The Wages of Destruction: The Making and Breaking of the Nazi Economy

by Adam Tooze

On the one hand, armaments were one aspect of industrial and economic activity in which Hitler displayed a lasting and persistent interest. On the other, it was military spending that increasingly dominated the behaviour of the German economy. Of the growth in total national output in Germany between 1935 and 1938 almost half (47 per cent) was accounted for directly by the increase in the Reich’s military spending.15 If we add investment, of which a very large part was dictated either by the priorities of autarchy or rearmament, the share rises to two-thirds (67 per cent). Private consumption, by contrast, was responsible for only 25 per cent of the growth over this same period, even though in 1935 it had accounted for 70 per cent of total economic activity. If we consider only that part of economic activity that was directly under the control of the state, the dominance of military spending is even more dramatic. Of the goods and services purchased by the Reich, the Wehrmacht accounted for 70 per cent in 1935 and 80 per cent three years later. Not surprisingly, therefore, discussion of every aspect of economic policy was increasingly dominated by rearmament. And it was through rearmament in turn that the future of the German economy was coupled to the ultimate question now facing Hitler’s government, the question of peace or war.