Recorded at the Mises Institute in Auburn, Alabama, on July 19, 2018.
Mises University is the world’s leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.
TRANSCRIPT BELOW
00:00
the title that I have for today is a
00:02
little bit unclear isn’t it
00:05
what on what in heaven’s name could I be
00:07
talking about here and I’m not primarily
00:10
talking about Nazi economic policy
00:12
although a little bit of that will come
00:13
through but I want to look more at the
00:16
big picture and a big-picture view of
00:19
what the economic philosophy such as it
00:23
was of Hitler really was and I want to
00:26
do that simply because Hitler has become
00:29
especially in the age of the internet
00:30
almost a cartoonish figure everybody
00:33
trots out for sometimes for good reasons
00:36
and usually for dumb reasons if you’re
00:38
if you’re really getting on somebody’s
00:40
nerves they start calling you Hitler
00:42
like Hitler approaching Hitler or
00:44
whatever everybody’s Hitler if you’re a
00:46
vegetarian you’re Hitler cuz he was a
00:48
vegetarian if you want war you’re Hitler
00:50
even if you don’t want war you’re Hitler
00:54
I find you know like I I want no wars at
00:56
all and I’m Hitler I don’t understand
00:58
how that could be I mean it wasn’t
00:59
militarism kind of central to the whole
01:01
thing so anyway so I’m gonna be looking
01:03
more broadly at economic thought and
01:06
maybe social philosophy a bit with with
01:08
a little bit of policy thrown in and I’m
01:11
doing this as I say partly because the
01:14
term fascism and to a lesser extent Nazi
01:17
have come to be used as generic terms of
01:21
abuse and when they are so applied they
01:24
are shall we say more obfuscating than
01:27
clarifying I would tend to think that if
01:30
I were to survey the general public
01:32
about the definition of fascism I would
01:35
probably not get something very close to
01:38
the dictionary definition so I thought
01:41
what the heck couldn’t hurt and frankly
01:43
some of the kinds of themes that I’m
01:46
going to be talking about can be heard
01:48
in some sectors of the ideological
01:53
spectrum out there even today and it’s
01:57
almost spooky how similar they are now I
02:01
recall back when I was first teaching I
02:04
was still getting my PhD but I had taken
02:06
a job in the meanwhile at a community
02:09
college and at that college I was
02:12
required to take a ten
02:13
and I thought this is just insult take
02:16
attendance in college you know but
02:18
alright you know I got a that’s what
02:20
they asked me to do but what I did was I
02:22
just passed the sheet of paper around
02:24
and had people sign their names and then
02:25
I just ignored the piece of paper
02:26
through and then fruit away so anyway
02:29
one day I was reading because it’s I I
02:32
taught Western civilization it was the
02:34
second half so we were in the twentieth
02:36
century so we were going over the
02:38
nineteen twenty Nazi platform which has
02:40
twenty five points in it and I you know
02:44
want to get their feedback we’re talking
02:46
about this as a primary source document
02:48
and in there you can see some things
02:49
that almost anybody would favor I mean
02:52
any social democrat would favor like
02:54
old-age pensions for example and I
02:56
thought things like that would probably
02:57
surprise them because they favor old-age
02:59
pensions and I wasn’t trying to say
03:00
you’re Hitler because you want an
03:02
old-age pension but just to show that
03:04
you know Hitler did and the the Nazis
03:06
did take for granted a lot of social
03:08
democratic assumptions even if they
03:10
believed a lot of other things that you
03:11
know that today we don’t well anyway I
03:15
had to take attendance that day and I
03:16
only had one piece of paper and I sent
03:18
it around for them to sign and then when
03:20
I got it back I realized I had
03:21
accidentally all had them sign the 1920
03:24
Nazi platform that was a mistake but
03:32
I hung on to that in case I ever needed
03:35
to blackmail any of them alright
03:41
now one thing you notice when you begin
03:43
to scour documentary evidence is that
03:47
the fascists of all sorts did view
03:50
economics as very much subordinate to
03:54
other issues they viewed it as
03:57
hopelessly mundane they viewed it as a a
04:00
phony science like not a real science
04:03
and so I I do want to talk a bit at the
04:07
beginning about what what they thought
04:10
of economics per se before I do that I’m
04:13
afraid I’m going to forget so let me let
04:15
me do this right now there were if you
04:17
are interested in this general topic
04:18
there are three books that I would
04:20
recommend to you and I was gonna write
04:21
them down and then I forgot to set this
04:23
up and I know how it works and I’m very
04:24
low-tech so the first book I would
04:28
recommend to you was recommended to me
04:30
by Ralph Reiko now if you’re a real
04:33
Mises Institute junkie you know Ralph
04:36
Reiko great European historian died not
04:41
too long ago and it’s a real loss for
04:43
sure but years ago I asked him for a
04:45
source on this and he gave it to me
04:47
and the author’s last name is Z tlemen
04:51
zi te l MA and N and the book is called
04:56
so that’s Z tlemen and the book is
04:58
called Hitler the policies of seduction
05:01
it’s got a really excellent and
05:03
particularly chapter four is really
05:05
really good on this material the second
05:08
book that I would recommend is available
05:10
in the bookstore here and I believe
05:12
online it’s an old book by a guy named
05:15
Gunther
05:16
Hyman r-e I ma NN and it has one of my
05:23
favorite book titles of all time
05:26
the vampire economy I love that title I
05:29
don’t even know what that means but
05:31
that’s great subtitle doing business
05:34
under fascism what’s interesting about
05:36
rhyme on which you may not know you
05:37
would not necessarily know by reading
05:39
the book as I’ve read that book without
05:40
knowing it
05:42
