The German pattern differs from the Russian one in that it (seemingly and nominally) maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets. There are, however, no longer entrepreneurs but only shop managers (Betriebsführer)…. The government, not the consumers, directs production. This is socialism in the outward guise of capitalism.

By Llewellyn H. Rockwell, Jr.

These days, supporters of President Trump and others on the right are often smeared as “fascists,” and what is meant by this is that they support the Nazis. For example, the historian Ruth Ben-Ghiat says: “To get people to lose their aversion to violence, savvy authoritarians also dehumanize their enemies. That’s what Trump is doing. Hitler used this ploy from the very start, calling Jews the ‘black parasites of the nation’ in a 1920 speech. By the time Hitler got into power in 1933 and translated dehumanizing rhetoric into repressive policies, Germans had heard these messages for over a decade.

As a historian of autocracy with a specialization in Italian Fascism, the use of the ‘vermin’ image got my attention. Mussolini used similar language in his 1927 Ascension Day speech which laid out Fascism’s intention to subject leftists and others to ‘prophylaxis’ measures ‘to defend the Italian state and society from their nefarious influences.’ But nothing could be further from the truth. The Nazis, as their name, National Socialists, suggests, were supporters of a centrally planned economy. Although Trump supports tariffs and deficit spending, he isn’t an opponent of the free market and favors measures such as tax cuts that help free enterprise.

As the great economist Ludwig von Mises points out, there are two kinds of socialism. One features overt ownership of industry by the government: the centrally planned economy of the former Soviet Union is an example. In the other, private ownership of business is preserved, but the government tells the ostensible owners what to produce and what prices to charge. Mises says in Omnipotent Government: “The German and the Russian systems of socialism have in common the fact that the government has full control of the means of production. It decides what shall be produced and how. It allots to each individual a share of consumer’s goods for his consumption…. The German pattern differs from the Russian one in that it (seemingly and nominally) maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets. There are, however, no longer entrepreneurs but only shop managers (Betriebsführer)…. The government, not the consumers, directs production. This is socialism in the outward guise of capitalism. Some labels of capitalistic market economy are retained but they mean something entirely different from what they mean in a genuine market economy.”

Later research has supported Mises’s account of the Nazi economy. One of the most comprehensive accounts of the Nazi economy is in the book by Adam Tooze, The Wages of Destruction, and Tooze confirms that the German industrialists had to follow the Nazis’ direction. Tooze especially draws attention to the importance of Herman Goering’s Four-Year Plan: “Businesses who were reluctant to follow the plans of the New Order had to be forced into line. One law allowed the government to impose compulsory cartels. By 1936, the Four-Year Plan, headed by Hermann Goering, changed the nature of the German economy.

On 18 October [1936] Goering was given Hitler’s formal authorization as general plenipotentiary for the Four-Year Plan. On the following days he presented decrees empowering him to take responsibility for virtually every aspect of economic policy, including control of the business media.”

Moreover, Hitler admired the Soviet economy, and the Nazis hoped to transform their kind of socialism into full-fledged central planning after the war. The Nazis did not reveal their intentions publicly, because during the war they needed the cooperation of business, but Hitler and other leading Nazis made their intentions clear in private. As Rainer Zitelmann, the foremost authority on the Nazis’ economic ideology, notes: “The National Socialists intended to expand the planned economy for the period after the war, as we know from many of Hitler’s remarks. As already mentioned, Hitler increasingly admired the Soviet economic system. And this did not fail to affect his views on the question of private property. ‘If Stalin had continued to work for another ten to fifteen years’, Hitler said in a monologue in the Führer headquarters in August 1942,

‘Soviet Russia would have become the most powerful nation on earth, 150, 200, 300 years may go by, that is such a unique phenomenon! That the general standard of living rose, there can be no doubt. The people did not suffer from hunger. Taking everything together we have to say: They built factories here where two years ago there was nothing but forgotten villages, factories which are as big as the Hermann Göring Works.’

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