Snowpiercer an “action-movie spectacle” with “a message of class struggle” that “evokes some of the thorniest dilemmas of socialism and revolution, in the twentieth century and today.”

In an attempt to reverse global warming, humanity overdid it and froze the planet.

Your Film Professor, the highbrow lefty, praises Snowpiercer’s “incredible capacity to cuttingly capture — or ‘cognitively map’ — how our current and future dystopian milieu is informed by our (globalized) capitalism system. . . . The reason this film is just SO important is because it cuts through the fog of ideological distractions (e.g., consumerism, status quo/reformist [capitalistic] rhetoric, patriotism, nationalism, etc.) and didactically spells out the REAL of ruling class ideologies in a way that is to my mind almost miraculous.”

I don’t know about all that. It does tell you how some on the Left think (and write).

Snowpiercer is a science fiction story set on a frozen earth. In an attempt to reverse global warming, humanity overdid it and froze the planet. But a capitalist named Wilford, who was fascinated with model trains as a kid, had put his corporate fortune into a high-speed train with an enclosed ecosystem: tanks of fish, hooches of chickens, an engine to propel the train and keep the contents warm. For 17 years, Wilford’s shinkansen has been rushing over the world’s continents, one full loop each year, pushing through the wasteland of snow and frozen machines around it. Every human alive is a passenger on this train.

After the police-state cars with hooded goons wielding truncheons and automatic pistols come the lumpenproletariat at the tail end.

It doesn’t make a lot of sense — but cut some slack for surrealism. The story of Snowpiercer is from a graphic novel, in other words, a comic book. A French socialist comic book. The film is quite well made, and on the Internet Movie Database (imdb.com) is rated 7.1. That’s not quite up to the 8.2 rating of V for Vendetta, another political tale based on a comic book, but well above the 6.2 for Waterworld (1995).

Snowpiercer’s train comes with a recognizably Marxist class structure. Wilford, the egoistic owner played by Ed Harris, is the deity at the train’s head. Next in line are train cars of sybarites with their club music, dancing, and drug-fueled orgies, then the genteel with their classical music and handmade sushi, then the obedient workers tending the orange groves, tanks of fish, and hooches of chickens, and the smiling teacher (Allison Pill) in the grade-school car of fresh-looking kids. After the police-state cars with hooded goons wielding truncheons and automatic pistols come the lumpenproletariat at the tail end. In Marxist terms, you might think of them as “workers,” but they mostly just suffer. They live in rags and squalor and are terrorized by goons. For food they are issued “protein bars” made from pulverized cockroaches.

And they are the folks the movie is about.

Wilford’s mouthpiece to them is an unctuous woman played by Tilda Swinton, who was the White Witch in The Chronicles of Narnia: The Lion, The Witch and the Wardrobe (2005). Early in Snowpiercer she instructs the rabble in a style that parodies Margaret Thatcher. “Order is the barrier that holds back the frozen death,” she declares. “We must all of us, in this train of life, remain in our allotted station. We must each of us occupy our preordained particular position.”

The society around us has a “one percent,” but its membership is not fixed. People go in and out of the “one percent” all the time.

She holds a man’s shoe and puts it on the head of one of the proles. “A hat belongs to your head,” she bellows. “A shoe belongs to your foot. I am a hat. You are a shoe. I belong on the head. You belong on the foot.”

And again: “I belong to the front. You belong to the tail. When the foot seeks the place of the head, a sacred line is crossed. Know your place.”

Here is the message of the movie. Society — capitalist society — is a hierarchy of assigned privilege.

Well, the society around us is surely a hierarchy, just as its Canadian defender, Jordan Peterson, allows, though he calls it a hierarchy of competence. And it is mostly that, else today’s world would not work. It has a “one percent,” but its membership is not fixed. People go in and out of the “one percent” all the time. Margaret Thatcher was part of the political one percent, but she famously started out as a shopkeeper’s daughter, in what the Marxists call the petit bourgeoisie.

Capitalism is an economic system of private workers and owners who buy and sell in a market, making their own decisions. In Snowpiercer there is no market. Wilfred’s chickens produce eggs, and one of his men wheels them in a cart and gives them away. He doesn’t sell them. There is no buying or selling in Snowpiercer and no money. There is no property other than Wilford’s. The supposed “Wilford Industries” cannot buy or sell anything, because there is no other entity to sell to or buy from.

As an ideological venture, a kind of leftist "Anthem" or "Animal Farm," "Snowpiercer" does seem to be part of something.

Watching Snowpiercer, you can’t help but identify with the lumpen heroes (especially the characters played by John Hurt and Octavia Spencer) who disobey the faux Margaret Thatcher and refuse to remain “shoes” on the godhead’s foot.

But why care about a five-year-old movie that had only a limited release in the United States? Worldwide it did better; in its first year, Snowpiercer brought in $87 million, more than half of what V for Vendetta did. As a business venture Snowpiercer did all right. As an ideological venture, a kind of leftist Anthem or Animal Farm, it does seem to be part of something.

There has been a small upsurge of socialism in the United States. So far it is a pale image of the leftist tide of the 1930s, when private investment had collapsed and millions were out of work. Then it looked to many as if capitalism was finished. In the 1930s socialism was a relatively new thing, and intellectuals might be excused for not knowing what a defective product it was.

Now my hometown, Seattle, has a socialist on its city council. Her supporters are raucous and young, full of resentment of the billionaire rich. Maybe they believe because they read Karl Marx and Thomas Piketty, but more likely because they have imbibed their history and politics from left-wing teachers, or maybe from graphic novels and movies like Snowpiercer.

In the 1930s socialism was a relatively new thing, and intellectuals might be excused for not knowing what a defective product it was.

But socialism — really? Like Peterson, I want to yell at them: Did you miss the 20th century? And a lot of them did. They are that young.

I lived through the last third of that century as an adult. I saw socialism collapse in Europe, abandoned in China, and decaying in Cuba. Now it is collapsing again in Venezuela. It’s time for the socialists to give up.

All the Left’s bellowing about hierarchies and social classes makes me think of the guys I grew up with. The son of a small-town optometrist became an airline pilot. The son of an aerospace engineer became a sheet-metal worker, then lost it all when he married a crackhead. We are all of retirement age now, though some of us are still working and one, a teacher, has been retired on a fat pension for more than ten years. I have a grade-school friend who lived for years in a ruined trailer and a former colleague who lived for seven years in his truck. Both have now been put in decent housing, courtesy of the welfare state.

The kids I grew up with did not achieve equality, at least not as the Left defines it. They weren’t promised it, didn’t aim at it, and didn’t get it. They went in all different directions. None was assigned his position in life, and most of them, over time, changed what that position was. No doubt some of their paths were shaped by “power relations” under capitalism, and I know some were touched by luck. But where each one ended up depended mostly on the decisions he made, the sort of work he did and how diligently it was done, how much present satisfaction was sacrificed for the future, and, crucially, on whom he married.

Why would anyone think his world is like Snowpiercer?

A software man of the new generation predicted that robotics will extinguish so many jobs that the government will have to offer a universal guaranteed income.

I think back to when I was 20, and a student at the university. I used to go on long walks through a city neighborhood with big houses, many of them brick, built in the early 20th century. I was bunking in a rental house shared with other students, eating meals of hot dogs and ramen and working a part-time job for $1.75 an hour. That neighborhood of big homes was a foreign country to me. It would have been easy to think I was looking at the brick walls of an impenetrable class, and that I was doomed to a life of instant noodles. But I wasn’t.

There is another thought, which I heard recently from a software man of the new generation. Noting the divide in his fellows between those with brain work and those living in parents’ basements, he predicted that robotics will extinguish so many jobs that the government will have to offer a universal guaranteed income.

I do see the loss of jobs. My health clinic, which used to have a row of clerks checking in patients, has replaced them with touchscreens. The local superstore (which would have been called a department store, years ago) has replaced half of its checkers with touch screens. Several downtown parking garages that used to employ Ethiopians to collect the money have replaced them with card scanners.

Then again, three blocks from my house is a shop that concocts such fluffy desserts as Mexican chocolate pie. A pie from that shop costs $36; a slice, $6. That sort of pie was not available here two decades ago. Nor was nitrogen-infused ale. Or black sesame ice cream. My neighborhood now has artisan bread, artisan ice cream, artisan chocolate, artisan beer and, more recently, artisan spirits. Within a few miles are stores offering artisan cannabis.

A young man I know, the son of a bank vice president, has chosen to be an organic farmer. He shares in an old house on a muddy farm and produces organic vegetables and free-range, grass-fed beef. He sells his artisan hamburger for $6 a pound.

Capitalism can be about much more than efficiency.

A century ago, a middle-class family here might have a Swedish girl to cook, clean, tend the children, and mend the holes in socks. Now we have au pairs, housecleaning services, gardening services, and (I can hardly believe this) dog-walking services. I even know of a poop-removal service for people who keep dogs in backyards. In my neighborhood the environmentally sensitive no longer put in concrete walkways. They hire Mexican immigrants to put in brick walkways, carefully laying each brick by hand, using no mortar, so that rainwater can soak sustainably into the earth.

Back in the 1970s, my university professor of marketing predicted that the future of consumer products was Miller and Bud, two brands distinguishable only by labels and the ads on network television. All consumer markets were going to go that way, he said. I suppose it would have been the most efficient outcome. But look at the beer shelf at your grocery today. And what has happened to television? Capitalism can be about much more than efficiency.

The young man selling $6-a-pound hamburger makes far less money than a programmer at Amazon. Probably he officially qualifies as poor. But he is no serf. To him, the programmers working 60-hour weeks are the serfs.

Snowpiercer is, as the socialists say, “an original, inventive, futuristic work,” totally unlike the black-and-white TV westerns and World War II shows I grew up with. I enjoyed it. I cheered for the rebels at the back of the train along with everybody else. I just hope that most of those who saw the film took it as an artisan product of an affluent culture and not as any sort of wisdom on the world around them.




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Paul Allen, R.I.P.

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According to Forbes of March 5, 2016, the billionaires in my home state, Washington, had a combined wealth greater than that of the billionaires of Texas and one-third that of the billionaires of California. One of our signature tycoons, Paul Allen, reportedly worth $20.3 billion, has just died.

Allen was partly an accidental billionaire. At Lakeside, Seattle’s old private high school, Allen had a pal named Bill Gates. Together in 1975 they dropped out of college and founded Microsoft. Gates stayed on and built Microsoft into a global company. Allen left in 1982, four years before the company went public. He became rich because of what Gates and others did afterward.

Did he deserve his wealth? Unlike Gates, Allen appears to have worked for only a small part of it. He performed the initial role in a system that creates great wealth for people who start great things, and a bunch of that wealth fell in his lap. Seattle is full of people who made money on Microsoft stock, and I can’t argue that their capital gains are directly proportional to their value added. Still, it was his money.

Allen was partly an accidental billionaire. He became rich because of what Bill Gates and others did at Microsoft after he left.

Paul Allen had a fabulous life. He bought the Portland Trail Blazers basketball team and the Seattle Seahawks football team. He funded a museum that collected the memorabilia of Jimi Hendrix and another that collected the aircraft of World War II. He spent money on rockets into space and on a telescope array to look for life on other planets.

He spent — I hesitate to say invested — in all manner of wonderful projects.

And some of them right where I live. Seattle Times business columnist Jon Talton wrote that Allen “may be the last of the great moneyed stewards who invested deeply and with abiding person affection for the city of Seattle.”

I was fine with Allen wanting a stadium for his football team, but I thought he should pay for it himself. For this, I was denounced by football fans.

One of his hometown projects was buying, restoring, and preserving Seattle’s curved-screen Cinerama Theater, which is where I watched the Lord of the Rings movies. Another was funding the Seattle Public Library’s purchase of thousands of DVDs, many of which I watch. Another was funding the Allen Library at the University of Washington, where I do historical research.

I have benefitted from this guy. I am sad to see him go.

Allen has had a respectable send-off, but not from the Seattle Left. Kshama Sawant, our city councilwoman, posted on Facebook:

He spent $250 million on the biggest yacht in the world in 2003; he also owned two more yachts and a fleet of private jets, several sports teams. He paid to put the Qwest Field on the ballot so that working people picked up most of the $425M tab. He spent half a million dollars to defeat the I-1098 Tax the Rich statewide initiative in 2010.

This is posted above an image that says, “Remember the Greediest.”

Sawant is right about Allen paying to put a measure on the statewide ballot to subsidize a football stadium. I was a newspaper columnist at that time, and denounced the ballot measure vehemently, and the state lawmakers who voted for it. For this, I was denounced by football fans. I was fine with Allen wanting a stadium for his football team, but I thought he should pay for it himself.

Sawant derided her colleagues as chickens, which they were.

But I never denounced Allen for what he was, which is what Sawant does. She doesn’t believe people like Paul Allen should exist. (He would be replaced by what? Workers’ committees?) I find her attitude distasteful — and I note that on my neighborhood blog, nextdoor.com, in this left-progressive town I am not the only one down on Sawant.

Some examples:

  • “She is repulsive and needs to be removed ASAP.”
  • “I am very eager to see her out of a $123k a year job.”
  • “I’m one of the misguided people who voted for her . . . She seemed so grounded, solid when I heard her speak in person. Boy, oh boy, was I wrong!”
  • “If it wasn’t for Paul Allen, she wouldn’t even be here. She came to the US after marrying a Microsoft engineer. Show a little gratitude, Kshama.”

