 The title that I have for today is a little bit unclear, isn't it? What in heaven's name could I be talking about here? And I'm not primarily talking about Nazi economic policy, although a little bit of that will come through. But I want to look more at the big picture, a big picture view of what the economic philosophy, such as it was, of Hitler really was. And I want to do that simply because Hitler has become, especially in the age of the Internet, almost a cartoonish figure. Everybody trots out sometimes for good reasons and usually for dumb reasons. If you're really getting on somebody's nerves, they start calling you Hitler or like Hitler or approaching Hitler or whatever. Everybody's Hitler. If you're a vegetarian, you're Hitler because he was a vegetarian. If you want war, you're Hitler. Even if you don't want war, you're Hitler, I find. I want no wars at all and I'm Hitler. I don't understand how that could be. It wasn't militarism kind of central to the whole thing. So anyway, I'm going to be looking more broadly at economic thought and maybe social philosophy a bit with a little bit of policy thrown in. And I'm doing this, as I say, partly because the term fascism and to a lesser extent Nazi have come to be used as generic terms of abuse. And when they are so applied, they are, shall we say, more obfuscating than clarifying. I would tend to think that if I were to survey the general public about the definition of fascism, I would probably not get something very close to the dictionary definition. So I thought, what the heck, couldn't hurt. And frankly, some of the kinds of themes that I'm going to be talking about can be heard in some sectors of the ideological spectrum out there, even today. And it's almost spooky how similar they are. Now I recall back when I was first teaching, I was still getting my PhD, but I had taken a job in the meanwhile at a community college. And at that college, I was required to take attendance and I thought this is just insult, take attendance in college. But all right, that's what they asked me to do. But what I did was I just passed a sheet of paper around and had people sign their names and then I just ignored the piece of paper and threw it away. So anyway, one day I was reading because I taught Western civilization. It was the second half, so we were in the 20th century. So we were going over the 1920 Nazi platform, which has 25 points in it. And I wanted to get their feedback. We're talking about this as a primary source document. And in there, you can see some things that almost anybody would favor. I mean, any social democrat would favor, like old age pensions, for example. And I thought things like that would probably surprise them because they favor old age pensions. And I wasn't trying to say you're Hitler because you want an old age pension, but just to show that Hitler and the Nazis did take for granted a lot of social democratic assumptions, even if they believed a lot of other things that today we don't. Well anyway, I had to take attendance that day and I only had one piece of paper and I sent it around for them to sign. And then when I got it back, I realized I had accidentally all had them sign the 1920 Nazi platform. That was a mistake, but I hung on to that in case I ever needed to blackmail any of them. Now one thing you notice when you begin to scour documentary evidence is that fascists of all sorts did view economics as very much subordinate to other issues. They viewed it as hopelessly mundane. They viewed it as a phony science, like not a real science. And so I do want to talk a bit at the beginning about what they thought of economics per se. Before I do that, I'm afraid I'm going to forget. So let me do this right now. If you are interested in this general topic, there are three books that I would recommend to you. And I was going to write them down and then I forgot to set this up and I don't know how it works and I'm very low tech. So the first book I would recommend to you was recommended to me by Ralph Raco. Now if you're a real Mises Institute junkie, you know Ralph Raco. Great European historian died not too long ago and it's a real loss for sure. But years ago I asked him for a source on this and he gave it to me. And the author's last name is Zitelmann, Z-I-T-E-L-M-A-N-N. And the book is called, so that's Zitelmann and the book is called Hitler, The Policies of Seduction. It's got a really excellent, particularly chapter four is really, really good on this material. The second book that I would recommend is available in the bookstore here and I believe online. It's an old book by a guy named Gunter Raimann, R-E-I-M-A-N-N. And it has one of my favorite book titles of all time, The Vampire Economy. I love that title. I don't even know what that means but that's great. Subtitle, Doing Business Under Fascism. What's interesting about Raimann, which you may not know, you would not necessarily know by reading the book because I've read that book without knowing it. He's not a free market guy and he's complaining about all these controls on the private sector and how oppressive the Nazi regime was. He was a member of the German Communist Party. Bizarre. So I am a little skeptical about his crocodile tears about oppressing the private sector but it's a good study so I'll take it. You know, there aren't that many, I'll take it. Then there's a third one and I'll just leave it here. The guy's last name is spelled T-O-O-Z-E and the book is called The Wages of Destruction and this is kind of a history of Nazi economic policy and the economy of Germany throughout the 30s. So I would definitely start with those sources. All right, so getting back to this, if you read an essay by Mises which may still be one of the required readings from