Germany's Default
Tim publishers claim that this is the first book in English which examines in detail the economic aspects of National Socialism. It may be the first book on the economic aspects, but the claim that they are examined in detail is distinctly ambitious.
Dr. Einzig discusses with fairness and clarity the de- velopment of the financial crisis and the relations of Germany with her creditors. This part of the book is well worth reading. The intricate mechanism which has been built up to maintain what unkind critics have called the " insolvency gold standard," to control all exchange move- ments, and at the same time to practise " exchange-dumping by utilizing the creditors' money to subsidize the German imports by which alone they can be paid, is exceedingly well described.
" As a result of this ingenious system," writes Dr. Einzig, " both exporters and debtors have benefited, while Ger- mans at the same time have been in a position to claim that the reichsmark is stable in relation to gold. This is what may be regarded as a unique example of eating one's cake and keeping it."
Dr. Einzig is not optimistic regarding the prospects of Germany's creditors, and he points out rightly that the policy of public works and cautious " reflation " must reduce GermSny's capacity to pay her debts so long as there is no revival of her international trade. He criticizes Dr. Schacht's distinctly high-handed attitude towards the creditors, but is probably correct in asserting that the President of the Reichsbank, as well as the present Finance and Economic Ministers. are really aiming at a permanent reduction of the German debt and would be opposed to the utmost to any act of repudiation. He warns the creditors in particular against assenting to conversion of their claims into reichsrnarks as a method of reduction, since they could then be depreciated at will.
Dr. Einzig's attempt to analyse Nazi economics is less illuminating. The subject is certainly difficult, for, as Dr. Schacht himself pointed out to me not long ago, National Socialism is not really an economic movement at all. It is poli- tical, cultural, social, religious, or pseudo-religious. Its econo- mic doctrine has.not yet been intelligibly formulated except in so far as it represents the world-wide trend against laissez-faire individualism and towards a greater measure of national self-sufficiency.
Here it is that Dr. Einzig goes wrong. He declares his ad- herence to the " well-known principle of the materialistic conception of history," and endeavours to base political judgements and prophecies on his reading of the economic facts. Although he disclaims any intention of dealing with the political aspects of the German problem, the continued intrusion of politics in my opinion mars the book. Despite desultory attempts at concealment the book is fundamentally anti-Nazi. It aims above all at proving that the economic programme of Hitlerism aims at the establishment of a Super-Empire which is to rule Europe and the world, and must thus inevitably involve war.
National Socialism may lead to war. It is as yet impossible
to tell. But it is absurd to base the assertion upon the analysis of an economic programme which has as yet barely reached the chrysalis stage. It is an astonishing suggestion that be- cause Germany is adopting a less accommodating attitude towards her creditors she is likely to wish to fight them.
To do him justice, Dr. Einzig abandons the pretence of economic reasoning in his conclusion. " Having aroused tho German people by awakening passions of extreme nationalism in them," he writes, " the only way by which the Government can maintain its position is by satisfying those passions." Italian Fascism must have led to war on the same reasoning, and the chapter in which an attempt is made to prove that National Socialism is something entirely different from and far less satisfactory than Fascism is entirely uncon- vincing.
II. P. GREENWOOD.
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