Almost two decades have passed since the end of the cold war, and living in a unipolar world dominated by the US has begun to change the way scholars view the history of twentieth-century Europe. For someone in his mid-thirties, like the British historian Adam Tooze, the rise of America to the superpower status it has enjoyed for most of his adult life is the fundamental fact of the last century as well as the present one. Already in the decade from 1924 to 1935, the total national income of the US averaged three times more than that of Great Britain, nearly four times more than that of Germany, and around five times more than that of France or the Soviet Union. Disparities in living standards were less marked, but still striking. Over the same period, British per capita Gross Domestic Product was running at 89 percent of the comparable US figure, French at 72 percent, German at 63 percent, and Soviet at 25 percent.

European contemporaries were very much aware of these facts; and none more so than Adolf Hitler. Already in his unpublished “Second Book,” written in 1928, he was declaring that “the European, even without being fully conscious of it, applies the conditions of American life as the yardstick for his life.” For Hitler, who read the Wild West novels of Karl May during his childhood and adolescence, it seemed obvious that America had achieved its industrial advantage and high standard of living through its conquest of the West and its extermination of the Native American population. If Germany, as Europe’s leading power, did not do something similar, the “threatened global hegemony of the North American continent” would degrade all the European powers to the level of “Switzerland and Holland.” Far from being the revival of some medieval dream of conquest sparked by the example of the Teutonic Knights, Hitler’s drive to conquer Eastern Europe was based on a very modern model, a model of colonization, enslavement, and extermination that had its parallels in the creation of European empires in Africa and Australia, or the nineteenth-century Russian conquest of Central Asia and Siberia.

Here, for Hitler, lay the key to Germany’s achievement of European dominance:

In future, the only state that will be able to stand up to North America will be the one that has understood how…to raise the value of its people in racial terms and to bring them into the state-form most appropriate for this purpose.

That state form, of course, was the dictatorship of the Third Reich, and as soon as Hitler came to power, he threw off the shackles of the peace settlement concluded at the end of World War I, which had restricted Germany’s army to a maximum of 100,000 men and banned the construction of tanks, airplanes, battleships, and other essential instruments of modern warfare.

Adam Tooze, whose work so far has focused on the emergence of economic statistics in early-twentieth-century Germany, gathers much economic data to demonstrate conclusively that rearmament was the motor that drove German economic recovery from the outset of the Third Reich. The Depression had thrown more than a third of the workforce into unemployment, and the Nazis made great play with so-called job-creation schemes like the construction of the new freeways, the Autobahnen, but in reality even these were meant to serve military purposes (ferrying troops and equipment rapidly around the country); and the number of jobs they actually provided was very small. Unemployment remained at high levels until the introduction of mass conscription soaked up entire generations of young men from 1935 onward.

Tooze is saying nothing very new here; 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, six months before Hitler came to power, “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 anything to it. In particular, consumers suffered as resources and foreign exchange were diverted into arms expenditures. Cotton imports, for example, were hard hit, and people started to complain about the poor quality of the synthetic-fiber clothing that they were forced to wear. Tooze here completely explodes the German historian Götz Aly’s recent claim that the Nazi regime deliberately cushioned the civilian population for fear of alienating it.* Contrary to what Aly suggests, Tooze points out that Germany’s population was the most heavily taxed in Europe.



In the competition between guns and butter, it was always the former that won out, at least in the short term. Indeed butter was among the foodstuffs that had to be rationed from the mid-1930s on, as the arms industry began to draw workers away from the farms into Germany’s large cities; and the backward peasant-farming sector failed to cope with the demands imposed on it of making the country self-sufficient in food supplies. Hitler was only too aware of the fact that 600,000 German civilians had died of malnutrition and related diseases under the impact of the Allied blockade during World War I, and he did not want the same thing to happen again, most of all because he thought that the demoralization this had caused had been one of the factors in Germany’s defeat (through the mythical “stab in the back” supposedly meted out to the German armies by revolutionaries at home).

Lacking the overseas colonies and transatlantic connections of Britain and France, and the resources provided by the vast Eurasian empire of the Soviet Union, Germany was forced, Hitler believed, to fall back as far as possible on its own resources until it could harness the oil fields of the Caucasus and the granaries of the Ukraine to its own use. That would be the moment when the sacrifices of the German people would be rewarded with an affluence far beyond anything they had experienced. To achieve this, as he said on numerous occasions from the early 1930s onward, the conquest of the East, preceded by sharp and decisive blows against Germany’s enemies in the West (which meant in the first place France), would be necessary. Hence the need for a huge army, backed by an air force that would be bigger than any other in Europe.