Much of the annoyance is for disregarding the taboo against abusing the freshly dead. I hope that’s not all it is.

Sawant, who may be the only hard-socialist councilwoman of a major American city, was at the losing end of the big political battle of 2018 — the Seattle City Council’s “head tax” on large private employers. Her target was Amazon, the company founded and headed by Jeff Bezos, a man even richer than Paul Allen. After the tax passed with the support of Sawant and the council’s progressive Democrats, Amazon, the city’s #1 employer, donated money to an effort to put the ordinance up for a public vote. (We have the initiative and referendum in Washington, and you can do that.) When pollsters discovered that the people of Seattle didn’t support the head tax, the council reluctantly repealed it.

Sawant voted not to repeal it. She derided her colleagues as chickens, which they were.

Sawant demonized Bezos as the greedy rich, particularly when his company said that if the head tax passed, it would not build a planned office tower. When Sawant led a demonstration of her left-wing supporters in front of Amazon’s new headquarters, she faced a counter-demonstration from union ironworkers who wanted to build Amazon’s new tower.

Sawant is up for reelection in 2019. Maybe voters will remember her nastiness at the death of Paul Allen.

Recalled one of the nextdoor.com bloggers:

“I do still get a kick out of seeing the footage of construction workers shouting ‘No Head Tax!’ when she was trying to speak in front of the Amazon spheres. Funny watching her getting completely drowned out by their chants.”

Sawant is up for reelection in 2019. It’s a year from now, but I think people will remember the head tax. Maybe they will also remember her nastiness at the death of Paul Allen.

I think of it every time I get a DVD from the library.




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Seattle Solons Sideline Squatters

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Last month (Liberty, May 10), I reported on the Seattle City Council’s attempt to impose a per-employee tax on large businesses, the proceeds of which were supposed to be used to help the homeless.

The video of the meeting (June 12) at which the Council acted in response to public opposition and repealed the head tax is entertaining. The council chamber is full of people with signs — green ones saying “No Tax on Jobs” and red ones urging a tax on Amazon, the city’s largest private employer. The people holding the green signs are quiet and the people holding the red signs are noisy. When the council members come to a vote, the red-sign people set up a chant to drown them out: “We . . . are . . . ready to fight! Housing . . . is . . . a human right!”

The council members, who had voted unanimously for the head tax a month before, explain their votes (7 to 2 for repeal). First come the progressive Democrats who are voting for repeal. Not one of them admits that the head tax is bad policy. Referring to the success of the business-led petition drive to put the ordinance on the ballot, and polls showing that on this issue Seattle’s liberal electorate sides with business, Councilwoman Lisa Herbold says, “This is not a winnable battle. The opposition has unlimited resources.” By repealing the head tax, she says, the progressives are cutting their losses. “There is so much more to lose between today and November,” she says.

“We need more resources,” the councilman says, and votes to repeal the tax that would have raised tens of millions.

Councilwoman Teresa Mosqueda, who opposes repeal, talks of the vote as if it were not a defeat. What makes it not a defeat? Because she still believes in the cause. Her belief is what’s important. And also that a month before, the council did vote for the tax. “I’m proud that this council stood up in the face of intimidation and fear,” she says, just before seven of her colleagues vote to reverse their action.

Councilman Mike O’Brien says the city spent $94 million on the homeless last year, and that it is not enough. “We need more resources,” he says, and votes to repeal the tax that would have raised tens of millions.

“We know what the solutions are,” says Councilwoman Lorena Gonzalez, who votes against the solution she is so sure of.

Finally comes our Socialist Alternative councilwoman, Kshama Sawant, speaking to her chanting groupies with the red signs. She calls this a defeat — and just the sort of defeat you get by putting your faith in Democrats. Her Democratic colleagues patting themselves on the back for caring about the homeless have nothing to be proud of. “This is a capitulation and a betrayal,” Sawant says.

Really Sawant cares about making the rich pay, about bringing them down in status, and about building a socialist America.

And not of the homeless, really. The Democrats talk about the homeless. Sawant talks about working people, at one point saying that the vote to repeal the tax is a betrayal of working people, as if the squatters in Seattle’s public parks were waking up every morning, putting on clean clothes, and going to work.

Really Sawant cares about making the rich pay, about bringing them down in status, and about building her movement for a socialist America.

Mostly Sawant was sore at her colleagues’ unwillingness to accept the business community’s challenge of a public vote. “There was a chance of winning,” she says.

A chance, yes. Not a good one.

Yes, Bezos is her enemy. And yes, her colleagues are spineless Democrats.

Sawant berates her colleagues for surrendering to the business community and its supporters, though she characterizes it as a surrender to Amazon CEO Jeff Bezos. “Jeff Bezos IS our enemy,” she proclaims.

And I find myself agreeing with her. Not with her condemnation of Bezos or her advocacy of “social housing” and “taxing the rich,” but with her political clarity. Yes, Bezos is her enemy. Damn right. And yes, her colleagues are spineless Democrats. They did betray her cause, and her. It was disgusting to hear them praising themselves even as they backed down, as if they could weasel out with talk. They lost, and because they lost, she lost.

It’s a glorious day.




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Bettina Bien Greaves, R.I.P.

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All scholars dream of having one or more disciples who will make sure their legacy is kept alive and their works and theories prominently trumpeted before the public eye.

For the great Austrian economist Ludwig von Mises, there was quite a following, including two couples, Hans and Mary Sennholz, and Percy and Bettina Greaves. On January 22 the last of the four, Bettina Bien Greaves, died at the astounding age of 100. (Mary Sennholz also lived to be 100. Austrian economists live long!)

Bettina Greaves deserves to be honored as Mises’ most devoted student, and in July a room will be dedicated to her at the annual FreedomFest conference in Las Vegas.

From the time she first heard Mises speak in 1951 at a Freeman seminar in Washington Square in New York City, Bettina was smitten. With a background in shorthand and secretarial work during the war years, she attended Mises’ famous New York University graduate seminar, taking copious notes on every lecture from 1951 until 1969. Although she had no formal training in economics, Greaves was the queen of the Austrian school and never deviated from it. She joined the Foundation of Economic Education (FEE) staff in 1953 and worked at the FEE mansion for the rest of her career. She survived everyone, including founder Leonard Read. After retiring, she stayed on as a board member and even donated her home in New York to FEE.

Bettina Bien Greaves was an uncompromising advocate of liberty, and will always be an inspiration to aspiring Austrian economists, and scholars everywhere.

I met her a few times when I visited FEE headquarters. My favorite Bettina Greaves story came from 2001, when I became president of FEE. After my first board meeting, Bettina came up to me and said privately, "I support you in every way as the new president. But could you do me a favor? Please be more critical of Milton Friedman!"

I nodded, and she left the room. A few minutes later another board member, Muso Ayau, came over to me. He was the founder of the Universidad Francisco Marroquín in Guatemala and a former president of the Mont Pelerin Society. He whispered, "Mark, I support you in every way as the new president of FEE, but could you do me a favor? Stop being so critical of Milton Friedman!" I’ll never forget it. I told this story to Milton and he had a belly laugh.

Bettina was a true believer in Austrian economics, and always sided with Mises when it came to differences between him and Milton Friedman and the Chicago school. (I’ve written a book on the differences, entitled Vienna and Chicago, Friends or Foes? A Tale of Two Schools of Free-Market Economics [Capital Press, 2005].) She focused her career on advancing the works and ideas of the Austrian school, including the contributions by Henry Hazlitt and Hans Sennholz. She wrote many articles for The Freeman, gave lectures, and compiled anthologies about Austrian economics. She spearheaded FEE’s program to provide libertarian material for high school debaters with packets on foreign aid, government regulations, medical care, and other issues. She compiled and edited Free Market Economics: A Syllabus, and A Basic Reader, a two-volume set that was distributed to thousands of students and teachers. After her husband’s death in 1984, she kept alive Percy Greaves’ lively interest in the controversies surrounding Roosevelt and Pearl Harbor, and wrote several Freeman articles on events that led up to that day of infamy, December 7, 1941.

But her main interest was always in her mentor, Ludwig von Mises. As Margit von Mises noted, Bettina studied “line by line, word for word” her husband’s writings. Bettina and her husband traveled with Lu and Margit to Argentina, Mexico, and other foreign lands where Mises lectured. (She spoke fluent Spanish and German.) She compiled, edited, and translated many of his books after his death in 1973. She also worked with her husband Percy to make Mises’s writings more understandable to the public. It was published in 1974, called Mises Made Easier (but never easy!). With the help of Robert W. McGee, she published an exhaustive Mises: An Annotated Bibliography (FEE, 1993, 1995). When the Liberty Fund decided to publish the complete works of Mises, Bettina was asked to be the editor, writing introductions for each volume.

Bettina Bien Greaves was an uncompromising advocate of liberty, and will always be an inspiration to aspiring Austrian economists, and scholars everywhere. ¡Bien hecho!

* * *

Editor’s note: Bettina Greaves was a loved and valued Contributing Editor of Liberty. Readers can find her articles and reviews from November 1997, “To the Dialecticians of All Parties,” to November 2008, “War from Six Sides,” by clicking here. More biographical information can be found in Jim Powell’s article, “A Salute to Bettina Bien Greaves,” July 1, 1997, on the FEE website.




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Caracas Dispatches

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Mercedes Flanagan — I’ll call her that — a Venezuelan lawyer, television executive, and jurist, and most important, this author’s first cousin, arrived in Miami on December 15, 2017.

Flanagan. A good Latin American name, like O’Higgins or De Valera.

Mercedes was able to get here after acquiring a six-month US visa (months in the making and a miracle) and flying a convoluted route that included Trinidad and Panama City. Direct flights — or flights of any sort — have become increasingly difficult to book because of Venezuela’s paucity of convertible currency. Five days after her arrival we met at her sister’s house in Boca Raton to celebrate the holidays together. Two of her granddaughters were there, having left Venezuela three months before. They too were seeking political asylum. Mercedes had lost a lot of weight but looked good, a result she attributed to the “Maduro diet,” as Venezuela’s food shortage is nicknamed, after Nicolás Maduro, the current president. She dreads returning.

Please forgive me for that absurd phrase: “mismanaged socialist economy,” as if a well-managed socialist economy could be a reality.

“Behind the scenes,” she said, “Cubans run everything.” A surprising revelation for what was once one of South America’s richest, most sophisticated, and modern countries — and a dark irony. During the 1960s, Cuban military and guerrilla leaders funded and aided leftist insurgents. Though thoroughly defeated, they’ve made a latter-day comeback.

I asked Mercedes about the state of her finances. She answered that she was still receiving her government pension but that one-third of it had been converted into nonconvertible “economic war bonds,” useless savings certificates.

In 2017, the mismanagement of Venezuela’s socialist economy — please forgive me for that absurd phrase: “mismanaged socialist economy,” as if a well-managed socialist economy could be a reality (a socialist economy is, by definition, a mismanaged economy; to actually mismanage a socialist economy would be to insert market mechanisms into it) — drove the inflation rate of the Bolivar (Venezuela’s currency) to somewhere above 4,000%. Mercedes reported a black-market exchange rate of 102,000 Bolivares to the dollar, circa December 1. CNN now (mid-January) reports 191,000 Bolivares to the dollar.

In order to conserve cash, banks are sticklers at enforcing check cashing procedures and creating on-the-spot, arbitrary rules to deny a check.

Let’s take a closer look at this money thing. Each day, Venezuelan banks are given a fixed budget dictating how much cash they’re allowed to disburse to clients. Electronic transactions are allowed, but forget ATMs, they’re all out of cash. Outside the banks, the lines of customers waiting to cash checks in order to acquire cash are already long by opening time — translating to about an hour’s wait. In order to conserve cash, banks are sticklers at enforcing check cashing procedures and creating on-the-spot, arbitrary rules to deny a check. But here’s the kicker: the daily per client check-cashing allotment set by the government is the equivalent of between 6 and 18 US cents — often not even enough to buy a “tit’s” worth of groceries.

Yes, a “tit” or teta, as it is called, because it resembles a droopy breast. Officially, they are CLAP bags. They hold a month’s worth of groceries and toiletries that cost the equivalent of 18 US cents. The government makes them available to the poorest Venezuelans at heavily subsidized prices. But, as CNN reports, “Recently, CLAP bags have gotten smaller or been delayed as more Venezuelans slip into poverty and as the government runs out of money to import essential goods.” How ironic: a shortage of worthless cash.

Salaries are unpredictable, even for government employees. So garbage is collected perhaps once a month, according to Mercedes. One enterprising “Chávista collective” in Caracas representing about 4,000 families has issued its own, parallel currency, the panal, and its own bank, El Banco Panalero, to ease the shortage of cash. The pudgy face of the demagogue former President Hugo Chávez graces one side.

Speaking of iconic faces, renditions of Simón Bolívar’s face have been subtly altered to make him look more creole than European white by pugging his nose and darkening his skin — in other words, to have him resemble Chávez and Maduro.

Salaries are unpredictable, even for government employees. So garbage is collected perhaps once a month.

On the plus side, gasoline runs at about 60 cents a gallon — up from 4 cents a gallon not very long ago — a price that has allowed a lucrative smuggling market to thrive at the Colombian border. And Venezuelan day workers — mostly prostitutes — are now allowed into Colombia to earn some real money.