he’s not a free market guy and he’s
05:45
complaining about all these controls on
05:47
the private sector and how oppressive
05:49
the Nazi regime was he was a member of
05:51
the German Communist Party bazaar so I I
05:56
am a little skeptical about his
05:59
crocodile tears about oppressing the
06:01
private sector but it’s a good study so
06:03
I’ll take it you know there aren’t that
06:04
many I’ll take it then there’s a third
06:06
one and I’ll just leave it here I don’t
06:08
know how the guy’s last name is spelled
06:09
t oo ze and the book is called the wages
06:13
of destruction and this is kind of us a
06:15
history of Nazi economic policy and the
06:18
economy of Germany throughout the 30s so
06:21
I would definitely start with those
06:23
sources all right yeah so getting back
06:24
to this if if you read an essay by Mises
06:30
which may still be one of the required
06:31
readings for Mises University called the
06:33
historical setting of the Austrian
06:35
School of Economics then you have become
06:38
familiar with the so called German
06:40
historical school and the with a well
06:43
known debate over economic method that
06:45
took place in the late nineteenth
06:46
century and the primary antagonists in
06:50
that debate were karl menger for the
06:52
Austrians and Gustav von Shmuel for the
06:55
German historical school and this debate
06:59
was all about really what economics is
07:01
should we conceive of economics as
07:04
consisting of a series of propositions
07:06
that apply across time and place or
07:10
should we instead think of it as a
07:12
series of empirical regularities that
07:15
may differ across time and place it may
07:17
be that some people’s in effect have
07:20
different they wouldn’t say economic
07:23
laws but different economic regularities
07:25
different races may have different
07:27
economic regularities so the Austrians
07:29
were trying although Mises you can tell
07:31
from what he has to say about Menger is
07:33
not entirely satisfied with mangers
07:35
performance in that exchange but the
07:38
Austrians are trying to take the
07:40
alternative view here that we can
07:42
abstract from from individuating
07:45
characteristics like race and nation and
07:47
time and place to get at universal
07:51
truths so this went back and forth for
07:54
some time now
07:55
just framing the debate in that way you
07:58
can probably tell where the Nazis come
08:00
down on that the idea that we’re gonna
08:03
subscribe to a series of abstract
08:05
propositions doesn’t knock not gonna fly
08:09
so Mises actually in that essay traces
08:12
the thinking of the German historical
08:15
school all the way from smaller to
08:17
Hitler himself he does not shy away from
08:19
that because that is how Hitler thinks
08:21
of economics there is no Theory here to
08:25
the extent that he thinks about
08:27
economics as a discipline there are
08:30
times when he appears to think it’s a
08:32
sham science created by Jews to enslave
08:35
us but moreover as every dictator thinks
08:40
the idea that there’s an economic law
08:42
that can impose constraints on my will
08:46
is of course an insult and cannot be
08:50
considered it has to be rejected
08:52
so-called economic law here’s Hitler in
08:55
1937 and by the way they’re going to be
08:58
many passages because I don’t want it I
09:00
don’t want there to be any possibility
09:02
of my embellishing anything that he said
09:04
or editorializing about I’m just gonna
09:06
quote from his own words he said I am
09:09
NOT going to tell you that in place of
09:11
these economic theories I am now going
09:14
to put in a National Socialist economic
09:17
theory I would like to avoid the term
09:19
theory altogether yes I would even like
09:22
to say that what I’m going to tell you
09:24
today is not intended to be a theory at
09:26
all because if I recognize any dogma at
09:30
all in the economic sector then it is
09:32
only the one dogma that there is no
09:35
dogma in this sector no theory at all
09:38
and now I’d like to share with you one
09:42
of my favorite not strictly economic
09:44
passages from Mises because when Mises
09:48
stands up to defend economics against
09:52
anti economics like what you just heard
09:54
he’s at his most passionate because
09:57
sometimes Mises can be very restrained
09:58
and scientific and other times even that
10:02
you know Vienna gentleman’s blood boils
10:04
and here this just makes him crazy when
10:07
people talk like this
10:09
so here’s how the gentlemanly Mises
10:11
replies to this kind of thinking he says
10:13
the issue has been obfuscated by the
10:16
endeavors of governments and powerful
10:18
pressure groups to disparage economics
10:21
and to defame the economists despots and
10:25
Democratic majorities are drunk with
10:27
power
10:28
they must reluctantly admit that they
10:30
are subject to the laws of nature but
10:33
they reject the very notion of economic
10:35
law are they not the supreme legislators
10:38
don’t they have the power to crush every
10:41
opponent no warlord is prone to
10:43
acknowledge any limits other than those
10:45
imposed on him by a superior armed force
10:49
servile scribblers are always ready to
10:52
foster such complacency by expounding
10:54
the appropriate doctrines they call
10:56
their garbled presumptions historical
11:00
economics in fact economic history is a
11:03
long record of government policies that
11:05
failed because they were designed with a
11:07
bold disregard for the laws of economics
11:10
and then he says it is impossible to
11:14
understand the history of economic
11:16
thought if one does not pay attention to
11:18
the fact that economics as such is a
11:20
challenge to the conceit of those in
11:23
power an economists can never be a
11:26
favorite of autocrats and demagogues
11:28
with them he is always the mischief
11:31
maker and the more they are inwardly
11:33
convinced that his objections are
11:35
well-founded the more they hate him no I
11:39
just love that but then but then I like
11:44
