STICK TO BANKS! (And did the National Socialist state raise living standards or benefit the poor?)

STICK TO BANKS! (And did the National Socialist state raise living standards or benefit the poor?)

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almost a year ago now josh holland via subscribe star sent me 100 to support what i'm doing here so thank you for that josh i've been slow to answer but i've been mulling over what you said for a while and what you said was high tick love your videos on economics please keep them coming especially when past economic events are very relatable to what is happening today i find your historian economist combo to be quite the game changer and finally gives the full picture behind many of the topics you explore why people voted for hitler was brilliant do not stick to tanks i know you are flat out working on battlestorm stalingrad but it's been a while since you have done an economics focused video so i hope this donation sends a clear message of what i hope is what a lot of your audience is looking for you're not the only one to say that you're looking for the economics content there are other patrons and subscriber stars who are asking for economic videos for example stephen watson said eye-opening i'd not known one of my eyelids was stuck shut even knowing it was in the name even knowing mussolini had been a socialist and mostly a labor minister i'd never properly grocked that nazis and fascists were socialists the economic cluelessness you have revealed is quite extraordinary similarly cameron has said the same thing hello tick i have been enjoying your new videos regarding economics i am majoring in economics in college and i actually prefer the economics videos over military strategy videos i like both though and there are others beside these so there is a demand for the economics and politics related videos and many people think that what i'm saying makes a lot of sense and that i'm doing a good job explaining things but the backlash i've received in the past and still do receive has made people assume that my videos on economics related topics are rubbish even though that's simply not true even when a significant portion of my audience is now asking for them a lot of people can't understand why so they complain when i make videos mentioning economic stuff and it's frustrating because i actually do want to talk about the economics i'm excited to talk about the economic stuff especially given the political and economic crisis the whole world is going through right now and has gone through for numerous months if not years or decades my subconscious at least is pulling me towards the economics issues both historically and modern day that's because history repeats or at least rhymes so i want to learn from the past so that i can protect myself and then educate as many of you as possible so that you can take steps to protect yourself from the great antagonisms we are facing on a daily basis and i'm not saying that i want to give up on the tank stuff far from it but i think right now it makes more sense to talk about the parts of history that have a direct impact on our lives today and the economics of old are perfect for that anyway josh goes on modern economists often seem to me to be more harassmenties than critical thinkers harassments were ancient etruscans who sacrificed animals and tried to predict the future through omens and stuff like that and i absolutely agree with you josh they haven't got a clue what they're doing and people follow them in the hope that their magical promises of plenty will come true which they won't if we all win the lottery none of us won the lottery modern historians generally cannot explain the difference between capitalism and socialism there is a serious lack of thought and discussion as far as modern economics in the historical context thanks in part to your videos and austrian economic theory i am beginning to think that economics is not that complicated when it comes down to it there are just too many vested interests in this space for honest discussion and analysis to occur in the mainstream and political arenas let's try and remedy this my question is as follows how successful or harmful were hitler's socialist slash interventionist economic policies in managing productivity and increasing standards of living would the nazis have had a more efficient wartime economy if there was less market interventionism is this relatable to today's socialist western policies such as central banking establishment of central bank cryptocurrencies and central banks purchasing their respective nations bonds and now even private securities what do you think the end result of this will be and which assets have historically appreciated in value during such times as these josh i'm going to split josh's question into a few different videos because he deserves more than one video for his support and the questions are wide ranging anyway so it would be better to do separately that said i've been working on a massive video project on the interwar period which will be similar in scale to my hitler's socialism video in the sense that five hours wouldn't be an unreasonable length for the video if not longer in that particular video which definitely isn't ready yet i intend to answer that final question that you asked josh as i said before history rhymes so we can learn from that but anyway today i'm gonna answer josh's first question how successful or harmful were hitler's socialist slash interventionalist economic policies in managing productivity and increasing standards of living let's focus on the standard of living and then we'll come back to the productivity bit the german experience during the first world war shaped what happened later the stab