N.B.: Mercedes requested that her true identity not be revealed, writing: “The situation in Venezuela is now much worse with the cold-blooded assassination of the soldier officer for ‘desertion’ for disagreeing with the dictatorship of ‘twenty-first century socialism’ along with three civilians, one of them a pregnant woman . . . and they're not allowing family to see, identify the cadavers, or bury them. We're awaiting Maduro's announcement of the suspension of all civil rights. . . There the raids by armed ‘collectives’ controlled by the government continue with orders to spread panic so that the real, suffering population won't continue to demand their rights to food, medicine, security and free elections."




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Buying Genocide, Part 3

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Nazis as Socialists: How Accurate a Description?

An economic historian, Andrei Znamenski, wrote a nice analysis of the question of whether the National Socialists were really socialists. He begins by noting a fascinating historical fact: in the West outside of Germany, people to this day call the NSDAP “Nazis,” whereas the Germans still call them National Socialists. The full name of the party was of course the National Socialist German Workers Party, but Germans use — and used — just the first two words. Znamenski points out that Hitler and his followers never liked the term “Nazi”; they used “National Socialist” or the initials ND or NSDP. And in the years after the discovery of the Holocaust, “Nazi” — like “fascist” — became a generic term of abuse against political opponents. So we now have expressions like “condo-Nazi” and “femi-Nazi.” But as Znamenski notes, this is odd. Historians and other intellectuals never use “Commies” when writing about the Soviet Union under Stalin — they call people “Soviets” and so on. In fact, Znamenski observes, the Left in the West has systematically refused to recognize the egalitarian and socialist aspects of National Socialism. It has instead pushed two versions of the “Hitler Myth.”

One version — the one the communist and socialist Left most embraced — is that Hitler, while manipulating ordinary Germans, especially the bourgeoisie, was a puppet of the large industrial capitalists. That is, this Leftist myth has it that Nazism in particular and fascism in general “were the last-ditch effort of decaying monopoly capitalism that used them [i.e., dictators like Hitler and Mussolini] in their desperate desire to save the [capitalist] system from its final and unavoidable collapse” (550).

The Left in the West has systematically refused to recognize the egalitarian and socialist aspects of National Socialism.

This idea is belied by the facts. Early on (1925–1933), two-thirds of Nazi Party members were workers, farmers, and professionals. By the mid-1930s, industrial workers — who earlier supported by huge margins the Social Democratic and Communist Parties — were drawn over to the National Socialists, primarily because of the Party’s program of full employment. By the mid-1930s, nearly half of the SS were people of working-class background. By contrast, the industrialists overwhelmingly favored the conservative and ultra-conservative parties — the German National People’s Party, the German People’s Party, and the Catholic Center.

The second version of the Hitler Myth — the one most embraced by the progressive liberal and non-communist Left — was that Hitler was a demonic, uniquely charismatic dictator “who took advantage of the German people’s sadomasochistic and authoritative nature — enabled in this by the Great Depression.” Znamenski cites as an example a recent BBC documentary written by Laurence Rees, The Dark Charisma of Adolf Hitler.

By the mid-1930s, nearly half of the SS were people of working-class background.

Znamenski doesn’t reply directly to this myth, so I will. I would suggest that it is in fact a pseudo-explanation. To say that Hitler was “charismatic” is merely to say that he was able to make his message resonate with many people. But the issues remain: what was the message? Why was it ultimately more appealing than the communist, mainstream socialist, progressive and conservative ideologies? Saying that Hitler (or Churchill, FDR, JFK, or Reagan) was charismatic is like saying that silent movie star Clara Bow was the “It” girl — the word names rather than explains an historical fact.

Yet, as Znamenski argues, the work of Götz Aly and others enables us to see that Hitler’s regime was indeed both nationalistic and socialistic:

Their goal was to empower all people of “Aryan stock” at the expense of non-Germans. Whereas Stalin cannibalized his own population, expropriating and phasing out segments of society on the basis of their social and class origin, Hitler rejected class warfare and acted as a “benign” dictator toward the German people. His bio-politics aspired to mold the members of the Aryan “tribe” into an all-inclusive “people’s community” (Volksgemeinschaft) by uplifting them not through attacks on “class” aliens but on ethnic and racial “others.” Hence the ideological emphasis of Hitler’s regime on the expropriation of resources belonging to non-Germans and the exploitation of their slave labor. (545).

He might have added the exploitation of their bodies — the hair, the gold teeth, and even the ashes of bones used as fertilizer. National Socialism was similar to the international variety: anti-bourgeois, aiming for a classless system, but dissimilar primarily in privileging one ethnic group at the expense of others.

Znamenski adds a number of important points, including the fact that Hitler espoused socialist views before he adopted virulent anti-Semitic ones. Underscoring Aly’s analysis of the regime’s purchase of popular support, Znamenski quotes Albert Speer, the regime’s preferred architect and minister of war production:

It remains one of the oddities of this war that Hitler demanded far less from his people than Churchill and Roosevelt did from their respective nations. The German leaders were not disposed to make sacrifices themselves or ask sacrifices of the people. They tried to keep the morale of the people in the best possible state by concessions. (546)

It is worth noting that the top income tax rate in Germany throughout the war was a mere 13.7%, compared to 23.7% in Great Britain, and a whopping 94% in the United States.

One last, provocative point that Znamenski makes is that as the Nazis gained power, their socialist opponents started aping the nationalist aspect of National Socialism. In Germany, a group of communists formed their own splinter party — National Bolshevism — which (among other things) espoused militarism and anti-Semitism. They had posters with both the red star and the swastika and their street fighters were called “beefsteak” (brown on the outside, red on the inside).

He might have added the exploitation of their bodies — the hair, the gold teeth, and even the ashes of bones used as fertilizer.

Even more interesting is the response of Stalin to Hitler, a man whom Stalin trusted and admired at some level, but also feared. During the ferocious war with Nazi Germany, a war costing the lives of upwards of 22 million Russians, Stalin started openly appealing to Russian patriotism (as opposed to class warfare) and even loosened restrictions on the Russian Orthodox Church. After the war, Stalin aped Hitler ever more closely, In January 1953, an aging Stalin had the state propaganda organ Pravda put out the story that a group of Kremlin doctors, almost all of them Jewish, had poisoned two of Stalin’s closest aides and taken part in a “vast plot conducted by Western imperialists and Zionists to kill the top Soviet political and military leadership.” This was the Doctors’ Plot, and Stalin intended to have a show trial to set up a national campaign to rid the Soviet Union of “cosmopolitan” and “Zionist” elements. In short, Stalin was going to go after Russia’s (then) 2 million Jews. They would be sent to Stalin’s own concentration camp system, under the pretext of protecting them. No doubt the Jews would have been sent to the industrial camps to be used as slaves to support the Soviet regime. Stalin’s own profound anti-Semitism was a partial motive for his actions, but one suspects that he figured out that he could help pay for his war against the West by stealing whatever Jewish assets were left, just as this strategy worked for the Nazis (at least for a while). Only Stalin’s death a few months later stopped this plan from being implemented.

As fine as Znamenski’s analysis is, however, it requires considerable qualification.

First, there was a salient difference between Nazism and socialism (as that was typically defined), concerning ownership of private property. Specifically, even “democratic” socialist regimes traditionally advocated the nationalization (the socialization or social ownership of) major industries. For instance, Britain after WWII nationalized the coal, electricity, railway, and healthcare industries. And the communists essentially tried to own all industries, virtually socializing all sources of production, even family farms.

In Germany, a group of communists formed their own splinter party — National Bolshevism — which espoused militarism and anti-Semitism.

However, the Nazis seemed ambivalent about socialist economics. While their early party platform advocated nationalization of major industries, when in power Hitler actually privatized a number of companies. These included four major banks; the German railway, then the second largest socialized company in the world; the largest German steel company; several shipbuilding companies; and the company that controlled all the metal production in Upper Silesia.

Hitler’s own description of his economic views is at least unclear, if not downright oxymoronic. He said at one point, “We are socialists; we are enemies of today’s capitalistic system.” However, he also held that socialism of the Nazi sort “has nothing to do with Marxian socialism . . . Marxism is anti-property; true socialism is not.” And he said in private, “I absolutely insist on protecting private property . . . we must encourage private initiative.” Again, Hitler said, “Socialism! That is an unfortunate word altogether . . . What does socialism really mean? If people have something to eat and their pleasures, then they have their socialism.” He also said, “The basic feature of our economic theory is that we have no theory at all.”

One revealing thing that Hitler (after achieving power) said in this regard was, “There is no license anymore, no private sphere where the individual belongs to himself. That is socialism, not such trivial matters as the possibility of privately owning the means of production. Such things mean nothing if I subject people to a kind of discipline they can’t escape . . . what need have we to socialize banks and factories? We socialize human beings.”

Stalin figured out that he could help pay for his war against the West by stealing whatever Jewish assets were left, just as this strategy worked for the Nazis (at least for a while)

This has puzzled some commentators, so much that some say the Nazi regime didn’t really have an economic ideology. But it did, of course: it had its own form of corporatism (or “corporativism”). Corporatism permits private businesses but organizes them by industrial sector and tightly controls them (as well as the workers) so that economic production satisfies the state’s needs and purposes. From the corporatist perspective, what was needed was not the elimination of private enterprise but its total control by the State for the good of the people generally.

So under corporatism the State is the chief institution. No wonder the Italian fascists summarized this view as: “Everything for the state; nothing outside the state; nothing against the state.” It is worth noting that this vision (of the various institutions in society not competing and clashing, but of cooperating — under the direction of the state) is a vison shared by more than fascists and National Socialists: it is attractive to many Catholic social philosophers (who have advocated a “Catholic corporatism”), many American soi-disant progressives, and the present-day leadership of both China and Russia.

Under corporatism, people are allowed to keep their private property, including their businesses, even large ones, but only if these are controlled by and run for the benefit of the state. Neosocialism, of which fascism and National Socialism were varieties, can be defined as the state pursuit of socialist social goals (such as equality and “fraternity”) through a corporatist rather than a socialist economy.That is, a neosocialist state will pursue wealth equality, say, or fraternity (e.g., Volksgemeinschaft), not by nationalizing industries sector by sector but by controlling and coordinating the private companies to further these goals, including taxing businesses and redistributing the wealth.

From the corporatist perspective, what was needed was not the elimination of private enterprise but its total control by the State for the good of the people generally.

The concept of Volksgemeinschaft informed the National Socialist form of corporatism. The state would not directly own, but would certainly direct all major industries, and control and coordinate labor, industry, farming, the educational system, and the media for the benefit of the Volk, through its embodiment as the state, which was in turn embodied in the Führer.

The Nazi regime pursued classical corporatist economic policies, including central planning, massive controls, autarkic and one-sided trade policies, and massive spending programs. The regime replaced the trade unions with a unified German Labor Front, under regime control, which banned strikes, lockouts, and summary terminations. The regime replaced all the chambers of commerce with a unified Chamber of Economics, which then was folded into the Labor Front. The combined Labor Front and Chamber of Economics was run by a board of trustees, all appointed by the regime. Small businesses were monitored by shop councils and Courts of Honor that cooperated with small business owners to set working standards and wages — under the supervision of the regime.

The first economic program the regime formulated was a massive infrastructure program, which led to a 300% increase in the number of construction workers. The regime controlled the number of car models made, and (when war broke out) restricted their use. The regime of course rapidly increased military spending, which hit 10% of GDP in 1936, vastly more than that of any other European nation. And while there were regime members who favored free market policies, the faction that favored autarkic policies and a military economy won out — Hitler envisioning a struggle to the death between National Socialism and “Judeo-Bolshevism.” Germany’s trade policy was reconfigured to favor trade with southern and southeastern Europe, aiming to make southern Europe and the Balkans dependent upon the regime, supplying it with raw materials in exchange for German manufactured goods. The regime fostered the creation of monopolies and oligopolies, the better to control them. Naturally, the degree of state control over the economy only increased with the outbreak and then escalation of the war.

The state would not directly own, but would certainly direct all major industries for the benefit of the Volk, through its embodiment as the state.

The clear Nazi aim was to provide a high standard of living for citizens of the country — an aim that was never urgent for Stalin. But consider another major difference between Stalin and Hitler. Lenin had achieved power by armed revolt and Stalin by systematically eliminating his rivals in the party dictatorship. At no point did Lenin, Stalin, or any of the Bolsheviks ever have to face genuine elections with actual opposition parties, parties with competing ideologies, as the Nazis originally did. This may be part of the reason why Stalin could (in Znamenski’s nice phrase) “cannibalize” his own population, selecting various groups on the basis of alleged class affiliation for use in the Soviet’s own vast concentration camp system. However, the Nazis retained to the end the sense that they needed to keep their base — German workers, farmers, small businesses, bureaucrats, big businesses, the military command — at least materially provided for until the end. And as I explain below, there was a deeper motive for the National Socialist transfer of wealth to German citizens.

In the end, the regime collapsed, because as the conquests were halted and then rolled back — and the number of Jews (and others) whose assets and labor it could completely seize diminished — it ran out of money, men, and machines to continue fighting.

The regime fostered the creation of monopolies and oligopolies, the better to control them.

In fine, the Nazi regime was truly socialist. And it died as all socialist schemes must, for precisely the reason Baroness Thatcher identified so clearly: it ran out of other people’s assets to steal.

Nazi Anti-Semitism: Was it Unique?

