Schacht, Mefo Bills and the Restoration of the German Economy 1933-39 (2013)

Schacht, Mefo Bills and the Restoration of the German Economy 1933-39 (2013)
fixingtheeconomists.wordpress.com

> "This is an incredible story from an economic point-of-view. After Hitler’s election in 1933 the Nazis were able to sustain between about 8-10% GDP for five years running with an inflation rate that would be the envy of the Bank of England and other inflation-targeters today."

It is so hard to know what to ask for to get standardised but pithy measures of:

* 8-10% against what base? Growth is easy for the small. Was the German economy large or small at the time relative to 'comparable' 'neighbors'?

* Were these policies sustainable? Were they redirecting resources towards competent long-term managers or towards wartime industrialists who aren't really producing anything useful for the times we want to live in?

* Did any of the benefit from those rosy figures help any one in any way, given that the money all ended up funding one of the costliest and most devastating wars in the history of Europe? Can that context be untangled from the 'positives'?

I'm not convinced I see anything written here to suggest the policies used were good or bad ideas - there isn't even a language to discuss what 'good' means in such extreme times. I just see meaningless numbers from a different world. I'm doubtful they even measured things the same way in Germany 100 years ago compared to today.

Possibly Schacht was an economic genius, but I would like to hear why, given what I know of Germany, rearming wasn't simply raw materials + their world class establishment of craftsmen, who have histories that precede and extend beyond Schacht by generations. Give me a capable workforce and a country that has recently been through hyperinflation, and I suspect I could find any number of geniuses to manage it. The countries sending them raw materials might even have been the ones with the economic problem, rather than the Germans. I doubt they got paid back.

The first years of the Nazi boom can of course be explained as recovery from the recent depression, but it seems that the boom went beyond that. And it's important to keep in mind that other countries didn't recover as quickly.

As for benefits to individuals, at the very least those programs created jobs. That is bound to have helped the living standards of many people.

Indisputably it would have been better to create jobs geared towards peaceful production. The question then is, why were democratically-oriented politicians unwilling or unable to take similar measures?

(And I don't mean that as praise of fascism. I mean it as a challenge to all those who consider themselves lower-case democrats: the job of democracy is to foster the well-being of the people. Stories like this article suggest that a lot more can be done on that front than we tend to see in contemporary democracies.)

I guess we'd need to define what the end-game was for different regimes/governments back then. For the Nazi regime their end-game/target (or one of their main ones, in any way) was to reverse the post-WW1 Versailles humiliation against France and its allies, to gain some extra territorial space further East and to wipe out an entire populace based on its religion alone. I'd say they were quite successful in all of that up to a point, and given the limited economic resources Germany had at its disposal up to the late '20s studying how its leaders in the '30s and early '40s managed to do it can be quite interesting.

We, the people living in liberal/democratic regimes, need to be aware that the endgames/targets of different other regimes around the globe is not always aligned with our way of seeing things, i.e. they don't care all that match about the domestic consumer market the much as we do, for example (and the Nazis were pretty much in favor of physically eliminating a great part of their domestic consumer market).