By the mid thirties there was also in existence an advanced demonstration of the Keynesian system.  This was the economic policy of Adolf Hitler and the Third Reich.  It involved large-scale borrowing for public expenditures, and at first this was principally for civilian works -- railroads, canals and the Autobahnen.  The result was a far more effective attack on unemployment than in any other industrial city.¹⁶ By 1935, German unemployment was minimal.  'Hitler had already found how to cure unemployment before Keynes had finished explaining why it occurred.'¹⁷  In 1936, as prices and wages came under upward pressure, Hitler took the further step of combining an expansive employment policy with comprehensive price controls.
      The Nazi economic policy, it should be noted, was an ad hoc response to what seemed over-riding circumstance.  The unemployment position was desperate.  So money was borrowed and people put to work.  When rising wages and prices threatened price stability, a price ceiling was imposed.  Although there had been much discussion of such policy in pre-Hitler Germany, it seems doubtful if it was highly influential.  Hitler and his cohorts were not a bookish lot.  Nevertheless the elimination of unemployment in Germany during the Great Depression without inflation -- and with initial reliance on essentially civilian activities -- was a signal accomplishment.  It has rarely been praised and not much remarked.  The notion that Hitler could do no good extends to his economics as it does, more plausibly, to all else.

      Thus the effect of The General Theory was to legitimatize ideas that were in circulation.  What had been the aberrations of cranks and crackpots became now respectable scholarly discussion.  To suggest that there might be over-saving now no longer cost a man his degree or, necessarily, his promotion.  That the proper remedy for over-saving was public spending financed by borrowing was henceforth a fit topic for discussion -- although it continued to provoke bitter rebuke.  The way was now open for public action.

16. '... the Nazies were ... more successful in curing the economic ills of the 1930s [than the United States].  They reduced unemployment and stimulated industrial production faster than than the Americans did and, considering their resources, handled their monetary and trade problems more successfully, certainly more imaginatively.  This was partly because the Nazis employed deficit financing on a larger scale ... By 1936 the depression was substantially over in Germany, far from finished in the United State.' John A. Garraty, 'The New Deal, National Socialism, and the Great Depression' American Historical Review, vol. 78, no. 4 (October 1973), p. 944.

17. Joan Robinson. Quoted by Garvy.

_______

John Kenneth Galbraith, "The Coming of J.M. Keynes", Money: Whence It Came, Where It Went (1975), pp. 237-239

So he does qualify the Nazi achievement as "the elimination of unemployment in Germany during the Great Depression without inflation", but this was done through the use of price controls, which seems like cheating to me (though to Galbraith, who served as deputy head of the [U.S.] Office of Price Administration during World War II, price controls were a legitimate economic policy tool, if used judiciously in appropriate types of markets).

The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence.

But - by definition - Nazi economic policy cannot have got anything right....

"The future is already here -- it's just not very evenly distributed" William Gibson

What seems to be missing is pressure (or an attack) of international investors on the "funny" Nazi currency. It is not a big secret that, particularly, a portion of US political and financial establishment was rooting for Nazis.

This seems rather more plausible.

But what compelled entrepreneurs to raise wages (in those 'the last months of the boom, when indeed wages started to raise')?

The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence.

"I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market: You can intimidate everybody."

Such is the power of financial democracy (or oligarchy?!).

I see a lot of subjective demand and supply in the modern economy and financial world - perceptions or anticipations, what the supplies and demands should be, or blind herd following of investment fashions or "best available" strategies. The two big theories do not apply well to bubble periods; they basically ignore relevance of bubbles. Regarding post-bubble depressions, I don't see how Friedman helps.