The War of the World: History's Age of Hatred (43 page)

Figure 7.3
Real output, trough to 1938 (or latest available date), selected European countries

1932. More than six million Germans had been unemployed when Hitler became Chancellor. By June 1935 the number had fallen below two million, by April 1937 below one million and by September of the same year below half a million. In August 1939 just 34,000 Germans were registered as unemployed.

How was it done? It was plainly not through the credit-financed job-creation schemes that had been initiated under Hitler’s predecessors. Investment had collapsed in the Depression; the government led its recovery with substantial increases in expenditure on armaments and (often defence-related) infrastructure – which accounted for roughly even shares of gross fixed investment between 1933 and 1938 – and the private sector followed, accounting for two-thirds of all fixed investment. The annual growth rate of gross fixed investment, adjusted for inflation, was 29 per cent. The increase in public sector investment, from an average of just over 3 per cent of national income in the Weimar period to more than 10 per cent by 1938, was financed in large measure by running deficits. Total government expenditure had risen steeply between 1925 and 1932 from 30 to 45 per cent of
national income and continued its rise under the Nazis, despite a brief decline in 1935 and 1936, to reach 53 per cent by 1938. But taxes did not keep pace after 1933. Weimar deficits after 1924 had averaged just 2.1 per cent of national income. Between 1933 and 1938 the total public sector deficit averaged 5.2 per cent (though it rose steeply from less than 2 per cent in 1933 to more than 10 per cent in 1938). Gross domestic product grew, on average, by a remarkable 11 per cent a year. Private consumption grew more slowly; indeed, as a share of GDP it declined from a peak of 90 per cent in 1932 to just 59 per cent. The Keynesian multiplier, which determines the knock-on effect of deficit spending on aggregate demand, was evidently not high for 1930s Germany. But for most people, the most important thing was the dramatic growth of employment. Given all the warnings that had been uttered during the Weimar years, the mystery was that all this was achieved without a significant increase in inflation. Consumer prices rose at an average annual rate of just 1.2 per cent between 1933 and 1939. This meant that German workers were better off in real as well as nominal terms: between 1933 and 1938, weekly net earnings (after tax) rose by 22 per cent, while the cost of living rose by just 7 per cent. The explanation lies in the complex of controls on trade, capital flows and prices which the Nazis inherited and extended, and the surreptitious ways in which some of the new government borrowing was financed, combined with the destruction of trade union autonomy, which removed the chronic ‘wage push’ that had afflicted the German economy in the 1920s. Keynes, in other words, was right when he said that a totalitarian regime would be able to achieve full employment with an expansionary fiscal policy, precisely because it would be able to impose the necessary controls.

There were, it is true, limits to what could be achieved by these means, most obviously in the realm of the balance of payments. Germany’s position was certainly easier than it had been in the last Weimar years, when the withdrawal of foreign capital and the continued need to pay reparations and interest on foreign loans had imposed a crippling burden, ultimately precipitating a devastating banking crisis in 1931. On the other hand, Schacht’s suspension of interest payments on some (though at first not all) of Germany’s long-term foreign debt could not entirely solve the underlying problem:
the Reich’s continued and growing need for imports, despite all talk of autarky, and the limited opportunities she had for increasing her exports, because of foreign tariffs, worsening terms of trade, a pegged and overvalued exchange rate and other impediments such as the bilateral clearing arrangements established with creditor countries. In prices of 1913, Germany was running trade deficits of unprecedented size during the 1930s. This was not a sustainable state of affairs, as Schacht well knew – just as he knew that fiscal deficits in excess of 5 per cent of GDP could not be financed other than by money creation, increasing the potential for future inflation. There was a full-blown currency crisis in mid-1934, which practically emptied the Reichsbank of its reserves, forcing Schacht to extend the German default to all foreign debt.

Yet what did the average German care about the intricacies of Schacht’s New Plan, introduced to try to economize on scarce foreign exchange by strictly controlling imports and subsidizing exports? To most people in 1930s Germany it seemed there had been an economic miracle. The
Volksgemeinschaft
was more than mere rhetoric; it meant full employment, higher wages, stable prices, reduced poverty, cheap radios (the
Volksempfänger
) and budget holidays. It is too easily forgotten that there were more holiday camps than concentration camps in Germany between 1935 and 1939. Workers became better trained, farmers saw their incomes rise. Nor were foreigners unimpressed by what was happening. American corporations including Standard Oil, General Motors and IBM all rushed to invest directly in the German economy. Germans in 1938 were not, to be sure, as rich as Americans; US per capita national income was roughly twice as high. But they were unquestionably better off than Germans in 1933.

Hitler’s folk-community implied more than national unity, however. It also implied the exclusion of ‘folk-alien’ (
Volksfremd
) social groups. There was no doubt who was meant by that. From his earliest days as a political agitator, Hitler had repeatedly expressed his hatred of the Jews. He blamed them for Germany’s defeat in the First World War. ‘If at the beginning of the War and during the War,’ he notoriously wrote in
Mein Kampf
, ‘twelve or fifteen thousand of these Hebrew cor-rupters of the people had been held under poison gas, as happened to hundreds of thousands of our very best German workers in the field, the
sacrifice of millions at the front would not have been in vain. On the contrary: twelve thousand scoundrels eliminated in time might have saved the lives of a million real Germans, valuable for the future.’ That he and his minions ultimately used precisely that method as part of their genocidal campaign against the Jews during the Second World War has led many historians to regard anti-Semitism as the defining characteristic of the Third Reich. There is no question of its importance to Hitler and a substantial number of leading National Socialists. Yet it is far from clear that they were tapping a deeply rooted ‘eliminationist anti-Semitism’ within the German population as a whole.

