Congressional Candidate Praises Hitler's Economics, "from the biplane to the rocket". Is He Wrong? | The Nest
Big Praise for the Rockets
In an interview conducted by the Chicago Sun-Times, Illinois congressional candidate Arthur Jones praised Adolf Hitler for his economic policies saying, "In twelve years of his rule they brought that country up from the age of the biplane to the age of the rocket". On the face of that statement, one might be repelled by the mere notion that Hitler was capable of doing anything good. Conversely, one might feel the need to jump to the defense of Arthur Jones, cheekily replying is he wrong though?
Regardless of Arthur Jones as a man, who I'm quite sure is an awful person to hang around with (his choice of company to keep doesn't seem that charming either), Arthur Jones as an "intellectual" made a statement. The idea that Adolf Hitler was a fantastic economic mind, with wonderful fiscal and monetary policies, is not a new stance we hear central bankers and Western policymakers taking. Even Ben Bernanke felt the need to praise Hitler for his economics in the 1930s.
The Problem is the Message
We'll set Arthur Jones aside for a moment; neither is Jones an economist nor a historian. Bernanke's praise seems better to focus on. Why would a two-term Federal Reserve Chairman find himself praising the economic policies of the Nazis anyway?
Because Ben Bernanke is a New Keynesian. Keynes himself praised the totalitarian state for the ease with which it can adapt itself to the theory of aggregate production, a theory which has been fully and totally debunked as an effective long-term stimulus. But Bernanke either isn't aware that a fundamental part of his beliefs on economics are wrong or- more likely- he knows that he is wrong but, having built an entire career and reputation on these beliefs, finds himself defending some strange characters in order to keep up his reputation. I don't know about you, but I'd be willing to bet that after countless busts and a business-cycle with waves you could surf on, a smart guy like Bernanke knows that when it quacks like a duck, it might just be a duck.
Now look, this isn't all just to target Ben Bernanke (though any opportunity I get to do that, I take). He isn't the subject of this article. He isn't, you know, the guy who throws birthday parties for a dead dictator he fought in a war against. He isn't Arthur Jones. But Ben Bernanke and other Keynesians trumpet broken economics and broken policies; fake accolades that adds fuel to the fire of people like Arthur Jones. When Ben Bernanke, one of the most well-known and powerful economists of his time, gives credit to Adolf Hitler because of his sound fiscal approach (and we'll get into why that's a ludicrous thing for him to suggest), it gives repugnant imbeciles like Jones a reason to say, "Hey, we told you Hitler wasn't a bad guy!". Should that weigh all on the shoulders of Ben Bernanke? Of course not. Nor does it indicate that Bernanke supports anything like Jones' ilk. But praising a totalitarian mass-murderer for anything is a minefield to tread, especially when you're wrong. And if you're praising Hitler's "great" economics: You're wrong.
Would Jones still love ol' "Uncle Adolf" even if his economics were broken? Most assuredly, yes. In fact, something tells me that Jones couldn't even name an economic policy that Hitler and his party pushed for. And yet, Jones uses the beautiful science of economics to push his brain-dead agenda.
Adolf Hitler is no special target, either. I would be writing this article if Jones was praising the economics of Che Guevara, Donald Rumsfeld, or Elizabeth Warren. For the purpose of dissecting bad economics, Adolf Hitler is merely the subject of the day. While Hitler is especially abhorrent, his policies are just as confused as every other Keynesian's. Collectivist policy-making is consistently wrong, no matter who's mouth it comes from or who's hand writes it.
And with that out of the way, we can get to the meaty stuff.
Why is Jones Wrong?
We ought exercise care in analyzing Jones' exact quote. The good part is, in any other way than taking Jones absolutely literally, his claim is absolutely wrong. I will give Jones credit for his literal statement; Hitler did, in fact, take his nation "from the era of the biplane to the era of the rocket" in 12 years.
Does anyone find that statement to be incredibly wanting? I do.
Similarly to saying, "Son, in twelve years I took this marriage with your mother from the era of hugs and kisses to the era of signing divorce papers", Jones paper-thin statement of admiration leaves a lot to be desired. Where is the history? Where are the economics? Where the hell is the policy? Even in the most literal sense, are we to assume that Adolf Hitler introduced "the era of rockets" to Germany? Are we really saying that, without Adolf Hitler, the rocket wouldn't have made its way into one of the most powerful nations in Europe at the same time the "era of the rocket" made its way to every other Westernized nation?
Taking Jones' statement less literally, we see just as many flaws in the argument. The Wiemar government defaulted on its loans twice before Hitler came to power. American investors were eager to see a post-World War I Germany rise from its ashes, and lent around $210 million (to the tune of over $5 billion dollars when adjusted for inflation) to the German government to do just that. In 1933, Hitler effectively defaulted by cancelling the repayment of any and all loans and reparations. With this, he completed tattered the value of the Reichsmark, a currency that hadn't been in circulation even as long as the Nazi part had been. Because of this, in combination with losing the war that Hitler spurred on, Germany was feeling the crippling effects of this awful policy move until as late as 1995 when its final debt was repaid. Hitler's poor management of finances kept a great nation, which still managed to be an economic powerhouse despite its debts, stuck under a glass ceiling. So why do Keynesian's praise Hitler's policy? Why, because it took Germany "from the era of the biplane to the era of the rocket" in 12 years!
