Aly describes and documents here the financial workings of Hitler‘s “Nazi” government leading up to and during the war. „Nazi “stands for “National-Sozialismus”. How did the ideology of “national-socialism” transform the state and how did the “national-socialist” government finance re-armament and the war?
First, it’s ‘socialist’ side: the broad masses on moderate income, ca. 60% of the German population, received much support: organized holidays, a small car, the ‘Volkswagen’, was designed for them to be within their means, generous pay for the soldiers and support for their families (in complete contrast to their neglect in the 1st world war), promt re-housing of bombed-out families, … further: promotion and responsibilities to the young – Aly reminds us that the Nazi revolution was a revolution of the young with all the fervor and impatience of the young! – according to competence regardless of class background, increased social security for the masses, stop to housing speculation, high taxation of the rich, etc. etc. In today’s world, where the rich get richer and the poor poorer and there is little prospects for the young, these are recommendable goals!

Second, the ‘national’ side: all these benefits and opportunities were solely for Germans of Arian background. Occupied countries and the Jews were robbed and plundered to pay for it. Aly describes and documents in detail the methods employed. One example: soldiers were paid in the local currency; they sent millions of parcels with locally purchased goods home to the delight of their families – ultimately - as ‘Besatzungskosten’ (‘occupation costs’) – charged to the occupied country: plundering in disguise. Brecht’s poem “Und was bekam des Soldaten Weib?” is to the point.

Both these sides are demonstrated by looking at who it was who paid for the war: the German small- and average earners (incl. their families ca. 60 million) paid ca. 10% through indirect taxation on tobacco and alcohol, the higher earners (ca. 1/3 of the taxpayers) 20%, the rest, 70% , was extracted from the occupied countries, forced labor and Jews.

Jews were arrested and their possessions confiscated so that these could be made available to bombed-out families. Furniture of deported Jews from all over occupied Europe was locally auctioned to the benefit of the German war-chest, or shipped to Germany to be distributed to the needy.
Aly points out that the persecution of the Jews was not purely for ideological reasons (as stressed by the Nazi propaganda): first they were burdened with extra taxes (‘Judenbuße’), then they were forced to purchase Kriegsanleihen (war loans); ‘loans’ in name only as the creditors fled or were murdered and robbed of their last possessions: The holocaust is not understood, says Aly, unless this side – the systematic mass-murder with intend of robbery – is taken into account. Expropriation of the Jews happened usually with the cooperation of the occupied countries: Germany demanded overwhelming and ruinous occupation costs but offered, as compensation to stabilize the local currency, jointly to rob and deport the Jews – this is often overlooked in the historic literature, says Aly.

Aly points at the dynamic interplay between the political leadership and the financial experts: the political demand of keeping the broad mass of the German people happy often clashed with the rational expert advice, but only their interchange gave the regime its destructive force.

This book is essential reading for anybody studying the 3rd Reich and the Holocaust. (VIII-14)

Some of my favorite and very different versions of Brecht’s poem:
http://www.youtube.com/watch?v=G8E8o_phubY
http://www.youtube.com/watch?v=1M-N7gw4rNg
http://www.youtube.com/watch?v=mqvPzW8RPN8)
http://www.youtube.com/watch?v=PaKt9VZqHYM ( )

Götz Aly's book examines two questions. Firstly, he tries to explain why ordinary Germans supported Hitler for so long. He claims (with quite some merit) that it was economics not racial motives that kept the Nazis in power. Deliberate Nazi policies improved the economic welfare of the people, the Volk at the cost of those declared not part of it. (Smart) progressive taxation apart, the Nazis robbed and redistributed Jewish wealth. One of the most vivid impressions of Auschwitz is seeing the collection of meticulously sorted used Jewish goods - suitcases, glasses, clothes and shoes - intended for redistribution. It is hard to understand today that anyone could want and appreciate those used goods, but this neglects the abject poverty caused by the Great Depression. Socializing the Jewish property, while nobody cared for the sort of their former owners, was one way to improve the average German's welfare. To this must be added the indirect looting of foreign property and goods in the conquered territories in WWII. The Nazis requisitioned goods and paid for it by paper money, largely financed by the occupied nations themselves due to disadvantageous exchange rates and accounting shenanigans. For most of WWII, German soldiers sent an unending stream of goods home, so that food deprivation became only an issue in Germany after the end of the war. While the occupied nations suffered and hungered, Germans lived better than before. It was a marvel of German logistics that soldiers could send home eggs and dairy products on a weekly basis (I don't think that the current postal system would manage to deliver eggs safely and in time across Europe). Overall, Aly's explanation sounds plausible, although the complete separation of economics from moral questions is doubtful. Mankind, unfortunately, is all to accepting of other people's suffering as long as one's own economic situation is improving.

His second question deals with the topic of war finance. The shallow popular support of the Nazis meant that they couldn't burden the people without fear of political backlash. Thus, in contrast to the British who financed their war by bond issues and increasing the taxes of the average man, the Germans financed their war by indirect expropriation of first the Jews and then the conquered nations. More and more parts of these groups' fortunes had to be exchanged for German government debt papers, which the Nazis never intended to repay. The Jews were killed and their assets stolen. The conquered nations were expropriated by unfair exchange rates and inflation. The Germans imported goods and services without actually paying for them (handing out worthless paper instead. As these worthless papers had the official approval of the conquered nations, the conquered populations were quite eager to collaborate with the Germans). Making the foreigners pay for the German war also solved the classic "guns and butter" production problem in Germany. Instead of producing inflation caused by the extra demand for scarce resources in Germany, the Nazis exported the excess demand and inflation to the conquered nations. The main defect of the scheme was its Ponzi nature: The Nazis could not stop attacking and conquering other nations without risking bankruptcy. The Lebensraum was needed not for territory but for the loot it contained. Aly argues that the attack on the Soviet Union was triggered by financial motives.

Overall, I found Aly's arguments quite convincing. I wish he had at least mentioned that the Nazis not only relied on the frightened petit-bourgeoisie but also the plutocrats (a similar coalition holds together the current US Republicans). The plutocrats and the large corporations disappear from the discussion, which is rather surprising given his supposedly leftist political point of view. He also fails to mention how Austria often served as a laboratory for anti-Jewish and occupation policies. Many of these tools were applied first in Austria and Austrian "expertise" in exploitation was crucial in plundering and killing in the conquered territories. An important read of how evil policies are sustained. ( )

Everyone who knows anything about the Third Reich knows about its kleptocratic tendencies. Everyone who knows anything about the Nazis knows that they nominally considered themselves socialists. Gotz Aly examines what the conjunction of these two tendencies meant in practice and the conclusions really take one aback. While the rhetoric may have been that of a "Thousand-Year Reich," the Nazi government was content with buying support in the moment at any cost to anyone who fell out of the magic circle of the "Volk." This meant a fine social welfare state to generate the best life possible for the man in street, so long as one didn't ask too many questions about how one came by one's fine comfortable status in life; Hitler's greatest achievement might well have been the creation of a nation of compliant receivers of stolen goods. I could go on and on about all the disquieting little tendencies that Aly teases out of the historical literature, but this portrait of a nation on the make will most certainly haunt your imagination. Or you can simply say that this is just another illustration about how the root of evil is usually selfishness. ( )