There were in fact few European countries in the world where ethnic minorities were less of a problem than Germany after the First World War. There were fewer than 503,000 Jews in Germany in 1933, a tiny 0.76 per cent of population, and the number had been falling steadily since the war as a result of a striking decline in the Jewish birthrate to roughly half that of the rest of the population. The overwhelming majority of members of this dwindling community were almost completely assimilated into the middle class as lawyers, doctors, academics, businessmen and so on. Indeed, Jews were disproportionately represented in Germany’s financial, cultural and intellectual elites. Their children attended the same schools as Gentiles, they lived in the same neighbourhoods as Gentiles. Writing in 1921, Jacob Wassermann looked back on his childhood in Fürth in Franconia in terms that most German Jews of his generation would have echoed:

As far as clothing, language and mode of life were concerned, the adaptation was complete. I attended a public State-supported school. We lived among Christians, associated with Christians. The progressive Jews, of whom my father was one, felt that the Jewish community existed only in the sense of religious worship and tradition. Religion, fleeing the powerful seductions of modern life, took refuge in secret and unworldly groups of zealots. Tradition became a legend, a matter of phrases, an empty shell.

Though his family had once kept feast days and fast days, observing the Sabbath and eating only kosher food, ‘as the struggle for bread grew keener, as the spirit of the new age became more importunate, these commandments too were neglected, and our domestic life approximated to that of our non-Jewish neighbours’:

We still acknowledged membership in the religious community, though hardly any traces remained of either community or religion. Precisely speaking, we were Jews only in name, and through the hostility, aversion or aloofness of the Christians about us, who, for their part, based their attitude only on a word, a phrase, an illustrative state of affairs. Why, then, were we still Jews, and what did our Jewishness mean? For me this question became ever more and more importunate; and no one could answer it.

The insight Wassermann finally arrived at was a profound one, which brilliantly captures the ambivalence of the German-Jewish love-hate relationship in the 1920s:

A non-German cannot possibly imagine the heartbreaking position of the German Jew. German Jew – you must place full emphasis on both words. You must understand him as the final product of a lengthy evolutionary process. His twofold love and his struggle on two fronts drive him close to the brink of despair. The German and the Jew: I once dreamt an allegorical dream, but I am not sure that I can make it clear. I placed the surfaces of two mirrors together; and I felt as though the human images contained and preserved in the two mirrors must needs fight one another tooth and nail…

I am a German and I am a Jew; one as much and as fully as the other; I am both simultaneously and irrevocably… It was disturbing… because on both sides I constantly encountered arms that received or repelled me, voices that cried a welcome or a warning.

To call the German-Jewish relationship a love-hate relationship is by no means as inappropriate as might be thought. A crucial symptom of German-Jewish assimilation was the rise in the rate of intermarriage between Jews and non-Jews. For Germany as a whole the percentage of Jews marrying outside their own faith rose from 7 per cent in 1902 to 28 per cent by 1933. It reached a peak of more than a third in 1915 (see
Figure 7.4
). Though Hamburg and Munich saw the highest rates of intermarriage, the figures were also well above average in Berlin, Cologne, the Saxon cities of Dresden and Leipzig as well as Breslau in Silesia. When Arthur Ruppin gathered data for other European cities, he found only Trieste had a higher rate of intermarriage. Though also relatively high, the rates for Leningrad, Budapest, Amsterdam and Vienna lagged behind those in the major German cities. Of

Figure 7.4
Percentage of Prussian/German Jews who married outside the faith, 1875–1933

164,000 Jews who remained in Germany in 1939, 15,000 were partners in mixed marriages. When the Nazis came to define the children of mixed marriages as
Mischlinge
, they estimated there were nearly 300,000 of them, though the real figure lay between 60,000 and 125,000. It is hard to speak of deep-rooted collective hatred when there is so much evidence of love between individuals of different ethnic origins. And these figures, needless to say, tell us nothing about sexual relationships outside marriage.

A perfect example of German-Jewish assimilation was Victor Klemperer. Born in 1881, the son of a Brandenburg rabbi, Klemperer – like Hitler – served in the Bavarian army during the First World War. In 1906 he married Eva Schlemmer, a Protestant from that most Protestant of Prussian towns, Kö nigsberg. Like so many German Jews of his generation, and so many members of his family, Klemperer excelled academically. In 1920 he was appointed Professor of Romance Languages and Literature at Dresden Technical University. His attitude towards Judaism was almost wholly negative. When a friend named Isakowitz insisted on making him celebrate the Jewish
New Year, Klemperer was dismayed: ‘The man came from the “temple”’, he noted in his diary, ‘(I have not heard that word for thirty years), his head covered he read from the Torah, a hat was put on my head too, candles burned. I found it quite painful. Where do I belong? To the “Jewish nation” decrees Hitler. And
I
feel the Jewish nation recognized by Isakowitz is a comedy and am nothing but a German or German European. – The mood… was one of extreme depression.’ Klemperer had in fact converted to Protestantism after his marriage. Throughout the 1930s, he maintained that it was the Nazis who were ‘un-German’: ‘I… feel shame for Germany,’ he wrote after Hitler had come to power. ‘I have truly always felt German.’