No mention of where it took Germany after the era of the rocket. Sans Hitler, Germany could have taken itself another twelve years from the era of the rocket to the era of the rocket ship. Instead of crediting Hitler for short-term gains at the expense of economically kneecapping post-war Germany, perhaps Arthur Jones should be thanking the deregulatory efforts of Ludwig Erhard. If Keynesian economists, and those who sing the praises of their economic genius, are anything, they are struck with tunnel-vision. Demand-side vampires and window-breakers either ignorantly or purposefully look past the long-term negative consequences of centrally-planned protectionism, under the fallacious assumption that short-term government diversion of resources and financing bonds cure the long-term ills of investor uncertainty and bond servicing and repayment.
The phobia of decentralization and deregulation extended far beyond the second World War. In 1963, Paul Samuelson showered Hitler with praise as he admonished public-project skeptics and doomsayers, explaining that Hitler's policies kept the German government afloat.
On one level, this is not surprising. Hitler instituted a New Deal for Germany, different from FDR and Mussolini only in the details. And it worked only on paper in the sense that the GDP figures from the era reflect a growth path. Unemployment stayed low because Hitler, though he intervened in labor markets, never attempted to boost wages beyond their market level. But underneath it all, grave distortions were taking place, just as they occur in any non-market economy. They may boost GDP in the short run (see how government spending boosted the US Q2 2003 growth rate from 0.7 to 2.4 percent), but they do not work in the long run.
Adolf Hitler's policy-making would have been considered "populist". The ideas Hitler had, as specifically outlined in his 25 Points, were geared towards protectionist populism: demanding large industries profit-share, demanding those of German blood be treated as equals, that usurers and profiteers be "punished with death, regardless of creed or race".
Even as a populist, Hitler failed.
In The Hitler Myth, author Ian Kershaw takes the blind glorification of Hitler's populism to task.
The working class remained the social grouping least impressed by the ‘economic miracle’ and relatively immune to the image of Hitler as the creator of Germany’s striking new prosperity. After all, with their own standard of living pinned down to Depression levels in the years 1933-36, most industrial workers saw no particular reason to offer marked signs of gratitude to the Fuhrer. Through repression and intimidation, low wages, and longer hours, the ‘economic miracle’, as most realized, was being carried out on their own backs.
Hilariously, in the very same interview where Arthur Jones made these comments about Hitler almost literally putting Germany on his back and hoisting it into the stars, Jones also found himself criticizing, and being "totally opposed" to "these criminal no-win wars in the Middle East". While I agree with Jones, I find it rather ironic that on the one hand, he is opposed to foreign no-win wars, yet the entire economic track record of Adolf Hitler, the man who he praised, is dominated by military spending. Albrecht Ritschl confirms this in research publication entitled DEFICIT SPENDING IN THE NAZI RECOVERY, 1933-1938: A CRITICAL REASSESSMENT:
Our results also indicate that government spending was dominated by war preparation already in a very early phase of the Nazi recovery. I find little justification for the popular interpretation that recovery was sparked off by non-military work-creation and the construction of the autobahn network. Investment in the autobahn reached sizable magnitudes only in 1936. All these projects pale in comparison with the rapid build-up of military expenditure, except for the year of 1933 17 when rearmament had not yet really begun. To secure the desired high speed of war preparation, the Nazi administration took early, often draconian steps to crowd out private demand. The growth in consumer spending fell short of the increase in national product, and the contribution of private investment to the recovery remained unimpressive.
Beyond purely economic inefficiencies, Adolf Hitler stole Jewish finances, suspended the gold standard, and managed to trick large swaths of the population (still to this day) that he created GDP growth at astonishing rates; the truth is, Hitler oversaw GDP recovery rate that was as average as the rest of the world's, at the time.
The Persistence of Wrongness
So why do people keep parroting these beliefs? I'll leave that up for you to decide. I think its a large mix of Keynesian egos combining with the ever-present cancer being attracted to Hitler's "bad boy image". Lets face it, if you're a neo-Nazi, I can't imagine sound economic policy really matters all that much to you. But because this myth is so persistent (in large part thanks to the demand-siders), Neo-nazis and white supremacists alike will use whatever they can to realize their beliefs. It is the ultimate in confirmation bias.
Whatever it is, it needs to stop. Real economics needs to start taking over.
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Other Citations:
[1] Smith, Noah. “Ben Bernanke's The Courage to Act: A Review Essay.” International Finance, vol. 19, no. 1, 2016, pp. 108–118., doi:10.1111/infi.12084.
[2] George Garvy, "Keynes and the Economic Activists of Pre-Hitler Germany," The Journal of Political Economy, Volume 83, Issue 2, April 1975, pp. 391–405
[3] Kershaw, Ian. 9780192802064: The "Hitler Myth": Image and Reality in the Third Reich, Oxford University Press, 1 Jan. 1970.
[4] Ritschl, Albrecht. “Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment.” Institute for Empirical Research in Economics University of Zurich, Dec. 2000.