The National-Socialist Economic Program as of 1932

Instead of cancellation of all interest as Gottfried Feder advocated in his Manifesto of 1919, this document coauthored with Walther Funk in 1932 speaks of a universal lowering of interest, but still with the goal of generally freeing the people from debt and thus facilitating economic recovery. The intention of putting banking under the control of the government, originally advocated by Paul de Lagarde, and repeated by Feder in 1919, remains.

Certain aspects of this program, the general idea that reduction of burdens and limitations is the way to stimulate economic growth, the reduction or elimination of “production-inhibiting taxes,” the simplification of the tax-code, and the intention to provide incentives to save money, were echoed in Reaganism.

The direct creation of jobs by the government is of course a major point of difference from Reaganism (and of course from the “quantitative easing” of the Obama years, which does not create jobs, because businesses do not normally borrow money to expand, and hire new employees, until the economy is already improving), as is the goal of protecting the small farm and small to middle-sized businesses, and the guarding of national self-sufficiency. These goals, along with staying out of debt, are all still cherished in Germany, but now discarded in the United States.

The proposal for “dynamic structuring of tax-rates in accord with the needs of a productive economic system” opposes post-Reagan American mainstream economic doctrine in two major respects. It refers to a strongly graduated schedule of tax-rates, and it contains the assumption that economic productivity is helped by thus countering the tendency for wealth to accumulate more and more in the hands of a few, a tendency that Reaganism seems to deny or consider unimportant. National-Socialist economic doctrine, while anticipating Reaganism’s concern for the negative effect of taxation on production, disagrees with Reaganism insofar as it does not count progressive taxation as “production-inhibiting”: rather the opposite.

In general, National-Socialism differs from current American economics by treating the economy as a means to support the entire nation (just as an army treats its resources as a basis for maintaining the entire army), rather than as a game of competition where the rights of the winning competitors completely overrule the needs and well-being of the people.

Walther Funk, Gottfried Feder

The NSDAP’s Program of Economic Organization

Walther Funk and Gottfried Feder

(National-Socialist Yearbook, 1932)

Translation by Hadding Scott, 2012

The National-Socialist German Workers’ Party strives for a new construction of the state and of the economy on a National-Socialist basis, which can only be achieved in a total solution through a profound reorganization of the political and economic system. The Papen government has limited itself to inadequate ad hoc measures that do not function as a whole and therefore cannot lead to success. We approach combating the economic crisis from the premise that this crisis is not only economic in nature but embodies a crisis of the state, indeed a crisis of the folk. We therefore distinguish ourselves fundamentally from the Papen government, both in the conception of the essence of the crisis and in the purpose of economic policy.

The Papen government believes that it can save the German economy while retaining the momentary structure of the economy, and undertakes no alterations of the current economic system.

We are convinced that the German economy must be subjected to a radical structural change, and that the German economic system in its current configuration cannot be maintained. Apart from that however we believe that every economic remedy is doomed to failure unless it embarks on an extensive change in the administration of the Reich and of the States, and of municipal and professional self-governments, and unless new forms and a new content are given to economic administration. This complete reconstruction of public administration, of the economy, and of social life must succeed on the basis of the National-Socialist worldview and be pervaded with National-Socialist spirit.

In the

new construction of the German national economy

the political and psychological prerequisites must first be created through the establishment of the stabilizing effect of a strong governmental power supported by the will of the people. Political leadership must first clear the path for economic leadership for a comprehensive renewal of economic and social life in Germany through elimination of outer and inner hindrances, through overcoming of social conflicts, and through a restructuring of the constitutional and legal foundations of administration in the German Reich.

The highest goal of economic policy must be the maintenance and strengthening of the national potentials of the people and the soil, so that every German again benefits from his labor, and indeed each according to his achievement. According to this fundamental principle German economic policy must be conducted holistically [einheitlich].

In order to achieve this, a profound rebuilding of both the structure of the German economy and particular economic arrangements is necessary. Thus economic policy will have to be conducted organically and dynamically, and maintain and cultivate what is viable.

