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New Studies in Economic and Social History
The Nazi Economic Recovery 1932–1938
This is a fully revised and updated edition of R.J. Overy's highly regarded survey of the Nazi economic recovery (first published by Macmillan in 1982). The performance of the German economy under the Nazi regime has been the subject of intense academic debate. Overy discusses the main areas of this debate, arguing that the war preparation that took place at this time was ultimately incompatible with long-term economic recovery, and that the German economic miracle did not occur until after 1945.
108 pages, Paperback
First published October 1, 1982
About the author
Richard Overy
152 books358 followersRichard James Overy is a British historian who has published extensively on the history of World War II and the Third Reich.
Educated at Caius College, Cambridge and awarded a research fellowship at Churchill College, Professor Overy taught history at Cambridge from 1972 to 1979, as a fellow of Queens' College and from 1976 as a university assistant lecturer. In 1980 he moved to King's College London, where he became professor of modern history in 1994. He was appointed to a professorship at the University of Exeter in 2004.
His work on World War II has been praised as "highly effective in the ruthless dispelling of myths" (A. J. P. Taylor), "original and important" (New York Review of Books) and "at the cutting edge" (Times Literary Supplement.)[
Educated at Caius College, Cambridge and awarded a research fellowship at Churchill College, Professor Overy taught history at Cambridge from 1972 to 1979, as a fellow of Queens' College and from 1976 as a university assistant lecturer. In 1980 he moved to King's College London, where he became professor of modern history in 1994. He was appointed to a professorship at the University of Exeter in 2004.
His work on World War II has been praised as "highly effective in the ruthless dispelling of myths" (A. J. P. Taylor), "original and important" (New York Review of Books) and "at the cutting edge" (Times Literary Supplement.)[
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Displaying 1 - 6 of 6 reviews
February 21, 2016
When the nazi's came to power in 1933, they promised the Germans 'bread and work' - meaning food on the table and a steady job. And indeed, the unemployment rate was rapidly declining during the nazi rule. So how did the nazi's create this?
Richard Overy defines a few key points for this. First of all, they took complete control of the economy, allowing the economy to work for them. Second, they created a way of injecting capital in the system by introducing 'mefo's', government bonds that were used to pay for the investments, to be repayed after 5 years. By then they hoped to have reached a drastic expansion of government income (through taxes) that enabled them to repay the debts.
Richard Overy does not agree with the general view that the investments in the re-armaments was the cause. True, they did play a great part, but only after 1936, and they were not the cause of the economic recovery in the years 1933-1936. Before 1936 the bulk expenditure was on work-creation, motorisation and general construction, which already had begun under the Von Papen and Von Schleicher regimes of 1932. After 1936 rearmament became increasingly important.
Overy states that the Nazi 'economic system' became simply a part of the Nazi 'political' system, closer in character to the economy of Stalin's Russia that to those of the capitalist West. Hitler was able to control and guide the economic transformation from the Depression years, where Stalin was able to transform the economy. After 1936, the efforts of the Nazi regime to create an economy for waging war had the effect of actually slowing down recovery and growth, stifling initiative and creating business uncertainty once again. 'Recovery' in this context was a dead end.
Richard Overy defines a few key points for this. First of all, they took complete control of the economy, allowing the economy to work for them. Second, they created a way of injecting capital in the system by introducing 'mefo's', government bonds that were used to pay for the investments, to be repayed after 5 years. By then they hoped to have reached a drastic expansion of government income (through taxes) that enabled them to repay the debts.
Richard Overy does not agree with the general view that the investments in the re-armaments was the cause. True, they did play a great part, but only after 1936, and they were not the cause of the economic recovery in the years 1933-1936. Before 1936 the bulk expenditure was on work-creation, motorisation and general construction, which already had begun under the Von Papen and Von Schleicher regimes of 1932. After 1936 rearmament became increasingly important.
Overy states that the Nazi 'economic system' became simply a part of the Nazi 'political' system, closer in character to the economy of Stalin's Russia that to those of the capitalist West. Hitler was able to control and guide the economic transformation from the Depression years, where Stalin was able to transform the economy. After 1936, the efforts of the Nazi regime to create an economy for waging war had the effect of actually slowing down recovery and growth, stifling initiative and creating business uncertainty once again. 'Recovery' in this context was a dead end.
