Ludwig von Mises, Review of Maxine Y. Sweezy, The Structure of the Nazi Economy (1942)

Ludwig von Mises’s review distinguishes the empirical merits of Sweezy’s study from what he regards as its fundamental conceptual failure. He praises her careful, scientifically honest survey of Nazi economic facts but argues that her opposition between capitalism and socialist planning prevents her from recognizing the Third Reich’s economy as socialist. The review moves from this criticism of classification to an account of government control, managerial incentives, and economic calculation, before predicting the system’s eventual breakdown.

Agricultural policy supplies Mises’s first test case. Sweezy describes rigid controls directed toward agricultural self-sufficiency yet places “Planning” in quotation marks. For Mises, disagreement with a policy cannot determine whether it counts as planning:

Mrs. Sweezy disagrees with this Nazi plan, (so do I), but she should not deny that it is a plan.

His objection is methodological as well as polemical: planning must be identified by its organization of economic decisions, not by whether its purposes satisfy the observer’s political ideals. He then introduces the calculation problem. Socialist countries that retain relations with market economies can use foreign prices as guides; this qualification applies to both Germany and Russia and therefore cannot justify assigning them to opposite economic categories.

The central conceptual move separates effective command over production from the legal forms and vocabulary of private enterprise. Under the Nazi system, Mises argues, ownership, profits, wages, and prices persist in name while government determines production, exchange, employment, investment, and permitted consumption.

But the government alone controls the whole system. The government orders what and how to produce, from whom to buy and at what price, to whom to sell and at what price, whom to employ and what salaries and wages to pay.

On this account, entrepreneurs have become shop managers rather than independent decision-makers. Mises contrasts this arrangement with Lenin’s model of direct state administration and with earlier German nationalization efforts. He identifies its temporary advantage in managers’ expectation that private ownership will return after the war: their hope of recovering their enterprises encourages them to preserve productive equipment and capital. Apparent continuity with capitalism thus supplies incentives within what he describes as comprehensive state control.

Income inequality likewise fails, for Mises, to distinguish Nazi Germany from Soviet socialism. The decisive criterion is control over productive resources:

The characteristic feature of socialism is not equality of incomes, but the all-round control of all business activities by the government, the government's exclusive power to use all means of production.

He connects this definition to totalitarianism. The support of affluent Germans for Nazism does not, in his interpretation, establish the system’s capitalist character: entrepreneurs preferred subordination as managers to the liquidation they feared under Bolshevism. His comparison also distinguishes Germany’s rapid military mobilization from durable economic efficiency. He rejects Sweezy’s characterization of an economy that could be decadent yet efficient in war, arguing that its apparent strength reflects comparison with a still less efficient Soviet system.

It will break down, whether this war ends with Germany's victory or its defeat.

This prediction states the review’s strongest conclusion rather than a demonstrated historical outcome. Mises grounds it in his broader claim that socialist economic calculation is impracticable, though the short review does not develop that argument fully. Its significance lies in its insistence that economic systems be classified by actual decision-making power rather than ownership terminology, income distribution, or political sympathies. The closing judgment preserves the distinction with which the review began: Sweezy’s interpretive shortcomings belong, he says, to the prevailing intellectual climate, while the substantial merits of her research remain her own.