Averting the Nazi seizure of power: A counterfactual thought experiment

Abstract

The Great Depression in Germany led to the radicalization of the electorate, leading the country and then the world into the darkest days of Western Civilization. Could it have been otherwise? This paper explores whether the NSDAP takeover might have been averted with a fiscal policy that lowered the unemployment rate in those parts of Germany where their support rose most rapidly. A counterfactual simulation model based on estimates of the relationship between unemployment and the radical vote at the electoral district level provides a framework for considering how much lower unemployment would have to have been in those districts to prevent the NSDAP from becoming a formidable political force in Germany. Budget neutrality is maintained, so that the simulations do not depend on an expanded fiscal policy. The results indicate that such a policy could well have averted the NSDAP's seizure of power, and the catastrophe that followed in its wake. "The only thing we owe history is to rewrite it." -Oscar WildeThat the Great Depression in Germany led to the radicalization of the electorate is not controversial. With the unprecedented increase in unemployment, the support for the extreme right-wing NSDAP (Nationalsozialistische Deutsche Arbeiterpartei) increased dramatically, leading Germany and then the world directly into the darkest days of Western Civilization (Stögbauer 2001b). Could it have been otherwise? We explore whether the NSDAP takeover could have been averted with a fiscal policy that lowered the unemployment rate in those parts of Germany where their support increased most rapidly. A counterfactual simulation model based on estimates of the relationship between unemployment and the radical vote at the electoral district level provides a framework for considering how much lower unemployment would have to have been in these districts to prevent the NSDAP from becoming a formidable political force in Germany.2 Budget neutrality is strictly maintained, so that the simulations do not depend on an expanded fiscal policy. Instead, expenditures, and thereby also unemployment, are reshuffled among electoral districts in a way that increases government expenditures in regions where the propensity to vote for the NSDAP was highest and reduces them in those areas where they were lowest. Thus, the model redistributes unemployment spatially, without further burdening the already over-stretched Weimar budget.The results indicate that such a policy could well have averted the NSDAP takeover, and the catastrophe that followed inextricably in its wake, without an increase in government expenditures. Financial considerations alone did not impose a binding constraint on decisive government action in defense of the Republic. However, this counterfactual analysis does notimply --and this should be made clear at the very outset --that the government was actually capable of mustering the will to bring such an economic program into effect. In that sense, the policy considered below may well not have been feasible. The ...

Austerity and the Rise of the Nazi Party

“…Even though there has been a German debate on whether there was an alternative to austerity (Borchardt 1980;Büttner 1989;Ritschl 1998;Voth 1993) and speculation that austerity played a role in the rise of the Nazi Party, to our knowledge, no previous research has directly tested the quantitative impact and the channels by which fiscal austerity mattered. Falter, Lindenberger, and Schumann (1986), Frey and Weck (1981), King et al (2008), and Stögbauer and Komlos (2004) studied the economic shocks of the period, but they did not use fiscal data and the transmission mechanisms emphasized are different from ours. Previous work focused on a direct channel from lower disposable incomes and unemployment to frustration at the polls.…”

Thought experiments: Review and recommendations

“…Another useful approach for including several thought experiments is to consider adding what-if counterfactual scenarios to ground abstract theory narratively. In an effort to demonstrate the effects of fiscal policy, Stögbauer and Komlos (2004) used the Nazi seizure of power to create a counterfactual thought experiment.…”

“… Note : Sources used to derive best‐practice recommendations: 1 Botha (2019), 2 Bozeman and Feeney (2007), 3 Brown (2011), 4 Burge (1979), 5 Caste (1992), 6 Darnell (2001), 7 Elias and Gallagher (2014), 8 Emmerich and Gordjin (2018), 9 Fisher (2020), 10 Folger and Turillo (1999), 11 Harre and Wang (1999), 12 Hatherly et al (2020), 13 Haukioja (2020), 14 Hong (2012), 15 Kadvany (2010), 16 Lachenicht (1993), 17 Leicester (2012), 18 Lucas (2003), 19 Mankiw (2013), 20 Maziarz (2017), 21 McDonald et al (2017), 22 Nanay (2015), 23 Nothhaft and Stensson (2019), 24 Otero‐Iglesias and Weissenegger (2020), 25 Raverty (2007), 26 Reichstein (2019), 27 Rinsley (1980), 28 Smith (2007), 29 Stögbauer and Komlos (2004), 30 Tateo and Valsiner (2015), 31 Vasileiou (2021), 32 Weick (1989), 33 Wempe (2008). …”

“…The researcher, in other words, must be a raconteur to theorize and “bridge the gap between the abstract and the concrete” (Folger & Turillo, 1999, p. 742). Thought experiments can also arise from different situations, including real‐life experiences and situations from the distant past or present (e.g., Fisher, 2020; Leicester, 2012; Stögbauer & Komlos, 2004) or completely new situations (Elias & Gallagher, 2014; Haukioja, 2020). In sum, the second decision point refers to whether and how the theory can be modeled in the thought experiment.…”

“…To give a thought experiment more breadth, researchers may also decide to include multiple thought experiments (Burge, 1979; Lachenicht, 1993) or create new what if counterfactual scenarios to narratively apply and explain abstract theoretical mechanisms (Leicester, 2012; Stögbauer & Komlos, 2004). For example, when considering behavioral solutions to the AIDS crisis, Lachenicht (1993) conducted multiple thought experiments, with slight variations, to contrast ideas.…”