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www.ipa.org.au42 IPA Review | November 2008

In the acclaimed television seriesBand o Brothers the Webster char-acter abuses a column o German

prisoners o war, Say hello to Ford, andGeneral uckin Motors. You stupid as-cist pigs. Look at you. You have horses.

What were you thinking? In Te Wageso Destruction: Te Making and Breakingo the Nazi Economy, a recent and contro-versial book Adam ooze, senior lecturerin economic history at Cambridge, setsout what the Germans were thinking.He has provided an exhaustive accounto the economics o the Tird Reich.

In particular he sets out the eco-nomic constraints acing the Germans in

the prosecution o the war.War history normally consists o

battleeld or political maneuveringthis history however concerns itsel more

with balance o payments, over-valuedcurrencies and coal supplies. Tis is aperspective that many general readers orthe average arm-chair expert on WWII

will be likely to appreciate.Te controversial aspect o the

analysis is that the Nazis were not sim-ply madmen. Tey were highly rational

and acted consistently given their warpedworld-view and the economic and politi-cal constraints they aced.

Tis makes their grand plan all themore grotesque. It is well-known that NaziGermany invaded Russia in order to ex-pand its own territory and to provide Ger-many with living space. ooze explainshow the Nazis went to war in order to

murder millions and millions o people.Te Holocaust was not simply a case omurdering a hated minority; it was thestarting point o a planned mass murderon a ar greater scale.

Te war had caused substantial eco-nomic problems in Europe. Te oodsupply was severely disrupted. It wasonly the mass murder o eastern Jews andUkrainians that allowed or sufcientood supplies in 1942. ooze explainsthe trade-o associated with the need or

slave labour, the need to murder and theood supply. It is a horric story o in-centives, economic constraints, perverted

worldviews and amoral pragmatism.Tis Hunger Plan is well worth a

book by itsel. ooze, however, is com-prehensive. He touches on many otheraspects o the war economy. Te balanceo payments was a problem or Germany,ultimately solved by non-market means.

As Gustav Schlotterer told German busi-nessmen in July 1940:

Our tendency is to use sleight ohand, guile and possibly violenceto get the European states to selltheir goods to Germany, but toleave their credits, when theybuild up, in Berlin.

At least he was honest. ooze has takena disliking to Albert Speer, and spends agreat deal o time and eort document-ing how dishonest he was. In particular,ooze expresses surprise that Speer was

not executed ater Nuremburg.

ooze describes Speer as a power

hungry man who inated his own abili-ties and expanded his bureaucratic em-pire. Ultimately Speer is portrayed as asel-serving bureaucrat and a spin-doctor.It is difcult to know what to make ooozes portrayal o Speer. Being a spin-doctor is not a crime against humanity.Speer may have been morally complicitin many o the crimes o Nazi Germany,but oozes new evidence is not enoughto doubt the judgement at Nuremberg

which chose to merely imprison, rather

than execute, Speer.Ultimately Germany lost the war be-

cause they could not match the resourceso the Americans, British, and Sovieteconomies. Had the Allies done more todestroy the German economy, the warcould have ended earliermore bomb-ing o the Ruhr Valley and less bombingo Berlin. Some high ranking Germanofcers, such as General Georg Tomasalso knew the balance o resources wasunavourable.

ooze has little time or the argu-ment that the German war economywas inefcient and German planning in-competent. As he indicates the Germansought the world to a standstill. So whythen did the war break out when it did?Te usual argument is that Hitler mis-calculated. oozes argument is that there

was nothing to gain by waitingtheoutbreak o war was a calculated risk.

ooze has made an important con-tribution. Some aspects are likely to becontroversial. Understanding the eco-nomic constraints acing the Germansduring the war, and the incentives theNazis perceived provides a greater in-sight into those terrible events.

It will be difcult or uture histori-ans to write about WWII without payingserious attention to this well argued, welldocumented narrative.

Some readers will nd the argu-ments dense and bewildering but thebook is well worth the time and eort.Sinclair Davidson is a Senior Fellow

with the Institute o Public Afairs. r

Sinclair Davidson reviews

The Wages of Destruction:

The Making and Breaking

of the Nazi Economyby Adam Tooze

(Allen Lane, 2007, 799 pages)

Hitlers grotesqueeconomics