In the last section I focused on the socialist aspect of National Socialism. Let us turn now to the nationalistic side.

It is a question often asked: How could the Germans — arguably the most culturally advanced people in the world at the time — descend into the barbarism of totalitarianism and genocide? I suggest that a great part of the answer lies precisely in that advanced culture.

Let me start by talking about an influential German sociologist who helped shape National Socialist ideology: Ferdinand Tonnies (1855–1936), a star in the German academic world. Tonnies distinguished between Gemeinschaft (roughly “organic community”) and Gesellschaft (roughly, “associational society”). Gemeinschaft is the sort of emotionally tight community that (allegedly) characterizes the family and long-standing ethnically homogeneous neighborhoods. In such communities, Tonnies held, individuals have mutually recognized roles to play in set relationships defined by Wesenwille (“natural will”), which consists of naturally occurring emotions. People behave towards one another in accordance with traditional social rules developed by a shared organic history.

In the end, the regime died as all socialist schemes must, for precisely the reason Margaret Thatcher identified so clearly: it ran out of other people’s assets to steal.

In contrast, Tonnies said, Gesellschaft is the sort of loosely structured and diverse organizations such as governmental bureaucracies and large industrial companies. Such organizations are characterized by Kurwille (“rational will”), relationships based solely on rational self-interest. The growth of Gesellschaft (during the industrial revolution) undermined the ties of family and neighborhood, resulting in an impersonal society and widespread alienation, the feeling of being separated from one’s work and society generally. This is a line of thought that traces back to Marx at least.

Now, Tonnies held that all societies contain both sorts of organizations, though a given society may have a dominance of either Gemeinschaft or Gesellschaft. His view was not that societies should aim at one or the other type of association, but rather (in the words of the New World Encyclopedia), “More important for the developed of a successful society is the effort to harmonize the two aspects, and thus to ensure that both individual goals and the needs of the society as a whole are satisfied, while maintaining the element of care and concern for each person as members of one human family.”

In much sociological literature, then as now, so-called observational science is mixed with ethical value judgments. The fact-value distinction — or in Humean terms, the is-ought distinction — is routinely disregarded by sociologists in particular, and social scientists in general.[1] Whatever Tonnies meant about balancing the two types of association, by his very description, Gemeinschaft is more appealing, especially to people of a romantic bent. Isn’t familial concern a better basis for society than cold, selfish calculation? So, while Tonnies opposed the Nazis, leading them to strip him of his emeritus position in 1933, the National Socialists seized on his concept of Gemeinschaft and made it the center of their worldview. More precisely, the Party’s sociological ideology was centered on turning Germany into a Volksgemeinschaft — in this case, an extended Aryan clan.

German socialism is informed by the national spirit, the antithesis of the German spirit is the Jewish spirit, and the main goal of the German people and National Socialism is to eliminate that Jewish spirit.

We can now turn to Werner Sombart. Znamenski mentions the key influence that Sombart (1863–1941) played in the development of national socialist ideology but doesn’t spell out this influence. Sombart started as a Marxist, but moved away from Marxism to develop his own rightist critique of (modern) capitalism. He laid his views out in his magnum opus, The Modern Capitalism: Historical and Systematic Presentation of the Overall European Economic Life from its Beginnings to the Present Day[2] — first published in two volumes in 1902, then expanded in 1916, and growing to three volumes by 1927 — as well as The Jews and Modern Capitalism — published in 1911.

Sombart held that capitalism developed in three stages: early capitalism (prior to the industrial revolution); high capitalism (beginning in 1760 or so); and late capitalism (beginning with World War I). In Sombart’s analysis, early capitalism — medieval commerce — was a stable, coherent, supportive system, in which guilds and merchants cooperated, with wages held constant at a “just” level, markets shared equitably by the players, profits and wages guaranteed but held to reasonable levels, and markets with production levels limited and protected from competition with those in other places. But, he argued, because Jewish traders and manufacturers were excluded from the guilds, the Jews developed a hatred for the system, deliberately destroyed it and replaced it by modern predatory capitalism, with its unlimited competition.

In a book he wrote at the outset of WWI, Sombart advocated the theory that the war was the unavoidable clash “between the English commercial civilization and the heroic culture of Germany.” The English, under the influence of their commercial mindset, with its utilitarian emphasis on the happiness of individual people, had lost their warlike instincts. He held that the highest ideal was the “German idea of the State. . . . The State is neither founded nor formed by individuals, nor is its purpose to serve any interests of individuals. It is a Volksgemeinschaft in which the individual has no rights but only duties.”

Considering that this is precisely how Hitler consummated his power after gaining office, Schmitt’s work is prophetic, to say the least.

By 1917 Sombart was a full professor at one of the top universities in Germany, and was more renowned as a sociologist than even his longtime friend Max Weber. By the early 1930s, he had moved into the National Socialism orbit.[3] In a 1934 book called German Socialism, he claimed that German socialism puts the “welfare of the whole over the welfare of the individual.” This new socialism requires “a planned economy in accordance with state regulations.” Moreover, German socialism is informed by the Volkgeist (national spirit), the antithesis of the German spirit is the Jewish spirit, and the main goal of the German people and National Socialism is to eliminate that Jewish spirit.

Besides Sombart, there were a number of other academic or intellectual stars whose views informed the development of the National Socialist ideology in the 1920s. These thinkers, whom Jeffrey Herf has called “reactionary modernists,” tried to combine progressive feelings toward modern technology with regressive feelings toward modern democratic government and free market economics. They included sociologist Hans Freyer (1887–1969), philosopher Martin Heidegger (1889–1976), writer Ernst Jünger (1895–1998), legal scholar Carl Schmitt (1888–1985), and historian Oswald Spengler (1880–1936). While these thinkers differed in their receptivity to the National Socialist party — most joining the party enthusiastically, but one of them (Spengler) being critical of it — they were all “nationalists who turned the romantic anti-capitalism of the German Right away from backward-looking pastoralism, pointing instead to the outlines of a beautifully new order replacing the formless chaos due to capitalism in a united, technologically advanced nation” (264).

How enthusiastic Sombart and Heidegger were about technological advance is open to dispute, but that these thinkers contributed ideas that informed National Socialism is not. Freyer held that the highest stage of society is the state in which individuals merge into a collective unity. Jünger wrote that the Jews had to be either completely assimilated or forced to immigrate to Palestine. Spengler argued for a Prussian Socialism, meaning a German nationalistic non-Marxist socialism.

This is, of course, a standard fascist trope — suggesting there is such a thing as “the Will of the People” in a collective sense.

Especially useful to the National Socialists in developing their views about government and law was the work of Carl Schmitt. During the 1920s, he wrote a string of influential essays and books with ideas that the National Socialists found useful. For example, in 1921, he published the essay On Dictatorship, in which he argued that one of the most effective components of the new (Weimar) constitution was the power given to the president to declare a state of emergency, which he characterizes as dictatorial. Considering that this is precisely how Hitler consummated his power after gaining office, Schmitt’s work is prophetic, to say the least. And Schmitt urged that dictatorship means simply power achieved by other than the slow means permitted by republican democracy.

Just a year later (1922), Schmitt published another controversial essay — Political Theology — in which he advanced the thesis that political theory investigates the state in precisely the way theology investigates God. In 1923 — a decade before he joined the Nazi Party — he published a critique of the legitimacy of parliamentary government entitled The Crisis of Parliamentary Democracy. In this work he attacked the practices of representative liberal politics in ways that ironically anticipate by a half-century Public Choice Theory, arguing that actual party politics are far from the ideal of dispassionate rational actors debating policy prescriptions with the goal of reaching the best answer for society, but are instead the trading of favors in back rooms. He also questioned the idea that a majority vote represents the will of the people. As an author of the excellent Stanford Encyclopedia of Philosophy entry on Schmitt puts it:

If a majority can overrule a minority, and identify its will with the will of the people, why should it not be possible for the will of a minority to express the will of the people? What if a group of democratic rebels want to establish a democracy in a society where most people are opposed to the principle of democracy? Would they not be justified, from a democratic point of view, to abandon majority rule, to identify their own will as the will of the people, and to subject their compatriots to a re-education dictatorship? Schmitt suggests that such a dictatorship would still have to be considered democratic, since it still appeals to the idea that political rule ought to be base or the will of the people.

This is, of course, a standard fascist trope — suggesting there is such a thing as “the Will of the People” in a collective sense. His was a sophisticated defense and explication of the fascist notion that the dictator can better represent the Will of the People than even — the majority of the people!

The last major work that Schmitt brought out during the period during which the National Socialists were solidifying their general ideology and electoral platforms (the early- to mid-1920s) was The Concept of the Political (1927; with views elaborated in Constitutional Theory, 1928). In this work, he advances the theory that “the political” is what is central to politics, not mere party politics. The political, he held, is always and everywhere constituted by the existential delineation of friend from enemy. Not even friend from other, please note, but friend from enemy. The enemy can be anybody felt by the dominant political group to be different and alien “in an especially intense way.” And the difference that sets the enemy apart need not be nationality — it can be any difference (racial, religious, or ideological) so long as it is felt deeply enough to become a violent struggle with the other.[4]

The notion that the state’s political unity necessarily requires the delineation of an enemy that threatens the people’s interests and wellbeing is tailor-made as a justification for the singularly virulent National Socialist anti-Semitism.

Looking at the work of Tonnies and Sombart in relation to the development of National Socialist ideology, I think we are in a position at least partially to answer the question raised by the work of Goldhagen: whether the reason for Hitler’s support was that the German culture had a uniquely virulent form of anti-Semitism — eliminationist anti-Semitism — that accounted for the German public support of the Holocaust.

The notion that the state’s political unity necessarily requires the delineation of an enemy is tailor-made for National Socialist anti-Semitism.

The idea that there is a unique form of anti-Semitism indigenous in German culture seems dubious on its face. The standard form of anti-Semitism is one common in Europe, but also in North and South America, and the Middle East. It is what I call lumpen anti-Semitism — the anti-Semitism of the average, not particularly well-educated Christian. Among many Christians, it takes the form of hating Jews, allegedly because they “killed Christ,” but also generally from “prophet rejection resentment,” the idea that Jews are people who reject the view of Jesus as Messiah, and even more as the son of God. Lumpen anti-Semitism is quite common among Muslims as well, because Jews also reject Muhammad as a prophet. Pogroms aimed at Jews were recurrent in European history. Note, however, that lumpen anti-Semitism is not eliminationist: throughout European history, typically, if any Jews converted to Christianity (or Islam), no further attacks were made on them.

But the Nazi Party’s ideological anti-Semitism was never based on the idea of prophet rejection, or on any aspect of Christian theology, for the simple reason that the Party never allied itself with any Christian religion, in the way some other German right-wing parties had.[5] No, the Nazi Party’s anti-Semitism was what we can call doctrinaire anti-Semitism. It was informed by the rightist anti-capitalism of the German academic right-wing critics of modern capitalism, which held that Jews represent modern capitalism, that they are solely interested in profit and market share, not Volksgemeinschaft, that they want unrestrained free markets and widespread free trade, rather than structured and controlled nationally autarchic markets. This was the justification for the singular twist of Nationalist Socialist anti-Semitism.

What was unique to Germany was the presence in the late 1800s and early 1900s of a group of major academic thinkers — truly academic superstars — whose writings were not widely influential outside the German world but profoundly informed the National Socialist ideology. It was a more “sophisticated” anti-Semitism based on a hatred of modern capitalism rather than a love of ancient religion. It tapped into a pre-existing strain of German romantic pastoralism. And it was given a racial basis by the Nazis. This is what was deliberately spread by the Nazi propaganda regime, certainly exploiting pre-existing lumpen anti-Semitism but twisting it into the doctrinaire anti-Semitism.

The idea that there is a unique form of anti-Semitism indigenous in German culture seems dubious on its face.

If you want to see the Tonnies-Sombart strain of socioeconomic theory in Nazi ideology, there is no better place to look than one of the five major anti-Semitic propaganda movies the regime produced during the period 1939 to 1940, Linen from Ireland (Linen aus Irland, 1939). I have discussed this film extensively elsewhere, so I will be brief here. Suffice it to say that the plot concerns humble German village artisans and a local company owned by a man who, although he is wealthy, has total respect for them. The artisans make linen, and the local company buys it. Together the local tradesman and the company form a cozy economic Volksgemeinschaft — the artisans earn a decent living, taking pride in the craft that they and their ancestors have practiced time out of mind, the company owner gets rich, but not “obscenely” so, and looks out for the artisans in a patriarchal sort of way. The owner and the artisans are able to get the prices needed for them all to live well because the government imposes steep tariffs on linen imported from Ireland — where apparently it can be produced much more cheaply.

Into this German spirit heaven — heaven for the workers and owners, but apparently not for the consumers who are forced to pay higher prices! — steps a devil right out of Jewish spirit hell. A big company owned by a good Aryan but controlled by a scheming Jewish manager buys out the local linen companies so that they will not oppose a scheme to end tariffs on imported linen. The manager’s scheme calls for importing cheap linen from Ireland and then shutting down the domestic industry. The Jewish manager is portrayed as quite willing to do this and thereby (the film alleges) destroy the centuries-old community and starve thousands of people, because (as he brags) he is a man of the world, not rooted in any community. Only at the end is his scheme exposed and halted.