in the back myth was very popular and the neglect of the home front was seen as a major reason for why germany lost the war hitler learnt from this and didn't want to make the same mistake again which is why even right up to the battle of berlin he was obsessed with keeping the german civilians happy he didn't want a repeat of the stab in the back that had supposedly failed germany in the first world war obviously this is interesting because it was the british blockade the hindenburg program inflation and the other interventionist economic policies that caused issues in the german economy during the first world war hitler went ahead and repeated all of those things he implemented all tarki self-sufficiency in the early 1930s meaning he imposed his own blockade on germany doing the british job for them then he implemented widespread production and price controls just like the hindenburg program and distorted the economy in many other ways with his interventionist and inflationist economic policies as we're about to see so he didn't really learn the lessons of the first world war the only thing he did differently was he implemented a totalitarian state that prevented discontent i recently discovered that hitler's economists were yao marshakt wilhelm lautenbach heinrich draga wilhelm grotzkopf friedlander pretzel thick and bischoff and none of you should be shocked to learn that lord baron keynes was influenced by all these economists i wonder why that was on the surface there appeared to be some good things with the nazi economic policies through government spending the nazis reduced unemployment from 5.6 million in 1932 to 1.6 million in 1936 and while some say that the nazis shifted the tax burden to the workers it turns out that this wasn't really the case by focusing on the nominal values they missed the bigger picture tax hikes mainly focused on corporations and businesses not poor in fact proposals for taxing the poor were rejected over and over industrialists complained that some 80 to 90 percent of business profits were being siphoned off by the state this figure is clearly exaggerated but it speaks volumes about the nazi government's basic tax policy orientation the slogan national solidarity volkska mineshaft had got such a hold on the german mentality that nobody dared to resist the nazis when they struck their final blow the nazis crushed the hopes of many groups who once supported them big business the landowners and the farmers the artisans and the shopkeepers the churches all were disappointed but the prestige of the main items of the nazi creed nationalism and socialism was so overwhelming that this dissatisfaction had no important consequences taxes on alcohol and tobacco were the only consumption taxes imposed by the reich but they gave supplements to things like rent insurance coal potatoes and other needs there were rent and price freezes throughout the 1930s and especially during the war when rents didn't go up at all in addition there were various taxes on landlords and private property owners polamics against landlords continue to appear in party organs such as dashfar secor the official newspaper of the ss the public works corporation was created and specialized in building public housing the construction in soil bank intervened and invested in private housing real estate taxes shifted the burden of inflation to the well-off while price subsidies for farmers kept the price of milk and potatoes down at least in theory pensions were raised by 15 percent and the national socialists implemented mandatory health insurance and gave assistance with dental bills they also provided household assistance in terms of payments or tax exemptions for families with lots of children women received loans if they left a labor market and then had those loans cancelled or part of them cancelled for every child they had child support increased 25 percent in 1939 28 in 1940 56 in 1941 and 96 in 1942 meanwhile bachelors had taxes imposed upon them which doesn't sound like a good deal for the men the states purchased and also seized stocks on the stock market which was good for state employees but bad for those holding those stocks there were certain exemptions for aryans protecting them from asset seizures especially during wartime and of course they stole jewish property to give to the aryans in fact there is a strong argument to be made that the primary driver for the big h of world war ii thank you youtube censorship was that it provided a massive economic benefit to the state it's also one reason why i didn't want to say that the national socialist economy benefited the poor because it exploited the poor jews and certainly didn't benefit them the nazis also stole food and goods from other countries and sent them to germany to please the consumer which i've mentioned before in my previous videos but the point is that this was a major factor keeping the nazi economy afloat by creating unbridled demand for goods wherever they set foot citizens of the right destroyed the price equilibrium everywhere in europe they also developed an active self-interest in blaming others for what they themselves did the vast majority of germans were much better off than they had been in world war one although average household income levels were somewhat lower than in peacetime stable prices a freeze on rents and an exemption from asset seizure made it possible to live in material comfort if one factors into the equation soldiers wages and their food rations many german families actually had more disposable income in war than in peacetime so yes the standard of living at least on the surface appeared to be good but if you think about it this was nothing other than bribery the people were being bribed into supporting the nazi regime