I am well aware we should never make any comparison between today’s well-meaning statists and Adolf Hitler. But the latter’s “table talk,” his table monologues to inner-circle guests, recorded by shorthand writers, are sometimes instructive. On October 15, 1941, for example, he explained his monetary theory (Hitler’s Table Talk, 1941-1944, Enigma Books, 1953, pp. 65-66). By happenstance, they show some resemblance with so-called Modern Monetary Theory, perhaps even more in what would likely be MMT’s political consequences.
He starts by confusing a definition and a causal theory: inflation is not caused by money creation but by an increase in prices. His reported statement is:
Inflation is not caused by increasing the fiduciary circulation. It begins on the day when the purchaser is obliged to pay, for the same goods, a higher sum than that asked the day before.
The conclusion immediately follows that “one”—that is, the wise rulers—must do something:
At that point, one must intervene.
As common in economic history, scapegoats are found in the speculators (and profiteers and price-gougers):
The currency remains stable when the speculators are put under lock and key. … excess profits must be removed from economic circulation.
Economists just complicate things:
All these things are simple and natural. … People go into ecstasies of confidence before the science of the great economists. Anyone who doesn’t understand is taxed with ignorance! At bottom, the only object of all these notions is to throw everything into confusion.
But ordinary people, guided by the ruler, can understand with their flesh:
The very simple ideas that happen to be mine have nowadays penetrated into the flesh and blood of millions.
Hitler is not so far from the Keynesian idea (although not necessarily the claim of Keynes himself) that creating money will generate the production without which there would be inflation. At least, this is the logical way to interpret the statement:
To give people money is solely a problem of making paper. The whole question is to know whether the workers are producing goods to match the paper that’s made.
To be (very) charitable, we could read this as meaning that if there is a higher demand for money (or equivalently, a lower velocity of money), it can be produced without inflation.
Caveat: The Table Talk comes from the combination of several original manuscripts in German and there has been some controversy about the accuracy of the English translation. The tone of the monologues, however, is not inconsistent with what we know of Hitler or his Mein Kampf. Moreover, to the extent that the statements partly represent the interpretation of Hitler’s inner circle, they would still say something.
Albert Speer, who was Hitler’s Minister of Armaments and War Production, later described Hitler’s table talk as “rambling nonsense” (according to a Wikipedia’s citation):
[Hitler] was that classic German type known as Besserwisser, the know-it-all. His mind was cluttered with minor information and misinformation, about everything. I believe that one of the reasons he gathered so many flunkies around him was that his instinct told him that first-rate people couldn’t possibly stomach the outpourings.
Doesn’t this evoke some more recent politicians?
READER COMMENTS
Craig
Apr 15 2021 at 11:24am
Of course Speer should’ve hung at Nuremberg. His actions during the war were surely worse than those of Streicher. Difference of course is that Speer had an educated aristocratic air and Streicher was perceived as much more crass. Indeed, Speer was one of the few defendants at Nuremberg who expressed some kind of remorse. Nevertheless, his ‘classy’ demeanor, expressed remorse and relative good looks probably saved him from the noose.
Of course one of the benefits of savings Speer from justice is that Speer wrote “Inside the Third Reich” which is definitely worth reading for anybody interested in World War 2 generally. Of course it must be read as Speer-apologism, but that does not mean that it doesn’t lack historical value. It obviously does, but the bias must be accounted for.
“I believe that one of the reasons he gathered so many flunkies around him was that his instinct told him that first-rate people couldn’t possibly stomach the outpourings.”
Of course Speer was a regular at Hitlers dinner table. Frankly my take of Speer is that he was entranced by Hitler. After the war he could afford to make such remarks after the spell had been broken. I would suggest Speer is engaged in a personal form of revisionism here.
Michael Rulle
Apr 16 2021 at 8:20am
Agree on your take “of our take” on Speer, Craig. One could easily argue he was one of the worst of all. As he made sure all the war machinery ran well. He certainly was worse than a stupid goon like Streicher. I like to pretend we saved the smart guy so he could eventually tell us things we did not know——but I prefer the cynical take. Anyway, they are all dead and gone——so that is at least good.
Pierre Lemieux
Apr 15 2021 at 3:33pm
Craig: I have not read Speer’s book, so you know more than I do on this. However, it is not unusual for people who have followed a lider maximo and been misled or abandonned by him to have second thoughts. How many of the hundreds arrested after the Capitol attack would still vote for “my president”?
Craig
Apr 15 2021 at 7:09pm
Also a movie btw!
Michael Rulle
Apr 16 2021 at 8:24am
I will not get into a habit of responding to comments such as the one Pierre made to Craig. But it appears that he is serious about his comparison of Trump with Hitler. I must object strenuously.
Jon Murphy
Apr 16 2021 at 8:41am
The comment is not about Trump nor Hitler. It’s certainly not comparing the two. Rather, it’s about the fanaticism of crowds gravitating toward a charismatic leader and subsequent disillusionment.
Monte
Apr 18 2021 at 10:38am
How many of the thousands not arrested after all the riots would still vote for “We hold these truths to be self a evident. All men and women created…by the…you know…you know, the thing.?”
