Hitler’s Money

The Bills of Exchange of Schacht and Rearmament in the Third Reich

The economic recovery under Hitler stands as a remarkable feat of financial swiftness. Consummated in less than four years, the Nazi resurgence could indeed vaunt by the end of 1938 the erasure of nearly eight million unemployed, the total absence of inflationary pangs, and the most ravaging army one could then conceive. The monetary contrivances behind such a conjuring of awesome potency were imagined by a team of traditional bankers. They were headed by Reichsbankpräsident Hjalmar Schacht.

In sum, it is here argued that the financial pattern of the Nazi episode had a famous literary precedent. It was, in fact, a variation of the ‘monetary sleight-of-hand’ that Mephisto played before the Kaiser in Goethe’s Faust. And that is, to issue paper-money backed by layers of putative gold (wealth)  buried deep into the ground. And to pay the troops with it while promising them certain victory in forthcoming imperial expeditions. Theatrical prophecy and preparation for war mix uncannily in this unique example of an economic recovery achieved without any concern for ideological etiquette.

In American Review of Political Economy, Vol. 1 n.1 (December 2002)

Full Essay