So extensive was Hitler’s drive to rearm that it was absorbing over a fifth of German state expenditure by the eve of the war. So much raw material had to be imported to feed the Moloch of the arms industry that serious foreign exchange crises hit the country in 1934 and again in 1939, forcing severe cutbacks in arms expenditures. Among Tooze’s most original contributions is his demonstration that these well-known problems had their root in Hitler’s refusal to devalue the Reichsmark despite the urgings of numerous economics experts, although he does not really explain why Hitler was unwilling to take this step. So severe was the shortage of hard currency that the regime even undermined its own policy of forcing Germany’s Jews to emigrate by banning them from taking their assets and savings with them; this caused a drop in emigration until the violence of the November 1938 pogrom and the forcible dispossession and expropriation of Germany’s remaining Jews pushed the figure up again.

Shortages of steel—particularly because of a lack of imports of suitable iron ore—made a mockery of Hitler’s irrationally ambitious aim of deploying an air force of 21,000 planes at the beginning of the coming European war, and the army and navy were similarly unable to find the raw materials to equip themselves properly. Gangs of storm troopers roamed the country tearing down iron railings around parks, cemeteries, and even private gardens to be melted down for arms and ammunition, and the chemists of IG Farben worked around the clock to devise synthetic substitutes for rubber and gasoline; but it was all to no avail.

Very much aware of these problems, and conscious by the middle of 1939 that Britain and France were rearming apace, Hitler decided to get in the decisive blow while Germany’s armaments were still superior to those of its potential enemies. The crisis in armaments production was not, as the late British historian Tim Mason argued, a general crisis of the whole economy, leading to rising worker unrest, but it was severe enough all the same to make Hitler, as he told Mussolini in March 1940, “begin immediately…even at the risk of thereby precipitating the war” with “the Western powers two or three years earlier” than he had always envisioned.

Tooze makes effective use of the work of military historians over the past few years in showing that the famous Blitzkrieg strategy of short, decisive blows by rapidly moving armored columns against an enemy pulverized by heavy air strikes was the result of improvisation, not of careful planning designed to minimize the burden of war on Germany’s civilian population. German plans for the invasion of France originally envisioned a direct and probably lengthy confrontation of the main armies. It was only the chance discovery of the plans by the Allies that forced their abandonment and the substitution of the celebrated though extremely risky push through the densely forested Ardennes and the subsequent “sickle-cut” that disposed of the Allied armies in France and Belgium in the space of a few weeks in 1940.


When it came to the invasion of the Soviet Union the following year, the Blitzkrieg strategy had an even shakier foundation. It depended for its success on the racist assumption that a country populated by supposedly subhuman Slavs under the leadership of a political elite the Nazis regarded as “Jewish-Bolshevik” exploiters would collapse after the first defeat, leaving the Third Reich to pick up the pieces. When this did not happen, the Nazis found themselves embroiled in a war they could not hope to win.


Looked at from an economic perspective, indeed, the cards were stacked against the Germans from the outset. Tooze perhaps overstresses the point when he describes Germany, as he frequently does, as a “medium-sized European power”; even according to his own figures it far outclassed all other European states with the exception of Britain and the Soviet Union. The point was, however, that by the end of 1941 it had arrayed against it the combined might not only of these two countries, together with the British Empire, still at this time the largest the world had ever seen, but also of the United States.

To try to counter this, Hitler more or less abandoned the construction of costly and generally ineffective battleships and poured resources into the U-boat campaign with which he hoped to cut off British supplies from across the Atlantic and force a separate peace. Yet there were too few submarines to make an impact, especially against an enemy that organized an effective convoy system and had the advantage, thanks to the Ultra decoder, of being able to decipher German signals in advance of the operations they unleashed. Once more, the raw materials needed to build and fuel a submarine fleet large enough to overcome these obstacles were simply lacking.

Tooze points to a similar problem with the projected invasion of Britain in the summer and fall of 1940. Irrespective of whether Hitler was really set on this course, he simply lacked the resources to establish the air superiority that was the sine qua non of a successful crossing of the English Channel. A third of the initial strength of the German air force, the Luftwaffe, had been lost in the western campaign in the spring. The Germans lacked the trained pilots, the effective fighter planes, and the heavy bombers that would have been needed. Moreover, before long, the German attempt to gain control over the oil-rich Middle East and also threaten British control over the vital artery of the Suez Canal had suffered a fatal blow when Britain defeated a German-sponsored uprising in Iraq and seized Syria from the Vichy French.