and perhaps more importantly nothing is free but the cheese on the trap all this bribery came at a cost the economy was in trouble the budget wasn't in any way balanced and the inflation crisis was rampant by about 1936. they painted over this by implementing price controls but then this led to massive shortages see my call video for more details on that symptoms of excess demand made their first appearance in 1937 shortages developed in a number of consumer goods especially in meats and dairy products long waiting lists appeared for many items of housing construction and for tools and dyes that were needed in the armaments industries so even though they had subsidized dairy products and housing construction and the production of raw materials etc there were shortages of all this stuff it's the principle known as the scene and the unseen that henry hasley goes into great detail about in his book economics in one lesson which is why i keep telling people to read it you might think that subsidizing food would lead to cheaper food maybe but it also leads to shortages or other issues in the quality of the food this is why people are against minimum wage it's not because they want the poor to be poor it's because the poor will be made poorer as a result of the minimum wage through unforeseen consequences if there were no knock-on effects of implementing a minimum wage then nobody would be against it they're against it because of the massive knock-on effects well the massive knock-on effect of subsidizing and implementing controls over food in the third reich was that they started to have shortages they therefore had to implement rationing on certain goods way before the war had even begun the newspapers would announce the available rations for food such as bread butter meat sugar etc for clothing shoes bedding etc coupons were issued upon application and proof of need surely all allocated goods needed to be paid for but the coupon or ration card was the primary authority for purchase i want to emphasize this because some seem to have this misconception that the nazis were capitalist no they were against money capital and against the free market they were for price controls wage controls rent controls and so on and they were replacing the currency in circulation with ration coupons that is the opposite of capitalism i've given this quote before but it's worth repeating from 1936 as rearmament accelerated money ceased to be the primary means for allocating economic resources in germany instead state authorities most notably the four-year plan office headed by guring began allocating resources with the aim of achieving the ambitious expansion of the german armed forces demanded by hitler in fact the quantity of reichsbank notes doubled between 1933 and 1939 it doubled again between 1941 and 1944 and doubled again in 1945. yes that's right there was a hyperinflation in 1945 which would actually continue after the war was over a topic for another day worse this was just the reichsbank notes there was a credit expansion of epic proportions on top of this as well but because of the rationing and price controls people couldn't spend the currency that they had so it started accumulating in people's bank accounts deluding people into thinking that they were richer than they actually were because the quantity of available consumer goods was shrinking throughout the war making way for greater armament production a rising share of personal income no longer found real goods and therefore was saved upon deposit of these savings with financial institutions they were immediately invested in medium and long-term obligations of the reich so yes what he's saying is that because of the lack of consumer goods you couldn't spend your currency it was therefore sat in the bank the state then helped itself to your currency stealing your wealth it's a trick your currency isn't in the bank the banks are insolvent and this didn't just happen back then it's happening now the banks are insolvent there's no currency in the banks worse just like today the german people were completely unaware of what was happening to their currency the gradual impoverishment of the people was accompanied by a rapid growth of savings that were generally mistaken for rising personal wealth after all everyone could watch his bank balance grow steadily promising better living conditions in the future but it was a lie it was an illusion and the mirage wouldn't last forever contrary to all principles of economics this vast expansion of money did not lead to higher prices at first the state with its awesome power and coercion stabilized the purchasing power of money through stop orders and rationing systems daily spot checks of prices followed by public prosecutions and severe punishments brutally maintained the price structure wages were permitted to rise by a mere two percent in almost six years of war effort however total labor income rose by more than 50 percent because of the growing labor force and the longer work day a rising share of personal income no longer could buy anything and therefore was tramping about the economy a money surplus came into existence that defied all government efforts at capturing it the inflation then caused price rises or shortages and it got so bad that even silver nickel and copper coins disappeared from circulation since the metal value on the black market was much higher than the official fiat number on the coin it was this self-inflicted economic crisis that compelled them to go to war to exploit the economic resources of the conquered territories coming back to the question about increases in productivity there's no actual way to calculate how efficient they were being in terms of production because the only way to know that