Mises University called The Historical Setting of the Austrian School of Economics then you have become familiar with the so-called German Historical School and the well-known debate over economic method that took place in the late 19th century and the primary antagonists in that debate were Carl Manger for the Austrians and Gustav von Schmoller for the German Historical School and this debate was all about really what economics is. Should we conceive of economics as consisting of a series of propositions that apply across time and place? Or should we instead think of it as a series of empirical regularities that may differ across time and place? It may be that some peoples in effect have different, they wouldn't say economic laws but different economic regularities, different races may have different economic regularities. The Austrians were trying, although Mises, you can tell from what he has to say about Manger is not entirely satisfied with Manger's performance in that exchange but the Austrians are trying to take the alternative view here that we can abstract from individuating characteristics like race and nation and time and place to get at universal truths. So this went back and forth for some time. Just framing the debate in that way, you can probably tell where the Nazis come down on that. The idea that we're going to subscribe to a series of abstract propositions doesn't, not going to fly. So Mises actually in that essay traces the thinking of the German Historical School all the way from Schmoller to Hitler himself. He does not shy away from that because that is how Hitler thinks of economics. There is no theory here. To the extent that he thinks about economics as a discipline, there are times when he appears to think it's a sham science created by Jews to enslave us. But moreover, as every dictator thinks, the idea that there's an economic law that can impose constraints on my will is of course an insult and cannot be considered. It has to be rejected, so-called economic law. Here's Hitler in 1937, and by the way, there are going to be many passages because I don't want there to be any possibility of my embellishing anything that he said or editorializing about it. I'm just going to quote from his own words. He said, I am not going to tell you that in place of these economic theories, I am now going to put in a national socialist economic theory. I would like to avoid the term theory altogether. Yes, I would even like to say that what I'm going to tell you today is not intended to be a theory at all. Because if I recognize any dogma at all in the economic sector, then it is only the one dogma that there is no dogma in this sector, no theory at all. And now I'd like to share with you one of my favorite, not strictly economic, passages from Mises. Because when Mises stands up to defend economics against anti-economics like what you just heard, he's at his most passionate. Because sometimes Mises can be very restrained and scientific, and other times even that, you know, Vienna gentleman's blood boils. And here this just makes him crazy when people talk like this. So here's how the gentlemanly Mises replies to this kind of thinking. He says, Our Lord is prone to acknowledge any limits other than those imposed on Him by a superior armed force. Servile scribblers are always ready to foster such complacency by expounding the appropriate doctrines. They call their garbled presumptions historical economics. In fact, economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics. And then he says, It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics as such is a challenge to the conceit of those in power. An economist can never be a favorite of autocrats and demagogues. With them he is always the mischief maker, and the more they are inwardly convinced that his objections are well founded, the more they hate him. Oh, I just love that. But then, I like this actually because this is a somewhat dorkier paragraph but gets to the heart of it even more. He says, If one tries to refute the devastating criticism leveled by economics against the suitability of all these interventionist schemes, one is forced to deny the very existence, not to mention the epistemological claims, of a science of economics and of praxeology as well. This is what all the champions of authoritarianism, government omnipotence, and quote, welfare policies have always done. They blame economics for being abstract and advocate a visualizing mode of dealing with the problems involved. They emphasize that matters in this field are too complicated to be described in formulas and theorems. They assert that the various nations and races are so different from one another that their actions cannot be comprehended by a uniform theory. There are as many economic theories required as there are nations and races. These and similar objections are advanced in order to discredit economics as such. So economics as such, properly understood, is advancing statements that are universally applicable, as opposed to those who would try to limit these statements, particularly by race, nation, time period, and so on. Mises points out, by the way, that if you follow the train of thought of the German Historical School, you follow it from the early days of Schmoller, and you go all the way down to Werner Zumbart. He says, Zumbart crowned a literary career of 45 years with a book on German socialism, whose guiding idea is that the Fuhrer gets his orders from God, who is the supreme Fuhrer of the universe. And in effect, Mises says, you know, there's a nice way to cap 45 years of writing. You write a bone-headed book like this, you know, Worshiping Hitler. But in a way, this is just following from Schmoller, who was, you know, I wouldn't say worshipping, but