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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Fri Feb 27, 2009 10:49 am Post subject: Hitler Was a Keynesian |
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...quiet around here these days. Let's try and shake things up:
http://www.lewrockwell.com/rockwell/hitlers-economics.html
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For today's generation, Hitler is the most hated man in history, and his regime the archetype of political evil. This view does not extend to his economic policies, however. Far from it. They are embraced by governments all around the world. The Glenview State Bank of Chicago, for example, recently praised Hitler's economics in its monthly newsletter. In doing so, the bank discovered the hazards of praising Keynesian policies in the wrong context.
The issue of the newsletter (July 2003) is not online, but the content can be discerned via the letter of protest from the Anti-Defamation League. "Regardless of the economic arguments" the letter said, "Hitler's economic policies cannot be divorced from his great policies of virulent anti-Semitism, racism and genocide�. Analyzing his actions through any other lens severely misses the point."
The same could be said about all forms of central planning. It is wrong to attempt to examine the economic policies of any leviathan state apart from the political violence that characterizes all central planning, whether in Germany, the Soviet Union, or the United States. The controversy highlights the ways in which the connection between violence and central planning is still not understood, not even by the ADL. The tendency of economists to admire Hitler's economic program is a case in point.
In the 1930s, Hitler was widely viewed as just another protectionist central planner who recognized the supposed failure of the free market and the need for nationally guided economic development. Proto-Keynesian socialist economist Joan Robinson wrote that "Hitler found a cure against unemployment before Keynes was finished explaining it."
What were those economic policies? He suspended the gold standard, embarked on huge public works programs like Autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national health care and unemployment insurance, imposed education standards, and eventually ran huge deficits. The Nazi interventionist program was essential to the regime's rejection of the market economy and its embrace of socialism in one country.
Such programs remain widely praised today, even given their failures. They are features of every "capitalist" democracy. Keynes himself admired the Nazi economic program, writing in the foreword to the German edition to the General Theory: "[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire."
Keynes's comment, which may shock many, did not come out of the blue. Hitler's economists rejected laissez-faire, and admired Keynes, even foreshadowing him in many ways. Similarly, the Keynesians admired Hitler (see George Garvy, "Keynes and the Economic Activists of Pre-Hitler Germany," The Journal of Political Economy, Volume 83, Issue 2, April 1975, pp. 391�405).
Even as late as 1962, in a report written for President Kennedy, Paul Samuelson had implicit praise for Hitler: "History reminds us that even in the worst days of the great depression there was never a shortage of experts to warn against all curative public actions�. Had this counsel prevailed here, as it did in the pre-Hitler Germany, the existence of our form of government could be at stake. No modern government will make that mistake again."
On one level, this is not surprising. Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. And it worked only on paper in the sense that the GDP figures from the era reflect a growth path. Unemployment stayed low because Hitler, though he intervened in labor markets, never attempted to boost wages beyond their market level. But underneath it all, grave distortions were taking place, just as they occur in any non-market economy. They may boost GDP in the short run (see how government spending boosted the US Q2 2003 growth rate from 0.7 to 2.4 percent), but they do not work in the long run.
"To write of Hitler without the context of the millions of innocents brutally murdered and the tens of millions who died fighting against him is an insult to all of their memories," wrote the ADL in protest of the analysis published by the Glenview State Bank. Indeed it is.
But being cavalier about the moral implications of economic policies is the stock-in-trade of the profession. When economists call for boosting "aggregate demand," they do not spell out what this really means. It means forcibly overriding the voluntary decisions of consumers and savers, violating their property rights and their freedom of association in order to realize the national government�s economic ambitions. Even if such programs worked in some technical economic sense, they should be rejected on grounds that they are incompatible with liberty.
So it is with protectionism. It was the major ambition of Hitler's economic program to expand the borders of Germany to make autarky viable, which meant building huge protectionist barriers to imports. The goal was to make Germany a self-sufficient producer so that it did not have to risk foreign influence and would not have the fate of its economy bound up with the goings-on in other countries. It was a classic case of economically counterproductive xenophobia.
