Throughout history, authoritarian states have demonstrated that economic policies are instrumental for their maintenance of power. This essay will examine the domestic economic policies of two such states from different regions: Adolf Hitler's Third Reich in Germany and Mao Zedong's China under the Communist Party. Both leaders wielded economic policies to consolidate power, create social cohesion, and advance ideological goals.
In Germany, when Hitler ascended to power in 1933, he inherited a nation ravaged by the Great Depression. Unemployment was widespread, and the economy was in disarray. Hitler sought to revitalise the German economy and restore national pride, primarily through an economic policy geared towards rearmament and self-sufficiency, otherwise known as autarky. The strategy of autarky was twofold; it shielded the German economy from the fluctuations of international markets and prepared Germany for Hitler's aggressive expansionist policies. Dr. Hjalmar Schacht, Hitler's economics minister, implemented a "New Plan" in 1934. This plan allowed Germany to negotiate bilateral trade agreements, circumventing the global market's instability and enabling Germany to secure necessary raw materials for rearmament. Furthermore, the regime imposed stringent controls over wages and prices, effectively eradicating unemployment by 1939, as argued by historian Richard Overy. Public works projects, such as the construction of the Autobahn, also played a significant role in creating jobs and stimulating the economy.
However, historians such as Adam Tooze assert that this economic recovery was, in many ways, illusory. Tooze argues that the economic boom was largely financed by Mefo bills – a type of deferred payment instrument that effectively disguised the extent of rearmament spending. Moreover, while these policies helped Hitler consolidate his grip on power by creating an illusion of economic prosperity and stability, they also laid the groundwork for the military aggressions that would eventually lead to World War II. Hence, the economic policies of Nazi Germany played a crucial role in consolidating Hitler's power while simultaneously setting the stage for its ultimate downfall.
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On the other hand, in China, Mao Zedong came to power in 1949 with the intention of transforming a predominantly agrarian society into a modern socialist state. He sought to achieve this transformation through a series of radical economic and social changes. At the heart of Mao's economic policy was the concept of 'continuous revolution', a notion derived from his interpretation of Marxist-Leninist principles. It called for the relentless drive towards communism, even at the cost of economic stability. In 1953, Mao launched the First Five-Year Plan modelled after the Soviet Union's approach. It focused on heavy industry and was financed primarily through agricultural surpluses. The plan significantly increased the industrial output, positioning China on the path towards modernisation. However, this came at the cost of the rural population, who were subjected to mandatory procurement quotas. Historian Frank Dikötter characterises this period as one of 'relentless hardship' for China's peasants.
Nevertheless, the most radical phase of Mao's economic policy was the Great Leap Forward (1958-1962). This plan aimed to surpass Western industrial output in a few years through the mass mobilisation of labour in both agriculture and industry. Collectivisation of farms was introduced, forming communes that were expected to reach unrealistic production quotas. This policy, however, led to one of the deadliest famines in history, with estimates of deaths ranging from 15 to 45 million. Despite this, Mao was able to maintain power as he attributed the policy's failure to bad weather and bourgeois elements sabotaging the revolution, effectively manipulating the narrative. Critics such as historian Roderick MacFarquhar argue that Mao's economic policies were more about maintaining control and pursuing ideological purity than fostering economic growth or improving living standards. For instance, the Anti-Rightist Campaign in 1957, which followed the Hundred Flowers Campaign, effectively silenced critics of the regime. Moreover, the Cultural Revolution (1966-1976) was arguably less an economic policy than a socio-political campaign aimed at reinforcing Maoist ideology and purging perceived "revisionist" elements within the Communist Party.
However, another viewpoint, often argued by the likes of historian Mobo Gao, posits that these economic policies, despite their failures, reinforced the power of the Communist Party and solidified its control over Chinese society. Gao argues that Mao's policies, such as land redistribution, helped establish the Party's legitimacy among the peasantry, who made up the majority of the population. Furthermore, these policies, though disastrous in terms of human cost, allowed the Communist Party to tightly control the economy and society, thereby ensuring its survival. In contrast, Hitler's economic policies, though initially successful in rallying support for the regime and revitalising the German economy, ultimately contributed to the state's demise. The aggressive pursuit of rearmament and territorial expansion, funded by risky financial instruments, led Germany into a war it was unprepared to sustain in the long run. However, it is worth noting that both Hitler and Mao used economic policies as tools for maintaining their authoritarian rule. They manipulated the economy not only to achieve economic goals but also to suppress opposition, promote ideological conformity, and maintain social control.
In conclusion, the economic policies of both Nazi Germany and Maoist China had a profound impact on their respective states' longevity. While their approaches varied significantly, with Hitler focusing on industrialisation and rearmament and Mao on collectivisation and continuous revolution, their overarching objective was the same: to consolidate power. Through their economic policies, they manipulated the fabric of their societies, securing their positions of power despite the significant costs to their economies and their people. This assessment has also highlighted the complex relationship between economic policies and political power in authoritarian regimes. The utilisation of economic policies for political ends underscores the instrumental role they play in power consolidation, legitimisation, and even regime survival. However, the consequences of such policies, particularly when implemented with little regard for human cost, can be catastrophic, leading to devastating outcomes that mar the historical legacy of these regimes. This tension between the pursuit of power and the welfare of the populace underlies the historical narratives of authoritarian states, making the study of their economic policies not just an exploration of economic history, but a broader contemplation of power, ideology, and human agency.