Germany, of course, had at its disposal the resources of conquered countries in Europe, from France in the West to Belarus in the East. The Nazis had no compunction in ruthlessly exploiting the defeated nations to their own advantage. Tooze notes that by 1944 the Germans had taken nearly four million shells, over five thousand artillery pieces, and more than two thousand tanks from the French. Nearly half of all German artillery guns in March 1944 were non-German. Enough tin and nickel was seized after the victories in the West to cover German needs for a year, enough copper for eight months. France was drained of almost all its gasoline supplies. Yet such exploitation contributed to a collapse of the French economy in 1940, and the confiscated resources did not last for very long. This was another reason for Hitler’s avoiding any further delay in pushing on with the invasion of the Soviet Union.

When German armies marched into the Soviet-controlled part of Poland in June 1941, they soon scored a series of stunning victories, surrounding and killing or capturing millions of Red Army troops. Here too, shortages of fuel and ammunition quickly affected the German armies as their rapid advance stretched their supply lines to the breaking point. More serious still was the food situation. It was no use commandeering the Ukrainian collective farms if there was no gasoline to run the tractors and combine harvesters. Millions of German troops had to be fed, and more resources still were needed to sustain the civilian population back home, not to mention the foreign workers who were being forced into the country by the millions to boost the labor supply.

The Nazis and the German military decided to deal with this problem through the planned starvation of the native population of the occupied areas of Eastern Europe. At least three and a third million Soviet prisoners of war were deliberately killed in German captivity, allowed to die of starvation, disease, and neglect, or simply shot. Nearly three quarters of a million people perished during the German siege of Leningrad as a deliberate result of the blockade. German plans for the region envisaged the deaths of up to 30 million of its civilian inhabitants over the following years as German settlers were moved in to populate its towns, cities, and manor houses. This was mass murder on a historically unprecedented scale.

Nazi anti-Semitism was being fueled by 1941 by Hitler’s growing obsession with Franklin D. Roosevelt, who was steering American supplies to Britain and, soon, the Soviet Union in ever-increasing quantities. In December 1941, assuming that America would be preoccupied with the Japanese following the attack on Pearl Harbor, Hitler declared war on the US. Convinced of the existence of a Jewish axis uniting Stalin, Churchill, and Roosevelt (or rather, the dark forces he imagined were manipulating them), he had already embarked on a campaign of mass murder against Europe’s Jews. Here too, however, there were contradictions.

Killing millions of able-bodied Jews hardly seemed rational at a time of increasingly desperate manpower shortages in the German economy. Tooze argues that the idea of “annihilation through labor” was a compromise between the SS, who wanted to kill all the Jews, and economic and political leaders who wanted to make use of those judged fit for work. In practice, of course, the latter were a very small proportion of the whole. Tooze suggests that at the Wannsee conference early in 1942, arranged to coordinate the logistics of the “Final Solution of the Jewish Question in Europe,” as the Nazis euphemistically put it, Himmler’s deputy Reinhard Heydrich, in the chair, “referred neither to gassing nor shooting as a means of disposing of the Jewish populations of Poland or Western Europe. Instead, he proposed that they should be evacuated eastward in giant construction columns,” and used on the building of roads.

But in fact the minutes of the meeting identified two and a half million Jews who lived in the “General Government” part of occupied Poland as unfit for work. Nobody present at the conference was left in any doubt that they were to be killed. Goebbels recorded in his diary that around 40 percent of the Jews were to be used on construction schemes. From the outset, however, they were kept on inadequate rations, beaten, housed in desperately unsanitary conditions, and generally regarded as expendable, as, to an only slightly lesser degree, were the foreign workers who were now brought into the German economy in growing numbers.

Unlike some German historians who have recently written about this topic, Tooze is alive to the importance of ideology and the role of Hitler in directing the extermination program. Yet there is a danger here of making it all seem too instrumental. If, for example, food shortages in April and May 1942 were the key factor in prompting the Nazi leadership to kill the remaining Jews of Poland and occupied Eastern Europe, how does one explain the fact that Western European Jews were already being shipped off to the extermination camps by this time?


The war was still going relatively well for Hitler in the spring of 1942. Yet the resilience of the Soviet Union was as unsettling as it was unexpected. Largely independently of US aid, Stalin’s industries, safely located well behind the battlefront, were outperforming their German counterparts and producing considerably greater quantities of arms, ammunition, and equipment. By 1942, the Soviet Union managed to build four tanks for every German tank, three guns for every German gun, and two combat airplanes for every German combat airplane.