this actually cuz this is some somewhat
11:46
dorkier paragraph but but gets to the
11:49
heart of it even more he says if one
11:51
tries to refute the devastating
11:53
criticism leveled by economics against
11:55
the suitability of all these
11:57
interventionist schemes one is forced to
11:59
deny the very existence not to mention
12:02
the epistemological claims of a science
12:05
of economics and of proxy ology as well
12:08
this is what all the champions of
12:10
authoritarianism government omnipotence
12:12
and quote welfare policies have always
12:15
done they blame economics for being
12:18
abstract and advocate of visualizing
12:22
mode of deal
12:22
with the problems involved they
12:24
emphasize that matters in this field are
12:26
too complicated to be described in
12:28
formulas and theorems they assert that
12:30
the various nations and races are so
12:33
different from one another that their
12:35
actions cannot be comprehended by a
12:37
uniform theory there are as many
12:39
economic theories required as there are
12:41
nations and races these and similar
12:44
objections are advanced in order to
12:46
discredit economics as such so economics
12:50
as such properly understood is advancing
12:54
statements that are universally
12:56
applicable as opposed to those who would
12:58
try to limit these statements
13:00
particularly by race nation time period
13:03
and so on then
13:06
Mises points out by the way that if you
13:09
Trent if you if you follow the train of
13:11
thought of the German historical school
13:13
you followed from the early days of
13:15
smaller and you go all the way down to
13:17
two Vernors some zone Bart he says some
13:21
Bart crowned a literary career of 45
13:24
years with a book on German socialism
13:27
whose guiding idea is that the Fuhrer
13:29
gets his orders from God who is the
13:32
supreme Fuhrer of the universe and in
13:35
effect Mises says that you know there’s
13:36
a nice way to cap 45 years of writing
13:38
you write up you know boneheaded book
13:40
like this you know worshiping Hitler but
13:43
in a way this is just following from
13:46
smaller who was you know I wouldn’t say
13:48
worshipping but extremely high dollar
13:50
idolatrous toward the Hohenzollerns well
13:54
we see this even today in some circles
13:57
where we hear less a fair described both
14:01
on the extreme left and the so-called
14:03
extreme right less a fair is abstract
14:06
and soulless these are just abstract
14:08
propositions and moreover we also hear
14:11
on particularly on the extreme right
14:13
look as long as we have a state we
14:15
shouldn’t be like these wimpy
14:16
libertarians or just want to abdicate we
14:19
might as well be realistic take the
14:21
reins of that state and make sure that
14:23
we we turn its powers in favor of the
14:26
interests of the people the funny thing
14:29
is they call us naive and they want to
14:32
advance the idea that if we just get
14:34
good people in power then we’ll make
14:35
sure the people’s intro
14:36
sir observed not sure I’m not sure I go
14:39
for that so when when Hitler does
14:41
venture into specific questions of
14:44
economics well he’s rather unsystematic
14:47
and sloppy and why wouldn’t he be
14:50
there’s no economic theory to study so
14:52
he can just kind of you know spout
14:55
inanities just like your friends on
14:58
Facebook with no economic training I’m
15:02
not saying your Facebook friends or
15:04
Nazis I am saying your Facebook friends
15:07
are wrong about the Nazis however all
15:11
right those of you who read my free
15:12
ebooks know that reference okay he
15:16
didn’t like the gold standard for
15:17
example so in monetary policy no gold
15:20
standard I know you’re shocked if you’re
15:22
if you’re tempted to if we have EMTs
15:25
standing by if anyone faints how about
15:27
that I wonder why
15:29
Hitler would not like the gold standard
15:32
gee you know and we get made fun of for
15:36
this and of course in reality I favor
15:39
much more radical approach than the gold
15:41
standard I favor total separation of
15:43
money and state but I’ll take the gold
15:45
standard if that’s all I could get and
15:46
we get made fun of for this how terrible
15:49
and backward it is but the funny thing
15:51
is Hitler also thought it was terrible
15:53
and backward
15:53
that doesn’t mean that it’s good but you
15:57
know if you are gonna be siding with
15:59
Hitler on a major major thing you should
16:01
at least think well hmm maybe there’s
16:04
another side to this well so he says he
16:06
refers to it as a virtually sanctified
16:10
financial theory he says and showing
16:13
that he has no understanding of the
16:15
issues involved he says today we smile
16:17
about a time when our political
16:19
economists actually did believe that the
16:22
value of a currency dependent on the
16:24
amount of gold and foreign currency
16:26
reserves piled up in the safes of the
16:28
state banks and that it was guaranteed
16:30
by these we have learned instead that
16:33
the value of a currency lies in the
16:35
productive capacity of a nation that
16:37
increasing production is what holds up a
16:40
currency even revalue sit under certain
16:42
circumstances so I talked to one of the
16:46
faculty members about this today and I
16:47
said what do you think he’s saying there
16:50
and this faculty member said well if
16:52
we’re being as generous as possible and
16:54
I said oh that’s very charitable let’s
16:55
be as generous as possible with with
16:58
Hitler so as not to be character what
17:03
could he possibly mean by this the best
17:04
we could come up with was well what he’s
17:06
saying is that let’s say the money
17:08
supply is increased but if the supply of
17:11
goods is you know also increases then
17:14
you know there’s an increased demand for
17:15
money and you know whatever you couldn’t
17:17
stabilize the money and purchasing power
17:20
and stuff
17:21
on the end of the production of goods so
17:24
there are more goods
17:25
but there are more dollars or you know
