Hitler's Version of MMT
By Pierre Lemieux
I am well aware we should never make any comparison between today’s well-meaning statists and Adolf Hitler. But the latter’s “table talk,” his table monologues to inner-circle guests, recorded by shorthand writers, are sometimes instructive. On October 15, 1941, for example, he explained his monetary theory (Hitler’s Table Talk, 1941-1944, Enigma Books, 1953, pp. 65-66). By happenstance, they show some resemblance with so-called Modern Monetary Theory, perhaps even more in what would likely be MMT’s political consequences.
He starts by confusing a definition and a causal theory: inflation is not caused by money creation but by an increase in prices. His reported statement is:
Inflation is not caused by increasing the fiduciary circulation. It begins on the day when the purchaser is obliged to pay, for the same goods, a higher sum than that asked the day before.
The conclusion immediately follows that “one”—that is, the wise rulers—must do something:
At that point, one must intervene.
As common in economic history, scapegoats are found in the speculators (and profiteers and price-gougers):
The currency remains stable when the speculators are put under lock and key. … excess profits must be removed from economic circulation.
Economists just complicate things:
All these things are simple and natural. … People go into ecstasies of confidence before the science of the great economists. Anyone who doesn’t understand is taxed with ignorance! At bottom, the only object of all these notions is to throw everything into confusion.
But ordinary people, guided by the ruler, can understand with their flesh:
The very simple ideas that happen to be mine have nowadays penetrated into the flesh and blood of millions.
Hitler is not so far from the Keynesian idea (although not necessarily the claim of Keynes himself) that creating money will generate the production without which there would be inflation. At least, this is the logical way to interpret the statement:
To give people money is solely a problem of making paper. The whole question is to know whether the workers are producing goods to match the paper that’s made.
To be (very) charitable, we could read this as meaning that if there is a higher demand for money (or equivalently, a lower velocity of money), it can be produced without inflation.
Caveat: The Table Talk comes from the combination of several original manuscripts in German and there has been some controversy about the accuracy of the English translation. The tone of the monologues, however, is not inconsistent with what we know of Hitler or his Mein Kampf. Moreover, to the extent that the statements partly represent the interpretation of Hitler’s inner circle, they would still say something.
Albert Speer, who was Hitler’s Minister of Armaments and War Production, later described Hitler’s table talk as “rambling nonsense” (according to a Wikipedia’s citation):
[Hitler] was that classic German type known as Besserwisser, the know-it-all. His mind was cluttered with minor information and misinformation, about everything. I believe that one of the reasons he gathered so many flunkies around him was that his instinct told him that first-rate people couldn’t possibly stomach the outpourings.
Doesn’t this evoke some more recent politicians?