The next five years in Germany had to be devoted to rendering the German people again capable of bearing arms [Wiederwehrhaftmachung]. Every publicly sponsored measure to create employment had to be considered from the point of view of whether it was necessary with respect to rendering the German people again capable of bearing arms for military service. This had to be the dominant thought, always and everywhere.
Indeed, this was to become a dominant motif in Hitler's economic policy and will be returned to later .
In addition to the indirect rearmament, there was a parallel programme of direct rearmament. This began in 1933, largely under the control of the army. The `December Programme' focused on limited rearmament: developing a relatively small army for defensive purposes, rebuilding the post-Versailles military structures, and developing a body of trained personnel . This limited rearmament reflects the weakness of Germany on the international stage at this juncture. All the same, military expenditure constituted 1.9% of GNP in 1933, rising significantly to 4% in 1934 .
The slow development of direct rearmament, partially constrained by pressures from abroad, continued until 1936, when its scope and pace both became greater. As rearmament had progressed over the past three years, the competitive and uncoordinated system had thrown up important problems of control and resource allocation. The `Four Year Plan' and Hermann Gring's appointment as `economic dictator' marks the transition from economic and military consolidation to a more active expansionist policy. Under the auspices of Gring's extensive authority the role of the state as economic arbiter was enlarged, not through direct ownership and requisitions, but through the creation of an intricate and increasingly pervasive set of regulations. These regulations and controls allowed the state to range freely over all spheres of the economy - labour, agriculture, food supply, trade and foreign exchange, prices - and were instrumental in centralizing state control of economic activity and in reducing the influence of conservative elements in the army and in industry.
The main aims of the Four-Year Plan were to rationalize economic control and to create increased German self-sufficiency, particularly with regard to key resources such as fuel oil, rubber, and iron ore. Additionally, as Hitler stated in a memorandum, "The German armed forces must be operational within four years [and the] German economy must be fit for war within four years." Although the Four-Year Plan failed to achieve the targets that were set , rearmament under the Nazis had boosted military expenditure from 3% of GNP in 1933 to 23% by 1939. To give a wider context of German economic development (to which rearmament had been an important contributor), between 1933 and 1938 consumer goods' output rose by 45%, whilst production goods' output increased by more than 150% . The German economy had recovered to become the second largest industrial economy in the world .
I will now turn to the position of economic policy within the broader framework of Nazi policy-making.
Hitler's assertion in 1933 that economic restructuring was geared to preparing Germany for increased militarization, reiterated in the Four-Year Plan decree (see pp 3 - 4 above) typifies his view of economic activity as `instrumental', by which we mean that he saw it as a tool which would help him and the German people achieve more fundamental goals. An appreciation of this, and of the nature of those goals, is essential in understanding the `economic necessity' of war.
In Hitler's long-term view of Germany's development, which he outlined in Mein Kampf and in subsequent writings, Germany's destiny was to be a racially homogeneous state at the heart of Europe, a state which would thwart Bolshevism and utilise the resources of eastern Europe and beyond to support its own security and subsistence. This view was explicitly linked with economic development in the memorandum that presaged the Four-Year Plan: Germany's mission and national destiny was predicated on the establishment of armed forces which would facilitate defence and which would subsequently allow Germany to claim its rightful living space . Thus, German survival and expansion was dependent on militarization which was in turn dependent on restructuring the economy, whose primary function was to create armed forces capable of enforcing territorial expansion. It was in this context that Hitler's conception of Wehrwirtschaft (defence-based economy) assumed its centrality in his economic thinking. This concept had antecedents in Germany: World War One had taught the German military the lesson that the successful prosecution of war was premised on the total mobilization of the nation's "material and moral resources for the war effort." In the aftermath of the war General Groener and others had established the need to create closer links between the economy and the military, steps towards which had been taken in the 1920s with the establishment of an officer network in important economic areas and in the creation of a Statistische Gesellschaft which served a co-ordinating function. With the fulfilment of Nazi political hegemony and the re-assertion of the military's political role in the 1930s, Hitler inherited these ideas and found in them a useful means by which he could influence the armed forces in the coalition of groupings that mediated his rise to power.
Given that economic control and rearmament were essential elements in Germany's development, the Nazi government set about achieving them as circumstances allowed. Infrastructure investment and the development of productive capacity gave way to more open rearmament, and a negotiation-based foreign policy gave way to a more aggressive and expansionist dynamic as German strength and Hitler's confidence and successes increased. From the linkages between Hitler's writings and directives, and from the correspondences between economic development, rearmament, and foreign policy, it is plausible to derive the idea that the war which came in 1939 was the result of an expansionist dynamic that found its well-spring in Hitler's strategic vision of Germany's place in Europe and the world. I will now turn to some of the other interpretations that have been provided for the outbreak of European war in 1939.
One influential interpretation of the events of 1939 suggests that Hitler was driven to war with Poland and thereafter with Britain and France primarily as the result of domestic pressures: the argument is that the conflicts between domestic and civilian consumption created by the rearmament programmes led to social stresses and the capacity for domestic crises that could only be assuaged by the outlet of an expansionist war in pursuit of resources and foreign conquest. A sometime corollary of this is that Hitler intentionally set out to wage small-scale wars so that he could continue to satisfy domestic demands and thus circumvent social unrest. These views are comprehensively demolished by Overy in his (to this writer) highly convincing War and Economy in the Third Reich. In refuting these ideas, Overy points out that much of the evidence cited in favour of the `domestic crisis' model comes from self-interested and conservative elements in German society, and observes that the resource allocation problems of the Germans were no more serious than those of the other rearming nations. He also cites documents and statistics which make the `limited wars' theories difficult to sustain. Instead, Overy posits the theory that rather than being the result of economic necessities driven by domestic demands, the war came as the result of a miscalculation by Hitler in his foreign policy: namely, that he did not expect Britain and France to fight, and that he expected to be able to conquer Poland unmolested, particularly in the light of the August 1939 non-aggression pact with Stalin's USSR. On this view, diplomatic and military considerations - best seen in the light of Hitler's long-term strategic plans - were dominant in the decision to make war on Poland in 1939.
