April 25, 2025
Should you hire your spouse?
April 25, 2025
Hiring you spouse isn't necessarily the best financial decision for your personal or business finances. We did a deep dive on what to consider.
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A strong financial system offers everyone a chance to improve their standard of living—and it is an alluring campaign promise. Throughout history, the dream of economic prosperity for all has been used across the political spectrum. Regimes known for repression or draconian social laws have been no exception.
There have been historical points of imbalance, where the scales between the value of good governance and promised financial gains. This is true even of pro-free market or pro-corporation governments. For reference, a pro-corporation government, often referred to as a corporatist government, is when policy is dictated by corporate groups.
We’ve compiled a list of 4 examples of “free market” economies under oppressive regimes. While the “free” element is often short-lived, it is an important distinction to make. All promised low unemployment and economic growth—but we wanted to see how they delivered in the long-term.
These governments range from full-scale totalitarianism under Nazi Germany to the softer Park pro-corporate economy in 1960s-1970s South Korea. All economic policies and governments reviewed were or are friendly to capitalist markets. Since communism and other economic models operate on an entirely different premise, we have excluded these non-capitalist models.
In this article, we’ll cover:
Nazi Germany today is defined by the horrors of the Holocaust—its beginning did not lie solely in concentration camps. Instead, Nazi leadership emphasized solutions to the hyperinflation following the Weimar Republic and World War I.
They inherited a weak economy in 1933. At the time, the rapid financial turnaround accomplished during the Nazi party’s early years was met with astonishment. While they had been hit harder by the Great Depression, they managed to increase the Gross National Product (GNP) by 9% annually, and reached 400,000 new jobs in their first year alone. They kept inflation and the deficit low while privatizing businesses, creating what many dubbed a “miracle economy.”
Of course, it was not sustainable. And much of it was buttressed by military spending. By 1934, 70% of the budget went to the German military.
While the boom started off with a support for business privatization, these independent businesses were later co-opted to pay for military spending. The Nazis did not use direct control to do so. Instead, they offered incentives, such as loans with low and fixed interest rates, to prompt business reinvestment into rearmament.
However, businesses often did not believe that the rapid growth of re-armment was a long-term possibility, causing them to curtail their investments. Furthermore, Germany’s antagonistic foreign policy caused international investors and trade partners to decline, thus lowering the value of German bonds. This distrust caused a snowball effect on imports in Germany—a critical component to the country’s survival.
The loss of foreign support ultimately led to shaky domestic trust–further exacerbating the economy. As we know, investing capital is an emotional endeavor. And the Nazi party, despite its initial economic success, ultimately lost all credibility across the board, from financial acumen to governance and human rights.
Within 7 years of Nazi rule, Germany hit rock bottom.
Like Hitler in Germany, Mussolini campaigned on economic reform. And like his German counterpart, this Italian dictator found success in the early years.
For example, he subsidized farmers to increase Italy’s self-sufficiency in wheat, provided tax incentives to couples to increase population, and reclaimed land.
However, many of these initiatives were not as successful as the regime proclaimed. While Italy did more than double its wheat product, this also increased the cost of exports and the country still required significant fertilizer imports. Another instance is in land reclamation—the actual amount of land reclaimed was only 1/20th of the propaganda.
The biggest blow for the Italian economy at this time was the Battle of the Lira. Mussolini attempted to re-align the lira with the gold standard. They cut wages by 20% and placed tight controls on the money supply. However, by 1936, the administration was forced to devalue their currency. This weakened their position and purchasing power.
South Korea experienced a military junta in 1962, and at its helm was Park Chung-hee. His administration is noted for its pro-corporate structure.
Compared to the years before and after the junta, high inflation was fairly maintained in the early years. However, for the most part, Korea experienced high inflation, high interest rates, and a rise in inequality. Park attempted to quell discontent through an initial wage increase—but this was short lived.
This period was followed by a rapid downward spiral as the increase was unsustainable. This period is also categorized for its high business failures and reduced export competitiveness.
Park Chung-hee was assassinated in 1979, and South Korea soon held free elections. But the specter of that era haunted the country well into the 21st century. In fact, a study from Cambridge links Park Chung-hee’s privatization and deregulation of South Korea’s shipping industry to the April 2014 sinking of the MV Sewol. In this horrifying ferry accident, over 300 people died, 250 of them children.
Nahendra Modi became Prime Minister of India in 2014, promising a “Made in India” initiative and an end to the country’s economic woes. Ten years later, many issues remain.
Modi inherited a strong economy. Initially, strong GDP growth continued, attracting foreign investment. However, over the years, the country has seen high unemployment, with government numbers being highly unreliable. Over 80% of India’s workers operate without regulation and government oversight, making it impossible to accurately determine the unemployment rate. Low consumer spending, weakening foreign investment, and deposit crunch have all contributed to a strained economy underneath the tech hype.
What kind of policies did Modi implement? In 2016, he demonetized the 500 and 1,000 rupee bill overnight, causing a panic as consumers struggled to deposit their larger notes. The economy lost ₹107.2 billion ($123 billion) that was not circulated, and analysts largely concluded that the Prime Minister’s mission to curb black money failed.
Modi has also invested significant time and money in deporting refugees fleeing violence in Myanmar, as well as discriminating against poor, low-caste, and Muslim residents. He spent significant funds on renovating government buildings in Delhi, fueled ethno-religious division during the pandemic, and implemented poorly designed digital ID infrastructure.
While it is still considered a democracy, India under the Modi years has dropped its place in freedom. It was downgraded to a “partially free democracy” by Freedom House, a US non-profit in 2021. The Economist Intelligence Unit’s Democracy Index reported that India as a flawed democracy in 2023, stating the country lacks capability for fully free and fair elections.
We can learn much from pro-market but authoritative regimes: They don’t work in the long-term. Short bursts of economic prosperity spiral downward as rights for citizens dwindle away and good governance is eroded.
These case studies highlight the importance of understanding that we must balance value with expenses. Just as with any budget, some things just cannot be cut for a community or household to function—such as house rules and essential freedoms.
Basically: You get what you pay for.
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