Historical Response #27: Ellen Brown Denies That Hitler's National Socialism Was Socialistic and Keynesian.

Gary North

Ellen Brown praised Hitler's economic policy in Web of Debt. She wants America to adopt his economic policy.

I said in my critique that his centralizing economic policies were implemented only because of his political policy: centralization. I argued along the lines that Hayek did in The Road to Serfdom (1944): Hitler's centralizing economic policies led to his reign of terror.

The Left always has denied Hayek's thesis. We can have centralized economic planning without tyranny, the Left says. So does Ellen Brown. This is one more reason why we should regard her as a leftist. You can read my critique here:

Here, she reasserts her original thesis. She begins by trying to distinguish Hitler's politics (national socialism) from Hitler's politics (Keynesian socialism). Why this fine distinction? Because she wants to get the monster's political and military policies off the playing field to justify her cheerleading. She is trying to convince us that she is a cheerleader only for the first two years of his regime (which included the "night of the long knives"), when he was a good guy, but not for the years when -- lo and behold! -- he somehow turned into a bad guy without warning.

27. Hitler's National Socialism ended the Great Depression in Germany.

"National socialism" was a political party. I was talking about an economic policy. In any case, I don't see that your sources say otherwise than that it worked. They say it was military spending at the end of the 1930s that kept the economy going, but I was writing about the early 1930s, and there are many sources that I cite supporting my point. You write:

Ellen Brown adds this:

While Hitler clearly deserved the opprobrium heaped on him for his later military and racial aggressions, he was enormously popular with the German people, at least for a time. [Web of Debt, p. 235.]

Her message: Hitler was a man of the people! She wants the United States to follow his lead . . . but only in economic policy, of course. Not the concentration camps. Not the war.

She does not draw the obvious conclusion, namely, that the centralized power of the government over money, business, and labor was basic to the power which that government imposed over the Jews and other minorities. It is almost as if his racial tyranny and military aggression were completely divorced from his economic views and the government's economic policies.

I addressed this in my earlier response: tyranny and military aggression are NOT necessary corollaries of governments using their own national credit power to get their economies going again. They did not result in Australia, New Zealand, Canada, Guernsey, or the American colonies when that economic policy was pursued.

The Guernsey example is Greenbacker fairy tale, as I have said for 45 years. I choose to ignore it here.

First, she argued in her book that Hitler's Germany escaped the Great Depression because it became a welfare state. I presented evidence from the world's leading expert on Nazi Germany's economy that Hitler was building a military force. The welfare state aspects of his spending program were marginal compared to the military spending. She chose to ignore this argument in her response.

Second, she argued that this deliverance was accomplished with the equivalent of fiat money -- Greenbacks. It was not. She now says she was talking about 1933-35. But the recovery took longer, until 1938. In Götz Aly's book, Hitler's Beneficiaries: Plunder, Racial War, and the Welfare State (2005), the author writes:

Upon taking power in 1933, Hitler promised, above all, to put German's 6 million unemployed back to work. He was able to achieve this goal within five years (p. 27).

So, it took five years, 1933-38, to accomplish this. How did Hitler do this?

When Hitler assumed the daily business of running the government in 1933, the Depression had already bottomed out. It was the perfect moment for his financial experts to promote the incipient economic recovery (p. 38).

Did he use fiat money to fund the state's projects? No; the government used bank-provided debt. The Nazi economy was Keynesian, as I said in my original critique.

Yet with additional expenditures exceeding additional revenues by almost 300 percent, public debt increased in the first two years of the Nazi regime by 10.3 billion reichsmarks (p. 38).

She tries in her response to say that she was talking only about 1933-35. But this expansion of debt took place in 1933-35. Thus, her arguments for Hitler's success, 1933-35, collapse like the proverbial house of cards. Hitler's regime offers no evidence for her case for Greenback economic salvation.

In short, once again, her book and her attempted response reveal that she does not know what she is talking about.

She is left as a cheerleader for Hitler, when he in fact was a Keynesian. She thinks she can shrug off the centralizing power of the Nazi state by saying, "But I was talking only about 1933-35." But the peacetime economic recovery held through 1939, when the war began. That was the era of the Great Depression, worldwide. It was also the era of the Germany's laws against the Jews. She wants us to accept the success of the "good Nazi era," 1933-35, and thereby escape responsibility for being a cheerleader for a monster.

It doesn't wash. If she thinks it does, she is naive.

Second, she presented not a shred of evidence that the following nations escaped the Great Depression prior to World War II's mass inflation, price controls, conscription, and rationing: Canada, Australia, and New Zealand.

Third, she remains oblivious to the hyperinflation and devastation that the fiat money of the American Revolution produced. She simply chooses to ignore the evidence that I presented.

Fourth, compared to the economic liberty that existed before the Great Depression, today's high-tax welfare states are far less free than they were. She cannot see this, because she is a leftist who wants less freedom and more welfare state spending. This is what I have said repeatedly in my criticisms of her.

Ellen Brown is the incarnation of the crest in the stained glass window that Britain's socialist Fabian Society adopted: a wolf in sheep's clothing. You can see the window here. You can read about it here. Here is an artist's drawing of the Fabian shield/crest, based on the image in the window.

http://seeker401.files.wordpress.com/2010/02/fabianshield.gif

Leonard E. Read, the founder of the Foundation for Economic Education, used to say that today's voters are so ignorant of the principles of liberty that they cannot tell the difference between liberty and coercion. He said that 40 years ago. This comment surely applies to Ellen Brown.

Hayek was widely dismissed or ignored by the intelligentsia until he won the Nobel Prize in 1974. The Road to Serfdom was still not taken seriously by most of academia until after the official suicide of the Soviet Union on the last day of 1991, a few months before Hayek died. Ellen Brown is still unpersuaded by Hayek's arguments.

I can understand why the leftist Huffington Post publishes her articles. I am appalled by the fact that Tea Party voters take her seriously. It reminds me that Read was correct 40 years ago. Things have barely changed.