17:27
more marks or whatever running around
17:28
but there are more goods to take those
17:29
dollars then you can still have
17:31
stability but sooner or later that you
17:34
if you keep inflating the currency
17:36
there’s no way you could keep producing
17:38
enough goods to match that so that it
17:39
doesn’t get completely out of control
17:41
it’s kind of an oddball theory but how
17:43
about this he claims in effect that so
17:46
many economic issues are simple they’re
17:49
just made complicated by Jews so all of
17:53
these things are natural and simple only
17:55
you should not let a Jew play around
17:57
with them the foundation of Jewish
17:59
business policy is to make normal
18:01
business incomprehensible for a normal
18:03
brain
18:04
you start by shuttering before the
18:06
wisdom of the political economists if
18:09
somebody refuses to play along in other
18:11
words if somebody refuses to learn
18:12
economics you say this person is
18:14
uneducated he lacks a higher knowledge
18:17
in reality these terms have been
18:19
invented so that you do not understand
18:21
anything
18:22
only the professors have still not
18:24
caught on that the currency value
18:26
depends on the amount of goods backing
18:29
up the currency so we still get that
18:31
he’s he’s got some more monetary stuff
18:33
to kind of crank –is– sort of a
18:35
monetary crank turns out from Hitler but
18:38
a major major theme in his overall
18:40
political economy is summarized in the
18:43
phrase the primacy of politics over
18:45
economics and without even elaborating
18:48
on that you can probably guess what
18:51
that’s all about all the way back in
18:54
meine Kampf Hitler criticized the idea
18:57
and now these are his words that the
18:58
state is first of all a business
19:00
institution is to be governed according
19:02
to business interests
19:03
and therefore also depends on business
19:05
for its continued existence politics is
19:08
supreme over economics and this makes
19:11
sense in the general scheme of fascism
19:13
either whether it’s in its Hallion or
19:16
German form because when we think about
19:18
what are the ideas motivating fascism
19:21
well a lot of it came about right around
19:24
the time of World War 1 in the aftermath
19:26
of World War 1 people looked around
19:28
Italy let’s say in Italy was you know
19:30
still had quite noticeable regional
19:33
differences but during the war there was
19:36
this sense that whether you were
19:38
Sicilian or you know a Lombard or
19:41
Piedmontese or whatever
19:42
everybody had come together in a single
19:45
national effort and that this was you
19:48
know kind of reviving the the Italian
19:51
people you know in really exciting and
19:54
momentous ways and so in peacetime we
19:57
need to have that same kind of
19:59
commitment to organization and maybe the
20:02
suppression of regional differences but
20:04
playing up the idea of Italian unity
20:06
once more
20:07
and when you think about them and to
20:10
think of the state moreover as this
20:12
vehicle almost a divine vehicle through
20:15
which the destiny of the people unfolds
20:18
well business seems so mundane seem
20:24
seems so pedestrian compared to the
20:26
realization of our great destiny as a
20:28
people
20:29
so in reflecting that we have Hitler
20:32
saying business does not build States
20:35
the political forces built States well
20:38
I’m glad they admit it
20:40
business can never replace the political
20:42
force and if a nation does not possess
20:44
political force its economy will
20:47
collapse business is more burdening than
20:50
uplifting today you see many Germans
20:54
especially in middle-class circles who
20:56
always say business will Forge our
20:58
nation together no business is a factor
21:02
which is more likely to sunder a nation
21:04
a nation has political ideals but if a
21:08
nation only lives for business business
21:11
must thereby sunder a nation because in
21:14
business employers and employees all
21:17
oppose each other but you see when we
21:20
think about more elevated things rather
21:22
than the mundane world of buying and
21:24
selling these class distinctions fall
21:26
away
21:27
see we’re all Germans now we don’t have
21:29
to think about those things that divide
21:30
us he said that the rule of force of the
21:34
economically more powerful is to be
21:36
replaced by the higher interests of the
21:39
community again a major theme that the
21:42
public good which will be defined by the
21:44
state that’s one of these slippery words
21:46
that sometimes conservatives want you to
21:48
accept the public good the public good
21:50
who gets to define the public good the
21:52
sociopaths who tax me and no thanks and
21:57
we need to subordinate that or we need
21:59
to subordinate your individual interests
22:02
to the public good which we will define
22:04
well that’s his view and that’s the view
22:06
of every social democrat he says all the
22:11
gigantic tasks which not only the
22:13
economic needs of the present show us
22:15
but also a critical look into the future
22:17
can only be completed if over the
22:19
egoistic mind of the individual the
22:22
speaker for the interests of the
22:23
community hold sway and his will counts
22:26
as the final decision we see this I mean
22:31
to some degree he acknowledges that you
22:33
need business but it’s got to be
22:34
absolutely subordinate to the political
22:36
power and in a minute we’ll see his view
22:39
that if you don’t do what I ask you to
22:41
do then I’ll even take over that so in
22:44
fact at one point Hitler says our
22:47
socialism is goes much deeper than
22:49
theirs because in effect he says who
22:53
needs to nationalize the factories and
22:55
the banks if we socialize the people if
22:59
they do everything I asked them to do
23:01
then I don’t need to take them over in
23:03
fact he says I’ll quote that later as
23:04
long as you guys do everything I say you
23:06
can keep your stuff but to what extent
23:08