The NSDAP’s program of economic organization is founded in the following fundamental demands:

1. Direct creation of jobs for circa two million people on the basis of contract-awards for new state and private investments to the extent of 5 billion Reichsmarks. A special job-creation program will exist.

2. Productive creation of credit through the Reichsbank at the level of 3 billion Reichsmarks, which represents mainly bank-deposits, and circulating money only to the extent of 300-500 million Reichsmarks. These moneys flow automatically back into the Reichsbank again after a fertilization of the economy. Thus no inflation, but restoration of a sound currency, and a sound money- and credit-economy that stimulates production.

3. Nationalization of the entire money- and credit-structure including bank-deposits, and an expansion of the governmental accounting-transactions.

4. Financial restructuring of the entire German economy through centralization of all public and private contractual obligations in a general financial restructuring institution. Healing of the ills of inflation through a pensioner-maintenance law.

5. Universal lowering of interest consistent with our great main goal of the abolition of interest-slavery, with wide-ranging consideration of particular circumstances in the economy.

6. Alteration of the moratorium, and uniform regulation of foreign debts, with interest and amortization adapted to Germany’s supply of foreign currency.

All exchange of foreign currency with foreign countries is place into the hands of a

7. foreign-trade office and a currency-center, which should constitute a department of the Reichsbank. There will not be a domestic currency and a separate foreign-trade currency, but only one German currency and one currency-bank, the Reichsbank that has been returned to the Reich.

8. New regulation of economic relations toward the rest of the world with priority given to the necessities of life in the domestic market, but with provision for exports, which are indispensable for Germany. The quota-system introduced by the government is in principle correct, but completely inadequate because in a paradoxical manner most-favored-nation status is included into this system, and for execution, both the power-factor in foreign policy and the will to live in domestic policy are lacking. In foreign policy we are completely isolated and in domestic policy without a unified popular will.

9. Tax-relief through mitigation or complete elimination of production-inhibiting taxes (which directly influence prices), simplification and unification of the tax-system, and dynamic structuring of tax-rates in accord with the needs of a productive economic system.

10. Restoration of German state credit:

a) Cleansing of public finances with inclusion of public guarantees, and with consideration of the fact that the spending of billions for the unemployed will end after successful creation of jobs.

b) Elimination of the current untenable methods of balancing budgets. Restoration of budgetary truth and clarity.

11. Governmental protection for agriculture (new organization of the distribution of agricultural products, and of the agricultural cooperative system, of the systems of storage, transport, dairy, processing, and preservation, and of the breeding of plants and animals. Grain-rationing.)

12. Reconstruction of the possession of house and land with consideration of the new arrangement of mortgage-credit (Reichshypothekenbank) and of the tax-system, with the aim of promoting the productivity and health of the folk.

13. Planned reorganization of production by industry and trades with regard to the enterprises controlled by the state, and the branches of industry especially important for national policy.

Preparation of means to generate jobs for the broadening of the German raw-materials base, and for readjustments to both manufacturing and technology for new national branches of trade and industry (trade-policy favoring the middle class).

14. National transport-economy. Federalization of the Reichsbahn, reorganization of tariffs in accord with national economic necessities, unified transport-policy (automobile traffic, shipping), and centralized energy-economy.


An undebting of the economy cannot be brought about by purging bank-balances and introducing subsidies for industry, and agriculture cannot be aided by lowering the interest for one part of the agricultural debt by about 2% and negotiating with the rest of the world for the reduced import  of a few thousand hundredweights or even tons of agricultural products. Also the enforcement of protection, having been arranged, will remain ineffective unless the soil upon which the farmer farms has been made healthy and fertile, and the future of the German farmer secured. None of that is achieved by the Papen government’s measures.