And yet even in the US today, protectionist policies are making a tragic comeback. Under the Bush administration alone, a huge range of products from lumber to microchips are being protected from low-priced foreign competition. These policies are being combined with attempts to stimulate supply and demand through large-scale military expenditure, foreign-policy adventurism, welfare, deficits, and the promotion of nationalist fervor. Such policies can create the illusion of growing prosperity, but the reality is that they divert scarce resources away from productive employment.
Perhaps the worst part of these policies is that they are inconceivable without a leviathan state, exactly as Keynes said. A government big enough and powerful enough to manipulate aggregate demand is big and powerful enough to violate people's civil liberties and attack their rights in every other way. Keynesian (or Hitlerian) policies unleash the sword of the state on the whole population. Central planning, even in its most petty variety, and freedom are incompatible.
Ever since 9-11 and the authoritarian, militarist response, the political left has warned that Bush is the new Hitler, while the right decries this kind of rhetoric as irresponsible hyperbole. The truth is that the left, in making these claims, is more correct than it knows. Hitler, like FDR, left his mark on Germany and the world by smashing the taboos against central planning and making big government a seemingly permanent feature of western economies.
David Raub, the author of the article for Glenview, was being na�ve in thinking he could look at the facts as the mainstream sees them and come up with what he thought would be a conventional answer. The ADL is right in this case: central planning should never be praised. We must always consider its historical context and inevitable political results. |
Therefore... |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Feb 27, 2009 2:19 pm Post subject: |
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Okay, but you highlighted the stupid, provocative parts. My turn to salvage this mess.
| Quote: |
Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. And it worked only on paper in the sense that the GDP figures from the era reflect a growth path. Unemployment stayed low because Hitler, though he intervened in labor markets, never attempted to boost wages beyond their market level. But underneath it all, grave distortions were taking place, just as they occur in any non-market economy. They may boost GDP in the short run (see how government spending boosted the US Q2 2003 growth rate from 0.7 to 2.4 percent), but they do not work in the long run.
"To write of Hitler without the context of the millions of innocents brutally murdered and the tens of millions who died fighting against him is an insult to all of their memories," wrote the ADL in protest of the analysis published by the Glenview State Bank. Indeed it is.
But being cavalier about the moral implications of economic policies is the stock-in-trade of the profession. When economists call for boosting "aggregate demand," they do not spell out what this really means. It means forcibly overriding the voluntary decisions of consumers and savers, violating their property rights and their freedom of association in order to realize the national government�s economic ambitions. Even if such programs worked in some technical economic sense, they should be rejected on grounds that they are incompatible with liberty.
So it is with protectionism. It was the major ambition of Hitler's economic program to expand the borders of Germany to make autarky viable, which meant building huge protectionist barriers to imports. The goal was to make Germany a self-sufficient producer so that it did not have to risk foreign influence and would not have the fate of its economy bound up with the goings-on in other countries. It was a classic case of economically counterproductive xenophobia.
And yet even in the US today, protectionist policies are making a tragic comeback. Under the Bush administration alone, a huge range of products from lumber to microchips are being protected from low-priced foreign competition. These policies are being combined with attempts to stimulate supply and demand through large-scale military expenditure, foreign-policy adventurism, welfare, deficits, and the promotion of nationalist fervor. Such policies can create the illusion of growing prosperity, but the reality is that they divert scarce resources away from productive employment. |
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MothraAttack
Joined: 20 Jan 2009
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| Posted: Fri Feb 27, 2009 4:28 pm Post subject: |
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There were certainly Keynesian elements (it was pretty vogue at the time, after all) in the NSDAP's policies, but the Nazis styled themselves as a "third way" that was modeled more after Mussolini's corporatism than Keynes' body of works. Moreover, Nazi plans were later predicated on slave labor and this is something clearly not condoned by Keynesian advocates. Adam Tooze recently published a massive thesis on the Reich's economy, and although I haven't read it it has been well received. I'm sure it's much more definitive than anything on Lew Rockwell's website.
The article is misleading in that Germany wanted to become self-sufficient in such a capacity. Germany's fate was hinged on other nations (the Axis) for a number of reasons -- including the fact that Buna and synthetic oil pretty much suck. The German drive toward the Grozny oilfields was bolstered by international allies and underscored the Reich's reliance on resources it could not procure itself.
edit: To clarify, though, the expansionism of Nazi Germany was not only rooted in economics -- living space and global hegemony were prime motives, and a byproduct of which would be economic supremacy. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Sat Feb 28, 2009 7:21 am Post subject: |
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| Quote: |
| Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. |
Exactly right.
