Thks for the points and a quite true correction. Hope you don't mind a few thoughts:
1) Jim D. writes:
It's [Nazi's following proto-Keynesianism] not an urban legend, though I would say that a lot of their proto-Keynesianism was dumb luck. The NSDAP was in no ways social-democratic, since the SDs don't usually use violence to suppress peaceful opposition parties and labor unionism. And when I looked at the data years ago, I found that the distribution of income in Germany shifted hard to the right (in favor of profits) during the NSDAP's 1930s.
I would be interested to hear why you say the Nazis were proto-Keynesian. Any particular authors you think I should look at? Even IF the overall budget was de facto expansionary in a significant way (still an IF, no? Galbraith claims that Kaldor's team was the first to put together even a rudimentary NSA for the war period) one still has an "incomes policy" (break the unions, etc) that is contractionary...so the overall effect of Nazi policy on aggregate demand is hardly proto-Keynesian. Doesn't your point about the shift in income towards profits support this? That shift is what I meant below by 'tried and true formula'.
2) Jim D. cites me and then writes:
> Hitler DID get the credit for the relative flush that comes from stabilization a few years after serious hyper-inflation. But we have seen the same transient rebound effect in our times in the 3rd world hyperinflation -- with credit going to IMF stabilization programs. It is a spurious economic association. In fact, mostly Nazi economic growth came from breaking the unions and wage repression. Of course there were some high profile Nazi govt initiatives: rearmament and, the much smaller autobahn program, but the net effect of govt actions was not to stimulate aggregate demand nor to promote accumulation\technological transformation. The Nazis really used the 'tried and true' formula.<
The NSDAP didn't come to power in the wake of hyperinflation (which occurred approximately a decade earlier) but in response to the steep fall of GDP and employment, as Germany had one of the worst experiences with the early Depression. Their proto-Keynesian policies were thus applied in an appropriate context (as were the Swedish SD proto-Keynesian policies of the same time). Their "tried and true" formula was in many ways similar to that applied by other capitalist countries during wars (e.g., the US during WWs I and II), though they started it before the wars began.
Thanks for the correction; apologies for the sloppy writing. I should have said: hyper-inflation of 1920s *followed by the depression of the early '30s*. But, as you can imagine, I think the point remains unchanged: when you follow these disasters you get a spurious bounce, even if you haven't stumbled on the "right" or even sustainable growth policies.
Digressing from the question of the Nazi policies were or were not actually proto-Keynesian for a moment -- don't you think it is still a bit of an open question how much Swedish SD (or American New Deal) actually produced in the 1930s? After all the policies were a patchwork, applied in a hit and miss way, and overall magnitudes that were relatively small (particularly when it comes to budget deficits in the 1930s). And in the US there was a second downturn in '37, no? Is it, at least *partly* a question of "right place, right time", plus people want to believe the New Deal changed the macro-economy because it was at least standing for the right people in a sincere way and had so many other positive attributes. Is the record of post-war Keynesianism so impressive that you feel it also worked in the 1930's [serious not facetious question]? (BTW, I am putting aside 1939-45 as not representing a reproducible policy.)
3)
Part of the Nazi problem was that they organized much of production as a large slave-labor camp (involving many actual slave-labor camps, of course). That's very good for promoting a sudden increase in production, but not good in the long run. It makes "technical transformation" very difficult to arrange.
I am just sticking to the Nazis in the '30s for now (pre-slave labour).
Thanks for the thoughtful response Paul