The Conviction of Ideologues

In this essay have tried to explore a number of points, some specific to National Socialism, and some more general. I explored the general compliance mechanisms of power, purchase, and persuasion. I argue that these tools are not mutually exclusive; any regime will use all three to get citizens to comply with its goals. Clearly, the National Socialists did so. In an earlier essay I argued that they had a propaganda machine second to none, which I illustrated by showing the amount of work the regime devoted to just one tiny medium of propaganda — uniforms and insignia.[6] In this piece I covered in detail how the regime carefully used racially redistributionist economic policy to give German citizens material prosperity, thus purchasing popular support. (In a subsequent essay, I will explore the regime’s use of power to enforce support).

Into this German spirit heaven steps a devil right out of Jewish spirit hell.

This brings us to another subject that I examined: the degree to which the National Socialists were socialists. Here, the answer is probably surprising to most Americans, but as Aly’s work brilliantly establishes, the National Socialists were indeed profoundly socialistic; that is, they pursued the practice common to all socialist regimes of targeting a subset of the population and then confiscating its assets, but they pushed the practice farther than most socialist regimes do. Rather than take, say, 75% of a targeted person’s income (as the present socialist prime minister of France has tried to do), the National Socialists tried to take, and often succeeded in taking, 100% of the targets’ assets, right down to their labor, personal belongings, and ultimately their bodies — hair, teeth and bones. This worked for a short while — only about a dozen years, which is just a blink of the eye in historical terms — in delivering material wealth to the nontargeted “Aryan” Germans. The National Socialists engaged in a radical redistributionist frenzy, but it worked only for a brief period.

The third subject I explored was the nationalist side of National Socialism. I suggested that what was unique about National Socialism was its explicit identification of Jews as the main enemy, and its focus on proper “Aryan” Germans of all economic classes. It wanted a fascist dictatorship of the Aryans, rather than the Marxist dictatorship of the proletariat. This identification with the German nation, presented as a desire for a Volksgemeinschaft, was a crucial feature of Nazi ideology, crafted to win popular support, especially the support of workers and farmers, away from other socialist and communist parties. The strategy worked so well that the communists started emulating the Nazis’ nationalism. Patriotism is a much more powerful identity than class.

The fourth matter I examined was the unique nature of National Socialist anti-Semitism. It transformed the traditional religious lumpen anti-Semitism, based on prophet rejection, into a pseudo-scientific doctrinaire anti-Semitism based on race-genetic theory, Social Darwinist eugenics theory, and right-wing anticapitalist sociological theory promulgated by major German academics. So the National Socialists didn’t just engage in a radical redistributionist frenzy; they engaged in a radical racial redistributionist frenzy.

The National Socialists were indeed profoundly socialistic; they pursued the socialist practice of targeting a subset of the population and then confiscating its assets, but they pushed the practice farther than most socialist regimes do.

How does this understanding of National Socialist ideology help us come at the Goldhagen-Groth dispute? Both authors were right about some things and wrong about others. Goldhagen (and Gellately) are right in thinking that the German people broadly backed the regime, and that anti-Semitism was historically common in German culture. But Groth is right in thinking that native German anti-Semitism was no different from that kind that is present in virtually all Christian and Muslim countries (then and now), not some special “eliminationist” anti-Semitism. More importantly, Groth is right in thinking that the regime’s popular support didn’t rest upon the German people’s anti-Semitism.

He is wrong, however, in his failure to recognize that National Socialist ideology certainly did have a different and more dangerous anti-Semitism than the lumpen variety. The regime’s anti-Semitism was based on racial genetics and anti-capitalist sociological culture. More importantly, Groth is wrong in thinking that the regime did not enjoy broad support throughout its existence. It did have that support, not because the whole populace shared its ideological anti-Semitism, but because the regime delivered substantial material wealth and other seeming geopolitical successes (at least until 1943). To reiterate a rejoinder I earlier made to Groth, this hardly validates Hitler. Yes, he gave his political base material wealth and national pride, but it was wealth stolen from viciously victimized people, especially the Jews, and it was national pride based on the brutal seizure of other countries’ lands.

Let me end by discussing briefly the issue of the role that ideology played in the “Final Solution.” I’ll repeat an observation made by Stephen Kotkin, who is arguably the greatest authority on Stalin and the Soviet Union. He makes the point that contemporary scholars now have access to archives recording what Stalin and other high-level officials said in private to one another. What scholars have discovered, Kotkin notes sarcastically, is that the communists really were — communist! In other words, the Party officials were true believers in Marxist-Leninist ideology at the highest level.

The Nazi regimed enjoyed broad support, not because the whole populace shared its ideological anti-Semitism, but because until 1943 it delivered substantial material wealth and other seeming geopolitical successes.

I would suggest that anyone interested in National Socialism take the same perspective. The Nazi leadership were true believers. Hitler, Himmler, Goebbels et al. really accepted National Socialist ideology, including especially its doctrinaire anti-Semitism, as fully true. They didn’t cynically target Jews and just call them racially and culturally inferior and dangerous; no, they targeted Jews because they viewed them precisely as such.

Now, was the National Socialism “eliminationist”? It certainly seems to be an open question, in that while the Party’s hostility towards the Jews was made manifest from the start, with a sequence of targeting actions. Yet in reality no attempts to exterminate the Jews in Germany or elsewhere took place before 1941. What was going on?

My suggestion — or better, my speculation — is that we need to differentiate between inherent and operational eliminationism. From 1933, when Hitler achieved power, to 1939 when he invaded Poland and the English declared war upon him, he was content to rack up geopolitical gains and simply harass Jews into emigrating (after seizing most of their tangible assets). The arch-ideologue Eichmann himself kept pushing his “Madagascar Plan” (under which all European Jews were to be dispossessed of assets and then shipped to Madagascar to live) until 1939 or later.

The Nazi leadership were true believers. Hitler, Himmler, Goebbels et al. really accepted National Socialist ideology, including especially its doctrinaire anti-Semitism, as fully true.

This was consistent with what I will call inherent eliminationism. If your anti-Semitism holds that Jews are racially inferior but also culturally dangerous to true Aryans, and you hold that true Aryans will eventually conquer the world, this would seem to imply that eventually, Jewish people must be eliminated. But that is like saying, “Someday, the Messiah will come.” It is more a statement of faith in the future than an imperative for the present.

But in 1939, things began to rapidly change. After earlier geopolitical successes with no military opposition, Hitler’s invasion of Poland finally brought Britain and France into the war. He had earlier threatened to hold Jews at fault if war ever broke out. In 1939, he had his excuse.

I suspect that the planning for the war with Britain and France in late 1938 was a big part of the reason the regime started the production of its first two explicitly anti-Semitic feature films, Robert and Bertram and Linen from Ireland, both produced in 1938 and released the next year (the first just two months before and the second one month after the outbreak of the war). Preparing for the actual use of the Wehrmacht (and recognizing the massive increase in funding this would require) led the regime to start actively preparing the public for the wholesale dispossession of the Jews.

In 1939, planning started in earnest toward the Wehrmacht’s much bigger challenge of invading the Low Countries and France, which again would increase the need for seized assets. Moreover, both Hitler and Goebbels were disappointed with the strength of the anti-Semitic messages of the 1939 films. So the three major regime studios were ordered to start production on major production anti-Semitic propaganda films. These films (The Rothschilds, Jud Suss, and The Eternal Jew) were released in 1940.

The socialistic solution to the nationalistic military program was to target Jews for complete dispossession, followed by the looting of captive peoples generally.

The war clearly went in Germany’s favor from 1939 until 1941. The regime rapidly conquered the Western half of Poland, the Nordic countries, and France with relative ease. It was only with the defeat of the Luftwaffe in the skies over Britain in 1941 (which ended the possibility of invading Britain) that the regime began to sense its vulnerability, and it was in 1941 that the decision was made to exterminate (rather that force the emigration of) the Jews.

So it was a real change in geopolitical realities that induced the National Socialists to move from merely implicit to actually explicit eliminationist anti-Semitism, and then to the implementation of the Final Solution. The socialistic solution to the nationalistic military program was to target Jews for complete dispossession, followed by the looting of captive peoples generally. This allowed the regime to purchase the support of the average (non-Jewish) German with stolen food, clothing, furniture, and homes.

In the first article in this series, “Total Regime, Total Propaganda,” I suggested that one crucial mechanism exploited by compliance agents, especially in totalitarian regimes, is propaganda — persuasion, if you will — and that the National Socialists were adept at that tool. In this article, I’ve put the focus on the mechanism of purchase — that is, gaining compliance by trading items of value; and I’ve reported Götz Aly’s evidence of how attentive the regime was to buying the citizen’s support. Aly nicely points out that the two methods of compliance — persuasion and purchase — were mutually supportive. Dispossessing, deporting, and destroying the Jews was made easier by the relentless and remorseless campaign of propaganda against them.

In the third and final installment of the series, I will turn to the role that power played in the regime’s attainment of popular compliance with its agenda. It is ironic — as Daniel Goldhagen and Götz Aly, despite their differences, agree: the regime’s power apparatus was modest, compared to its reputation. I will examine this idea more closely.

References

Aly, Götz. Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State. New York: Henry Holt and Company (2005).
Backhaus, Jürgen. “Sombart’s Modern Capitalism,” in Kyklos 42 (Fasc. 4) pp. 599–611, (1989). http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6435.1989.tb01276.x/abstract
Groth, Alexander. “Demonizing the Germans: Goldhagen and Gellately on Nazism,” in Political Society Review Vol. 32, No.1, pp. 118-158 (2003). https://isistatic.org/journal-archive/pr/32_01/groth.pdf
Grundmann, Reiner and Stehr, Nico. “Why Is Werner Sombart Not Part of the Core of Classical Sociology? From Fame to (Near) Oblivion,” in Journal of Classical Sociology Vol. 1 (2), pp. 257–287 (2001). http://journals.sagepub.com/doi/abs/10.1177/14687950122232558
Jason, Gary. “Ein Volk, Ein Fuhrer: A Review of Triumph of the Will,” in Liberty, April 2007, p. 44. http://libertyunbound.com/node/92
Jason, Gary. “Film and Propaganda: What Nazi Cinema Has to Tell US,” in Reason Papers 35 (1): 203-219 (2013). https://www.academia.edu/24443412/Film_and_Propaganda_The_Lessons_of_the_Nazi_Film_Industry_2013_
Jason, Gary. “Total Regime, Total Propaganda,” in Liberty, July 3, 2016 (2016a). http://www.libertyunbound.com/node/1574
Jason, Gary. “Whence did German Propaganda Films Derive Their Power?” in Reason Papers 38 (1): 166-181 (2016b). https://reasonpapers.com/wp-content/uploads/2016/09/rp_381_9.pdf
Jason, Gary. “Selling Genocide I: The Earlier Films,” in Reason Papers 38 (1): pp. 127-157 (2016c). https://reasonpapers.com/wp-content/uploads/2016/09/rp_381_7.pdf
Kotkin, Stephen. Interview on Uncommon Knowledge, October 6, 2015. http://www.hoover.org/research/hoover-fellow-stephen-kotkin-discusses-stalins-rise-power
Ridley, Matt. Interview with Russ Roberts, Econtalk, 2010. http://files.libertyfund.org/econtalk/y2010/Ridleytrade.mp3
Stanford Encyclopedia of Philosophy. “Carl Schmitt” (2014). https://plato.stanford.edu/entries/schmitt/
Znamenski, Andrei A. “From ‘National Socialists’ to ‘Nazi’: History, Politics, and the English Language,” The Independent Review Vol. 19, No. 4 pp. 537–561 (2015). http://www.independent.org/pdf/tir/tir_19_04_06_znamenski.pdf.



[1] Werner Sombart in particular couldn’t resist making value judgments — especially about Jews — though he feigned being purely scientific in his writings (Grundmann and Stehr, 270).

[2] For a nice overview of the structure of Sombart’s Modern Capitalism, see Jürgen Backhaus.

[3] Reiner Grundmann and Nico Stehr note that Sombart was initially enthusiastic about National Socialism, and say that he — like other reactionary modernists such as Heidegger and Schmitt — only soured on the regime when they realized it didn’t want them for high positions or for policy advice (271). They don’t explain why the regime didn’t welcome these intellectuals, but I would suggest it was primarily because Hitler was profoundly anti-intellectual, neither comfortable around nor deferential towards intellectuals.

[4] Tom G. Palmer in a recent lecture made the point that Carl Schmitt’s perspective is very much alive in Putin’s Russia.

[5] Indeed, there was a fascination with arch-anti-Christian Nietzsche among many of the Nazi hierarchy — including, of course, Hitler himself.

[6] I have written more extensively of the Nazi propaganda machine. Some of my essays of interest might include “Film and Propaganda: The Lessons of the German Film Industry”; “Whence Did German Propaganda Films Derive Their Power?”; and “Selling Genocide: The Earlier Films.”


Editor's Note: This essay is the final part of a three-part series.



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Buying Genocide, Part 2

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In the first installment of this series, I discussed two major explanations for the extensive support the Nazis received from virtually the entire German population. One is the view that the majority of ordinary Germans supported the genocide of the Jews because of the historically peculiar breadth and depth of their pre-existing cultural anti-Semitism — it was a virulent “eliminationist” strain (to use Goldhagen’s term) expressing a desire to eliminate Jews from the world. The other view (elaborated forcefully by Groth and others) is that a better explanation lies in the formidable police state that oppressed the German people, as well as the cradle-to-grave propaganda machine that worked on German opinion ceaselessly.

