Updated Preword (April 2025)
Yesterday near a subway entrance in New York, I encountered a group of smiling young men inviting passersby to a free meal under a tent set up on the sidewalk. They handed me a pamphlet filled with familiar phrases about how hard life has become for working people. Words like socialism, national interests, labor, and workers appeared repeatedly, wrapped in a tone of sympathetic urgency.
A subtle man with sand-colored mustaches, surrounded by a few attentive, sharp-eyed companions, spoke to me politely and amicably. His offer was simple: revolution. Workers, he said, must seize power and claim the assets of society. He criticized Trump vaguely for favoring the rich but praised tariffs, arguing that true change would come through empowering the labor class.
I told him bluntly that workers are generally poor leaders in politics. History, I said, teaches us to entrust power to the prepared, the qualified, the sophisticated—not to those who merely suffer. His expression hardened, slogans lost their charm, and the once-welcoming eyes around us turned cold and glassy. When he asked about my background and I named a university, the interest disappeared completely. I left soon after.
Back to home, I found an old paper I had written years ago, a study that feels even more relevant now. I have not yet edited it, but plan to map its sources and connections anew. What follows is that original text. That;s what is cooking.
Background: Feder’s 1932 Economic Plan and Nazi Ideology
Gottfried Feder (1883–1941) was one of the Nazi Party’s earliest economic theorists and co‐author of its 25‐point program. A civil engineer by training, he gained notoriety with his 1919 Manifesto on Breaking the Shackles of Interest, advocating anti‐usury, nationalist and anti‐capitalist policies . Hitler regarded Feder’s 1923 book Der deutsche Staat auf nationaler und sozialer Grundlage as a “catechism” of Nazi economic thought . By the early 1930s Feder was chairman of the Nazi Party’s economic council and a Reichstag deputy, though his hard‐line socialist rhetoric increasingly put him at odds with business–minded colleagues .
In May 1932, anticipating a Nazi government, Feder and economist Walter Funk drafted a detailed Sofortprogramm (“Immediate Economic Program”) for Germany. This 32‑page plan placed protectionism and autarky at the forefront. Feder wrote that “National Socialism demands that the needs of German workers no longer be supplied by Soviet slaves, Chinese coolies, and Negroes,” insisting that import restrictions be imposed whenever it would “produce work for the German worker or the German farmer” . The plan explicitly rejected both the “liberal world economy” and communism, demanding that “every people’s comrade be protected from foreign competition” . It warned that Germany’s dependency on imports (notably grain and raw materials) left it vulnerable, and called for striving to produce domestically everything “we are capable of producing” . In short, Feder’s 1932 program envisioned a state‐directed economy with high tariffs on imports, exchange controls, and nationalization of key sectors – measures far more radical than the Weimar status quo. (His proposals also included debt relief and bank nationalization, but these were largely sidelined once Hitler needed industrial support.) Feder’s ideas would resonate in Hitler’s rhetoric and the party’s early policy demands, even as pragmatic adjustments followed when the Nazis took power.
Tariffs and Autarky in Practice (1933–1936)
From the first days of Nazi rule, policy reflected Feder’s protectionist blueprint. In February 1933 – Hitler’s first full month as Chancellor – his new coalition (which included agrarian conservatives) quickly imposed steep tariffs on agricultural imports. Economic Minister Alfred Hugenberg announced that higher duties would “be met” to safeguard farmers, and Hitler enthusiastically backed this protectionist turn . Within weeks the government enacted new import taxes on items like grain, meat, dairy and poultry (one account notes an effective 600% tariff on eggs), explicitly to “liberate” German agriculture from foreign competition . These tariff hikes were justified on nationalist grounds, echoing Feder’s charge that Germany “exists not to accept the surplus production of other peoples” .
