Schacht, Mefo Bills and the Restoration of the German Economy 1933-39 (2013) (opens in new tab)

The truth is that the rise of authoritarian extremism tends to be facilitated by economic uncertainty (yes, racism and xenophobia tends to play a big role as well, but immigration is always easier to stomach when jobs are plenty etc.). Staving off anti-democratic forces should take precedence over almost everything else, and it certainly should take precedence over economic orthodoxy. If that means learning from a Nazi supporter (who wasn't a Nazi himself), then so be it.

So rather than hand-waving about "hidden debt", it would be important to explain the actual transmission mechanisms through which Schacht's policies would eventually have caused problems if the war hadn't happened.

It's unclear whether you would truly be able to do so. As the article explains, Schacht used some clever techniques both domestically (shifting investment from private to public sectors, basically) and externally (the aski accounts) that would seem to put a limit on the effects that the debt could have.

Those policies are against the tastes of the economic orthodoxy, and a lot of the "wisdom" of economic orthodoxy is stated with the hidden assumption that such policies aren't used. So any blanket statement about the dangers of debt made by this orthodoxy are quite suspect and probably do not apply. At the very least, you need to look at the details to consider whether they apply.

France wasn't affected much by the Great Depression because it had an economy centralised around the colonies, it affected a lot Germany but in France not that much.

The reason it only shows 26-39 is that Nazis came to power in 1932. The worst year in the GD was 1931-32, other countries were not moving out by 1933, most didn't move out decisively until WW2. The UK isn't a good comparison (the UK was still way ahead of most other nations at this point, Germany wasn't particularly similar).

It is definitely possible that without Schacht, the boom wouldn't have occurred. The constraints on resources were massive and required the invention of a range of complex economic devices to manage. Even at the time, there was the same backwards thinking about this: Germany must have managed to do this because they had the resources. No, they had no resources. What they did was very unusual. The only comparison that occurs is the international monetary co-operation in the 1960s to maintain the $ peg to gold...and even then, the level of sophistication required was nowhere near and the results achieved far less significant.

The first years of the Nazi boom can of course be explained as recovery from the recent depression, but it seems that the boom went beyond that. And it's important to keep in mind that other countries didn't recover as quickly.

As for benefits to individuals, at the very least those programs created jobs. That is bound to have helped the living standards of many people.

Indisputably it would have been better to create jobs geared towards peaceful production. The question then is, why were democratically-oriented politicians unwilling or unable to take similar measures?

(And I don't mean that as praise of fascism. I mean it as a challenge to all those who consider themselves lower-case democrats: the job of democracy is to foster the well-being of the people. Stories like this article suggest that a lot more can be done on that front than we tend to see in contemporary democracies.)

I think you mean deflation. The hyperinflation was in 1923, but the period of 1929 to 1933 was one of shocking deflation, one without precedent in an industrialized country. Germany was left with 60% unemployment, which in a sense made a remarkable bounce back easier -- all of the factories were still there, and all of the workers still existed, they simply needed some money to be pumped through the system so the workers could go back to work at the factories.

Yes, the performance of the German economy was considerable. But the point with Schacht for all economic historians is that the German economy was operating under immense constraints. And what impresses is the way Schacht created endless devices to keep production growing despite these challenges.

And yes, they did measure things the same way. The way of the world today is to look at historical statistics and assume that no-one had a clue about economic policy before the 1980s (Germany was actually one of the most earliest adopters of stats in policymaking). But if you actually look at the primary sources, it is apparent that there was actually a great deal of knowledge. And, in some ways, that understanding was far more deep than today (as it was often based on practice and experience). As the article says, Schacht is an example of this.

More broadly: the job of the economic historian is not to work out whether things were "good or bad ideas". Historians realised many decades ago that the answer to these questions is subjective. You have to look at these decisions within the conditions that existed at the time.

I guess we'd need to define what the end-game was for different regimes/governments back then. For the Nazi regime their end-game/target (or one of their main ones, in any way) was to reverse the post-WW1 Versailles humiliation against France and its allies, to gain some extra territorial space further East and to wipe out an entire populace based on its religion alone. I'd say they were quite successful in all of that up to a point, and given the limited economic resources Germany had at its disposal up to the late '20s studying how its leaders in the '30s and early '40s managed to do it can be quite interesting.

We, the people living in liberal/democratic regimes, need to be aware that the endgames/targets of different other regimes around the globe is not always aligned with our way of seeing things, i.e. they don't care all that match about the domestic consumer market the much as we do, for example (and the Nazis were pretty much in favor of physically eliminating a great part of their domestic consumer market).

By that metrics, most German citizens of that generation are guilty.