September 21, 2014
Nazis faced a terrible economic crisis, conversely, they fortunately experienced a successful rebound. Germany hastily spent huge amounts of money on martial industries and military force. The Germans have been drinking half as much beer in 1938 than in 1927; this conveys the state of contentment because of the Germans’ triumph. Moreover, North America was surpassing Germany in employment quality. For instance, North Americans received a much higher salary than German employees, Germans are the best at thriftiness therefore this shows how Germans got their economy reinforced. To specify, Germany currently surpasses every country at money-saving. The successful rebound experienced by the Germans confirms how Germany is experienced in economy.
North America is better at expansion that the Nazi government, therefore, Adolf Hitler wants to strengthen Germany’s farming and agriculture sectors. The rearming of the German military force and Four Year Plan of Germany somewhat hindered German expansion by having attempts on infertile areas. On the other hand, economic expansion was also poor in Germany. In Hitler’s perspective, Germany was tremendously preoccupied by the expansion rates but North America had lower rates making Germany economically advance. Actually, the thought of North America possessing higher expansion rates than Germany is rejected because North America had lower rates before 1913.
Adolf Hitler was clearly unsatisfied by his government policies. Hence, the German government imposed new government policies to increase demand and enhance investment. John Maynard or Baron Keynes, a British economist, influenced many countries by his economic theories and doctrines that are named Keynesianism. Nevertheless, the imposed policies are not swayed by Keynesianism; the policies also became part of the Nazis’ political system. The policies worked out for Hitler thus Germany fully deteriorated the deadly crisis.
North America is better at expansion that the Nazi government, therefore, Adolf Hitler wants to strengthen Germany’s farming and agriculture sectors. The rearming of the German military force and Four Year Plan of Germany somewhat hindered German expansion by having attempts on infertile areas. On the other hand, economic expansion was also poor in Germany. In Hitler’s perspective, Germany was tremendously preoccupied by the expansion rates but North America had lower rates making Germany economically advance. Actually, the thought of North America possessing higher expansion rates than Germany is rejected because North America had lower rates before 1913.
Adolf Hitler was clearly unsatisfied by his government policies. Hence, the German government imposed new government policies to increase demand and enhance investment. John Maynard or Baron Keynes, a British economist, influenced many countries by his economic theories and doctrines that are named Keynesianism. Nevertheless, the imposed policies are not swayed by Keynesianism; the policies also became part of the Nazis’ political system. The policies worked out for Hitler thus Germany fully deteriorated the deadly crisis.
April 24, 2024
“Inadequate” is about right. There’s a much better book to be written on this topic, and maybe it already has been written but I just haven’t found it yet.
The author’s full embrace of the wondrous magical effects of Keynesian economics and central planning (p 54) is, well, historically interesting. People actually took this kind of thinking seriously, and many still do, and in some limited way it probably has some explanatory value. It’s also almost touching the author’s insistence that just because the nazis did some Keynesian-looking stuff, as does just about everybody these days, Keynesian economics are NOT synonymous with nazi economics. He really seems worried that somebody somewhere might draw that conclusion. It never seems to occur to him that Keynesian economics are, well, inadequate, when not simply wrong (or wrong-headed). As a result, this book quite literally teems with unchallenged Keynesian gibberish. Hasn’t the “multiplier effect” been wholly discredited both theoretically and empirically? X dollars of government spending does NOT generate spending of 1.5X or 2.5X or 3.5X, but more like .85X or .9X due to all those bureaucrats and administrators (“friction” they used to call it) who have to collect and disburse and monitor those misused taxpayer dollars. And Mr. Overy actually mentions this in the text (p 64), but it’s kind of as an afterthought at best. And when I read a sentence about the “structural problems” that afflict this or that sector of the economy or a country as a whole, without going in to what those structural problems actually are, my instincts tell me that it’s because the author has no idea. More gibberish to disguise confusion. As for the author’s fondness for central planning, hasn’t anyone told him it doesn’t work? (and this book was published in the 1980s!)
