Fantasy and Reality in Nazi Work-Creation Programs, 1933-1936

Abstract

During 1933 and 1934, Hitler's National Socialist government achieved what have been described as enormous results in reduction of unemployment. During his first year in power, Hitler reduced unemployment by over one-third. Within eighteen months, unemployment had been cut by sixty percent. 1 One is inclined to agree with economist Gerhard Kroll's observation that reduction of unemployment by a third in one year borders on miraculous.2 Economics is not religion; miracles have to be explained. How did National Socialists, who had little respect for traditional economic expertise, bring off this Wirtschaftswunder and put Germany back to work? How did a system now generally recognized as chaotic conquer unemployment so effectively and efficiently? Over forty years after demise of Third Reich, historian Charles S. Maier conceded that the impulses that led to German remain difficult to explain. Maier downplayed public investment financed by deficit spending (including rearmament expenditures) as an explanation of Hitler's economic miracle, because recovery in fact soon outpaced whatever contribution deficit spending might have accounted for, even presuming a generous multiplier effect.3 He shared Harold James's view that, if there is a key to Germany's economic between 1933 and 1936, it was Nazis'