The economics of barbarism

Issue: 117

Donny Gluckstein

Gotz Aly, Hitler’s Beneficiaries: Plunder, Racial War and the Nazi Welfare State (Verso, 2007), £19.99

Hitler’s Beneficiaries is an important milestone in the study of Nazism and the Holocaust. At first glance, a book on German government financial policy and taxation is not likely to set the heart racing. However, a detailed study of these aspects yields some extraordinary results.

Aly begins with the pre-war Nazi period, 1933-9. When Hitler’s chancellorship began, unemployment was around 40 percent or six million. By 1937 it had fallen to 1.6 million. At the outbreak of the Second World War there was a severe labour shortage, which partly motivated the Nazi policy of blitzkrieg and foreign conquest. The economic turnaround was the result of a huge rearmament programme which would inevitably lead to war and devastation. But until 1939 that fact would not have been evident to those who were formerly unemployed. Furthermore, the resources needed to fund the war drive did not come from the German working class. The Nazis were mortgaging the economy to speculative profits to be obtained in the future through European conquest.

In the meantime, however, a short-term financial boost could be obtained through “Aryanisation” of Jewish assets both in Germany and, with the annexation of Austria and conquest of Czechoslovakia, further afield. Though Aly barely touches upon it, there was of course an ideological motivation here. The Jewish minority was not singled out arbitrarily. However, the drive was also financial. Göring, head of the Four Year Plan that was designed to prepare Germany for war, insisted that proceeds from the requisition and subsequent sale of Jewish businesses, warehouse stocks, furnishings and works of art “whether in Munich or Nuremberg, in Stuttgart, Karlsruhe or Hamburg”, belonged “exclusively to the reich central government”. This was necessary because: “I know no other way to keep my Four Year Plan and the German economy going.”

Once the war began, the Reich aimed to avoid the economic burden falling upon ordinary German people and so sought to “shift responsibility for funding the Nazi war machine to the citizens of foreign lands”. In 1943, after Mussolini was strung up by his own population, Goebbels would write that “the people must be convinced that we are their fair and generous administrators.

The methods the Nazis employed to “shift responsibility for funding” were as varied as they were outrageous. Aly relentlessly exposes every one in all its nauseating detail. From a stylistic point of view, several of the chapters are so dense and technical that they border on the unreadable. But ultimately the effort of wading through it is worthwhile because the weight of the evidence becomes overwhelming.

Conquered lands were forced to pay Germany for having the Wehrmacht occupy their soil. Poland, for example paid 100 million zlotys per month for the “services” of 400,000 soldiers, even though a mere 80,000 were stationed there. The same method of extortion was extended across Europe as the reich expanded. And it was not only foes who were caught in the net. Romania was bled dry in order to satisfy the financial appetite of its Nazi ally.

When the German army marched into a country it would issue its troops with its own currency—Reich Credit Bank certificates. The exchange rate for these against local notes was artificially fixed to make it easy for German soldiers to buy foreign produce at bargain basement rates. This kept ordinary soldiers happy, and they brought mountains of food and manufactures home in their bulging kit bags, or sent them home through the postal service. Shelves were emptied around Europe, leading eventually to mass starvation in places like Greece (where 300,000 perished in less than two months).

Aly reminds us of the Brecht quote, that it is easier to rob people by setting up a bank than by raiding it. Through these bank certificates the “benefits” of foreign occupation filtered through to broad sections of the German population. The government was keen to keep it that way. Restrictions on the amounts of contraband soldiers could shift were lifted, with Göring telling the finance minister, “Mr Reinhardt, desist with your customs checks… I’d rather have unlimited amounts of goods smuggled in.”

Allied bombing shook the home population out of a sense of complacency. To cushion the blow it was decided “to have the Jews evacuated so that at least some of those who had been hit by the bombs could be given new apartments”. This was an explicit item at the Wannsee Conference in January 1942, which planned the Holocaust in detail.

As problems on the Russian front mounted in 1943, so did the scale of the larceny. For example, the Belgian state spent 83 billion marks domestically during the war, while the German occupiers extracted 134 billion. The same picture was repeated, with minor variations, across Western Europe. In the East, Nazi treatment of the people was still more savage. The reich commissioner for the Ukraine put it in these terms: “Ukraine is required to provide everything Germany lacks. This requirement is to be fulfilled without regard to casualties… The grain we lack must be extracted from Ukraine. In light of this task, feeding the civilian population there is utterly insignificant.”

At the same time millions of Soviet POWs were being starved to death. The destination of the food was clear. Göring declared, “We are feeding our entire army from the occupied territories,” and announced an increase in food rations at home. This was “guns and butter”, with the Reich’s grain supplies growing by 10 percent and meat supplies by 12 percent.

