ABSTRACT
The German economy under National Socialism has been called a centrally planned capitalist economy, but this probably overstates the extent of state control prior to World War II. From early 1937 to early 1942, Germany was a mixed economy under the Nazi elite, although the latter had to make its programs reasonably attractive to the other groups. The Nazis expanded aggregate demand through a massive, semisecret rearmament program and a small, highly publicized program of public works—including construction of Germany's first superhighway—plus easy credit for home building. Once the currency reform removed the major roadblock, many factors contributed to West Germany's recovery and long postwar expansion. Aid from the United States and other Western nations and their assumption of most of the Federal Republic's defense burden—augmented its savings and freed them for productive investment in industry. Finally, before West Germany was permanently launched on a path of long-run expansion, it had to survive a crisis in the bottleneck sectors.
