1916 and the Health of the StateHin

In Planning for Freedom, we find Ludwig von  commenting once more on the ravages of World War I as he discusses the Hindenburg Program: had it had time to come to fruition, he suggests, “it would have transformed Germany into a purely totalitarian commonwealth.” Well, the war ended two years later, and the military dictatorship of Hindenburg and Ludendorff had indeed done much to create a totalitarian commonwealth. Within two years, as well, the Hindenburg Program had suggested to the Bolsheviks a practical program for achieving dissolution of capitalism. As Paul Johnson put it in Modern Times:  “So one might say that the man who really inspired Soviet economic planning was Ludendorff. His ‘war socialism’ certainly did not shrink from barbarism. It employed slave-labourers. In January 1918 Ludendorff broke a strike of 400,000 Berlin workers by drafting tens of thousands of them to the front in "labor battalions."

Hindenburg and Ludendorff

Hindenburg’s famous Quartermaster-General, Erich Ludendorff, was the chief promoter of the “Hindenburg” Program, but it was in fact a group of bureaucrats, army officers, technocratic intellectuals, and a crony capitalists who shaped it.

It was still a “mixed economy” affair, but one that Mises came back to more than once to demonstrate the easy continuity from mixed economy to omnipotent government.

Nineteen-sixteen once again. A major boost to the health of the state.

Hunt Tooley is the author of The Great War: Western Front and Home Front

(see also Hunt Tooley's two blogs, Design of Violent Century and The World At War and the World That Was)