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

by Adam Tooze

The situation of the Labour Ministry officials might have been easier but for the effects of the wage stop that had been reinforced in November 1936 along with the price stop. This helped to prevent excess demand from spilling over into general wage inflation. But it also meant that there was no market mechanism to guide a ‘spontaneous’ redeployment of workers into the highest priority sectors. Here too Hitler’s regime had robbed itself of one of the most effective, flexible and unobtrusive mechanisms for managing shortages. Indeed, by 1938 the fear of the inflationary pressure that everyone knew to be hanging over the German economy was such that any flexibility in wage setting was liable to be interpreted as indiscipline or even sabotage.63 If the market was not allowed to function, the logical alternative was to allocate labour by administrative means, as in the rationing of steel. And by 1938, the