Another element in the judgement of the `economic necessity' of war is the question of the `relative autonomies' of the economy and the state. This argument can operate at a number of levels, from the crude Marxist-Leninist view of the state as the tool of capital, where war can be seen as the highest form of capitalism , to the diametrically opposed view wherein the economy and industry are merely the instruments of Hitler and the Nazi hierarchy. These simplistic views, inadequate in themselves, nevertheless pose important questions which highlight the Polycracy/monocracy issue. A `hard monocracy' view would stress that Hitler was responsible for the direction of the totalitarian state, intentionally creating a mess of overlapping authorities and jurisdictions so that he might all the better exercise his control. Contrastingly, a `hard polycracy' view would assert that the divisions within the state, the party apparatus, and the economic sphere were symptomatic of the strength of disparate social forces and of a competitive social ethos which created an uncontrollable dynamic of its own.
I would argue that the monocracy/polycracy debate is of most use when used as a device to help unpick the influences in policy-making and changes over time, and of only limited use as an overall fixed description: that is, historical events and influences are too fluid and too dynamic to be usefully fitted into a single analytical scheme or model. Rather, as Kershaw suggests, we might more usefully think in terms of changing structures of power and influence and, specifically, in terms of the economy and the state as interconnected and overlapping rather than as separate spheres . In this context, it is possible to argue that the post-1936 acceleration of rearmament and the assertion of a more expansionist foreign policy were intimately tied to shifts within the alliance of power blocs that constituted the Nazi regime . Specifically, the Four-Year Plan and military expansion were linked to the emergence of the SS-Police-SD complex as the dominant component in the Nazi regime, at the expense of more conservative elements in the armed forces and within the economy. The establishment of Hitler's trustee Gring as key economic figure is also a crucial indicator of the importance of Hitler and his close allies at the nexus of control .
Finally, after this lengthy - but necessary - preamble, I come to an assessment of whether the Nazi arms economy made war an economic necessity. I have already concluded that in one sense war was not the result of economic imperatives - see the discussion of the `domestic crisis' thesis above. This kind of explanation seems to me to be predicated on a rather mechanical view of economic forces, where they take on a life of their own and are not amenable to control or meaningful mediation. Similarly, attempts to carve out discrete areas where economic or political primacy can be identified does not strike me as particularly useful in analytical terms. Meaningful assessment of economic influences can only come from recognising the interconnections between various elements of economic and political activity. In the Nazi Third Reich this is critical since the interactions between the state and economic activities were - especially after 1936 - closely bound to policy decisions made by the Nazis. Reciprocally, policy-making was influenced by economic developments. Despite this interconnectedness, Hitler himself saw the economy as a discrete instrument which could be moulded to the will - a view which I suggest was critical in his economic decision-making. Another crucial element in the `economic necessity' equation is that, because of the Fuhrerprinzip and the increasingly centralized role of economic decision-making through regulation and controls, it was Hitler himself who largely set the agenda for economic priorities, particularly when the balance of power shifted to the SS-Police-SD complex in the late 1930s. On this view, the intentions of Hitler and the Nazi hierarchy are harnessed to the structures of the state, the economy, of the military, and of society. In the same way that Kershaw posits the `Hitler Myth' as the glue which bound together the Nazi system of rule , I suggest that his strategic vision of German destiny and his desire to fulfil that vision formed the guiding element in economic development and rearmament, and that his dominant ideas were linked, through the state's systems of regulation, coercion, and control to the other functional spheres of German society. This is not to marginalize the importance of structures in the maintenance of Nazi rule, but rather suggests that the relationship of these structures to the Nazi hierarchy and to Hitler himself became increasingly dominated by the centre.
In conclusion, I would argue that war was not the result of economic necessity that grew out of the rearmament programme. Instead, I would argue that war was built into the Hitlerian strategy. Even if the war came `at the wrong time', Hitler's strategic aims inevitably had war at their core. The need for war and conquest drove rearmament - Germany must have living space and the materials of subsistence. In this sense, it was the necessity of making war at some stage in the future that provided the motive power for rearmament, rather than vice-versa. Hitler's foreign policy successes fuelled his popularity, his reputation as a `winner', and his own self-confidence. His plans for conquest advanced, and the economy was restructured to facilitate the future war that Hitler envisaged would give Germany mastery of Europe. His miscalculation in 1939 that Britain and France would not fight put Germany's economic capacity out of sync with the demands that his strategy made, and ultimately helped contribute to German defeat. In the sense that the success of the expansionist policy contributed to the attractiveness of further expansion it could be said that rearmament contributed to the necessity of war. Increasingly, the satisfaction of the dynamic of expansion became the only viable option available to Hitler, and Germany became `locked into' a strategy whose end-game was effectively settled once the great economies of the USA and the USSR, with their vast natural resources and production possibility frontiers, entered into the war.
War was an economic necessity, not in the short-term mitigation of domestic problems, but in the long-run realisation of an expansionist dynamic that lay at the heart of Hitler's thinking. It may be too simplistically `intentionalist' to equate Hitler's desires with every development in the economic and diplomatic spheres, but there is ample evidence to suggest that the image of Hitler as the motor cortex of the German political brain is one not too far from reality. I reiterate: it was the necessity of making war that provided the motive power for rearmament, rather than vice-versa.
