Nazi economic imperialism and the exploitation of the small: evidence from Germany’s secret foreign exchange balances, 1938‐1940

This article re‐examines the hypothesis of Hirschman and Child that Nazi trade policy before the Second World War exploited the smaller European countries. Archival evidence on foreign exchange balances for 1938‐40 shows that trade policies alone had only a small effect. Earlier dependence of south‐eastern Europe on Germany was caused partly by the collapse of south‐east European trade with the Soviet Union. Adjusted figures reveal a regional pattern similar to that of 1913. Generally, exploitation began with military occupation, but was then on a massive scale. Results again confirm Milward's findings on the westward orientation of the German war economy.