extremely idolatrous toward the Hohenzollerns. Well, we see this even today in some circles, where we hear Lézé Faire described, both on the extreme left and the so-called extreme right, Lézé Faire is abstract and soulless. These are just abstract propositions. And moreover, we also hear, particularly on the extreme right, look, as long as we have a state, we shouldn't be like these wimpy libertarians or just want to abdicate, we might as well be realistic, to the rains of that state and make sure that we turn its powers in favor of the interests of the people. The funny thing is they call us naive, and they want to advance the idea that if we just get good people in power, then we'll make sure the people's interests are observed. Not sure I go for that. So when Hitler does venture into specific questions of economics, well, he's rather unsystematic and sloppy. And why wouldn't he be? There's no economic theory to study. So he can just kind of, you know, spout inanities just like your friends on Facebook with no economic training. I'm not saying your Facebook friends are Nazis. I am saying your Facebook friends are wrong about the Nazis, however. All right, those of you who read my free e-books know that reference. Okay. He didn't like the gold standard, for example. So in monetary policy, no gold standard. I know you're shocked. If you're tempted to, if we have EMTs standing by, if anyone faints, how about that? I wonder why Hitler would not like the gold standard. Gee. You know, and we get made fun of for this. And of course, in reality, I favor a much more radical approach than the gold standard. I favor total separation of money and state. But I'll take the gold standard, if that's all I could get. And we get made fun of for this how terrible and backward it is. But the funny thing is, Hitler also thought it was terrible and backward. That doesn't mean that it's good. But, you know, if you are going to be siding with Hitler on a major, major thing, you should at least think, well, maybe there's another side to this. Well, so he says, he refers to it as a virtually sanctified financial theory. He says, and showing that he has no understanding of the issues involved, he says, today we smile about a time when our political economists actually did believe that the value of a currency depended on the amount of gold and foreign currency reserves piled up in the safes of the state banks, and that it was guaranteed by these. We have learned instead that the value of a currency lies in the productive capacity of a nation, that increasing production is what holds up a currency, even revalues it under certain circumstances. So I talked to one of the faculty members about this today, and I said, what do you think he's saying there? And this faculty member said, well, if we're being as generous as possible, and I said, oh, that's very charitable. Let's be as generous as possible with, with Hitler. So as not to be character, what could he possibly mean by this? The best we could come up with was, well, what he's saying is that, let's say the money supply is increased, but if the supply of goods is, you know, also increases, you know, there's an increased demand for money and, you know, whatever. You can stabilize the money and purchasing power and stuff on the end of the production of goods. So there are more goods, but there are more dollars or, you know, more marks or whatever running around, but there are more goods to take those dollars, then you can still have stability. But sooner or later, if you keep inflating the currency, there's no way you could keep producing enough goods to match that so that it doesn't get completely out of control. I don't know if that's a reasonable theory, but how about this? He claims in effect that so many economic issues are simple, they're just made complicated by Jews. So, all of these things are natural and simple, only you should not let a Jew play around with them. The foundation of Jewish business policy is to make normal business incomprehensible for a normal brain. You start by shuddering before the wisdom of the political economists. If somebody refuses to play along, in other words, if somebody refuses to learn economics, you say this person is uneducated. He lacks a higher knowledge. In reality, these terms have been invented so that you do not understand anything. Only the professors have still not caught on that the currency value depends on the amount of goods backing up the currency. So we still get that. He's got some more monetary stuff, kind of crankish, sort of a monetary crank, turns out from Hitler. But a major, major theme in his overall political economy is summarized in the phrase the primacy of politics over economics. And without even elaborating on that, you can probably guess what that's all about. All the way back in Mein Kampf, Hitler criticized the idea, and now these are his words, that the state is first of all a business institution, is to be governed according to business interests, and therefore also depends on business continued existence. Politics is supreme over economics. And this makes sense in the general scheme of fascism, whether it's in Italian or German form. Because when we think about what are the ideas motivating fascism, well, a lot of it came about right around the time of World War I and the aftermath of World War I, people looked around Italy, let's say. Italy still had quite noticeable regional differences. But during the war there was this sense that whether you were Sicilian or Lombard or Piedmontese or whatever, everybody had come together in a single national effort, and that this was kind of reviving the Italian people in really exciting and momentous ways. And so in peacetime we need to have that same kind of