is it still your stuff if you have to do
23:11
everything he says I wouldn’t I wouldn’t
23:13
ask that question at that time if I were
23:15
you but even in the realm of
23:17
architecture it mean here’s a spooky
23:19
passage
23:21
he in effect says that if your skyline
23:24
just shows hotels and office buildings
23:27
and things of this sort again how
23:28
mundane you cannot speak of art or
23:31
culture we need the state to build a big
23:33
beautiful building so he says it is
23:36
impossible to give a nation a strong
23:38
inner security if the large public
23:40
buildings do not tower greatly over the
23:43
works which oh they’re creation and
23:45
maintenance more or less to the
23:46
capitalist interests of individuals are
23:48
you getting the idea this guy is anti
23:50
capitalism to some degree and yet isn’t
23:52
it hysterical that we get called
23:54
terrible names we we are so far from
23:57
this right so then he says it is out of
24:00
the question to bring the monumental
24:01
buildings of the state or the movement
24:03
into a size which equates to that of two
24:05
or three centuries ago while on the
24:07
other hand the expressions of bourgeois
24:09
creations in the area of private or even
24:12
purely capitalist building have
24:14
increased and grown bigger many times
24:16
over as long as the vistas which
24:18
characterize our cities today have
24:20
department stores markets hotels office
24:23
buildings in the form of skyscrapers and
24:24
so forth as their outstanding
24:26
eye-catchers there can be no talk of art
24:29
or even of genuine culture and he says
24:33
during the bourgeois era the
24:35
architectural embellishment of public
24:37
life was held back in favour of the
24:39
objects of private capitalist business
24:41
life the great cultural historic task of
24:44
National Socialism will be exactly to
24:47
depart from this tendency and then of a
24:51
few other quotations just to solidify
24:52
the point one of the most urgent tasks
24:55
he says to achieve our goals it can be
24:59
broken down into two points state
25:01
interest goes before private interest
25:04
number two if the question arises
25:06
between state interest and private
25:08
interest it will be decided in favor of
25:11
the state interest you know that and by
25:15
an authority which is completely
25:16
independent I’m sure that’ll be
25:18
completely independent
25:19
he says the view now this is kind of
25:22
like you didn’t build this you didn’t
25:24
build that he says the view that the
25:25
utilization of a fortune no matter of
25:28
what size is solely the private affair
25:30
of the individual requires to be
25:33
corrected all the more in the net
25:34
socialist state because without the
25:37
contribution of the community no
25:39
individual would have been able to enjoy
25:41
such an advantage so you didn’t really
25:43
earn that ah how about that now if I’d
25:46
quoted that you know there’s that
25:48
there’s a funny YouTube video of some
25:50
kid who went to some like progressive
25:53
rally and he took some Hitler quotations
25:56
like this and he started just shouting
25:57
them through a bullhorn and these idiots
25:59
are all clapping yeah we’re sick and
26:01
tired of the state not sticking it to
26:03
these people and but now we get to this
26:06
idea that I’m gonna step in if necessary
26:10
the right to dispose completely freely
26:13
of that which must be invested in the
26:15
interest of the national community well
26:17
we we can’t say that an individual has
26:19
that if he disposes of his property in a
26:22
sensible manner all the better if he
26:24
does not act sensibly then the national
26:27
socialist state intervenes guess who
26:29
gets to define what constitutes sensibly
26:32
mmm indeed now it’s hard to know the
26:34
full scope of Hitler’s views before 1933
26:37
because he went out of his way to be
26:39
secretive about them so as not to offend
26:41
businessmen and he made that clear to
26:43
some of his colleagues that we have to
26:45
keep this quiet because then you know we
26:48
don’t want to be actively opposed by
26:49
powerful forces so he says what I have
26:54
said all along is that this idea is not
26:56
to become a subject for propaganda or
26:57
even for any sort of discussion except
26:59
within the innermost study group
27:01
it can only be implemented in any case
27:03
when we hold political power in our
27:05
hands and even then we will have as
27:07
opponents besides the Jews all of
27:10
private industry particularly heavy
27:12
industry as well as the medium and large
27:14
land holders and naturally the banks now
27:17
if it were really true as the Communists
27:19
tried to claim that fascism is merely
27:21
the the most developed like degenerate
27:24
form of capitalism why would he fear
27:26
that he would be opposed by private
27:29
industry heavy industry medium and large
27:31
land holders and the banks it’s almost
27:33
like the Communists don’t understand
27:34
fascism at all
27:37
he says again privately we are living
27:40
this is 1930 we are living in the middle
27:41
of a turnabout which is leading from
27:43
individualism and economic liberalism to
27:46
socialism and again in all of business
27:50
in all of life in fact all of life we
27:53
will have to do away with the concept
27:55
that the benefit to the individual is
27:57
what is most important and that from the
27:59
self-interest of the individual the
28:00
benefit to the whole is built up the
28:03
opposite is true the benefit to the
28:05
community determines the benefit to the
28:07
individual the profit of the individual
28:10
is only weighed out from the profit of
28:12
the community
28:12
if this principle is not accepted then
28:15
an egoism must necessarily develop which
28:17
will destroy the community I was gonna
28:19
kick out of it when politicians talk
28:21
about egoism like you know well I guess
28:22
you would know he says that the job of
28:26
the Ministry of economics is to present
28:28
the tasks of the national economy and
