AGAINST THE MAINSTREAM: NAZI PRIVATIZATION IN 1930S GERMANY
Abstract:
The Great Depression spurred State ownership in Western capitalist countries. Germany was no
exception; the last governments of the Weimar Republic took over firms in diverse sectors. Later,
the Nazi regime transferred public ownership and public services to the private sector. In doing
so, they went against the mainstream trends in the Western capitalist countries, none of which
systematically reprivatized firms during the 1930s. Privatization in Nazi Germany was also
unique in transferring to private hands the delivery of public services previously provided by
government. The firms and the services transferred to private ownership belonged to diverse
sectors. Privatization was part of an intentional policy with multiple objectives and was not
ideologically driven. As in many recent privatizations, particularly within the European Union,
strong financial restrictions were a central motivation. In addition, privatization was used as a
political tool to enhance support for the government and for the Nazi Party.
"The fiscal importance of privatization proceeds to 1934-37 Germany can hardly be denied,
particularly in comparison to modern privatizations like those applied recently in the European
Union countries. However, it is worth noting that the general orientation of the Nazi economic
policy was the exact opposite of that of the EU countries in the late 1990s: Whereas the modern
privatization in the EU has been parallel to liberalization policies, in Nazi Germany privatization
was applied within a framework of increasing control of the state over the whole economy
through regulation and political interference"
http://www.ub.edu/graap/nazi.pdf pg 13
Nazi policy was heavily dependent on Hitler’s decisions. Hitler made no specific comments
on nationalization or denationalization in Mein Kampf. Even if Hitler was an enemy of free
market economies (Overy, 1994, p. 1), he could by no means be considered a sympathizer of
economic socialism or nationalization of private firms (Heiden, 1944, p. 642). The Nazi regime
rejected liberalism, and was strongly against free competition and regulation of the economy by
market mechanisms (Barkai, 1990, p. 10). Still, as a social Darwinist, Hitler was reluctant to
totally dispense with private property and competition (Turner, 1985a, p. 71; Hayes, 1987, p. 71).
Hitler’s solution was to combine autonomy and a large role for private initiative and ownership
rights within firms with the total subjection of property rights outside the firm to State control. As
Nathan pointed out (1944a, p. 5) “It was a totalitarian system of government control within the
framework of private property and private profit. It maintained private enterprise and provided
profit incentives as spurs to efficient management. But the traditional freedom of the entrepreneur
was narrowly circumscribed.” In other words, there was private initiative in the production
process, but no private initiative was allowed in the distribution of the product. Owners could act
freely within their firms, but faced tight restrictions in the market.
Given this combination of private ownership within the firm and extreme State control
outside it, the core question here is whether Hitler was against public property or ideologically
favorable to privatization. On this issue, it is interesting to note two interviews in May and June
1931, in which Hitler explained his aims and plans to Richard Breiting, editor of the Leipziger
Neueste Nachrichten, on condition of confidentiality (Calic, 1971, p. 11). With respect to his
position with regard to private ownership, Hitler explained that “I want everyone to keep what he
has earned subject to the principle that the good of the community takes priority over that of the
individual. But the State should retain control; every owner should feel himself to be an agent of
the State….The Third Reich will always retain the right to control property owners.” (Calic,
1971, p. 32-33). Another indication of Hitler’s position on the state ownership of the means of production is found in Rauschning 33 (1940, pp. 192-3), which reports the following answer by
Hitler when questioned on socialization: “Why bother with such half-measures when I have far
more important matters in hand, such as the people themselves?. . .Why need we trouble to
socialize banks and factories? We socialize human beings.”
It seems clear that neither the Nazi Party nor Hitler had any ideological devotion to private
ownership. 34 In their theoretical work on the relationship between politicians and firms, Shleifer
and Vishny (1994, p. 1,015) stress that anti-market governments are compatible with
privatization, as long as they can retain control over the firms through strong regulation. Nazi
privatization in the mid-1930s is consistent with Shleifer and Vishny’s proposition 15 (1994, p.
1,021). As suggested in Temin (1991), property ownership was instrumental for the Nazis.
Hence, it is not likely that ideological motivations played a major role as a rationale for Nazi
privatization.
http://www.ub.edu/graap/nazi.pdf pg. 16-17
It is likely that privatization – as a policy favorable to private property – was used as a tool
for fostering the alliance between Nazi government and industrialists. The government sought to
win support for its policies from big business, even though most industrialists had been reluctant
to support the Nazi party before it took power.
http://www.ub.edu/graap/nazi.pdf pg. 18
Didn't redistribute wealth? What do you call the laws against Jews owning businesses, or the mass deportations, or the Nazi confiscation of their property including the gold fillings in their teeth before sending them off to be exterminated? As I've said before National Socialism isn't Marxist socialism, but they are both evil.