Why Hayek was Right About Nazis Being Socialists

Words are powerful things in that they enable us to share a common world of understanding with our contemporaries and, in the written form, with generations long past. But too often words can just as easily cause confusion, misunderstanding, and conflict among people in any society.

This has come up, again, in a recent article by Ronald J. Granieri, who is research director of the Lauder Institute at the University of Pennsylvania, on why, “The Right Needs to Stop Falsely Claiming that the Nazis were Socialists” (Washington Post, December 5, 2020).

Denying that National Socialism was “Socialist”

He seethes with frustration that those he calls on the political “right” attempt to classify the German Nazi regime of the 1930s and 1940s as “socialist.” Yes, the formal name of the Nazi Party was the National Socialist German Workers Party. But in his view, while the Nazis did impose an extensive degree of government intervention and control over the private sector, “their ‘socialism’ was at best a secondary element in their appeal.”


No doubt this summary of the content of Goetz Aly’s analysis of the National Socialist welfare system and its version of central planning would convince Ronald Granieri even more that the Nazi regime should not be classified as “socialist.”

Hayek was Right: Nazis were Socialist Central Planners, Too

But in my view, it demonstrates that all of its characteristics find their family resemblance in socialist regimes. Institutionally, the starting premise is that the individual is little or nothing, and must view himself as dependent upon and working for a wider “common good,” other than his own personal self-interest.

In the name of “the people” those in political authority, whether in that position through votes or violence, establish in the name of “the people” the hierarchy of social goals, purposes, and collective ends for which a set of government planning policies, interventions and welfare redistributions will be set in motion.

Individual choice and decision-making as consumers and producers are significantly reduced or even totally eliminated with government central planning and decision-making replacing voluntary association and exchange through the competitive processes of supply and demand.

Prices and production no longer fully reflect the valuations and appraisements of the multitudes of interacting buyers and sellers in the society – which means all of us in our consumption and production roles in the social system of division of labor. Instead, government plans and interventions determine or heavily influence wages and prices, along with what gets produced and how much; which means everything concerning our personal lives, livelihoods and standards of living.

Source: Why Hayek was Right About Nazis Being Socialists