Aly’s findings have wide significance. Simply compare Hitler’s Beneficiaries with the infamous bestseller by Daniel Goldhagen, Hitler’s Willing Executioners, whose title Aly almost seems to echo. Goldhagen makes two central claims in his book. First, he makes the Holocaust a unique and privileged feature that can be treated independently from wider Nazi policy. Second, he insists on the centrality of Nazi ideology in the genesis of the Holocaust. This is held to have penetrated so deeply into the German psyche that all sections of the population became active accomplices of the greatest crime in history.

By contrast, Aly sees the Holocaust as one element of a much broader picture, in which the gas chambers, the military occupation of Europe, and the German domestic economic and political situation are all intimately linked. This approach is essential. If the Holocaust is wrenched out of its historical setting, it cannot be adequately explained. One is forced to depend on ahistorical or psychological categories such as irrationality. Unfortunately Goldhagen is not alone in doing this. There is a trend among some very good historians (such as Michael Burleigh and Wolfgang Wippermann in The Racial State: Germany 19331945) to overemphasise the element of racial ideology in Nazism at the expense of an overall understanding.

From a Marxist point of view this is to turn the relationship between base and superstructure upside down, privileging the latter over the former for one special event that is held to be so exceptional it stands above all others. The 55 million who died in the war become extras in a backdrop for the Holocaust, while fundamental features such as politics, class and capitalism disappear from view.

Unlike Goldhagen, Aly locates the Nazis’ primary drive in the history and politics of Germany rather than pathology. The key background was the outcome of First World War. In November 1918 a revolution occurred in Germany that culminated in the overthrow of the Kaiser. Hitler remembered very well how, just two days later, the army admitted defeat in the First World War. Germany had lost the war not so much through defeat on the battlefield as on the “home front”. Even worse, from the Nazis’ point of view, the German Revolution unleashed a movement that came within an inch of winning the country over to Bolshevism. As Hitler revealed in Mein Kampf, it was his life’s work to undo the effects of defeat and revolution.

The shadow of November 1918 hung over Nazism throughout its history. But the ghosts that Hitler hoped had been exorcised by crushing of the Communists and Socialists could easily revive. He was shocked on 3 September 1939 when the masses, who had been fed on a diet of Nazi militarism for six years, greeted the outbreak of war with a sullen resentment. This reaction steeled his determination to bolster the “home front” at any cost, and he declared on that day, “A November 1918 shall never repeat itself in German history.”

Aly argues, against Goldhagen, that the dictatorship’s ideological hold on the German masses was much weaker than was the case in the Western democracies. He points out that Winston Churchill made “blood, toil, tears and sweat” speeches and, like Franklin Roosevelt, was far more open about the perils and costs of all-out warfare than Hitler. Both Western leaders were able to raise billions in war bonds to finance the conflict because their populations were convinced of the need to destroy the evils of Nazism. Hitler did not dare to make an equivalent appeal to the pockets of ordinary Germans to fight the Allies. As Aly says, “The much celebrated, seemingly omnipotent Führer never saw himself in a position to demand openly that his people entrust him with their savings.”

Instead of asking for self-sacrifice (and risking refusal), the Nazis sought to pacify the German masses. It is important here to reiterate that there is a distinction between Aly and Goldhagen, though both see the German people as tainted by Nazism. For Aly the large scale apathy shown for the fate of the Jews was not the result of ideology but of material corruption.

There is continuing doubt about how much ordinary Germans actually knew about the Holocaust itself. For Goldhagen’s thesis to work they had to be fully aware, and therefore conscious accomplices. For Aly this is not essential and he ignores the question. His argument does imply that many Germans knew about the exploitation of conquered territories. Of this there can be no doubt, because anything up to 12 million foreign slave labourers were to be found scattered across Germany. Indifference towards them was due, says Aly, to many Germans having been bribed by the loot extracted through conquest.

Hopefully it is clear by now how original Aly’s approach to the issue of the Holocaust is. In this horrific picture of general pillage right across Europe, it was the weakest sections of the population who paid the highest price and, given the anti-Semitism of the Nazis, this was bound to be the Jews. So politics and economics became entwined in a deadly race towards extermination. Aly does not pose this relationship in abstract terms, but in meticulous detail.

One example is the transport to Auschwitz of the 1,767 Jews of Rhodes. It occurred late in the war when the Wehrmacht was preparing to pull back towards its German heartland to ward off the Red Army. The diversion of a cargo ship and trains for this seemingly pointless murderous operation has been said to expose the “whole insanity of the Nazis”.

Aly argues that at this particular stage the occupying forces in Greece needed a quick injection of finance, especially gold, because their depredations had destroyed the value of the local money. As one Nazi official put it, “The delivery of fresh supplies…was endangered and [this] called, in the interest of the islands’ defence, for the ruthless impounding of gold and currency.” The Jews of Rhodes were doomed to provide this quick monetary fix.

This argument can be taken too far. In his article “Plumbing the Depths”
( Alex Callinicos rightly warns that “however instrumentally rational the bureaucratic organisation of the Holocaust may have become, this crime was dictated by considerations neither of profitability nor of military strategy”. The seizure of wealth from the Jews of Rhodes did not require their removal to Auschwitz, nor their extermination in gas chambers. An ideological obsession is a necessary part of the picture here.