It must be affirmed as a matter of principle that there can be no recovery of German agriculture unless the entire German economy recovers. And there can be no actual undebting of agriculture unless the entire German economy is liberated from the tension and oppression of debt, in which it has found itself for years. The structure of the German economy is unsound, and the system of the economy is wrong and outmoded, and therefore it is necessary to reach for much more thorough measures than what the Papen government has been doing, in order to bring about the necessary new construction of the economy, without which every attempt at an agricultural recovery is also condemned to failure.

We must also tackle the general cleanup of the economy alongside that of politics. This has to proceed from the principle that the highest goal of every economic policy must be the maintenance and strengthening of the national potentials of the people and of the soil. There can be no healthy export if the domestic market is ailing. We are not so foolish as not to recognize Germany’s need to export. But for exports too a new, healthy basis must first be created, since the current export is overwhelmingly an export that impoverishes and dissipates. The backbone of the German economy is a healthy domestic market, and the backbone of the domestic market is a healthy German yeomanry.

In no way do we want to destroy economic structures that are viable; we want rather to maintain and cultivate these structures, but we believe that it cannot be responsible when economic undertakings are dragged along with state subsidies that are built on an outmoded economic system. That is true not only of some economic forms like vertically integrated enterprises, but also of particular branches of the economy that only require a harmful import and in whose products German work-potential constitutes an insignificant part of the total value of the merchandise.

If the Papen government directs its main gaze to the healing of the banks, we too are convinced that a healthy money- and credit-system must constitute the starting point for economic recovery. But we are of the view that the current private-capitalist banking system cannot be maintained; rather that all money-transactions must be subject to the sovereignty of the state, and the banking system placed under the state’s supervision. Only with this prerequisite can a real undebting of the economy be brought about, which must extend over all debt-obligations. We shall not expect the state to spend billions for healing the banks while entrusting the accomplishment of this healing to a few private individuals, to whom all economic events are irresponsibly surrendered. The new construction of the German economy should be accomplished not by some bank-directors but by the government, which is supported by the confidence of the people and uses its power in accord with nationalist and socialist principles. We want no state-economy, nor any state-socialism in the sense of the Communist and Marxist doctrines, but we want a National-Socialist economy that protects the body of the folk from external and internal dangers and permits an orchestrated community-labor of all branches of trade and of all classes for the promotion of the common good.

From these general principles the new construction of the German economy will be accomplished, and these principles must also be applied in the measures for restoring health to agriculture. Therefore the rescheduling of debt will encompass the entire economy and be assigned to a general retraining fund anchored in the state’s money- and credit-system, but in such a way that the execution in detail succeeds on the basis of occupational class and is not carried out by people and institutions that stand outside of the agricultural profession. For the purpose of a real undebting and rescheduling of debt, agencies of the state are appropriate, but the Papen government does not have them at its command, and a rescheduling of debt can yield no enduring success unless the lowering of interest is also accomplished centrally in a state money- and credit-system. Only with these prerequisites can the certainty of rights in transactions of money and capital be restored and a just settlement between creditors and debtors reached. Only a general rescheduling of debts accomplished by governmental monetary institutions gives the guarantee that this measure will not lead to a shaking of confidence, and to unjustified and unbearable losses or devaluations of capital. We shall on the contrary hereby attain a higher and more certain assessment of the possession of land and soil, of home-possession and of other capital-possession, than is the case today. Agriculture and the entire economy, whenever it is first redeemed from the stress of debts and liberated from unbearable interest-burdens, will again breathe a sigh of relief. Then the necessary further decrease of burdens, especially tax-reductions, and the protection of national production against unnecessary and harmful importation will for the first time come into full effect. At the same time however the creation of jobs will have to originate from the government on the basis of productive creation of credit (Federgeld), through which for the first time a healthy underpinning for our currency is created, which today does not exist at all. Illiquid financial notes [Finanzwechsel] that today lie in the Reichsbank as gold backing must be replaced by production-notes [Produktionswechsel] and government securities, which constitute a healthy blood-supply for the economy and lead the stream of gold back again in specified intervals to the Reichsbank, whereas it now lies sunken somewhere in the stressed, illiquid economy, whereby disturbances in transactions of money and credit and deficiencies of property and income arise through deflationary practices. Furthermore a complete new regulation of foreign debts will be necessary, which also can be brought about in a tolerable manner only through an alteration of the entire system of money and credit. Governmental regulation of gold-transactions with the rest of the world is in no way identical with a nationalization of foreign trade. In the economic system that we shall build, the individual will be able to develop his initiatives in a much greater breadth than is today the case. The new construction of the economy as we shall accomplish it, on the basis of a new economic structure and a new economic system, will have as a goal of highest priority the deproletarianization of the broadest masses of the laboring population, of the yeomanry, and of the middle class. Real income will increase to the extent that unsupportable burdens of interest and taxation cease to exist and unemployment decreases. It is obvious that through such measures production also receives a strong stimulus, whereupon care must be taken that the disproportion between the prices for agricultural produce and industrial manufactures be eliminated. In the current system the credit-economy undergoes a general increase in prices as a result, which is believed to be remediable only through a freeze on wages. In our economic system the commodity-market is liberated from burdens and limitations that are caused by bad public administration and economic mismanagement, and prices will undergo a readjustment without a loss of purchasing power and real income. And finally after complete reconstruction of our economy we shall reach the point that saving money will again make sense, and we will promote thrift also through state measures.