commitment to organization and maybe the suppression of regional differences but playing up the idea of Italian unity once more. And to think of the state moreover, as this vehicle, almost a divine vehicle through which the destiny of the people unfolds, well, business seems so mundane, seems so pedestrian compared to the realization of our great destiny as a people. So in reflecting that we have Hitler saying business does not build states. The political forces built states. Well, I'm glad they admit it. Business can never replace the political force and if a nation does not possess political force its economy will collapse. Business is more burdening than uplifting. Today you see many Germans especially in middle-class circles who always say business will forge our nation together. No. Business is a factor which is more likely to sunder a nation. A nation has political ideals but if a nation only lives for business, business must thereby sunder a nation because in business employers and employees always oppose each other. But you see when we think about more elevated things rather than the mundane world of buying and selling, these class institutions fall away. See we're all Germans now. We don't have to think about those things that divide us. He said that the rule of force of the economically more powerful is to be replaced by the higher interests of the community. Again a major theme that the public good which will be defined by the state that's one of these slippery words that sometimes conservatives want you to accept. The public good, the public good who gets to define the public good. No thanks. And we need to subordinate that or we need to subordinate your individual interests to the public good which we will define. Well that's his view and that's the view of every social democrat. He says all the gigantic tasks which not only the economic needs of the present show us but also a critical look into the future can only be completed if over the egoistic mind of the individual the speaker for the interests of the community holds sway and his will counts as the final decision. We see this I mean to some degree he acknowledges that you need business but it's got to be absolutely subordinate to the political power and in a minute we'll see his view that if you don't do what I ask you to do then I'll even take over that. So in fact at one point Hitler says our socialism it goes much deeper than theirs because in effect he says who needs to nationalize the factories and the banks if we socialize the people. If they do everything I ask them to do then I don't need to take them over. In fact he says I'll quote that later. As long as you guys do everything I say you can keep your stuff. But to what extent is it still your stuff if you have to do everything he says I wouldn't ask that question at that time if I were you. But even in the realm of architecture I mean here's a spooky passage he in effect says that if your skyline just shows hotels and office buildings and things of this sort again how mundane you cannot speak of art or culture we need the state to build a big beautiful building so he says it is impossible to give a nation a strong inner security if the large public buildings do not tower greatly over the works which owe their creation and maintenance more or less to the capitalist interests of individuals are you getting the idea this guy is anti-capitalism to some degree and yet isn't it hysterical that we get called terrible names we are so far from this right so then he says it is out of the question to bring the monumental buildings of the state or the movement into a size which equates to that of two or three centuries ago while on the other hand the expressions of bourgeois creations in the area of private or even purely capitalist building have increased and grown bigger many times over as long as the vistas which characterize our cities today have department stores, markets, hotels office buildings in the form of skyscrapers and so forth as their outstanding eye catchers there can be no talk of art or even of genuine culture and he says during the bourgeois era the architectural embellishment of public life was held back in favor of the objects of private capitalist business life and a great cultural historic task of national socialism will be exactly to depart from this tendency and then a few other quotations just to solidify the point one of the most urgent tasks he says to achieve our goals it can be broken down into two points state interest goes before private interest number two if the question arises between state interest and private interest in favor of the state interest you know that and by an authority which is completely independent I'm sure that will be completely independent he says the view now this is kind of like you didn't build this you didn't build that he says the view that the utilization of a fortune no matter of what size is solely the private affair of the individual requires to be corrected all the more in the national socialist state because without the contribution of the community no individual would have been able to enjoy such an advantage so you didn't really earn that oh how about that now if I had quoted that there's a funny YouTube video of some kid who went to some like progressive rally and he took some Hitler quotations like this and he started just shouting them through a bullhorn and these idiots are all clapping yeah we're sick and tired of the state not sticking it to these people but now we get to this idea that I'm going to step in if necessary the right to dispose completely freely of that which must be invested in the interest of the national community well we can't say that an individual has that if he disposes of his property in a sensible