“The Wages of Destruction: The Making and Breaking of the Nazi Economy”, by Adam Tooze

832 pages, Viking, ISBN-13: 978-0670038268

Yeah, I know…more Nazis. Well, whad’ya want? I gotta buncha them and damnit you’re gonna read these reviews, see? Nearly a decade after it first appeared, Adam Tooze’s The Wages of Destruction: The Making and Breaking of the Nazi Economy is considered a classic by many and one cannot address the subject of the Third Reich’s wartime economy without reference to this book, which is basically an economist’s interpretation of why the Nazi state failed to achieve its objectives by offering several unique perspectives as to the causes. Overall, Tooze wrote a landmark book and a very good piece of historical work; the book is more focused on economic indicators and input variables (e.g. labor, raw materials, etc.) than either R&D or output.

The Wages of Destruction is divided into three broad sections. The first section covers the German economic recovery after Hitler came to power; Hitler wanted to spend 5% to 10% of Germany’s GDP on rearmament, but the economy was wobbly. Tooze makes interesting points in these opening chapters about how Hitler, Göring and friends coerced German businesses to adapt to their rearmament priorities, including forcing the coal industry to capitalize synthetic fuel production in 1934 and the nationalization of aviation companies like Junkers. Indeed, the ramp-up of aircraft production in Germany from 1934 to 1939 was phenomenal, but also expensive and wasteful. The author’s discussion of the Volkswagen program as a disastrous flop – but which was touted by Hitler as a great success – was also very illuminating about how the Third Reich ran industrial programs.

The second section covers the period 1936–1940 as Tooze focuses on three levers that inhibited German rearmament in the lead-up to war: the scarcity of foreign currency (which made it difficult to purchase raw materials overseas); the shortage of critical raw materials such as copper and rubber; and the persistent shortage of skilled labor. These are all good points, but Tooze does not always provide the supporting data to fully evaluate these issues. A number of the tables that are provided are not well explained and lack labels, which makes it hard to understand a graph with ambiguous number values. Another interesting point that Tooze makes is the Nazi failure to invest in railroad development which led to persistent transport issues during the war as demand greatly exceeded supply.

The third and final section covers 1941–1945 and is the best in the book with the most interesting details about how all the weaknesses in Germany’s economy undermined industrial performance. There is some discussion of specific programs, such as tanks and U-Boats, but the evidence presented is less than conclusive. For example, Tooze does not examine German assembly line practices, which were not very efficient, or the tendency to “over-design” weapons until they were too complex to mass produce. One chapter is focused on Albert Speer and the alleged “miracle” of production in 1943–44, which Tooze dismisses as mostly propaganda.

Overall, Tooze’s thesis is that Germany’s economy was not ready to wage a global war and was badly mismanaged, which he does a fairly good job of supporting, even though specifics are sometimes insufficient. The fact that Germany was badly out-produced even by the Soviet Union appears ipso facto to support Tooze’s conclusions. However what Tooze fails to do is to show why – if the Third Reich’s economy was such a mess – that it took its enemies so long to defeat it. Somewhere in here, there is an economist’s over-estimation of the economic levers and an under-estimation of the human factors, which the Third Reich actually did an exceedingly good job of organizing. In short, what a lousy way to run a country.