Only a couple of years after Groth’s article, an eminent German historian published a fine book that explored a new theory for German support for the Nazi regime. This book — Aly’s Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State — “set the cat among the pigeons,” as Tom Palmerhas put it. Really, I would suggest to Palmer that the book set a lynx among the pigeons.

The systematic plunder of others (especially Jews) and the flow of this plunder into households of average Germans was precisely what made the populace generally compliant and content.

In his preface, Aly recounts that one of the inspirations for his book was Stuart Eizenstat’s efforts to recover damages from the German and Swiss governments for Jews who had their bank accounts and other assets stolen by the Nazis. His only worry about such efforts is that they reinforce a false narrative — that only German industrialists, financiers, and other elites of the German bourgeoisie were responsible for the Holocaust. This wrongly shifts the blame from the German people generally to a relatively few “bad actors.”

On the contrary, Aly’s research has discovered that the systematic plunder of others (especially of course the Jews) and the flow of this plunder into households of average Germans was precisely what made the populace generally compliant and content. The Nazis bought the support of the people. Aly strikes a personal note by saying that when he asked relatives who lived through the regime, they cheerfully admitted that they were well-provisioned with clothes, food, jewelry, shoes, and other goods by family members serving in the German military abroad, and that the antique furniture he had inherited was undoubtedly pelf purloined from Dutch Jews. Aly holds that “Hitler was able to maintain general morale by transforming Germany’s military offenses into an increasingly coordinated series of destructive raids aimed at plundering other peoples” (4). Here he quotes Göring’s cynical words, “If someone has to go hungry, let it be someone other than a German.”

More broadly, Aly adds, his work is aimed at helping to explain why the Germans so often tolerated “unprecedented crimes against humanity.” He is admirably accepting of a multicausal (or compound causal) approach. He rightly observes that the powerful racist and anti-Semitic ideology of the regime. But ideology is only a partial explanation, in the sense that traditional German anti-Semitism was no more virulent, nor German nationalism more intense, than those that other nations experienced antecedently — or contemporaneously. And while the regime relied on a powerful propaganda machine to promulgate its general ideology and specific policies, that is only a partial cause of the people’s tacit or overt support. Aly notes (5–6) that even in the medieval pogroms, religious hatred was conjoined with overt plunder, and gives several historical examples. He sums up this point by saying, “While anti-Semitism was a necessary precondition for the Nazi attack on European Jews, it was not a sufficient one. The material interests of millions of individuals first had to be brought together with anti-Semitic ideology before the great crime we now know as the Holocaust could take on its genocidal momentum” (6).

Survivors cheerfully admitted that they were well-provisioned with clothes, food, jewelry, shoes, and other goods by family members serving in the German military abroad.

But this raises the larger question: how could the “obviously deceitful, megalomaniacal, and criminal” Nazi ideology win over the majority of Germans? Here Aly lays out his plan of attack. Part I of his bookexplores the notion that the first reason Nazi ideology had broad appeal was that while it targeted Jews (and some other groups, such as the disabled and the Roma), it was broadly inclusive, redistributing much wealth to underprivileged Aryans. Part II explores an anomaly: while the Nazis waged an unprecedentedly costly war, they managed to arrange it so that their own soldiers and citizens were well fed. Aly examines the financial tricks the regime used to transfer the wealth of the conquered countries to its own armed forces and citizenry. Part III explores the systematic and historically unparalleled plundering of the Jews. Finally, Part IV explores how internal policies (leveling wealth) and external policies (looting the Jews and conquered people) worked to cement widespread popular support, which lasted to the end of its reign.

Aly’s analysis focuses on the socialistic (i.e., redistributionist) aspects of the regime’s policies, because the common explanations — involving a demonic but charismatic Führer, or some conspiratorial clique of racist ideologues, ultra-wealthy elites, high-ranking military, or major industrialists who seduced the German public — are all unsatisfactory. Such explanations shift blame away from the vast number of Germans who supported the regime. And these “explanations” — really, just excuses — cannot account for that popular support, which manifested itself as lack of widespread opposition to the regime and a refusal to accept blame for it after its demise.

Part I begins with an exploration of the National Socialist ideal state. The ideology was hypernationalistic in that it held that nations (in the broad sense of “peoples,” or extended ethnic groups) were unequal — the German people alone being superior. But the socialist side of the ideology was important as well — all “Aryan” Germans are equal, regardless of economic class. As I suggested in an essay on The Triumph of the Will, one of the earliest and most successful of the regime’s propaganda movies explicitly pushed the theme of German unity across class. The dream of a Volksstaat was one of a “socially just state” in Hitler’s phraseology, or what Aly rightly calls a “welfare state for Germans of the proper racial pedigree” (13).

Prior “explanations” of Nazism cannot account for its popular support, which manifested itself as lack of widespread opposition to the regime and a refusal to accept blame for it after its demise.

When Hitler achieved power in 1933, he was only 43, and most of the other high-level party members were in their late 20s or early 30s; even to the end of the war, the rank and file of the Party viewed it as an extension of the youth movement. Young people rallied to support the regime — for example, university coeds would volunteer to spend their summers staffing daycare centers in Poland so that the German “settlers” could harvest crops. As Aly notes, people in their 20s often desire independence and challenging work, but also the chance to change the world, and the regime seemed to offer that.

Adding to the National Socialist appeal was a conspicuous imitation of leftist sentiments — remember, the Nazis fought the international socialist parties for the support of the German working and agricultural classes. Not surprisingly, the Nazis borrowed some of their opponents’ ideologies. The converse was also true — leftist parties started to borrow Nazi tropes.

Aly adds a point I find fascinating but paradoxical: the regime got its greatest support when it pushed seemingly contradictory policies, such as preserving tradition while embracing technological advance, or indulging the anti-authoritarian desire to topple the old elites with a desire for an authoritarian, rigid new order, or — most contradictory of all — harmonizing the social classes with committing racial genocide.

Another matter Aly explores is the large degree to which the German bureaucracy — especially civil servants in the Ministry of Economics — was transformed and used by the regime for its own purposes. For example, Göring demanded that German Jews pay an “atonement payment” of a billion reichsmarks in 1938 (about $14.5 billion in today’s money — quite a fine for the 214,000 Jews remaining in Germany at the time). The Finance Ministry immediately instituted a 20% tax on all personal assets of Jews, paid in four installments. The Ministry collected much more than Göring’s original goal.

Young people rallied to support the regime — for example, university coeds would volunteer to spend their summers staffing daycare centers in Poland so that the German “settlers” could harvest crops.

Aly argues that the willingness of the populace and the bureaucracy to support the Nazi regime resulted from the fact that the regime gave people much of what they wanted. It delivered many needed reforms (such as reforms on debt collection), as well as consumer goods (such as cars and vacations) and a number of popular policies (from increasing pension plans to environmental conservation). The regime took care to favor families in tax policy and redistribute wealth to poorer workers and farmers. It especially rewarded the families of military personnel, using such means as freezing their rents.

Aly reports, surprisingly, that the regime did not compel public employees to show absolute devotion to the Party. “Instead, it called for closeness to the common man — an anti-elitist stance that held considerable appeal for twentieth-century European intellectuals” (24).

But all of these popular programs needed funding. In 1935, the Nazis’ finance minister held a meeting in which he asked his staff to devise ways to change the tax system so as to extract maximum resources from the Jews. Proposals focused on denying Jews tax exemptions of various kinds — such as exemptions from the tax on dogs to those for people blinded in military service.

Fascinating as well is Aly’s discussion of the average non-Jewish German’s view of the Nazis as “unifiers.” Of course the Party was intolerant of “socialists [i.e., Marxists], Jews, and nonconformists.” But the post-WWI peace treaties that forbade Austria and Germany from unifying were highly unpopular: if nations of similar culture and language wanted to unite, why should other nations be able to stop them? Indeed, “Hitler always defined himself not just as German chancellor, but as leader of the entire German people, including ethnic Germans living outside the boundaries of the state he ruled” (27).

The willingness of the populace and the bureaucracy to support the Nazi regime resulted from the fact that the regime gave people much of what they wanted.

So Hitler’s early victories — the retaking of the Ruhr, the unification with Austria, and the annexation of the Sudetenland (and later the remainder of Czechoslovakia) — all “cheap” in the sense that Germany did not have to go to war to achieve them — together with the appearance of economic recovery, decisively weakened opposition to Hitler on the home front” (28). Aly adds that the regime was not maintained by force but by popular support, and it accordingly worried about the mood of the people and monitored that mood carefully. He notes that while Communist East Germany employed 190,000 secret police to control 17 million citizens, the Gestapo had in 1937 around 7,000 total staff, to keep tabs on 60 million citizens. In 1936, after an initial spasm of violence and terror against their opponents, the Nazis held only about 5,000 people in concentration camps — many just common criminals and vagrants. Aly notes, “Most Germans simply did not need to be subjected to surveillance or detention” (29).

Again, a big reason for this support was the Nazi focus on uniting the 96% of Germans it held to be racially German by smoothing out class and other social differences. Aly points out that a major tool in leveling differences within the “Aryan tribe” was the various uniformed services — the Hitler Youth, the National Labor Service, and the Wehrmacht. As I observed in my earlier review, wearing a uniform does indeed foster uniformity.

Another tool the regime used to level social differences among ethnic Germans was its move in 1939–1942 — a period when Germany seemed likely to assimilate much of Eastern Europe — to relocate Slavs farther to the East and give their land and other property to Germans. Racial ideology again justified the purchase of support: the Slavs, held to be an inferior race, must be forced to vacate their lands so that the “Aryans” would have “living space.” (The official plans called for 50 million Slavs to be relocated to Siberia, or to be slaughtered outright.) The intention was to give poor German farmers small plots of land, and poor German coal-miners access to vast new lands. As a result, “hundreds of soldiers’ wives dreamed of owning country estates in Ukraine” (31). Again, the idea was to purchase popular support with property stolen from non-Germans.

The recession hit bottom in 1933, when Hitler took power, so he got credit for the recovery.

All this was in marked contrast with WWI, during which 400,000 Germans starved to death, and the period of civil unrest and hyperinflation that followed. Between 1914 and 1918, the German average standard of living dropped by two-thirds. The regime was aware of the privation experienced in WWI, and how it undermined support for the war, and it was not going to repeat the mistake.

Aly’s second chapter has the intriguing title, “The Accommodating Dictatorship.” It explains the domestic side of the regime’s purchase of support. When Hitler took power in 1933, 6 million Germans were unemployed, and Hitler promised to put them all back to work. He appeared to accomplish this ambitious goal in just five years. Aly argues, however, that this victory was apparent, not real. He cites figures indicating that while the public came to believe that economic recovery was real, wages were falling. But the recession hit bottom in 1933, when Hitler took power, so he got credit for the recovery. Furthermore, by 1935, the regime had reinstated the draft, remilitarized the Rhineland, officially abrogated the Treaty of Versailles, and withdrawn from the League of Nations: “The early years of Hitler’s rule gave a desperate, belligerent and self-destructive people satisfaction for perceived past affronts.” (37).

But the apparent economic success of the regime was built upon massive borrowing. During the first two years, public debt ballooned by 10.3 billion reichsmarks, or about $144 billion in current dollars. The only taxes raised were those on corporations and the wealthy,and revenues were far below what was needed to fund just the military. Between 1933 and 1939, the regime dumped over 45 billion marks into the military — more than three times the total state revenues for the year 1937. The national debt expanded to 37.7 billion marks. The regime turned increasingly to extracting the money from the Jews. From the time it took power until late 1937, it pursued a campaign of harassment, including forcing Jews to sell their businesses to “Aryans,” aimed at pressuring Jews to emigrate, while it placed increasing restrictions on the ability of emigrating Jews to take assets abroad.

While the regime thus increasingly stole from Jews in a piecemeal fashion, it didn’t pursue a total looting of the Jews as such. But with the takeover of Austria in early 1938, Hitler’s personal economics advisor Wilhelm Keppler was appointed Reich commissioner for Austrian affairs and tasked by Göring with exploiting Austrian natural resources, keeping prices and wages stable, and, more importantly, “Aryanizing” Jewish-owned businesses. The debt caused by the military buildup began to threaten the economy as a whole, so the regime enacted laws requiring native-born Jews to declare all assets worth over 5,000 reichsmarks to the government, creating conditions for the complete confiscation of the assets of Jews fleeing the country, with nothing but state bonds as compensation. In April 1938, Göring met with all Reich ministers to plan “the definitive removal of Jews from economic life” (44). In the face of a worsening financial crisis, the regime sped up its annexation of Czechoslovakia and the war against the Jews. Göring told his assistants that all tangible Jewish assets were to be converted into government bonds, and the proceeds used to fund the regime’s war machine. After the outbreak of war in 1939, this 1938 model of Aryanizing Jewish assets would be applied all over the conquered lands (as Aly shows in deep detail).

But the apparent economic success of the regime was built upon massive borrowing. During the first two years, public debt ballooned.