manner all the better if he does not act sensibly then the national socialist state intervenes guess who gets to define what constitutes sensibly now it's hard to know the full scope of Hitler's views before 1933 because he went out of his way to be secretive about them so as not to offend businessmen and he made that clear to some of his colleagues that we have to keep this quiet because then you know we don't want to be actively opposed by powerful forces so he says what I have said all along is that this idea is not to become a subject for propaganda or even for any sort of discussion except within the innermost study group only be implemented in any case when we hold political power in our hands and even then we will have as opponents besides the Jews all of private industry particularly heavy industry as well as the medium and large land holders and naturally the banks now if it were really true as the communists try to claim that fascism is merely the the most developed like degenerate form of capitalism why would he fear that he would be opposed by private industry heavy industry medium and large land holders and the banks it's almost like the communists don't understand fascism at all he says again privately we are living this is 1930 we are living in the middle of a turnabout which is leading from individualism and economic liberalism to socialism and again in all of business in all of life in fact all of life we will have to do away with the concept that the benefit to the individual is what is most important and that from the most of the individual the benefit to the whole is built up the opposite is true the benefit to the community determines the benefit to the individual the profit of the individual is only weighed out from the profit of the community if this principle is not accepted then an egoism must necessarily develop which will destroy the community I was going to kick out of it when politicians talk about egoism like you know well I guess you would know he says that the job of the ministry of economics is to present the tasks of the national economy and then the private economy will have to fulfill them if the private sector doesn't comply we read this then the national social estate will know how to solve these tasks kind of chilling so in Hitler's mind there are two competing doctrines fundamentally at work number one is this idea of the primacy of politics over economics on the other hand for a long time competing against that in his mind is the idea that there is something to be valued in laissez-faire and that is the idea of economic competition because he believes economic competition can be a mainstream a mainspring for economic growth and progress and moreover being a social Darwinist he thinks that competition is really how greatness comes about and the great are rewarded not so great are not rewarded and so the total nationalization of the economy he thinks would unduly suppress these salutary features but as time goes on it becomes clear that the primacy of politics over economics is really coming more to the forefront of his thinking and his hesitations about nationalization are diminishing gradually particularly as World War II goes on and he observes what he thinks is the success of the Soviet model and he begins to think well again we can't be dogmatic about economics remember that we have to just see what works we have to see what the man of action is able to implement so I'll have something to say in a few minutes about what Hitler thought of Stalin but he's much more friendly to Stalin than let's say we in this room might be so you can go on and on with passages of Hitler talking about how business must be in the service of the state rather than the other way around I assume that point is made but in terms of a planned economy he begins to see that there is merit in this if not completely planned and nationalized then certainly with some kind of overarching plan there is actually a four year plan implemented in the second half of the 1930s and as the war is going on he makes quite clear that even though there's an intensification of planning that he believes is demanded by the war that does not mean that when the war is over the state will not continue to plan we're just getting started he said here he is if Germany intends to live then it must run its whole economy in a manner that is clear and planned we cannot manage without a plan if we were to let things run on according to the principle that everyone likes then in a very short time this freedom would end up in a terrible famine no we have to conduct our business and run our economy according to plan therefore the national socialist government cannot be dependent on any individual interests it cannot be dependent on the city or the country not on workers and not on employers it cannot be dependent on industry on the crafts, on trade or on finance it can only accept one obligation one is our master and we serve this nation to the best of our knowledge and belief and then speaking about the four year plan in 1936 this is a plan where they're going to have more public works and the state is going to control international trade and they're going to encourage some industries and so on as well as rearmament of course he says the German economy will learn to understand the new economic tasks or it will prove itself to be incapable of continuing to survive modern times in which the Soviet state sets up a gigantic plan so you see this from a distance this admiration of the Soviet system by January 30th 1937 which is the four year anniversary of his seizure of power we see that he's growing less and less skeptical of the planned economy he says again repeating his earlier theme there is no economic concept or view