In his defence, Aly’s purpose in Hitler’s Beneficiaries is not to explain the Holocaust alone, and so he virtually ignores the specific role of anti-Semitic ideology. Nonetheless, the book provides important new information that helps explain how many interlocking motivations and drives combined to produce political stability inside Germany, tumbling living standards in France, mass starvation in Russia and extermination in the death camps of Poland.

If the evidence contained in the book is riveting and worthy of the closest attention, the same cannot be said of the analytical framework that accompanies it. Aly is leagues ahead of people such as Goldhagen. However, as the title of Aly’s book suggests, his intention is to show that the ordinary German people, and the working class in particular, benefited from Nazism and by implication were accomplices to the crimes of Nazism.

It is one thing to argue that the Nazis feared revolutionary upheaval during wartime and so bought off discontent. It is another to say the people were incriminated in the plundering and murderous activities of their government. The distinction might seem rather too subtle or semantic to be of importance, but the contrary is true.

If the German working class had a material interest in the slaughter of Jews and ransacking of Europe, then they were the enemy of all non-Germans and Jews, along with Hitler and his gang. They could not, therefore, have been the victims (albeit paying a lesser price than many) of Nazi tyranny. The logic of the position is to see the Nazi government and German people as united in the very Volksgemeinschaft (racial community) that Hitler claimed he stood for. Aly comes close to arguing this, and along the way makes some extraordinary statements. We are told that under Nazism “greater equality…was achieved” and that National Socialism took “an anti_elitist stance” which aimed at “levelling out class distinctions”. The concentration camps seem almost benevolent institutions where at the end of 1936 “only 4,761 people—some of whom were chronic alcoholics and career criminals—were incarcerated”.

There is no space here to expose the deeply elitist thinking that infused Hitler’s Mein Kampf, but some practical examples are worth citing. In Hitler’s “anti-elitist” Germany 200,000 people had been compulsorily sterilised even before the war. The target was the 20 percent deemed “unfit to reproduce”. Some 35,000 forced abortions occurred after the policy was introduced in 1935. Between 1939 and 1941 70,000 Germans (mainly disabled children) were eliminated in gas chambers through Action T4. And so it went on. In the year before the war began the number of political prisoners in concentration camps stood at 163,000. This regime was not based on equality or benevolence, but was thoroughly elitist not only in relation to the different “races”, but within the “race” itself.

The fundamental problem with Aly’s approach is that it suggests the German working class were not exploited, but were in effect exploiters, because they were relatively better off than the victims of Nazism elsewhere in Europe. Aly himself gives evidence to show this was not the case. In 1928, before Hitler’s accession, the total wages paid in Germany were 42.6 billion marks. In 1935 the figure stood at 31.8 billion. Perhaps the first transports of Jews away from Germany to Poland (and eventual extermination) were in order to free up homes for other Germans. However, the latter were homeless because of the war Hitler started and the resultant RAF bombing raids—hardly a benefit for ordinary Germans. By the end of the war 25 percent of housing was uninhabitable.

Aly spends a long time showing how “the upper classes forked over the lion’s share” of increased wartime taxation, as compared to the workers who basked in “Nazi socialism” (not given in parentheses in the book). His proof is that “middle-income” Germans shouldered only 10 percent of the additional wartime tax burden (compared to 20 percent for the rich and 70 percent for Jews and forced labourers). If this is evidence of socialism then the introduction of income tax in Britain during the Napoleonic Wars, by which the rich paid more, ushered in a socialist society 200 years ago. We just didn’t notice it!

In wars the resources of society are thrown into supporting the fight and so it is often the case that those with the most wealth—the exploiters—are required to cough up relatively more than those with the least. Food rationing and state control did not make Churchill a socialist or an “anti-elitist”. Even if Aly’s tax figures are correct, it is still the case that the burden on the poorest increased as a result of Hitler’s criminal war.

In fact, the whole thesis that workers benefited from Nazism is unsound. Every year before the war saw a decline in the portion of the national income going to wages. Soldiers abroad might have sent home loot, but it is not true that their living standards doubled or tripled, as the profits of firms such as IG Farben, AEG and Krupps did. For socialists there is a fundamental distinction between benefiting from the system and merely suffering a lighter burden of exploitation. During the industrial revolution the income of British textile workers may have been higher than slaves on the US plantations, but both were exploited and could, during the American Civil War, unite, with British unions backing a blockade of the Confederates. This is not to deny the impact of differentials on working class attitudes and activities. Divide and rule is the oldest trick in the bosses’ book. But it is the role of socialists to argue that divisions are superficial compared to the fundamental unity of all those exploited by capitalism.

So there are deep flaws in some of Aly’s analysis. Nevertheless, this book is a brilliant piece of research. It brings a surprisingly fresh new perspective to an aspect of 21st century history that has been pored over for decades. Hitler’s Beneficiaries deserves careful consideration.