While the Jews (and later others) were having their assets confiscated, the regime increased its taxes on the wealthiest Germans and the biggest corporations. During all this, middle and lower classes were, by deliberate design, only lightly taxed. The regime was sensitive to its base of support. This led to a long struggle between the regime’s economic realists — who felt that the lower and middle classes needed to shoulder part of the burden of the war — and what I would call the regime’s political realists (especially Hitler and Göring), who wanted to be sure that the regime’s base of support was contented enough to not rebel. Aly documents this strategy. For example, he shows that in 1941, the regime instituted tax breaks for farmers, and actually raised pensions. The latter move was intended to combat the widespread suspicion that “the National Socialists had no time for the elderly and physically weak and wanted them to die off quickly” (56). Aly understands the strategy, observing that when the regime’s ally Mussolini was kicked out by his own countrymen in the summer of 1943, Goebbels called for a renewal of National Socialism to make sure that the lower and middle classes had no material cause for complaint, so no reason to rebel. The focus was now (in 1943) to be on owners of rental property and stocks.

The battle between the economic and the political realists continued even into 1945, as the regime’s demise was clearly and universally apparent. The political realists — who included the Party members at the top of the hierarchy — prevailed. In fact, during the war, “family members of German soldiers had 72.8% of peace-time household income at their disposal. That [was] nearly double what families of American (36.7%) and British soldiers (38.1%) received” (72).

In part II, Aly takes up the subjugation and subsequent exploitation of first Western and then Eastern Europe by the Wehrmacht. Here Aly richly documents the various tricks the regime used to covertly loot lands it conquered. This was a radical form of imperialism, indeed: force the conquered lands to pay for the conquering army that oppressed it. And it was quite a financial trick, indeed.

Aly explores the foreign “contributions” that came to Germany. He notes that at the outset of war, despite wage and price controls, the profits of companies and the wages of workers increased, as did the pay awarded to soldiers. But with production more and more focused on the military, there was a gap between purchasing power and what was available to the public. This led to black markets, inflation, and a flight to tangible assets, such as durable goods. The problem grew acute by late 1939, and as the gap widened through 1941, the regime finally decided to export inflation to conquered lands. As one Finance Ministry bureaucrat put it (echoing Göring), “If there has to be inflation, better there than in Germany” (76). Aly notes that pillaging foreign economies thus served two purposes: it kept the regime’s base relatively well-provisioned, and it was a major source of funding for the war machine. Regarding the latter, the regime had the explicit goal of getting any conquered territory to pay for all the costs of military occupation. Aly documents how the regime was able to do this “with unwavering efficiency.”

This was a radical form of imperialism, indeed: force the conquered lands to pay for the conquering army that oppressed it.

In occupied Serbia, for example, the Nazis set up a new Serbian national bank with a new currency and outlawed most currency exchanges, thus forcing people to cash in their real currency for a new one. This temporarily halted inflation — and allowed the Serbs to pay their “contribution for military protection” (as the regime called it, in all the countries it occupied). During the war the regime exacted unprecedented financial tributes from the countries it conquered — tributes that “soon exceeded the total peacetime budgets of the countries in question, usually by 100% and in the second half of the war by more than 200%” (77). Aly shows in detail how this affected Poland, France, Denmark and Norway. By 1943, most of the revenues funding the Nazi war machine came from “contributions” from conquered countries, and from the regime’s “allies” (Bulgaria, Slovakia, and Romania), as well as from foreign slave labor in Germany and the complete dispossession of the Jews.

The regime, as Aly shows, was successful in its clever manipulation of official exchange rates in occupied countries. He documents this in the case of occupied France, Bohemia, and Moravia. This currency manipulation, along with the establishment of “clearing accounts,” helped German consumers and Wehrmacht soldiers as well as the war regime. Soldiers “bought” massive amounts of food and other goods in the countries in which they were stationed and shipped them home to help their families.

Aly explores the use of another financial gimmick the regime employed — “Reich Credit Bank” certificates, which looked like paper money and could be traded by troops for local goods. As one German minister put it, these were really “requisition receipts disguised as money.” The regime had devised a way to take what it needed without incurring the direct wrath of those being relieved of their goods.

When the customs border between Germany and the Protectorates of Bohemia and Moravia was eliminated, German soldiers went on a “purchasing frenzy."

The regime forced allies and conquered countries alike to buy its bonds, and by July of 1944 it owed roughly 29 billion marks (or about $421 billion in today’s dollars) to the bondholders. An internal Nazi report estimated the total value of goods and services taken from the occupied territories from 1939 to 1944 at as much as 100 billion reichsmarks ($1.4 trillion in today’s dollars).

In a chapter called “Profits for the People,” Aly explores other mechanisms of plunder. One of them was direct soldier purchases. For example, German soldiers in the Netherlands were allowed to receive up to $15,000 per month (in today’s dollars) to buy local goods and ship them home. And German soldiers could take as much cash as they wanted when leaving Germany to return to the conquered lands. This led, predictably, to German soldiers buying so many local supplies that shortages ensued, much to the distress of the German occupying authorities. When the customs border between Germany and the Protectorates of Bohemia and Moravia was eliminated, German soldiers went on a “purchasing frenzy,” buying all the Czech goods they could, furniture included.

As Aly puts it, “German soldiers literally emptied the shelves of Europe. They sent millions of packages home from the front. The recipients were mainly women. When one [i.e., an historian such as Aly] asks the now elderly witnesses about this period in history, their eyes still gleam at the memory of the shoes from North Africa, the velvet, silk, liqueurs, and coffee from France, the tobacco from Russia, and the tons of herring from Norway — not to mention the various gifts that poured from Germany’s allies Romania, Hungary, and Italy” (97). Aly quotes numerous letters of German civilians saying in essence that they suffered no privations during the war years.

Aly gives another example: in the words of a French historian, these contrived purchases for the people back home “did significant damage to the French national economy, playing a significant role in the development of the black market and inflation. They were the reason it was increasingly difficult for everyday French people to procure the basic necessities” (99). Aly shows that the same phenomenon occurred in the Baltic States, Russia, Norway, Denmark, and Poland.

In the Wannsee Conference the next year, Heydrich emphasized the need for apartments in driving the decision to exterminate the Jews.

This pervasive pillaging fostered a climate of corruption and crime. Aly quotes extensively from an internal regime report on corrupt conditions in the Ukraine. The report reviews letters written home by German soldiers, and alleges that the Ukraine has become “the Reich’s flea market,” with soldiers writing their families to send cheap jewelry, cosmetics, used clothes, and other junk to be traded with the locals for the best food and produce. All this “sharp trading” was done by the Aryans, the very people who targeted the Jews for annihilation because they were allegedly — sharp traders! Vicious irony, indeed.

The crucial year for the outright dispossession of the Jews was 1941. In that year, “while people in the East were dreaming of a black market El Dorado,” civilians in Germany’s northwestern cities were really hurting from the British bombing. The Gauleiter of Hamburg, Karl Kaufmann, requested of Hitler that the Jews be removed so their apartments could be given to non-Jewish citizens made homeless by the Allied bombs. Hitler immediately made this an order. In the Wannsee Conference the next year, Heydrich emphasized the need for apartments in driving the decision to exterminate the Jews, and in late 1941, the first Jews rounded up were in the cities most bombed.

Not only were the Jews’ apartments confiscated, but so were their household effects, from their furniture down to their clothes. This policy was extended shortly thereafter to cover fine art, which was confiscated and sold. From France alone, the regime extracted about a million cubic meters of household goods from more than a quarter million Jewish homes. There are similar figures for goods taken from Jews in Belgium, the Netherlands, Czechoslovakia, and elsewhere, and for the wholesale confiscation of containers filled with the household effects of Jews who had emigrated earlier (129). By 1942, the regime was confiscating the containers of household effects of Jews now being sent to the death camps. And the regime bragged about what it was doing — one poster Aly that reproduces has a headline proclaiming that 1,362,945 books were seized, “enough to fully equip 2,600 local libraries” (128). Aly adds that the recipients of these handouts were grateful to the regime, as shown by an outpouring of thank-you notes.

Aly provides a revealing discussion of the regime’s systematic looting of the areas of Western Europe under its control from their fall in 1940 to their liberation in 1945. He describes the various mechanisms the regime used for surreptitious transfer of assets from the occupied population to the regime’s home base, via the hands of occupying German troops, who bought goods to send home. The burden was heavy. Belgium, a nation of about 8.3 million people, whose pre-war state budget was 11 billion francs, was pressed to pay 18 billion francs to the regime for occupation costs. With stolen Belgian money, the regime was able to buy in that country 18,500 motor vehicles, 1,100 locomotives, and 22,000 freight cars — in 1941 alone! That same year the regime was able to steal 41 tons of Belgium’s gold. All this the regime itself carefully documented. During the period in which Belgium was under occupation (1940–1944), its government spent 83.3 billion francs on providing for its own citizens, but had 133.6 billion francs worth of goods and currency taken for occupation costs — not counting the stolen Belgian gold or the loot grabbed from Belgium’s Jews.

By 1942, the regime was redistributing the household effects of Jews sent to the death camps. Recipients of these handouts were grateful to the regime, as shown by an outpouring of thank-you notes.

Statistics are equally striking for the other occupied counties. By 1944, the Netherlands had paid 8.3 billion reichsmarks (about $120 billion today), quite a sum for a nation of 8.8 million citizens to bear. 60% of that money was used to buy goods for the German citizenry. France during the occupation surrendered a staggering 40 billion reichsmarks to the regime (or about $580 billion dollars). Although Germany occupied its erstwhile ally Italy only from 1943 to 1945, it managed to extract the equivalent of 10 billion reichsmarks ($145 billion current dollars) from the hapless country.

Aly does not neglect the role that the Eastern European occupied territories played in the regime’s program of purchased support. He suggests that a huge component was the use of forced — truly, slave — labor. The regime made between 8 and 12 million people work for it, essentially for free and under harsh and dangerous conditions. Most of these forced laborers were from Eastern Europe. They were housed in shabby conditions (for which they were charged), and were paid 15% to 40% lower than German workers. And the regime managed by various schemes to divert much of that pay for the war effort. The workers’ pay was taxed, of course. Also, the regime officially set aside the money for the workers’ families, back in their home countries, paying these families in local currency out of the “occupation charges.” In other words, the home countries were forced to support the workers’ families. The essence of the regime’s con was clearly identified in 1944, by eminent jurist Raphael Lemkin: “The occupied countries not only finance exports to Germany but also pay their own people working in Germany.”[1]

Workers from Poland, Ukraine, and Russia received the worst treatment. Men and women taken prisoner and shipped to Germany to work in the labor camps would have their property liquidated and the money theoretically held in trust for their return, but in practice it was merely confiscated. The conscripted workers were paid low wages, and the Poles in particular had to pay a 15% “supplemental social compensation fee” in addition to an income tax. Poles in agricultural work got as little as 8.5 reichsmarks ($125 in current dollars) to 26.5 reichsmarks ($348) per month. In addition to the special fee, they were assigned to the highest income tax rates (paid by the wealthiest Germans).

Generally, Aly notes, “the amounts deducted from the wages of Jews — as well as of Gypsies and forced laborers from Eastern Europe — were thus more than triple those demanded of German workers. The Reich was able to double its wage tax revenues during the latter half of World War II on the backs of involuntary workers assigned to German industry” (160). There was some internal opposition — that of some people within the regime who feared that exploitation of the forced laborers would lessen their will to work hard and encourage resistance at home. But one economist estimated that, among Polish and Russian workers earning 40 reichsmarks per week, only 10 were left after the various taxes, fees, and charges for room and board in the labor camps.

But even leaving those meager wages in the hands of the forced workers threatened to reduce the availability and increase the prices of consumer goods for the “Aryan” Germans. So the regime devised another scheme: paying the forced laborers in part by special “savings bonds,” which supposedly offered a 2% interest rate but in the end were virtually unredeemable.

Among Polish and Russian workers earning 40 reichsmarks per week, only 10 were left after the various taxes, fees, and charges for room and board in the labor camps.

By these various artifices, the regime was able to pocket 60% to 70% of the forced laborers’ wages, which allowed for stable prices and no shortages and — as Aly shows in detail — in great measure paid for the social welfare programs that benefited “Aryan” workers. Behold National Socialism: it delivered the goods for the national workers in great measure by exploiting the international ones!

Reviewing the specific measures — including wholesale currency manipulation and food confiscation disguised as food purchases — by which the regime was able to pillage Ukraine and Russia, Aly trenchantly observes, “Even with food rationing, and wartime changes in people’s eating habits, shortfalls occurred. But as it had not done in World War I, the German leadership transferred the burdens of those shortages to people in occupied countries, to disadvantaged minorities, and to Soviet prisoners. The result was famine in Poland, Greece, and especially the Soviet Union; in psychiatric hospitals, ghettos, concentration camps, and POW camps, people starved to death” ( 170). The result, as Aly notes, was also a savage exploitation of Soviet POWs. By 1942, 2 million of the 3.3 million Red Army prisoners had died in the camps or in transit to the camps.

The regime stole a staggering amount from the Soviet territories. In one telling chart, Aly shows that the regime was able to transfer about 106 million Gus (grain units, with 2.5 Gus being what it takes to keep one person alive for a year) from Soviet lands to the Reich in the years 1941–43. Before the invasion, the Soviets produced 101% of the food needed to feed their public. This means that the Germans deprived about 21.2 million Soviet citizens of the food necessary for survival. Aly contrasts reports by German civilians that, until February 1945, no women complained that their children lacked whole milk, with reports of about 4,000 people starving to death a day in Leningrad.

In Part III, Aly focuses on the dispossession of the Jews. Chapter 7 — aptly entitled “Larceny as a State Principle” — tackles the common view that the “Aryanization” of Jewish property benefited German businessmen and bank directors the most. Aly argues that this is a false narrative. He describes in detail how the process took place.