Ponzi economics, the economics of fascist-socialism, is the economics of JMKeynes, FDR, Hitler, LBJ, Nixon, GWBush, Obama, the Democratic Party since the 1930s, and the Republican Party since the 1970s. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 28, 2009 8:18 am Post subject: |
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| Ponzi economics = Minsky's financial instability hypothesis, ontheway? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Sat Feb 28, 2009 10:06 am Post subject: |
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from: Minsky's financial instability hypothesis:
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| "... if an economy is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make positions by selling out positions. This is likely to lead to a collapse of asset values." |
Seems he anticipated some of what I was thinking, but ...
Minsky tried to "save" the failed Keynesian system by accounting for debt and inflation.
But, all government spending is consumption. And since governments have no income of their own, but rely on theft by way of taxation, all government debt is Ponzi debt from the outset.
This debt automatically puts the economy into an inflationary state, unless the country is on a strict, 100% gold standard. The Ponzi debt system, plus inflation leads to collapse and either recessions or depressions follow.
So, Minski, by trying to save the keysian-fascist-socialist Ponzi economic system actually accounted for IT being the sole cause of business cycles.
Also, interesting, he seems to have anticipated the application of Chaos theory to the economy, which is why the government should be limited to only ONE tax applied at all levels and minimal regulation (even if he didn't understand the implications of his own ideas). This was also the position of the ancient Chinese economic writings in the Kwan-Tzu.
Which means we need:
1) go on a 100% gold standard immediately
2) repeal all taxes on income and property
3) institute a 10% national sales tax, COLLECTED BY THE STATES, and shared by the Federal, State, and local governments
4) prohibit all government borrowing
5) prohibit government deficits except those funded from accumulated government savings of surpluses
6) abolish social security for everyone under age 55. For those 55 to 65, raise the retirement age to 72.
7) freeze SS payments for those still eligible, sell government assets to fund the payments, privatize the fund
8.) end all government entitlements
9) end the US empire, bring all troops home, close all foreign bases.
10) America defends only America. Countries that want US protection must become states.
11) No military action of any kind without Congressional approval.
12) Abolish ALL victimless crime laws. Pardon and free these political prisioners.
13) Cap pay levels for Congress, the Pres, and all government workers at the Median income level for US workers.
14) Sunset existing legislation.
15) Require a 2/3 majority for congressional spending and taxing legislation. Better, require a 2/3 majority for all new legislation. |
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MothraAttack
Joined: 20 Jan 2009
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| Posted: Sat Feb 28, 2009 10:46 am Post subject: |
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| ontheway wrote: |
| Quote: |
| Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. |
Exactly right.
Ponzi economics, the economics of fascist-socialism, is the economics of JMKeynes, FDR, Hitler, LBJ, Nixon, GWBush, Obama, the Democratic Party since the 1930s, and the Republican Party since the 1970s. |
Fascist-socialism is a paradox that really hasn't been around since Strasserism was purged.
It's true Hitler used government spending to stimulate the economy. Interestingly, military spending is a great Keynesian booster, although not entirely popular in liberal circles that tend to advocate said school.
The way that governments treated corporations in Germany was notably different than the U.S., though, and certainly different than the Soviet Union which virtually eliminated private enterprise. Economist Tibor Berend notes that "entrepreneurs had independence on investing, decisions about products, research and development, and other fields of company management" (An Economic History of Twentieth Century Europe pg. 109) but that the state set the larger goals and regulations. Company leaders donned the title of Betriebsfuehrer and as such private companies were induced to follow the plans of the NS state as a function of the Fuehrerprinzip, wherein multiple leaders were oftentimes given the same task for the purpose of out-competing each other to the advantage of the state.
There were certainly similarities in some economic aspects, but comparisons to the New Deal aren't entirely apt. Socially, culturally and militarily the two nations had entirely different approaches. The New Deal also involved the inclusion of society in terms that had not been seen (although civil rights still had a way to go in the U.S.) -- whereas the NS state systematically excluded entire segments of the populace from political parity after its rise to power.
