Some within the Nazi hierarchy… called for 'blue- and white-collar workers to be put on equal footing’ to give them a preliminary taste of the harmonious future to come, which would be achieve through a ‘generous reform of the social-welfare state in the interest of working people.’

The National Socialist German Workers Party was founded on a doctrine of inequality between races, but it also promised Germans greater equality among themselves than they had enjoyed during either the Wilhemine empire or the Weimar Republic. In practice, this goal was achieved at the expense of other groups, by means of a racist war of conquest. Nazi ideology conceived of a racial conflict as an antidote to class conflict. By framing its program in this way, the party was propagating two age-old dreams of the German people: national and class unity. That was the key to the Nazis’ popularity, from which they derived the power they needed to pursue their criminal aims. The ideal of the Volksstaat—a state of and for the people—was what we would now call a welfare state for Germans with the proper racial pedigree.

The ideology of Nazism included many of the same tenets of the social democrat and socialist democratic gradualists, today and in the past. The Nazis took gradualist positions to bring about socialism, social welfare measures, socioeconomic equality (known as Völkisch equality), classless society, public work projects, mandatory labor union membership, and class cooperation previously found appealing to Marxist heretics and reformers.

Such material benefits suggest how the regime maintained its popularity during the war. Indeed, concern for the people’s welfare—at any cost—was a mark of the Nazi system from its inception. Between 1933 and 1935, the leadership owed its domestic support to its efficient campaign against unemployment. However, the regime succeeded in combating joblessness only by incurring a fiscally irresponsible level of state debt. Later the regime would require a not particularly popular war to keep government finances afloat.

Joseph Goebbels once applauded the generosity of Hitler’s welfare state, boasting in a 1944 editorial, ‘Our Socialism,’ that ‘We and we alone [the Nazis] have the best social welfare measures. Everything is done for the nation… the Jews are the incarnation of capitalism.’ After all, in addition to old age insurance (social security) and universal socialized single-payer healthcare, the Nazi administration provided a plethora of social safety net benefits: rent supplements, holiday homes for mothers, extra food for larger families, over 8,000 day-nurseries, unemployment and disability benefits, old-age homes, and interest-free loans for married couples, to name just a few. But there was more: under the Third Reich’s redistributive-like policies, the main social welfare organization—the ‘National Socialist People’s Welfare’ (NSV)—was not only in charge of doling out social relief but ‘intended to realize the vision of society by means of social engineering.’ In other words, the Nazi welfare system ushered in a menagerie of welfare programs: aid to poor families and pregnant women, nutrition programs, welfare for children, ad nauseam. The Nazis also put energy into cleansing of their cities of ‘asocials,’ which ushered in a no-welfare-benefits-for-the-unfit program, based on a welfarism that was committed to a sort of social Darwinist collectivism.

Namely, how did National Socialism, an obviously deceitful, megalomaniacal, and criminal undertaking, succeed in persuading the great majority of the German people that it was working in their interest? One answer is that as harshly as the Nazi leadership applied its racist ideology to Jews, the handicapped, and other ‘undesirables,’ their domestic policies were remarkably friendly toward the German lower classes, soaking the wealthy and redistributing the burdens of wartime to the benefit of the underprivileged.

As Germany’s new chancellor in 1933, Hitler inherited a welfare state, which he strengthened, fundamentally transforming Germany into a utopian-style welfare-warfare state that imposed price and wage controls, rent controls, progressive income taxes, corporate taxes, redistribution of wealth, onerous regulations, and deficit spending, which led to shortages and rationing under the disincentive effects of ‘high taxes.’ Hitler and the National Socialists were able to ramp up Germany’s welfare system to the point where it became the largest, most massive, all-encompassing social service system of its time, even, according to some, rivaling the Soviet Union’s inadequate socialist safety net. And in an effort to provide more healthcare services, the Nazi regime enhanced what was essentially a universal single-payer healthcare system fully owned and operated by the Third Reich.

Workers were encouraged to overcome a trades union mentality – Ley’s Germany Labor Front (DAF) rapidly ceased to describe itself as such – and to think in terms of a ‘socialism’ transcending mere bread and butter issues. In a departure from labourist economism, the Nazis recognized the workers’ need for respect, and the pride they took at their work, their skill, their tools, and the products of their labour, attitudes already evident in the modern technological sectors, such as aircraft or optical manufacturing. This lends plausibility to the idea that they were embarked on a revolution in consciousness, changing the way people perceived the world, rather than its material circumstances.

The Nazis used pro-labor rhetoric, demanding limitations on profits and the abolition of rents. They actively limited competition and private ownership, under the guise of promoting the general welfare. Hitler expanded credit, subsidized farmers, suspended the gold standard, instituted government jobs programs, mandated unemployment insurance, decreed rent control, imposed high tariffs to protect German industry from foreign competition, nationalized education, enacted strict wage and price controls, borrowed heavily and eventually ran huge deficits almost to the point of financial collapse. Eventually, both Germany and Italy turned into vast welfare-warfare nations.

Gottfried Feder gave the Nazi Party an ideology. Its essential points were paramount State ownership of land and the prohibition of private sales of land, the substitution of German for Roman law, nationalization of the banks and the abolition of interest by an amortization service. It was he, too, who inspired the Party with its doctrine of the distinction between productive and non-productive capital and of the necessity for destroying the ‘slavery of profits.’

The Nazis offered a combination of economic nationalism with unorthodox anti-cyclical measures to stimulate employment.

Nazi infiltration of interest groups and also the creation of parallel organizations, which gave the impression of a party listening attentively to particular grievances. It also reflected a totalitarian aspiration, in the sense that Nazis believed that no area of life was to remain unpolitical, and a very modern view that an aggregation of interests would facilitate an eventual political takeover.

Content as most Germans were, there was little chance for a domestic movement that would have halted Nazi crimes. This new perspective on the Nazi regime as a kind of racist-totalitarian welfare state allows us to understand the connection between the Nazi policies of racial genocide and the countless, seemingly benign family anecdotes about how a generation of German citizens ‘got through’ World War II.

Since the banks and the big industrialists wished to rid themselves of the Socialists, with their wage demands and strikes, they contributed generously to this popular party. ...Hitler's speeches constantly promised the masses a renewal of the soldier-spirit, a new army and new victories.