Behold National Socialism: it delivered the goods for the national workers in great measure by exploiting the international ones!

Typically, first in Germany and then throughout occupied Europe, Jewish assets were first nationalized (i.e., seized by the state or occupation forces), then privatized (i.e., sold atbargain prices to non-Jewish individuals). Even selling these goods at bargain prices, however, brought substantial revenues to the state treasuries. In this regard, the 1938 seizure and sale of Jewish assets, which helped the regime to spend like mad building up its war machine without inducing hyperinflation, served as a model for how it would run its conquered territories.

The model proved useful indeed. As the regime imposed onerous “occupation costs” on its conquered territories — costs that in just the first year, according to one Reichsbank study, represented 211% of regular state revenues in France, 200% in Belgium, 180% in Holland, and 242% in Norway — it used the expropriation of Jewish assets to hold off hyperinflation in those countries.It pursued the policy under tight secrecy. Since the liquidation of civilian assets was a complete violation of international law, the regime employed small cadres of trained senior officials to do the actual seizures. Aly notes that in Serbia, where enough documentation remains to reconstruct the process, within one year after the invasion a Wehrmacht administrator reported that he had all the Jewish men rounded up and shot, and all the Jewish women and children suffocated to death by truck exhaust fumes. With Serbia’s 22,000 Jews dead, administrators from the department responsible for implementing Göring’s Four-Year Plan began the seizure and liquidation of their assets. The money flowed first to the Serbian treasury, then to the Nazi treasury as payment for occupation costs. The amount seized was able to cover more than six months of occupation costs, which dramatically lowered inflationary pressures in Serbia for an even longer period.

Aly notes that while ordinarily the expropriation of Jewish assets was done without any cover of law, in 1941 the regime did pass a law — the Reich Citizenship Law — that in one stroke seized the assets of Jews, which in great measure had earlier been forcibly converted into bonds, so it was easy to do. The debts were simply nullified. In 1942, Himmler and Reichsbank President Walther Funk worked out a deal by which all gold, gemstones, and cash taken from the death camp inmates would be given to the Reichsbank, which would then pay the market rate for this loot into a special treasury account (under a fictitious owner, ironically named “Max Heiliger” or “Holyman”). While gold watches were sold domestically, the regime sold jewelry in Switzerland.

Aly describes exactly how in 1941 one Jewish couple (the Uhlmanns) were dispossessed of more than 47,000 reichsmarks, between the emigration tax, the tax on Jewish wealth, and the confiscation of bonds when they fled to Luxembourg. When the regime conquered Luxembourg, they were killed. The money extracted from them “allowed the state to avoid tax increases — equivalent to a 50% hike for eight hundred workers with two children each — that otherwise would have been necessary,” as well as to “absorb some excess spending power in the middle of the war by selling off the Uhlmanns’ possessions” (200).

With Serbia’s 22,000 Jews dead, administrators from the department responsible for implementing Göring’s Four-Year Plan began the seizure and liquidation of their assets.

Aly devotes another chapter to various ways the regime used to launder the money it stole from Jews. He starts by describing how the regime used the puppet it installed in Norway, Vidkun Quisling, to strip Norway’s 2,100 Jews of their possessions. He did this in stages, and was able to put 11 million reichsmarks from the liquidated property into the Norwegian treasury, which then passed to the regime as part of the occupation costs, which then passed into the hands of German soldiers and regime procurement officers. Watches stolen from Jews were given out to German generals, who sometimes gave them away as Christmas gifts to staff and families.

The Belgian campaign to steal Jewish assets was carried out by the German military administration, rather than a collaborationist regime. As early as October 1940, the Wehrmacht required its approval for every ordinance concerning Jewish business, the registration of all Jews and all businesses “in which Jews had influence,” and the wholesale removal of Jews from the government. The next month the Wehrmacht ordered the removal of Jews from the economy and the liquidation of their businesses. But throughout the process, the regime managed by various subterfuges to keep a public “façade of legitimacy” over this asset seizure.

In Holland, the regime followed its common course after conquest: the removal of Jews from the economy. By 1941, Dutch Jews had to register their various assets. Shortly thereafter, the liquidation of Jewish assets began, under the color of legitimate governance. Dutch stockholders helped the regime sell about 80% of confiscated Jewish stocks, the proceeds going into state and industrial bonds — which made it appear as a transfer rather than a seizure. But the bonds were soon converted into Dutch government securities and used to cover the costs of occupation. Of the 14.5 billion reichsmarks (or about $210 billion in current dollars) extracted from the Netherlands during its occupation, about 10% came from the country’s tiny Jewish population of 140,000 souls.

Watches stolen from Jews were given out to German generals, who sometimes gave them away as Christmas gifts to staff and families.

The Reich didn’t simply enrich itself; it subsidized its allies. Even in 1940, in the puppet state of Slovakia, laws were passed to “Aryanize” the economy, with the goal of shipping all Jews to Madagascar (Adolf Eichmann’s personal plan). In just the first two years, the Slovakian government liquidated or “Aryanized” nearly all the 2,000 registered Jewish businesses — to the evident advantage of the non-Jewish population. In late 1941, when it went to war with Russia, the Slovakian government decreed a compulsory “contribution” of 20% of the total Jewish wealth under its control. During 1941 to 1942 the Slovakian government deported most of the country’s 89,000 Jews — with 53,000 sent directly to Auschwitz in just the first 13 weeks. Of the 7 billion crowns that Germany stole from tiny Slovakia during the war, 40% came from liquidated Jewish wealth — amazing, considering that Jews constituted only about 3% of the population. The story was the same in the Nazi puppet state of Croatia.

Bulgaria, which had joined the Axis Powers before they began their war with Yugoslavia and Greece in 1941, had to “loan” the Reichsbank nearly 62 million reichsmarks in 1941. It received parts of Thrace and Macedonia in compensation. It then had to cover the total costs of the German forces within its territory. It passed an anti-Semitic law in early 1941 that declared Jews to be foreigners and required them to register all their assets. Over the next two years these assets were pillaged. The Jews in Thrace and Macedonia were shipped to extermination camps in 1943.

Similarly, in Romania, even by 1940 Jewish-owned properties were being confiscated. This accelerated during the next year. By the end of 1942, surviving Romanian Jews were sent to Treblinka and murdered. Himmler was able to boast of settling half a million ethnic Germans in Romania in property once owned by Jews. In the end, the Jews were forced to cover 25% to 33% of the total costs of Romania’s part in the war.

Even the ancient Jewish cemetery in Salonika was cleared of headstones and the land auctioned off for real estate development.

Aly has been able to uncover the fate of the Jews of Salonika, Greece, once a center of Jewish population.This is a story that many Greeks would rather not confront. Crucial to the story is the “Aryanization” of Jewish assets — including twelve tons of gold (worth perhaps $5 billion today). Suffice it to say that the Nazis, along with their Italian and Bulgarian allies, rapidly conquered Greece and divided it into three occupation zones. As the Germans (and Bulgarians) took the produce of the land, the Greek currency started to lose its value. Stories surfaced about Greek children starving. Even Hitler was concerned enough to raise the issue with Mussolini. The Nazis sent in a special emissary to stabilize the situation. His measures “accelerated the ghettoization, dispossession, and deportation of Jews” (250). In October 1942, the Germans were pressing for Greece’s Jewish population, mainly concentrated in Salonika, to be dispossessed. In January 1943, Eichmann’s deputy Gunther flew to Salonika to help the process. Within two months, Jews were forced to declare their assets to the newly created Greek Office for the Management of Jewish Assets. Shortly thereafter — starting March 15, 1943 — deportations of Salonika’s 44,000 Jews began (along with 2,000 additional Jews from nearby), and were completed in a matter of months.

Jewish properties were seized and sold. Even the ancient Jewish cemetery in Salonika was cleared of headstones and the land auctioned off for real estate development. The proceeds were used, as elsewhere, to fund the Wehrmacht. But because of the rapid inflation of Greek currency and the relative poverty of the land, the Nazis focused on wringing as much gold out of the victims. The gold, Aly suggests, was sold by Greek brokers in Athens, and the cash that was raised flowed to the Wehrmacht, which used it to purchase local supplies to feed the troops and to pay the troops themselves. This stabilized the currency. The 46,000 Jews sent for Salonika to Auschwitz yielded 12 tons of gold, which was between two-thirds and three-fourths of the occupation costs. This gold stayed in Greece.

Part IV of Aly’s book, called “Crimes for the Benefit of the People,” draws his themes together and adds a great deal of information on the motives of Nazi minions.

For instance, he says, “Before the victims of Nazi looting could be deported from the occupied territories, the German military officers had to agree on and in most cases provide the means of transport. They did this without the slightest objection — and not simply because they hated Jews or were willing to sacrifice the last vestige of their consciences out of a supposedly innate German need for obedience. The officers helped carry out the deportations because the deportations served their own interests” (280). That is, besides the standard explanations for the expulsion and dispossession of the Jews — i.e., widespread German racialist anti-Semitism and the regime’s propaganda “ceaselessly” portraying Jews as a dangerous enemy “fifth column” — the driving motivation for the Wehrmacht’s complicity was the desire to keep troop morale up and keep pushing ahead with the military strategy. This military imperative to seize Jewish and other assets was intensified by the resolve of Nazi economists not to fund more than half the war’s costs by debt.

Aly notes that the various deceitful and opaque means of confiscating Jewish and conquered people’s assets succeeded only too well in hiding the massive dispossession from the notice of humanity. And in setting it up so that Jews had their assets first converted to German asset vehicles, the actual extermination of the Jews was made economically tempting: simply liquidate the creditors! Aly suggests concisely that the Holocaust will never be properly understood “until it is seen as the most single-mindedly pursued campaign of murderous larceny in modern history” (285).

To the reply that the resources seizedcould not have cost more than about 5% of the total wealth in the “German war chest” between 1939 and 1945, Aly observes that this was itself a large amount. I would add that during the period from 1933 to 1939, huge amounts were seized from Germans and Austrians. And seizures could be timed to fund major new offensives, such as the battle of Kursk in 1943.

In setting it up so that Jews had their assets first converted to German asset vehicles, the actual extermination of the Jews was made economically tempting: simply liquidate the creditors!

In the years 1939 to 1945, the regime brought in from occupied lands an astounding 170 billion reichsmarks — about 2.4 trillion euros. Of the total amount of money collected by the regime during this period, about 10% came from taxes on lower and middle class Germans, another 20% from taxes on wealthy Germans, and the remaining 70% from the proceeds of theft. It is precisely this that guaranteed that the regime retained substantial support until the very end.

In a chapter called “Speculative Politics,” Aly explores how the regime was able to render more or less invisible the massive borrowing it carried out, and again how this was done to make the load of the war light on the shoulders of non-Jewish Germans. Then, in the final Chapter, Aly summarizes his view of Nazi socialism as a socialism that radically confiscated assets from targeted groups and used them to fund the war, while enabling the population to live well. He puts the total amount of Nazi wartime revenues stolen from dispossessed Jews, occupied countries, and forced labor at a remarkable 70% of its total war costs (327). His book — all 334 pages of exposition, 59 pages of notes, and 17 pages of references — makes this estimate credible.

Much of the socialized pelf was funneled directly to German civilians in the form of fine food, produce, wine and liqueurs, jewelry, household goods, clothes, toys, books, and candies, making it clear that the regime’s support was based on purchase, as opposed to power or persuasion. “Nothing less than massive popular greed made it possible for the regime to tame the majority of Germans with a combination of low taxes, ample supplies of consumer goods, and targeted acts of terror against social outsiders” (324).

In sum, Aly’s suggestion is that the Germans were not exactly Hitler’s willing executioners, nor were they his unwilling victims; they were instead his willing beneficiaries. From the start, the regime’s elimination of unemployment by massive infrastructure and military spending was financed by the confiscation of the wealth and labor of the Jews. When war got underway, the regime exploited to the ultimate degree the people of conquered countries. It was a regime that pursued a radical racist redistributionism from the first.

The regime’s support was based on purchase, as opposed to power or persuasion.

One of the matters that Aly does not consider is the important role that early computer technology played in the Nazis’ war against the Jews. Henry Hollerith, an employee in the US Census Bureau in the early 1880s, first conceived of using punched cards to record census data. “Hollerith Machines” sorted and counted the millions of cards. The Hollerith Machine Corporation was sold to a conglomerate that eventually became IBM. The German industrialist Willy Heidinger established a subsidiary of the corporation called Dehomag (an acronym for the German Hollerith Machine Corporation) in 1911. Heidinger became an enthusiastic Nazi supporter, and the Nazis appreciated his machines. They used IBM machinery to implement the 1933 census and were thus able to catalogue citizens with partial Jewish ancestry, expanding the count of Jews to 2,000,000. The Nuremberg Laws specified the number of grandparents of Jewish ancestry necessary to be counted as a Jew, and those could now be identified.

At any rate, it was the seizure of wealth that bought the support of the Germans for the regime, rather than the Germans’ pre-existing anti-Semitism. It was this kind of socialism that really won the day. But the thesis requires some additional analytical work, which will be presented in the final installment of this series.


[1]Lemkin is the man who coined the neologism “genocide,” which he did in 1943 or 1944.


Editor's Note: This review-essay is part 2 of a three-part series.



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