28:31
then the private economy will have to
28:33
fulfill them if the private sector
28:36
doesn’t comply we read this then the
28:39
national socialist state will know how
28:41
to solve these tasks kind of chilling so
28:46
in Hitler’s mind there are two competing
28:49
doctrines fundamentally at work the
28:52
number one is this idea of the primacy
28:54
of politics over economics on the other
28:56
hand for a long time competing against
28:59
that in his mind is the idea that there
29:01
is something to be valued in
29:03
laissez-faire and that is the idea of
29:04
economic competition because he believes
29:06
economic competition can be a main
29:09
stream a mainspring for economic growth
29:12
and progress and moreover being a social
29:17
Darwinist he thinks that competition is
29:19
really how greatness comes about and the
29:21
great are rewarded and the not-so-great
29:23
are not rewarded and so the total
29:26
nationalization of the economy he thinks
29:28
would unduly suppress these salutary
29:31
features but as time goes on it becomes
29:34
clear that the primacy of politics over
29:38
economics is really coming more to the
29:40
forefront of his thinking and his
29:41
hesitations about nationalization are
29:44
diminishing gradually particularly as
29:47
World War Two goes on and he observes
29:51
what he thinks is the success of the
29:53
Soviet model and he begins to think well
29:56
you know we again we can’t be dogmatic
29:58
about economics remember that we have to
30:01
just see what works we have to see what
30:03
the man of action is able to implement
30:06
so I’ll have something to say in a few
30:08
minutes about what Hitler thought of
30:09
Stalin but he’s much more friendly to
30:13
Stalin than let’s say we in this room
30:15
might be okay so you can go on and on
30:22
and on and on and on and on with
30:24
passages of Hitler talking about how
30:25
business must be in the service of the
30:28
state rather than the other way around I
30:29
mean I assume that they thought that
30:30
point is that point is made but in terms
30:33
of a planned economy he begins to see
30:36
that there is merit in this if not
30:38
completely planned and nationalized then
30:40
certainly with some kind of overarching
30:42
plan there is actually a four year plan
30:45
implemented in the second half of the
30:47
1930s and as the war is going on he
30:50
makes quite clear that even though
30:52
there’s an intensification of planning
30:54
that he believes is demanded by the war
30:57
that does not mean that when the war is
30:59
over the state will not continue to plan
31:01
we’re just getting started he said here
31:05
here he is if Germany intends to live
31:08
then it must run its whole economy in a
31:11
manner that is clear and planned we
31:13
cannot manage without a plan if we were
31:16
to let things run on according to the
31:17
principle that everyone may do as he
31:19
likes then in a very short time this
31:22
freedom would end up in a terrible
31:23
famine no we have to conduct our
31:26
business and run our economy according
31:27
to plan
31:28
therefore the National Socialist
31:30
government cannot be dependent on any
31:32
individual interests it cannot be
31:34
dependent on the city or the country not
31:36
on workers and not on employers it
31:38
cannot be dependent on industry on the
31:41
crafts on trade or on finance it can
31:44
only accept one obligation the nation
31:47
alone is our master and we serve this
31:50
nation to the best of our knowledge and
31:52
belief and then speaking about the
31:55
four-year plan in 1936 this is a plan
31:57
where they’re gonna have more public
31:59
works and they’re gonna the state is
32:00
going to control international trade and
32:03
they’re gonna encourage some industries
32:04
and
32:05
as well as rearmament of course he says
32:07
the German economy will learn to
32:09
understand the new economic tasks or it
32:12
will prove itself to be incapable of
32:14
continuing to survive in these modern
32:16
times in which the Soviet state sets up
32:18
a gigantic plan so you see this from a
32:21
distance this admiration of the Soviet
32:23
system by January 30th 1937 which is the
32:27
four-year anniversary of his seizure of
32:28
power we see that he’s growing less and
32:31
less skeptical of the planned economy he
32:33
says again repeating his earlier theme
32:35
there is no economic concept or view
32:37
that can be considered that can claim to
32:39
be gospel what is decisive is the will
32:43
to always assign business at the role of
32:45
servant of the people
32:47
National Socialism is the sharpest
32:50
departure from the liberal istic point
32:52
of view that business exists for capital
32:54
and the people for business and then he
32:57
goes on he says a free economy in other
32:59
words one completely left to itself can
33:01
no longer exist today how much clearer
33:04
can the guy be he says not only will
33:08
this be politically intolerable but
33:10
economically to impossible conditions
33:12
would result and so what what he then
33:16
goes on to argue in a very long passages
33:18
he says let he says when you leave the
33:20
economy to itself you have for example
33:22
brand-new inventions that can completely
33:25
discombobulated whole industries and
33:27
then people suffer or and let’s say a
33:30
giant firm can close its doors then all
33:33
those employees suffer and then
33:35
meanwhile is the state going to take
33:36
care of those people of course we must
33:38
take care of them but it can’t just be
33:41
that we have the responsibility of
33:43
taking care of people who have been
33:44
displaced by the forces of business we
33:49
therefore need to be in charge of the
33:51
direction of business in the first place
33:53
so that we could have avoided this
33:55
displacement if we’re just standing here
33:58
holding the bag after business hollows
34:00
out some town and then leaves them with
34:02
no jobs well that’s not fair if the
34:04
state could have run that industry and
34:06