The Papen government in recent days has certified for itself, from particular economic crises, that the measures enacted by it are approved by the economy, and especially by the Central Association of Banks. The Papen government should not let itself be deceived, but above all the German people should not be misled about the fact that the measures of the Papen government only convulsively maintain a situation that over the long term is surely untenable. The relapse and the disappointment will then be all the more grievous. The entire insufficiency of Papen’s measures becomes especially obvious for the yeomanry. The farmer knows quite exactly that he cannot be saved from his frightening distress with such stingy assistance. He remains ultimately abandoned to the banks and to creditors who are strangers to the soil, and has no guarantee that he can again raise for himself on his own free land and soil a healthy and secure livelihood. But also all other economic circles that are sufficiently insightful as to recognize that something fundamentally new must first be created in order to be able to construct a healthy economy in Germany again, stand most skeptically opposed to the measures of the Papen government, insofar as they do not, out of some narrow and cold political affiliation, surrender to some dangerous self-deception. The fear of the ultimate decision is today in economics unfortunately still just as great as in politics. We shall not however avoid this ultimate decision unless we want to deliver the German economy into Bolshevist chaos or foreign enslavement. And it also belongs to this ultimate decision that we must abandon an outmoded economic system. The global economy, as it developed on the basis of a free economy of money and credit, and with emphasis of international interests in commerce among the nations, was destroyed by the World War and by the structural changes in the particular economic zones of the world in their essential component parts. This destruction has also gripped the individual national economies, least of course those that at the right time grasped the national necessities protected themselves through state measures. The German economy and above all German agriculture have almost defenselessly fallen victim to this destruction. Now it is necessary at first to set up once again a national economy. Only then can trade with the rest of the world be newly regulated, and indeed in a manner that is appropriate to the nation’s political and economic needs. We have in Germany enough national capital. And we can create new capital through labor, so that our people live and can further develop. We can and must reject international capital, and beyond that we have the task of liberating the German economy from the fetters of international capital.

German agriculture and likewise the whole German economy can only be helped through the national state, and not through international interest-bearing banks. Since we do not have a national money and credit system, we must create it. The same is true of all economic structures that are subject to international influences. To set aright a national German economy upon the basis of an internationally linked system of money and credit, as the Papen government currently attempts, is an absurdity and an irresponsible shortsightedness. The first one to collapse entirely under this system will be the German farmer. But industry, trade, and commerce will follow. Only a new government can accomplish the necessary reorganization of the German economy, which, supported by the confidence of the German people, will implement with inexorable consistency the national and socialist principles that today only the National-Socialist movement of Adolf Hitler represents.

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