The thing is, however, Rockwell claims that there's a causation, not merely correlation, between vast government spending and tyranny, yet he provides virtually no evidence. How Keynesian policies led to the Commando and Partisan orders, Operation Reihnhard, the Einsatzgruppen, the Nuremberg Laws, book burnings, the KZ system or anything of that nature is unexplained. It's a pretty big claim. Yes, a big government is more capable of oppression merely because of its size. But it doesn't necessarily mean they're more predisposed toward it, nor that economies based in classical liberalism aren't capable of atrocity and oppression.
After all, Sweden was along the path to democratic socialism while Pinochet -- mentored by Milton Friedman -- made desaparicido a household name. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 28, 2009 10:59 am Post subject: |
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Friedman met with Pinochet once, for 15 minutes. He spent far more time with the Chinese communists and Vietnamese.
There is a link between government spending and decreasing liberty. The bigger government is, the less free we are. More regulations, more taxes, more laws. More parasitic government mouths to feed.
Sweden had one political party in power for about 40 years. Democracy? The state totally controls every aspect of society, though in a soft way. Information, discussion, all economic interactions are all tightly controlled in the perfection of the Orwellian model with all decisions totally removed from "the people" and done by "the interests" in the name of the people. And we know that leftists will go for anything done for "the people" so the elite love it. Though a center right government now is following the exact same path of the prior government so maybe some change will come. muslim immigration into previously homogeneous societies is rapidly unraveling the tight consensus needed for this system to flourish. They've already lost Malmo. |
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MothraAttack
Joined: 20 Jan 2009
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| Posted: Sat Feb 28, 2009 11:20 am Post subject: |
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| mises wrote: |
Friedman met with Pinochet once, for 15 minutes. He spent far more time with the Chinese communists and Vietnamese.
There is a link between government spending and decreasing liberty. The bigger government is, the less free we are. More regulations, more taxes, more laws. More parasitic government mouths to feed.
Sweden had one political party in power for about 40 years. Democracy? The state totally controls every aspect of society, though in a soft way. Information, discussion, all economic interactions are all tightly controlled in the perfection of the Orwellian model with all decisions totally removed from "the people" and done by "the interests" in the name of the people. |
My mistake. The Chicago Boys, though, were an influence on Chilean economic policy under Pinochet, however. And I'm not supposing a causation between neoliberalism and oppression, either; it's merely something contrary to Rockwell's thesis.
More regulations, taxes and laws does not necessarily result in less civil liberties. It might mean less economic freedom for certain elements of society (be it the wealthy, investors, business owners, etc.), but it does not necessarily lead to the curtailment of civil liberties that Rockwell claims. Again, causative evidence is needed.
How have information and discussion in Sweden been "tightly controlled" in the "perfection of the Orwellian model?" Seriously? I've spent time in Sweden and really have no clue what you're trying to say about their society. What does that even mean? I have an American friend planning to attend graduate school in Goteburg and the academic environment there is pretty open and tuition is free. War is peace is academic transparency and educational equality?
As for Malm�, good riddance. It's just Copenhagen's boring suburb anyway.  |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 28, 2009 11:35 am Post subject: |
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| My mistake. The Chicago Boys, though, were an influence on Chilean economic policy under Pinochet, however. |
You're repeating things you've heard.
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| More regulations, taxes and laws does not necessarily result in less civil liberties. It might mean less economic freedom for certain elements of society (be it the wealthy, investors, business owners, etc.), but it does not necessarily lead to the curtailment of civil liberties that Rockwell claims. Again, causative evidence is needed. |
You think only the wealthy are required to follow regulations or need economic freedom? Just how privileged were you growing up? Small businesses are the primary way low class people raise their standard of living.
And nice to use "civil liberties" as the only liberty. Sure. I know your type.
| Quote: |
| How have information and discussion in Sweden been "tightly controlled" in the "perfection of the Orwellian model?" |
One party state. All information (digital) entering the state is monitored by the state. The press is tightly controlled and obedient.