run that firm or dictated to that firm
34:09
then maybe we could have avoided the
34:10
catastrophe so maybe that’s the way we
34:13
should be thinking that’s the way he’s
34:14
thinking hmm
34:17
so we are therefore also not dealing
34:20
with phrases such as freedom of the
34:22
economy oh you don’t say really we’re
34:24
not so again a sensible employment of
34:28
the powers of a nation can only be
34:29
achieved with a planned economy from
34:31
above and then he says in in 1941 so so
34:35
war is going on but he makes clear
34:38
that’s not why this is he said this is
34:40
happening he says as far as the planning
34:42
of the economy is concerned we are still
34:45
very much at the beginning and I imagine
34:48
it will be something wonderfully nice to
34:50
build up an encompassing German European
34:53
economic order and then he says that he
34:57
talks about in 1942 the the ability of
35:00
the German nation to deal with various
35:03
problems he attributes this to the fact
35:05
that the direction of the economy these
35:07
are his words gradually became more
35:09
controlled by the state only thus had it
35:12
been possible to enforce the overall
35:14
national objectives against the
35:16
interests of individual groups even
35:18
after the war we will not be able to
35:21
renounce state control of the economy
35:22
because then every interest group would
35:25
think exclusively of the fulfillment of
35:27
its wishes and again from the point of
35:29
view of fascism that can’t be individual
35:31
interest there’s the interest of the
35:32
nation that’s all that counts and the
35:34
nation in practice is the state then
35:37
July 1942 one had to have one had to
35:41
have an unqualified respect for Stalin
35:45
an unqualified not well Kaye you know he
35:49
did some bad things not a qualified and
35:51
unqualified respect for Stalin he says
35:54
in his way the guy was quite a genius
35:57
exclamation mark his ideals such as
36:00
Genghis Khan and so forth he knew very
36:03
well and his economic planning was so
36:05
all-encompassing that it was only
36:07
exceeded by our own four-year plan
36:10
I mean you know he’s a genius and
36:13
everything but he ain’t no Hitler seems
36:14
to be the message he had no doubts
36:17
whatsoever that there had been no
36:18
unemployed in the USSR as opposed to
36:21
capitalist countries such as the USA I
36:25
guess when you have labor camps
36:28
everybody finds work then 1945 the age
36:34
of unrestricted economic liberalism has
36:37
outlived itself and then he says the
36:39
crisis of the 30s was only a crisis of
36:41
growth albeit of global proportions
36:43
economic liberalism unveiled itself as
36:46
having become an outdated formula so
36:48
everything we believe in was dead
36:50
outdated not to be followed anymore
36:52
preposterous ridiculous the the fruits
36:56
of the 19th century
36:57
so again when your Facebook friends are
37:00
just carelessly throwing these words
37:01
around now you know even more than you
37:03
thought you did how ridiculous in an
37:05
inane there being how do you not I mean
37:07
it’s not like I had to just dig out
37:08
three sentences I don’t know even where
37:10
to start or finish with with all this
37:12
stuff
37:12
so 1937 now let’s listen to gurbles
37:16
writing in his diary had lunched with
37:20
the Fuhrer I wonder what that was like
37:22
let’s find out large group at table the
37:26
so-called industrial leaders are under
37:28
heavy attack they do not have a clue
37:30
about real political economy they are
37:33
stupid egoistic unnatural and
37:36
narrow-minded Lee conceded quite unlike
37:39
you know the state apparatus they would
37:41
like to sabotage the four-year plan out
37:44
of out of cowardice and mental laziness
37:46
Fuhrer heavily attacks the industrial
37:49
barons who still practice a silent
37:51
reserve against the four-year plan woe
37:54
to private industry if it does not fall
37:56
in line 4-year plan will be executed hmm
38:01
and then Hitler puts it this way look I
38:03
I’m not actually trying to take over
38:06
everything he says I tell German
38:08
industry for example this is 1937 you
38:10
have to produce such-and-such now I then
38:13
return to this in the four year plan if
38:15
German industry were to answer me we are
38:17
not able to then I would say to it fine
38:19
I will take that over myself
38:22
but it must be done but if industry
38:25
tells me we will do that then I’m very
38:27
glad I do not need to take that on
38:31
alright so he has there a number of
38:33
industries that Hitler is very
38:34
interested in in nationalizing let me as
38:36
I as I start to run low on time just run
38:39
through a few areas of policy by 1934
38:43
you have in effect complete control of
38:45
foreign trade import contracts all have
38:48
to be approved only then could you get
38:50
the necessary foreign currency it was
38:53
basically a monopoly on foreign trade
38:55
there was a comprehensive set of state
38:59
instruments for the direct control of
39:01
investment wages and prices subject to
39:05
irrational controls just so different
39:07
types of food would have controls on
39:09
them so a lot of people substituted pork
39:11
for other kinds of meat so on and on but
39:14
what Zi tlemen points out is none of
39:17
this was in any way an emergency measure
39:19
only required because of rearmament and
39:21
war but rather a deliberately created
39:24
instrument for the revolutionising of
39:26
the economic order and the establishment
39:28
of a new economic system that was to be
39:30
characterized by a synthesis between
39:32
elements of free enterprise and state
39:34
control whereby the preponderance
39:37
clearly lay on the aspect of state
39:38
control which was to implement the
39:40
primacy of politics now if you read that
39:43
book the vampire economy you also get
39:45
little snippets of things that were
39:46
going on like he talks about cases where
39:49
industrialists would be visited by state
39:51
auditors who had orders to examine their
