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Delanceyplace: The Wages Of Destruction

America's key economic advantage -- perhaps -- is that it has the largest "internal" market of any country in the world. It is the third most populated country in the world, with citizens that are far wealthier in the aggregate than those in China and India -- the only two countries larger than the U.S. This advantage in size and affluence means that American companies can become the largest in the world simply by selling to Americans -- thus gaining the advantage of scale that allows them to dominate globally, writes Adam Toze.

This advantage was already clear during and after World War I, which created
a fear among the those large European countries that had long been used to a role
as the most powerful on earth that they would slip into the same irrelevance as
Switzerland and Holland. This fear was especially prevalent in Germany, where
it dominated the thoughts and strategies of Chancellor Gustav Stresemann and his
successor, Chancellor Adolf Hitler. To Hitler, proof of the advantage of internal
market size came from the dominance of American motor vehicle industry and companies
like the Ford Motor Company. So to be able to compete with the U.S, he believed
Germany needed more geographic territory, or Lebensraum.

Hitler and Stresemann were both products of a shared political culture. They were
both advocates of the widely held view that World War I was the result of Imperial
competition. Specifically, both blamed Great Britain for having initiated the war,
in a deliberate attempt to cripple Germany as an economic and naval competitor.

... Hitler [thought that] any effort by the German people to seek salvation [after
World War I] through industry and trade would eventually bring them into competition
with Britain. Germany would again face the constellation of August 1914. ...

For Hitler, the decisive factors in world history were not labour and industry,
but struggle for the limited means of sustenance. Britain could sustain itself
through free trade, but only because it had already conquered an empire by military
force. What the German people needed to secure a decent standard of living was 'living
space', Lebensraum, and this could be achieved only by warlike conquest. ... After
the Treaty of Brest-Litovsk [between Germany and Bolshevik Russia], Stresemann too
had dreamed of a German Grossraum in the East. But, as we have seen, his primary
aim was to gain a market sufficient in scale to match the United States. ...

As Hitler could not fail to note, the United States -- even if it was not a military
factor in European affairs -- was an economic force to be reckoned with. Indeed,
the remarkable industrial advance of the United States had changed the parameters
of everyday life on the 'old continent'. As Hitler himself put it, in what is surely
one of the key passages in his 'Second Book':
'The European today dreams of a standard of living, which he derives as much from
Europe's possibilities as from the real conditions of America. ... The European,
even without being fully conscious of it, applies as the yardstick for his life
the conditions of American life ... '

And not surprisingly, what most caught Hitler's eye was the American domination
of the motor vehicle industry. Hitler, of course, was a motor enthusiast. But what
concerned him in his 'Second Book' were the strategic implications of America's
leadership in this crucial new industry. In their imaginings of a future of American
affluence Europeans were apt to forget 'that the relationship of surface area to
the population of the American continent is vastly superior ... .' America's enormous
competitive advantage in industrial technology was above all a function of 'the
size of' America's 'internal market' and its 'wealth in purchasing power but also
in raw materials'. It was the huge volume of 'guaranteed ... internal sales' that
enabled the American motor vehicle industry to adopt 'methods of production that
in Europe due to the lack of such internal sales would simply be impossible'. Fordism,
in other words, required Lebensraum. ...

Hitler believed that the emerging economic dominance of the United States placed
in jeopardy the 'global significance' of all the European countries. Unless the
political leaders of Europe could shake their populations out of their usual 'political
thoughtlessness', the 'threatened global hegemony of the North American continent'
would reduce all of them to the status of 'Switzerland and Holland.'

Author: Adam Tooze
Title: The Wages of Destruction
Publisher: Penguin
Date: Copyright 2006 by Adam Tooze
Pages: 8-11

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