Figure: Dr. Hjalmar Schacht (Reichsbank President, ca. 1933), whose “New Plan” embodied Nazi autarky goals. In March 1933 Hitler named conservative banker Hjalmar Schacht as Reichsbank President (and later Minister of Economics) to calm financial markets . Schacht turned quickly to trade and currency policy: by September 1934 he introduced the “New Plan” of import controls and bilateral agreements aimed at economic self-sufficiency . Under this plan Germany curtailed imports of consumer goods and raw materials except where needed for rearmament, and negotiated clearing‐trade deals (settling with Reichsmarks) with friendly countries in Southeast Europe and Latin America . The New Plan prioritized imports of strategic raw materials (oil, rubber, metals, grain) while exchanging German industrial exports in kind. It imposed strict import quotas and foreign‐exchange controls, effectively channeling scarce hard currency into a narrow range of goods.
Alongside Schacht’s measures, the Nazis created new agencies (e.g. a Foreign Exchange Office) to enforce autarky. Agricultural policy was reorganized under the Reich Food Corporation (Reichsnährstand), which fixed prices and production quotas to move Germany toward self‐sufficiency. Tariff barriers remained high. In practice the regime turned away from multilateral trade: Germany signed reciprocal trade pacts mostly with Eastern and Southern European states, limiting commerce with the rest of the world . The Tariff and Trade Law of 1935 (Tariffgesetz) further raised duties on many imports to protect domestic industry and agriculture. By 1936 the Nazis openly proclaimed an aim of building an autarkic war economy: Hermann Göring’s Four Year Plan memorandum instructed: “Maximizing autarkic policies, even at a cost to the German people,” preparing the nation for war . (In agriculture the drive toward autarky had some success: at Hitler’s rise Germany was about 80% self‐sufficient in basic foodstuffs; by 1939 this had risen to roughly 83% .)
Key measures implemented: The early Nazi economic program thus combined:
• Steep tariff increases on imports (especially food and raw materials) to protect farmers and producers .
• Import controls and quotas, enforced by Schacht’s New Plan (1934), which privileged military needs and halted nonessential imports .
• Bilateral clearing agreements, trading with friendly nations in Reichsmarks (thus insulating Germany from world capital) .
• State planning and cartels: Government encouraged cartels and monopolies in key industries, while repressing unions and wage demands. Price and wage controls were imposed to direct resources to rearmament .
• Four Year Plan targets: From 1936 onward, explicit autarky goals (e.g. synthetic rubber and fuel projects) were added under Göring, firmly subordinating economic policy to military build-up.
Economic Consequences (1932–1939)
In the short term, these measures helped kickstart a recovery from Depression, but at a heavy cost. Public investment (roadwork, rearmament factories, etc.) and conscription drove unemployment from its 1932 peak (around 30%) down to near zero by 1938 . Wages in total rose (longer workhours boosted real weekly earnings by nearly 20% from 1933–39), but hourly pay remained extremely low . Small farmers and consumers fared worse: price controls kept inflation in check, but disproportionately squeezed agrarian incomes . Indeed, price supports for farm goods meant urban consumers paid more. Rationing and shortages became common – reduced foreign trade “meant rationing of consumer goods like poultry, fruit, and clothing” for many Germans . Traditional luxuries were discouraged or banned: for example, public campaigns pushed brown bread and potato diets and discouraged imports like coffee or oranges . Studies document sharp declines in nutritional intake. Between 1927 and 1937 consumption of staples fell dramatically (meat down ~17%, milk ~21%, eggs ~46%) and experts noted a “continuous and chronic state of undernourishment” among parts of the population .
More broadly, the tariffs/autarky policy caused trade collapse and economic inefficiency. By cutting off most of the world market, German industry lost outlet markets: exports stagnated as other countries raised retaliatory barriers and reduced imports from Germany. Historians note that by late 1930s Germany’s trade policy sought to make client states economically dependent on the Reich , but overall export volume remained vulnerable. The economy’s rapid rearmament also masked long-term problems: Germany’s national income rose in the mid-1930s, but largely due to military spending. Civilian consumer industries were neglected. According to historian Werner Abelshauser and others, any apparent “economic miracle” was a “distorted growth”: gains were measured from the 1932 low point, whereas compared to the 1920s standards of living actually stagnated . Baten and Wagner (2003) find that while Western Europe’s “biological standard of living” (nutrition, health, mortality) improved in the 1930s, it stagnated in Nazi Germany . In fact, one study concludes that Nazi import restrictions and price controls on food and medicine were linked to rising mortality: “Food imports were curtailed, and prices of many agricultural products were controlled,” with “ample evidence” of negative health effects on the population .