It is also a very corporatist state. Ikea is a tax exempt charity (whose parent company is now located in Holland). Did you know that? So, if you're an average Svend toiling away for 40% of the rewards of your labour, sure, you get "free" health care. Ikea pays zero taxes on profit as it is a charity. It also receives huge government assistance. In short, it isn't what you seem to think it is. Not a social democracy, but a corporatist state with a basically one party government that manipulates every small aspect of society. But they have "health care" for "the people" meaning two of the primary platitudes for leftist admiration are met.
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| I have an American friend planning to attend graduate school in Goteburg and the academic environment there is pretty open and tuition is free. War is peace is academic transparency and educational equality? |
Have him dissent on a major liberal dogma in class. See where it gets him. The university is the most totalitarian area of Western life (other than the prison). Have you not followed this at all?
Good on your American friend in taking tax dollars from Swedes. That's awesome. He has lots of peers from Somalia in that camp. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sat Feb 28, 2009 2:54 pm Post subject: |
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| MothraAttack wrote: |
After all, Sweden was along the path to democratic socialism while Pinochet -- mentored by Milton Friedman -- made desaparicido a household name. |
This is where you find yourself out of your element, Donnie. |
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MothraAttack
Joined: 20 Jan 2009
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| Posted: Sat Feb 28, 2009 4:23 pm Post subject: |
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| mises wrote: |
Good on your American friend in taking tax dollars from Swedes. That's awesome. He has lots of peers from Somalia in that camp. |
Yes God forbid she wants to study Swedish.
I know I terribly misconstrued the relationship between Friedman and Pinochet and I could easily be mistaken about the Chicago Boys influencing Chilean policy but I've seen this in a number of sources ranging from NPR to the Hoover Institution.
Anyway, Ikea and Sweden in general are immaterial here because I'm talking about civil liberties. Not because I'm some "type" but because that's what Rockwell's claim is.
| Lew Rockwell wrote: |
A government big enough and powerful enough to manipulate aggregate demand is big and powerful enough to violate people's civil liberties and attack their rights in every other way.
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The ADL is right in this case: central planning should never be praised. We must always consider its historical context and inevitable political results.
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Please correct me if I am misinterpreting this, but Rockwell is saying that big government means greater ability to impugn civil liberties and that big government inevitably results in such.
Where's the evidence? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 28, 2009 4:37 pm Post subject: |
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| Quote: |
Please correct me if I am misinterpreting this, but Rockwell is saying that big government means greater ability to impugn civil liberties and that big government inevitably results in such.
Where's the evidence? |
Lew Rockwell, and the rest of the fundamentalist libertarians would at most accept a night watchman state.
Who puts pot users in jail?
Who spies on the people?
Who makes it legal for itself to have the sole ability to legally kill?
Who took the civil liberties of African Americans?
Who throws Dr's in jail for prescribing an apparently unreasonable amount of pain medication?
Who uses the law to regulate private speech?
Who picks which relationships between consenting adults are legitimate under the law?
Who has a bad habit of killing the family dog while on a no-knock drug raid, often at the wrong house?
Microsoft? The corner dry cleaner?
Who? |
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MothraAttack
Joined: 20 Jan 2009
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| Posted: Sat Feb 28, 2009 4:46 pm Post subject: |
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The government maintains the monopoly on violence, no doubt. I have sympathies with minarchists, and I'm not opposed to classical liberalism. But what I am concerned about is Rockwell's argument. Most of the examples you cited, although all perpetrated by the government, can also be undone by the government (in theory). And of course history is rife with examples of violence perpetrated by non-governmental forces. But just because the government conducts criminal behavior is not evidence in of itself that large government necessarily results in criminal behavior.
In other words, even if Hitler was a Keynesian it does not mean that Keynesianism leads to oppression. It very well could, but I think Rockwell's evidence is lacking and, as I said earlier, his comparisons to the New Deal overly simplistic. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sat Feb 28, 2009 4:52 pm Post subject: |
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| MothraAttack wrote: |
In other words, even if Hitler was a Keynesian it does not mean that Keynesianism leads to oppression. It very well could, but I think Rockwell's evidence is lacking and, as I said earlier, his comparisons to the New Deal overly simplistic. |
Yes. The op was a troll.
Though, in seriousness I do not like the widely held belief that the state is a protector of liberty, civil or other. It is still the greatest threat to our liberty, today. |
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