that can be considered that can claim to be gospel what is decisive is the will to always assign business at the role of servant of the people national socialism is the sharpest departure from the liberalistic point of view that business exists for capital and the people for business and then he goes on he says a free economy in other words one completely left to itself can no longer exist today how much clearer can the guy be he says not only will this be politically intolerable but economically too possible conditions would result and so what what he then goes on to argue in a very long passage is he says when you leave the economy to itself you have for example brand new inventions that can completely discombobulate whole industries and then people suffer or let's say a giant firm can close its doors then all those employees suffer and then meanwhile is the state going to take care of those people of course we must take care of them but it can't just be that we have the responsibility of taking care of people who have been displaced by the forces of business we therefore need to be in charge of the direction of business in the first place so that we could have avoided this displacement if we're just standing here holding the bag after business hollows out some town and then leaves them with no jobs well that's not fair if the state could have run that industry and run that firm dictated to that firm then maybe we could have avoided the catastrophe so maybe that's the way we should be thinking that's the way he's thinking so we are therefore also not dealing with phrases such as freedom of the economy oh you don't say really we're not so again a sensible employment of the powers of a nation can only be achieved with a planned economy from above and then he says in 1941 so war is going on but he makes clear that's not why this is he said this is happening he says as far as the planning of the economy is concerned we are still very much at the beginning and I imagine it will be something wonderfully nice to build up an encompassing German-European economic order and then he says that he talks about in 1942 the ability of the German nation to deal with various problems and he contributes this to the fact that the direction of the economy these are his words gradually became more controlled by the state only thus had it been possible to enforce the overall national objectives against the interests of individual groups even after the war we will not be able to renounce state control of the economy because then every interest group would think exclusively of the fulfillment of its wishes and again from the point of view of fascism there is the interest of the nation and the nation in practice is the state then July 1942 one had to have an unqualified respect for Stalin an unqualified not okay he did some bad things an unqualified respect for Stalin he says in his way the guy was quite a genius exclamation mark with ideals such as Genghis Khan and so forth he knew very well and his economic planning was so all encompassing that it was only exceeded by our own four year plan I mean you know he's a genius and everything but he ain't no Hitler seems to be the message he had no doubts whatsoever that there had been no unemployed in the USSR as opposed to capitalist countries such as the USA I guess when you have labor camps everybody finds work then 1945 the age of unrestricted economic liberalism has outlived itself and then he says the crisis of the 30s was only a crisis of growth albeit of global proportions economic liberalism unveiled itself as having become an outdated formula so everything we believe in was dead, outdated not to be followed anymore preposterous, ridiculous the fruits of the 19th century so again when your Facebook friends are just carelessly throwing these words around now you know even more than you thought you did how ridiculous and inane they're being it's not like I had to just dig out three sentences I don't know even where to start or finish with all this stuff so 1937 now let's listen to Goebbels writing in his diary had lunch with the Fuhrer I wonder what that was like let's find out large group at table the so called industrial leaders are under heavy attack they do not have a clue about real political economy they are stupid egoistic unnational and narrow-mindedly conceited quite unlike you know the state apparatus they would like to sabotage the four-year plan out of cowardice and mental laziness Fuhrer heavily attacks the industrial barons who still practice a silent reserve against the four-year plan woe to private industry if it does not fall in line four-year plan will be executed then Hitler puts it this way look I'm not actually trying to take over everything he says I tell German industry for example this is 1937 you have to produce such and such now I then return to this in the four-year plan if German industry were to answer me we are not able to then I would say to it fine I will take that over myself but it must be done but if industry tells me we will do that then I'm very glad I do not need to take that on alright so he has there are a number of industries that Hitler is very interested in nationalizing let me as I start to run low on time just run through a few areas of policy by 1934 you have in effect a complete control of foreign trade import contracts all have to be approved only then could you get the very foreign currency it was basically a monopoly on foreign trade there was a comprehensive set of state instruments for the direct control of investment wages and prices subject to irrational controls just so different types of food would have controls on them so a lot of people substituted pork for other kinds of meat so on and on but what Ziedelman points out