The Wages of Destruction: The Making and Breaking of the Nazi Economy

Adam Tooze describes the inner workings of how Nazi Germany came to be in The Wages of Destruction: The Making and Breaking of the Nazi Economy, a book detailing the trade-offs Germany made and the unprecedented extent to which Germany’s entire economy was reshaped intentionally and solely into a war machine. Tooze clarifies the enormous amount senior leadership knew and understood about the economic problems facing Germany and, in response, their willingness to feed people into the war machine in return for manufactured products. In addition, The Wages of Destruction shows the extent to which Hitler gambled on so-so odds in France and won, briefly, and then further gambled and lost. The win came from an extraordinary combination of the military’s skill in invading France and the inept allied response to it, while the loss came from trying to apply the same thinking to the Soviet Union. The German and occupied territory economies simply lacked the production and resources to fight multiple-front wars. All this is demonstrated with copious detail—the book’s strengths are its weaknesses in that it is relentlessly technical, and what I write by necessity lacks the evidence Tooze presents to make his case.

Recent history is largely a history of Germany’s aggressive wars, which shaped and continue to shape the world; it is hard not to see the offspring of World Wars I and II in many guises, from the current problems in the Middle East to international relations to art (the book to read is David Andelman’s A Shattered Peace: Versailles 1919 and the Price We Pay Today). In looking back, it is easy to read earlier art in terms of later developments: in The Rest is Noise: Listening to the Twentieth Century, Alex Ross gives this description of Wotan, the protagonist of Wagner’s Ring cycle: “He resembles the head of a great bourgeois family whose livelihood is destroyed by the modernizing forces that he himself has set in motion.” This is not far from what happened to Hitler, who oversaw the linking of primal fears, modern technology, and nationalism, creating what can only vie with Communism as the worst disease of the century.

This book has been part of my larger history kick, as The Pursuit of Glory: Europe 1648 – 1815, A Farewell to Alms, and From Dawn to Decadence: 500 Years of Western Cultural Life 1500 to the Present show. All three, like The Wages of Destruction, synthesize an enormous amount of the ideas and events that have wrought the world, from attitudes to culture to politics to technology to art. I say “art” intentionally because so much is caught up in the struggle of individuals against societies, the effort to retain individuality in the face of history, and the struggle of nations (it is also hard not read the larger world into art). Historical fiction rests on these ideas and often occurs at these turning points, where we know that the hero of a novel cannot change the historical event which is about to occur. Although individuals destinies might be shaped in such narratives, grand historical sweeps cannot be altered by such characters. To me this causes many narratives to be unsatisfactory and thus demands that they must focus on the small to succeed, or the world of the individual. Yet the appeal is continual, as the idea of the past is reshaped through the present and through additional evidence in both fiction and nonfiction. The Wages of Destruction is the latter and puts World War II into the larger context of economic systems.

Most of all, The Wages of Destruction is an exploration of the most fundamental idea of life and economics: we all face trade-offs at every level of existence, from the personal in a minute-by-minute sense to the national and world levels. The Nazis made numerous trade-offs favoring war and military spending, and despite their extreme ideology they could not escape from history or from the reality that they could not destroy large parts of German society and simultaneously do their utmost to defeat their enemies. Some commentators have noted that the primary world power of virtually any age is marked chiefly by its pluralism and willingness to provide tolerance, especially tolerance relative to others; by that standard, the U.S., Britain, and Rome before it have done relatively well. The numerous counter-examples toward plurality are well-known, as all three societies practiced slavery and numerous other horrendous practices, but at least two of the three trended toward liberalism, while Rome reached its zenith thanks to its republican beginnings. By contrast, Nazis tremendously damaged their economy by expelling and imprisoning large numbers of people and causing other nations to stop trading with the Germany bloc, and while Tooze shows the extent to which slave and imported labor helped the regime, it could not make up for the enormous disruptions it caused.

This common theme of slavery differs in that the Nazis moved towards it long after Britain and the United States had repudiated it. All three relatively liberal societies—Rome, Britain, the U.S.—were able to succeed in large part because they did what the Nazis would not: choose for the material betterment of their people and choose to incorporate more of their people into their economies and societies. Germany chose the opposite and paid, giving up living standards that Tooze demonstrated were already lower than most of Western Europe and the United States, a chance at real victory, and much more to their ideology of death and racial purity. Still, without ideology the Nazis would not have launched their attacks on Europe and the world. The United States and Britain chose pluralism. The Nazis faced trade-offs in their hatred for Jews; although the regime actively tried to convince Jews to emigrate in the 1930s, it made actually leaving difficult by forcing Jews to abandon their assets—especially hard currency—behind. This occurred because Germany had an enormous balance of payments problem, meaning the country paid out more money every year for imports than they sold in exports, constraining their financial system and their ability to implement their racial purity goals. Consequently, the Nazis prevented Jews from leaving thanks to their hard currency problem, as Tooze explains in the “Breaking Away” chapter detailing the financial crises during the early part of Hitler’s administration.

These financial crises made rearming all the more expensive, forcing consumer trade-offs, which were extreme, particularly in light of Hitler’s rhetorical striving for parity with the United States. The lives of most Germans were close to what we would associate with the nineteenth century; food and textiles consumed much of the population up through the middle of the war, when a massive amount of imported and often slave labor supplemented the tight German market. A massive portion of the population suffered from the lack of an export market combined with Hitler’s ceaseless redirection of money toward armaments. Germany was not particularly mechanized, either, and its army also wasn’t, and the demolition of these ideas about the modernity of Germany make this a fascinating and revisionist book. One section notes that “the rate of attrition amongst their motley collection of vehicles [tanks and supply trunks] had been high” in 1939 and only accelerated afterwards. Germany’s auto industry before the war was not particularly well-developed, and the overarching theme in Germany’s war planning from the late 1930s onward was fear of the United States’ industrial power. Germany also lacked raw material, particularly steal and oil, and Tooze shows that steel in particular limited production, as the necessity of armaments production brought their economy ever closer to the Soviet Union’s, despite Hitler’s antipathy toward Communism. This makes his alliance of convenience with the Soviet Union all the stranger given the Nazis’ fixation on ideology, and demonstrates further the paradoxical nature of the regime. The Wages of Destruction focuses on these numerous paradoxical aspects, their relationship to the Nazi economy, and their effect on the war, ultimately leading to the effects that still reverberate in the world.


The New York Review of Books has a good if characteristically lengthy essay about The Wages of Destruction here, although it is in a walled garden. Richard Evans is not as enthusiastic as some other reviewers:

Tooze is saying nothing very new [about Nazi civilian employment efforts]; and his claim to be overturning an entrenched orthodoxy that puts civilian job-creation at the center of the Nazi economic recovery has to be taken with a pinch of skepticism. Similarly, although he suggests that the evidence he presents for the recovery beginning in the late summer of 1932 […] “contradicts all subsequent portrayals of the German economy under National Socialism,” the fact is that economic historians have long known that the Nazis were lucky in their timing, taking over the German economy just as it was beginning to come out of the Depression.
What his book does offer is a mass of evidence that finally puts these arguments beyond dispute. Hitler’s drive to rearm was so obsessive, so megalomaniacal, that he was prepared to sacrifice almost everything to it.

Note the phrase “a mass of evidence”—the dense notes cite numerous sources, and this is a book more likely to be cited than read, given its pounding if necessary detail. The synthesis and conclusion sections may be slightly too short because of Tooze’s details, but such issues do not mar an otherwise good book.


After reading this, take a look at this short post about the modern monsters in North Korea, where the New York Philharmonic says it will play.

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