"The Wages of Destruction" | An unusual portrait of Nazis' real downfall

"The Wages of Destruction: The Making and Breaking of the Nazi Economy"
by Adam Tooze
Viking, 799 pp., $32.95

When Adolf Hitler took power in 1933, the German economy devoted 1 percent of its output to the military. By 1939 it was 30 percent. The Nazis, writes Adam Tooze in "The Wages of Destruction," had undertaken the "largest transfer of resources ever undertaken by a capitalist state in peacetime."

Tooze, a lecturer in economic history at the University of Cambridge, undertakes to explain how the Nazis overcame their economic problems — or didn't. He shows how economics influenced Hitler's decisions about going to war, and how to undertake his persecution of the Jews. Tooze affixes an economic turning point for the war — late 1941 — and he attacks what he declares to be misconceptions about the German economy,

For example, unlike some theorists, he does not portray the Nazis as pro-business. The party's name was, after all, the National Socialists, and its real interest was conquest rather than commerce. Most German industrialists went along with the Nazis because they promised to tame the unions and leave company management alone. What business got was an economy in which it could make money if it did what the government wanted, which was to build a war machine.

Tooze's story is far more realistic than the cartoonish tale Americans are told about Hitler aspiring to "take over the world." His dream was less than that, but grandiose enough. He was trying to create an Eastern European empire that would be self-contained in raw materials and could hold its own against the British Empire and the United States.

In pursuit of that goal, the Nazis cut Germany off from dependence on the global economy. They stiffed Germany's British and American creditors. They allowed only those imports that fed the military machine and only the exports that paid for the imports. Before the war, the Nazis pressed the Jews to leave, but the central bank wouldn't allow them to take their money out because the foreign exchange was for the military.

By the time Hitler began the war, his central bank was broke. He was not about to subject his dreams to the limitations of bankers. But during the war, he had no choice about subjecting them to the limitations of coal, oil, iron ore, steel, copper, fodder, food, labor and recruits. All were scarce. On paper, Nazi Europe should have been as productive as the United States, but that was impossible because of the predatory way the Nazis ran it.

The book contains several fascinating sub-stories, such as the vain effort of central banker Hjalmar Schacht to create a financially solvent Nazi state, and the moment in the war when the economic officials concluded it was lost. (One of them, Ernst Udet, committed suicide Nov. 7, 1941, a month before Japan's attack on Pearl Harbor.) Tooze recounts the problems of the show projects, such as the Volkswagen, which could not be manufactured for the price advertised, and the V-2 rocket, a technical triumph that had no effect on the war.

Tooze attacks the argument, made by John Kenneth Galbraith, that Germany lost the war because it refused to put its women to work. The women missing from factories were working on farms. Tooze also attacks the argument, made by A.J.P. Taylor, that Hitler didn't expect Britain and France to declare war in 1939. Tooze argues that Hitler's economic actions show that he wanted a war, and that by 1939 his odds — none too good — were as good as they were going to get.

This is an unusual book about Nazi Germany, well-researched and well-argued.

Bruce Ramsey is a Seattle Times editorial writer.