for certain is through the profit and loss mechanism which requires free market prices which they didn't have prices were totally manipulated any burst in productivity in germany was largely the result of rising employment and longer working hours not necessarily efficiency the removal of a number of urban inhabitants the jews reduced the number of consumers and this then meant that there was less mouths to feed thus there were more goods stolen from the jews or from other countries going to fewer consumers keeping prices down and helping to mask the production inefficiencies and inflation crisis it certainly financed the war and kept the whole scheme going far longer than it probably should have gone the one thing that we can say is that the state intervention shifted resources throughout the entire economy to armaments production but then there's the question of how efficient the almonds production was i would say that due to the economic mismanagement the large bureaucracy the materials shortages and the lack of incentives for workers slave labor and businessmen and the fact that the germans were producing lots of weapons they couldn't even use panzers and aircraft that ran on oil which they didn't have then it wasn't particularly efficient personally i think most of the benefits on productivity and living standards were largely illusionary the nominal confusion in the deficit spending resulted in the illusion of prosperity which didn't really exist much like what is happening today stealing from one part of society let's say the jews of the bourgeoisie and giving it to the other doesn't increase wealth it only redistributes it if you tax the rich you tax the poor if you tax the parent you tax the child so while it may have benefited some it's probable that production and living standards of the hauler society maybe went up initially in the early to mid 1930s but when the economy started catching up to the manipulations living standards and production then went down before the war and then went down even more significantly after the war began in a sense keynesian economics or similar like the what the nazis did is short-term gain long-term pain and when i come back to discuss this in the future i'll talk about the problems we're facing today i'll also come back and answer the rest of josh's questions in future videos for now i'm going to end this video with a massive but important quote from mises on the nazi economy as i'm reading this ask yourself does this sound like they had a high standard of living does it sound like they had everything under control and let me know what you think of the final paragraph the foreign critics condemn the nazi system as capitalist in this age of fanatical anti-capitalism and enthusiastic support of socialism no reproach seems to discredit a government more thoroughly in the eyes of fashionable opinion than the qualification pro-capitalistic but this is one charge against the nazis that is unfounded we have seen in a previous chapter that the vang vert shaft the nazi compulsory economy is a socialist system of all round government control of business it is true that there are still profits in germany some enterprises even make much higher profits than in the last years of the weimar regime but the significance of this fact is quite different from what the critics believe there is strict control of private spending no german capitalist or entrepreneur shop manager or anyone else is free to spend more money on his consumption than the government considers adequate to his rank and position in the service of the nation the surplus must be deposited with the banks or invested in domestic bonds or in the stock of german corporations wholly controlled by the government hoarding of money or bank notes is strictly forbidden and punished as high treason even before the war there were no imports of luxury goods from abroad and their domestic production has long since discontinued nobody is free to buy more food and clothing than the allotted ration rents are frozen furniture and all other goods are unattainable travel abroad is permitted only on government errands german corporations are not free to distribute their profits to their shareholders the amount of the dividends is strictly limited according to a highly complicated legal technique it has been asserted that this does not constitute a serious check and the corporations are free to water the stock this is an error they are free to increase their nominal stock only out of profits made and declared and taxed as such in previous years but not distributed to their shareholders as all private consumption is strictly limited and controlled by the government and as all unconsumed income must be invested which means virtually lent to the government high profits are nothing but a subtle method of taxation the consumer has to pay high prices and business is nominally profitable but the greater the profits are the more the government funds are swelled the government gets the money either as taxes or as loans and everybody must be aware that these loans will one day be repudiated for many years german business has not been in a position to replace its decaying equipment the fallacious doctrines of nazism cannot withstand the criticism of sound economics today disparaged as orthodox but whoever clings to the dogmas of popular neo-matantalism and advocates government control of business is impotent to refute them fabian and keynesian unorthodoxy resulted in a confused acceptance of the tenets of nazism its application in practical policies frustrated all endeavors to form a common front of all nations menaced by the aspirations of nazism thanks for watching bye for now

2021-08-31 21:56

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