The Soviet effort was successfully concentrated on turning out a small range of armaments in huge factories. German war production was already using up virtually all the available resources. But according to Albert Speer, Hitler’s personal architect, who took over as armaments minister in early February 1942, it was chaotic and poorly organized, and frittered away resources on far too many different products. After the war, Speer claimed to have taken the process by the scruff of the neck and boosted German war production simply by getting it properly organized. Portraying himself as an unpolitical technocrat, he took a perverse pride in his achievements, underlining them by claiming further to have had no knowledge of, or participation in, the genocidal policies being pursued by his master, Hitler.

Tooze comprehensively demolishes the myth so carefully crafted by Albert Speer, a myth that deceived generations of historians and journalists, from Joachim Fest to Gitta Sereny. Of course, he is not the first to try to puncture its dubious claims, but once again, he provides so much information so convincingly that he leaves no more room for doubt. Speer, he shows, not only fixed the statistics to make it look as if he was achieving more than he actually did; he also managed to take the credit for improvements in production that were already in the pipeline when he took over. Other economic managers, notably the air force’s Erhard Milch and the Economics Ministry’s Hans Kehrl, played an important part here, a part Speer successfully managed to obscure in his postwar testimony. He was never the complete armaments supremo he later claimed to have been.

Armaments production did increase in 1943 and 1944. Much of this was owing to the dispatch of forced labor, including Jews and concentration camp inmates, to the arms factories, where appalling living conditions ensured high mortality rates, and draconian rules and regulations prescribed shooting or beheading for the most trivial offenses. Moreover, quality was sacrificed to quantity, with resources being diverted into mass-producing inferior tanks and aircraft that were no match for those being built by the British, the Americans, and the Soviets.

Of course, there was a range of new, technically very sophisticated weaponry under development, including jet fighters, rockets, U-boats that could stay underwater for prolonged periods of time, and, notably, the atomic bomb. But research and development on such “wonder-weapons” inevitably took years, and Germany did not have years. Development was mostly rushed and botched, and these weapons never made much difference to the war; even the V-2 rockets that rained down on London in the final phase of the war were not able to carry the warheads they needed to have a really serious effect on the outcome of the conflict.

In any case, what was needed by this stage was not new weapons of attack, but adequate means of defending Germany against Allied air raids from the west and the onward march of the Red Army from the east. The former caused real devastation to arms factories and military facilities in heavy industrial areas like the Ruhr, and progressively damaged German civilian morale until people even began to lose confidence in Hitler, who responded by ratcheting up terror and repression against his own people in the final months of the war. Conditions deteriorated rapidly in Germany’s towns and cities, with inflation spawning an ever-expanding black market and living standards plummeting.

Tooze does not give much credence to the German historian Götz Aly’s argument that until this point, the regime had done its best to cushion the civilian population against the effects of the war. But even on his own admission, it held off raising taxes on private incomes, preferring to place the burden on businesses instead. Its failure to mobilize women for work in the hard-pressed armaments factories has been the focus of a great deal of attention from feminist historians.

Tooze bypasses this by pointing out that female participation in the labor force was already very high in Germany, so that the room for increasing it was extremely limited. There is surely more to say about it than this. Nazi ideology did not allow any campaigns for the recruitment of the German equivalent of Rosie the Riveter. And here too, Hitler was keen to avoid discontent on the home front by providing allowances to the wives of soldiers that were generous enough to dissuade them from seeking jobs. Nevertheless, however much it tried, the regime could not protect people from bombing, food rationing, and increasing economic misery; Aly is certainly wrong in his claim that even during the war, the German people had “never had it so good.”

Ideology, as Tooze demonstrates, was the real force behind what Speer was trying to do. More realistic economic managers had already concluded in 1942 that the war could not be won. For Speer, however, anything was possible through the “triumph of the will.” Of all the leading fanatics in the regime who were most adamant that the war should be fought to the bitter end, Speer was one of the most vocal and persistent.

The Wages of Destruction will doubtless excite discussion and debate for years to come. In his relentless focus on the economics of armaments, Tooze perhaps neglects other aspects of the Nazi economy, such as the role of big business, the “Aryanization” of Jewish enterprises, and the living standards of the military and civilian population. All of these, of course, are mentioned, but one wishes he had more to say about them.

For the moment, however, Tooze’s book takes its place immediately as the leading account of the economic history of Nazi Germany in any language, including German. Parts of it are inevitably somewhat technical, or clogged with statistical detail, and the use of some specialized economic jargon was doubtless unavoidable. Nevertheless, Tooze has a gift for narrative and an ability to coin a striking phrase, and few have come closer to making economic history genuinely readable. If his approach makes the outcome of the war seem all too predetermined, that, at least, is a valuable corrective to those many accounts that have little or nothing to say about the “sinews of war” without which no battle could have been fought, and no victory won.

This Issue

December 20, 2007