Still, to be fair, this is a slim volume, a survey at best. What I’d hoped to learn is how did Germany go from hyperinflation to rearmament in a few short years. Who financed it? Who bought the bonds, the mefos, and controlled the money supply? Where’d the money come from? I picked up a few clues, but it’s still not clear to me.
However, I did spot a couple of promising-looking references in the bibliography which I hope will lead me to better answers (J J Klein’s “German Money and Prices 1933-1944” seems to have potential.)
One insight that I did glean from this book, although likely unintended by the author, is that Keynesian economics is not really about economics; it’s really about politics. It’s a useful way to analyze a political entity and to come up with ways to direct state resources (ie, other people’s money) to politically favored sectors which will, in turn, vote for you. THAT is the real value of Keynesian “economics.” And, most curiously, the author recognizes this fact, but fails to consider the implications of what he’s said (which would further discredit and undermine Keynesian “economics.”) I quote: “The stimulation of private investment was achieved first of all through the granting of state contracts which required for their fulfillment a contribution from the individual firms and suppliers.”(p 39). They used to call that corruption; now it’s “economics”! lol.
In any case, this book is not what I’d hoped it would be. Inadequate is the best adjective for it.
The author’s full embrace of the wondrous magical effects of Keynesian economics and central planning (p 54) is, well, historically interesting. People actually took this kind of thinking seriously, and many still do, and in some limited way it probably has some explanatory value. It’s also almost touching the author’s insistence that just because the nazis did some Keynesian-looking stuff, as does just about everybody these days, Keynesian economics are NOT synonymous with nazi economics. He really seems worried that somebody somewhere might draw that conclusion. It never seems to occur to him that Keynesian economics are, well, inadequate, when not simply wrong (or wrong-headed). As a result, this book quite literally teems with unchallenged Keynesian gibberish. Hasn’t the “multiplier effect” been wholly discredited both theoretically and empirically? X dollars of government spending does NOT generate spending of 1.5X or 2.5X or 3.5X, but more like .85X or .9X due to all those bureaucrats and administrators (“friction” they used to call it) who have to collect and disburse and monitor those misused taxpayer dollars. And Mr. Overy actually mentions this in the text (p 64), but it’s kind of as an afterthought at best. And when I read a sentence about the “structural problems” that afflict this or that sector of the economy or a country as a whole, without going in to what those structural problems actually are, my instincts tell me that it’s because the author has no idea. More gibberish to disguise confusion. As for the author’s fondness for central planning, hasn’t anyone told him it doesn’t work? (and this book was published in the 1980s!)
Still, to be fair, this is a slim volume, a survey at best. What I’d hoped to learn is how did Germany go from hyperinflation to rearmament in a few short years. Who financed it? Who bought the bonds, the mefos, and controlled the money supply? Where’d the money come from? I picked up a few clues, but it’s still not clear to me.
However, I did spot a couple of promising-looking references in the bibliography which I hope will lead me to better answers (J J Klein’s “German Money and Prices 1933-1944” seems to have potential.)
One insight that I did glean from this book, although likely unintended by the author, is that Keynesian economics is not really about economics; it’s really about politics. It’s a useful way to analyze a political entity and to come up with ways to direct state resources (ie, other people’s money) to politically favored sectors which will, in turn, vote for you. THAT is the real value of Keynesian “economics.” And, most curiously, the author recognizes this fact, but fails to consider the implications of what he’s said (which would further discredit and undermine Keynesian “economics.”) I quote: “The stimulation of private investment was achieved first of all through the granting of state contracts which required for their fulfillment a contribution from the individual firms and suppliers.”(p 39). They used to call that corruption; now it’s “economics”! lol.
In any case, this book is not what I’d hoped it would be. Inadequate is the best adjective for it.
November 6, 2021
Overy is a government bureaucrat that has a holy mission to explain why ”their” government bureaucrats were wrong and why ”our” government planners are so much better. At a certain point it becomes hilarious, as Overy doesn't get Economics. And that is quite predictable as it doesn't seem he had a honest job in his entire life.
March 8, 2025
Concise
March 8, 2014
refuting the thesis that NSDAP policy led to an economic "miracle."
Displaying 1 - 6 of 6 reviews