39:53
balance sheets and bookkeeping entries
39:55
and they would find you know the tiniest
39:57
most trivial mistake and impose a huge
40:00
financial penalty on them well everybody
40:01
knew that this was just the state was
40:04
just going out and taking money from
40:05
business everybody knew they weren’t
40:06
really concerned about bookkeeping
40:07
mistakes but they wanted some legal
40:09
pretext so they carried it out this way
40:11
and then riemann says it is conceivable
40:14
that a businessman might be successful
40:16
in an appeal to the courts against some
40:18
regulation of an overzealous Nazi
40:20
official provided such regulation were a
40:22
gratuitous interference with private
40:24
property and had no bearing on the
40:26
defense of the Nazi regime
40:27
however court action was very rare
40:31
because most businessmen feared
40:33
arousing the anger of Nazi officials who
40:36
some later occasion might have
40:37
opportunity to take revenge I’d like to
40:40
actually read you a portion of a letter
40:41
written by a German businessman to a
40:44
friend abroad describing what was going
40:47
on in Germany this is like 1939 or so he
40:50
says I am here in Amsterdam for a couple
40:51
of days and take this opportunity to
40:53
write unrestrictedly to various friends
40:55
abroad I know you will be interested in
40:57
hearing what is happening within Germany
40:59
as for myself my knowledge as a
41:01
technical expert would not have been
41:03
sufficient to enable me to struggle
41:05
along during the past five years were it
41:07
not for the fact that our firm has the
41:09
backing of a prominent party man who
41:12
comes to our assistance when we need
41:13
certificates for foreign currency raw
41:16
materials and so on no firm in our trade
41:19
can exist without such a collaborator as
41:21
it is we have to spend considerable
41:23
money for quote juridical advice it is
41:26
not a question of simple bribery the
41:27
process is more complicated
41:29
I knew pre-war Russia in general bribery
41:32
under tsar ism was a simple affair you
41:34
could figure out how much you had to pay
41:36
a state official by counting the number
41:38
of stars on his uniform the higher the
41:41
rank the more stars he wore the more you
41:42
had to pay it’s different in Germany
41:44
today party members who control the
41:47
distribution of raw materials and
41:48
similar matters do not accept money
41:50
directly you do not offer money to a
41:53
party leader you ask him whether he
41:55
knows a good quote lawyer who might be
41:57
of help in proving to the authorities
41:59
the urgency of your demand for foreign
42:01
exchange or raw material he refers you
42:03
to a lawyer who gives you the necessary
42:05
juridical advice for which you pay and
42:07
eventually your request is granted
42:09
but the fees for this advice are
42:11
extremely high much higher than you
42:13
would have had to pay in direct bribery
42:15
or you would have paid to a first-rate
42:17
lawyer on a retainer basis it is
42:19
virtually impossible to function at all
42:21
without maintaining close relations with
42:23
one of these lawyers you come to depend
42:26
upon him completely and then he says I
42:28
cite one of my own experiences I needed
42:30
foreign currency from my current trip to
42:32
Amsterdam and duly made a request for
42:34
what I needed to the administration for
42:35
foreign currency in reply I received the
42:38
following answer absolutely impossible
42:41
I thereupon went to my adviser and
42:43
inquired of him how I might prove the
42:44
special urgency of my business trip he
42:47
told me something I had not known before
42:48
an
42:49
new ruling had been issued to the
42:51
effective factory leaders in my
42:52
particular line of business that we
42:55
could no longer obtain foreign currency
42:57
for a business trip abroad well I said
42:59
what about a personal trip in order that
43:01
I might inspect some new types of
43:02
machines for my personal information
43:04
this might be possible he said but it
43:06
will cost you three hundred marks
43:08
he says everywhere you will find new
43:10
bonds of friendship between businessmen
43:12
contact men and party men who are tied
43:15
to each other by complicity in
43:17
violations of laws and decrees that was
43:19
how you functioned by getting people who
43:21
would somehow get you around this crazy
43:23
quilt maze of insanity at least half the
43:27
time says riemann half the time of the
43:29
German manufacturer is spent on the
43:31
problem of how to get scarce raw
43:32
materials you can’t get these without a
43:34
certificate from one of the supervisory
43:36
boards which distribute the available
43:38
raw materials domestic as well as
43:40
foreign and then he says rubber got to
43:42
be so scarce and so how do you get a new
43:44
rubber tire and there was this policy
43:47
that no new tires can be taught sold
43:48
until the old tire is completely worn
43:51
out so you had cases of new trucks being
43:54
bought just for the tires and then they
43:56
would sell the truck for scrap and keep
43:59
the tires so this sort of thing was
44:01
going on all over the place Mises
44:03
himself called it socialism you know on
44:06
the you know on the German pattern or
44:08
the German model because he says these
44:10
are not really entrepreneurs they’re
44:12
just shop managers because they’re they
44:14
buy and sell and they hire and discharge
44:16
workers and remunerated at cetera but
44:20
they’re bound to obey unconditionally
44:22
the orders that are issued by the
44:25
supreme office of production management
44:27
so yet there might still be so-called
44:29
private ownership but what does it mean
44:31
in the kind of environment that we see
44:34
here described so as it turns out you’ll
44:37
never guess we have nothing to do with
44:39
any of this and people who want to think
44:42
that we are are themselves a lot closer
44:45
to it but I hate to break that to them
44:47
all right thank you very much