is none of this was in any way an emergency measure only required because of rearmament and war but rather a deliberately created instrument for the revolutionizing of the economic order and the establishment of a new economic system that was to be characterized by a synthesis between elements of free enterprise and state control whereby the preponderance clearly lay on the aspect of state control which was to implement the primacy of politics now if you read that book the vampire economy you also get little snippets of things that were going on he talks about cases where industrialists would be visited by state auditors who had orders to examine their balance sheets and bookkeeping entries and they would find the tiniest most trivial mistake and impose a huge financial penalty on them well everybody knew that this was just the state was just going out and taking money from business everybody knew they weren't really concerned about bookkeeping mistakes but they wanted some legal pretext so they carried it out this way and then Riemann says it is conceivable that a businessman might be successful in an appeal to the courts against some regulation of an overzealous Nazi official provided such regulation were a gratuitous interference with private property and had no bearing on the defense of the Nazi regime however court action was very rare because most businessmen feared arousing the anger of Nazi officials who on some later occasion might have opportunity to take revenge I'd like to actually read you a portion of a letter written by a German businessman to a friend abroad describing what was going on in Germany this is like 1939 or so he says I am here in Amsterdam for a couple of days and take this opportunity to write unrestrictedly to various friends abroad I know you will be interested in hearing what is happening within Germany as for myself my knowledge as a technical expert would not have been sufficient to enable me to struggle along during the past five years were it not for the fact that our firm has the backing of a prominent party man who comes to our assistance when we need certificates for foreign currency raw materials and so on no firm in our trade can exist without such a collaborator as it is we have to spend considerable money for quote, juridical advice it is not a question of simple bribery the process is more complicated I knew pre-war Russia in general bribery under Tsarism was a simple affair you could figure out how much you had to pay a state official by counting the number of stars on his uniform the higher the rank the more stars he wore the more you had to pay it's different in Germany today party members who control the distribution of raw materials and similar matters do not accept money directly you do not offer money to a party leader you ask him whether he knows a good quote lawyer who might be of help in proving to the authorities the urgency of your demand for foreign exchange or raw material he refers you to a lawyer who gives you the necessary juridical advice for which you pay and eventually your request is granted but the fees for this advice are extremely high much higher than you would have had to pay indirect bribery or you would have paid to a first rate lawyer on a retainer basis it is virtually impossible to function at all without maintaining close relations with one of these lawyers you come to depend upon him completely and then he says I cite one of my own experiences I needed foreign currency for my current trip to Amsterdam and duly made a request for what I needed for my application for foreign currency in reply I received the following answer absolutely impossible I there upon went to my advisor and inquired of him how I might prove the special urgency of my business trip he told me something I had not known before a new ruling had been issued to the effective factory leaders in my particular line of business that we could no longer obtain foreign currency for a business trip abroad well I said what about a personal trip in order that I might inspect some new types for my personal information this might be possible he said but it will cost you 300 marks he says everywhere you will find new bonds of friendship between business men contact men and party men who are tied to each other by complicity in violations of laws and decrees that was how you functioned by getting people who would somehow get you around this crazy quilt maze of insanity at least half the time says Riemann half the time of the German manufacturer how to get scarce raw materials you can't get these without a certificate from one of the supervisory boards which distribute the available raw materials domestic as well as foreign and then he says rubber got to be so scarce and so how do you get a new rubber tire and there was this policy that no new tires can be sold until the old tire is completely worn out so you had cases of new trucks being bought just for the tires and then they would sell the truck for scrap and keep the tires so this sort of thing was going on all over the place Mises himself called it socialism on the German pattern or the German model because he says these are not really entrepreneurs they're just shop managers because they buy and sell and they hire and discharge workers and remunerate their services etc but they're bound to obey unconditionally the orders that are issued by the supreme office of production management so yeah there might still be so-called private ownership but what does it mean in the kind of environment that we see here described so as it turns out you'll never guess we have nothing to do with any of this and people who want to think that we are are themselves a lot closer to it but I hate to break that to them alright thank you very much