If someone wanted to start a business in Nazi Germany, what kinds of difficulties would they face?

by J2quared

Let's say:

  • A restaurant
  • A grocery/retail shop/general purpose shop
  • And a business that would require a lot of start-up money, like a movie theater
dandan_noodles

I don't know about the steps of starting a business in Nazi Germany, but the government definitely isn't going to be the wind beneath your wings.

A successful business in Nazi Germany is going to have to have a 'Bribery' section in its budget, and the process of bribing officials was quite complex. Industrialists, for example, were subject to very tight regulation and oversight by government officials, and if they found eve the tiniest mistake in one's bookkeeping, there were tremendous financial penalties (just a measure to fill the regime's coffers, not one of zeal for economic justice, mind). While one could attempt to appeal the officials' decision, most business owners feared to do so, since the government would remember the act of defiance, and you really didn't want to stand out under the Nazi regime. Dispensation of important products, like foreign currency, raw materials, and so on, was controlled by the government in a series of boards, each with a different procedure for issuing the necessary certificates. Rubber was a notoriously difficult to acquire resource; the government wouldn't let you buy any tires until your existing stocks were exhausted and worn into uselessness. To build up reserve stocks, businesses would purchase entire vehicles, take the tires, and sell the actual vehicle for scrap.

A German businessman working in Holland wrote a very frank letter to an associate, describing the Kafkaesque labyrinth of bureaucratized bribery under the Nazi regime. If the authorities were obstructing you from some resource you could have simply bought previously, you had to ask them to 'recommend a good lawyer', who you would pay for 'juridical advice', and if you paid them enough, they could 'find' a statute that would 'vindicate' you or 'reinterpret' one in light of 'changes in party leadership.' This was much more expensive than bribery under, say, the Russian Empire, where you simply drew up an estimate based on the number of stars on the official's uniform.

Price controls were another hassle for German businesses during the period. As the cost of doing business rose, it became impossible to turn a profit with the price ceilings the government mandated, and businesses were forced to either lower product quality (to the ire of the regime, obviously), or to circumvent the regulations. If the price of Iphones is capped at 100$, and they cost 200$ to build because of all the bribery I have to put out to buy the materials, the way I can make a profit is by bundling it with a good that doesn't have a price ceiling; I'll sell you a toaster for 500$, and throw in the Iphone for free, whereupon you would give back the toaster. Of course, there were always officials attempting to infiltrate this process, to see who was circumventing the price controls, which brings us back to fines, appeals, and bribery.

There is a book out on this very subject called 'The Vampire Economy: Doing Business Under Fascism'. I'd recommend seeing if your local library has it or can borrow it. Adam Tooze's 'The Wages of Destruction' is more focused on the government policy side of economic life in the Reich, but it's also a good way to understand the subject.