Jon Murphy
Apr 18 2021 at 11:43am
That’s not really a relevant question, is it?
Monte
Apr 18 2021 at 12:01pm
Perfectly relevant, given the way Pierre framed his last comment. Are you his press secretary?
Jon Murphy
Apr 18 2021 at 1:06pm
I’m just trying to understand the quip. To my eyes, you’re comparing apples and oranges.
As I said above (and is stated in the post), the point is about the fanaticism of crowds gravitating toward a charismatic leader and subsequent disillusionment. Given the Constitution is not a “lider maximo,” your reference to it seems odd.
Now, if you’re trying to make a larger point about regret in politics in general, that’s fine. But it is worth noting there was a lot of disappointment and disillusionment with the US Constitution in the years following (see, for example, the Whiskey Rebellion. I highly recommend the book The Whiskey Rebellion by William Hogeland).
Pierre Lemieux
Apr 18 2021 at 3:12pm
Monte: I did not really understand your comment either, so one only has to think (as opposed to being a “press secretary”) to wonder how it is relevant.
Monte
Apr 18 2021 at 5:59pm
Gentlemen,
I was merely responding to the political undertone (unintended, perhaps) of Pierre’s final comment. It appeared to me and Michael, anyway, that it was a bit off color (“lider maximo” and “misled and abandoned” seem to segue into “my president”). It’s sometimes difficult for those of us who read with our own eyes what we perceive to be the case to be told that that’s not the case at all. But I can certainly accept that Mr. Lemieux’s intentions are above reproach.
With respect to the constitution, our recourse for disillusionment has always been, and should continue to be, a legal process. We can bend and amend, we just shouldn’t rend, like so many today seem predisposed.
Highest regards…
David Seltzer
Apr 15 2021 at 6:17pm
Pierre, I am reminded of your review of “An Unavoidable Theory of the State.” The muddled thinking coupled with political aspirations is not limited to the current POTUS or his immediate predecessor.
Pierre Lemieux
Apr 16 2021 at 10:54am
David: I agree but I would reformulate differently. It is useful to distinguish between self-interest and propaganda on the one hand (which, as you point out, is what de Jasay’s The State is about), and muddled thinking on the other hand (like Hitler’s). Many degrees of the latter are compatible with the former. Or, in more graphic terms, not all dictators or dictators-to-be are complete idiots.
David Seltzer
Apr 16 2021 at 7:28pm
Pierre, Thank you.
Mark Z
Apr 16 2021 at 4:34pm
Interesting, since Hitler’s regime didn’t really try to exploit this ‘knowledge,’ but rather steadfastly avoided expansionary monetary policy; even during WW2 they refrained from trying to finance the war with the printing press. This was all of course because Germany’s disastrous experiment with MMT in the 1920s left such an indelible mark on the country that inflation wouldn’t have been tolerated.
Alex Agha
Apr 17 2021 at 4:14am
Can you clarify what you mean by Germany’s experiment with mmt in the 20s? My understanding is that Germany experimented with unpayable reparations denominated in Gold and a collapse in the tax base leading to exclusive use of the printing press and then hyperinflation, as well as experimenting with having it’s industrial heartland invaded by France in 1923. Even if the government had been doing MMT, circumstances that guarantee doom hardly make for a fair test of an economic theory. As it happens though, almost nothing related to MMT was implemented in Germany in the 20s. Moreover since inflation seems to concern everyone who touches the subject, what brought Hitler to power wasn’t hyperinflation it was the combination of the great depression and the war guilt clause, which made Germans feel they’d been stabbed in the back by their democratic leaders.
In MMT:
1) money is given initial value by a tax liability. without that tax liability currency has no intrinsic value to the public so they have no reason to seek to earn it. German reperations were so vast that the public refused to repay them with taxes, knowing that would be impossible (see Keynes: the consequences of the peace)
2) A government solvency crisis is possible only when it’s obligations are owed in a form it can’t issue (foreign currency , Gold , coal, take your pick). Borrowing in your own non convertible fiat currency could never have risked German insolvency. But Germany owed all it’s war reperations in Gold and commodities. It took the Daweson plan to rectify that mistake.
3) Money should be spent into existence via the printing press only while the economy is operating below capacity and inflation is low. When there’s no slack in the economy as there was none in post war Germany producing all the coal and steel it could but paying it back to the allies. No MMT economists would recommend expanded deficits in periods of high inflation. Inflation is literally their signal for when to stop printing and start raising taxes.
4) 1920s Germany did not have a job guarantee for the unemployed to keep the economy at capacity without causing inflation
Looking at it realistically, 1920s Germany might be called the antithesis of MMT, unless you define MMT simply as ‘government printing mountains of money’, which I suspect you do.
5) The real success of MMT was in the US during the second world war when the gold standard was dropped, the chair of the fed realised and stated that taxes were not necessary to fund spending, speculators were reigned in so that speculative finance based on leverage stopped dominating credit provision to private industry (large government deficits stepping in to fill that role) , and money was provided by the fed to fund the war effort. They even incorporated the key MMT concept of the Job Guarantee: the worst depression in living memory happened to have ended in America after the adoption of every single one of MMT’s principles.
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