Jim D. writes, replying to me:
1)
> OK, I can take a joke (I am thinking of David Landes of Harvard and his "cultural superiority" theories, have I got it wrong?). But I want to reassure you my question was serious.<
I was serious. I don't think Landes' UNBOUND PROMETHEUS is significantly marred by his ethnocentrism (except in the choice of his subject-matter, i.e., Europe).
Glad to hear about the book; will check it out. Thanks. (I had in mind Landes' "Wealth and Poverty of Nations" and something he did long ago on colonial Egypt.)
2)So for
BTW, I'm told that the Italian trains didn't really run on time under Fascism.
Exactly. I haven't got a reference, but in Italy I read a serious study that showed that Mussolini did NOT undertake the reforms necessary to speed the trains to their theoretical schedule; he merely reprinted the schedules with longer and more realistic travel times. (Apparently, this impressed foreigners more than Italians who never much cited the "train" issue.)
But this is the wider question with the Nazi and Fascist movement. Through massive and unchallenged propaganda they portrayed themselves as "outsiders" and therefore able to undertake new and innovative reforms. At the time, foreigners (left and right) largely accepted this initial premise and that has been handed down to us. Hence Joan Robinson speaks of Hitler as the first "Keynesian". The anti-fascist emigres at Cambridge (Hans Singer, Sraffa) did not feel this way but never wrote about their home countries for a variety of reasons, including massive Home Office pressure (such as Sraffa's problems). Kaldor, for example, uncovered many of the myths about Nazi economic policy in his extensive work in Germany itself in 1945 in the Strategic Bombing Survey but never wrote about it publicly (see Thirlwall's biography "Nicholas Kaldor" pp 102-103). As I mentioned, his boss JK Galbraith also writes about this point in his memoirs but not in academic work (the documents of the Survey were classified for many years).
Questioning the conventional view has been left to more recent researchers, starting in the '60s-'70s on the continent. As it turns out the older economic historians were doing elaborate econometric models without having the actual budget numbers which the Nazis never published (??!). As per my last post, Ritschl has now dug those up from the archives and to my knowledge no one has contested his archival work. The budget deficits (active or passive; on or off-budget) are pretty meager in the '30s, especially during the recovery period. <http://www.wiwi.hu-berlin.de/wg/ritschl/pdf_files/ritschl_dec2000.pdf>
Ditto for other potential elements of "Keynsianism".
3)
[Paul].......<Likewise, a pact was made with big industry through measures like dropping the pledge for meaningful economic planning controls (only a toothless Plan was announced and only in '36; only the armaments industry and foreign exchange had serious controls).<
[JD] Central planning isn't Keynesian. But what you say above is largely true.
The issue here is "indicative planning" (industrial planning, wage-price controls etc). Of course this was a big issue in the 30's as an alternative proposal to the apparent success of the Soviet plans. It was a big part of Labour's platforms; the French made a considerable show of it until the '80s; and of course there is the Japanese. I think it is fair to say that Cambridge Keynesians considered it an integral part of a Keynesian package (and still do today, viz. Malcom Sawyer).
In the US there had been only the patchwork efforts of the NRA, etc, plus the wartime Office of Price Administration. As the New Dealers are steadily crowded (and voted) out throughout the war, ending all sector and pricing controls becomes a major post-war, post-New Deal objective. I believe this provides an important context for US Keynsianism with its massive and convoluted efforts to retain neo-classical microeconomics and support for "free markets".
The problem is that the Nazis remained rapid despite their alliances with Junkers and big industry. Their policies remained based on autarky and the like, while a military-style economy prevailed before remilitarization.
How much there was a true military-style economy in Nazi Germany is one of the things Kaldor, Galbraith and their successors contest with people like Overy (and apparently Landes and Temin). Apparently, the Nazi administration was more chaotic and had far less control than we had hitherto believed, and, interestingly they may have also feared that their political control was shaky.
I don't have any data here, so I'll agree to agree. It should be remembered, however, that as E. Cary Brown argued, almost all of FDR's fiscal deficits were due to the Depression itself rather than being efforts to fight the Depression (until "Dr. Win-the-War" took over).
Try just even Ritschl pp 4-5 on the data sources. You'll see what I mean. I agree with what I think is your point about E. Cary Brown. He (and Ritschl) search out the degree to which deficits were "active" policy choices. But what impresses me is simply the meager overall size of the Nazi deficits.
The class bias of Nazism was clearly the same as an extreme neo-liberal. But the Nazis were willing to reject the balance-the-budget orthodoxy, so on that level were Keynesians in practice.
Again, look hard at the numbers AND also look to what we can deduce from the historical conditions the Nazis faced, the nature of their political base and their concrete actions:
- After the trauma of hyper-inflation the Banks would shut down credit and big business would bail at the slightest whiff or irresponsible finance (irresponsible by the measures of the day). Until the year before the war the Nazis had no legal or practical mechanism for administering controls in the face of "market" refusals.
- The Nazis were obliged to make their economic Czar the "Allen Grenspan" of the previous era and keep him there until just before the war. Schacht had been the key Central Banker for the 10 years before the Nazis and was Mr. Indispensable for orthodox credibility. Until 1938 he had simultaneous control over the Bank, the Nazi equivalent of OMB, and the Treasury. He made clear that he refused to embark of large-scale deficit financing and in 1938 resigned his posts (other than the Bank) over that principal.
- As a minority party, whose base was petty bourgeois, the Nazis had little capacity for the kind of social mobilization required to "take over" big business and the banks. Their social base wanted a 'better deal' vis-a-vis big capital, particularly at the expense of workers. Accommodation with the economic elite was also the sine quo non of support from the military command (who remained a politically conscious and independent force throughout Nazi rule).
How many *economic* choices did the Nazis have? The powers that support economic orthodoxy had them hemmed in. The only radical change was the means by which orthodox goals were to be achieved.
Paul