Fiscal strains mounted as well. The regime concealed much of its spending in Mefo‐Bill debt, but by 1938 the hidden deficits became acute . Huge sums were committed to armaments: by mid‐1930s military spending had grown to about 10% of GDP . Domestic financing led to repressive measures (forced bank purchases of state bonds, tapping savers) and ultimately necessitated plunder abroad. In short, Germany’s early tariff‐autarky program improved industrial utilization but worsened consumer welfare: unemployment fell and heavy industries boomed, yet ordinary Germans faced higher prices and poorer nutrition .
Strategic Consequences: Militarization and Expansion
Crucially, these economic policies steered Germany toward war. Nazi ideology held that scarcity justified conquest. Hitler explicitly proclaimed that “the future of Germany depends exclusively… on the reconstruction of the Wehrmacht,” and that rearmament must override all other goals . In practice, every economic setback from protectionism was used to argue for military solutions. Germany’s chronic shortage of arable land was a constant refrain. The Reich Food Corporation bluntly calculated that Germany needed an extra 7–8 million hectares of farmland to feed itself, and identified Poland and Ukraine as targets for this “Lebensraum”. Similarly, lack of oil and metals fed the Four Year Plan’s mandate to secure raw materials by any means.
By 1936 the regime’s autarky rhetoric had clearly meshed with its aggressive foreign policy. The Four Year Plan (1936) directed massive investment in synthetic fuel and rubber to reduce imports, but also in preparation for war. During 1936–38 Hitler’s speeches and memoranda repeatedly linked tariffs and trade isolation to the need for conquest. The Anti‐Comintern Pact with Japan (1936) and Anschluss with Austria (1938) can be seen in part as moves to access resources and strategic markets. In September 1938 Göring spoke of the “Ressourcenprobleme” forcing expansion, and historians note that by 1939 Nazi planners openly envisioned war as necessary to solve Germany’s economic isolation .
Thus Feder’s protectionist vision, as implemented, created a self-reinforcing spiral: domestic shortages and trade exclusion made Germany increasingly dependent on acquiring territory. Rearmament, war propaganda, and autarky became intertwined. Economic historians summarize that the Nazi economy was “dirigiste” and a “mixed economy” oriented around the military . In the short term this meant full employment and industrial growth; in the long term it meant social strain, hidden deficits, and a hierarchy of priorities all pointed toward war .
Conclusion
Nazi Germany’s early economic program – rooted in Feder’s 1932 draft – pursued tariffs and autarky with single‐minded zeal. In practice, the regime imposed high import duties, import controls and state planning to insulate German producers. These policies initially spurred a recovery, but they also undercut exports, provoked shortages, and distorted the economy toward armaments. By the late 1930s, consumer austerity and macroeconomic imbalances were pervasive: everyday goods were rationed, farmers struggled under price controls, and living standards stagnated despite full employment . Importantly, the tariff‐autarky policy helped lock Germany onto a war footing. Cut off from the global market, Hitler felt he had little choice but militarization and conquest to secure food, fuel and raw materials. In this way, the early Nazi economic program – Feder’s vision enacted – laid a direct foundation for the regime’s rearmament and expansionist drive in the years before World War II .
Sources: Authoritative histories and economic studies of Nazi Germany have been used throughout, including contemporary analyses of Feder’s writings , scholarly surveys of Nazi economic policy (e.g. Tooze, Overy, and Reinhardt) and empirical research on Nazi living standards . Where possible, original documents and academic publications are cited directly. (Feder’s 1932 economic program is preserved in translation , and much of the above summary is drawn from peer‑reviewed economic history.)