Adam Tooze’s “The Wages of Destruction” (Viking, 832 pages, $32.95) is not simply an economic history of Nazi Germany. It is a formidable and profound new interpretation of German rearmament beginning in 1933, the preparations for war prior to 1939, and conduct of the war until its disastrous end in 1945. Mr. Tooze focuses above all on the determinative role of Adolf Hitler, who came to power with an already developed agenda for Germany’s future that aimed at nothing less than a racial empire in the East that would result in German hegemony in Europe and the capacity for the Nazis to challenge America. The book provides a new analysis of the significance of America in Hitler’s strategic thinking. Germany before the war, Mr. Tooze repeatedly reminds us, was a modest European industrial power with an over populated agrarian sector that could neither provide its population the kind of prosperity available to Americans nor rival its industrial and military strength. At the same time, however, Hitler and his major associates recognized America as the great barrier to their quest for Lebensraum in the East and worldpower status.

This book makes sobering reading for those who, like this reviewer, have taught the history of Nazi Germany for many years from a perspective dictated by the existing literature. The standard history marks the year 1936 as the caesura between the period of consolidating domestic power and the significant rearmament drive that followed. Historians have commonly questioned whether Germany really had a war economy before 1939 and have suggested that the Blitzkrieg strategy employed at first against Russia, and later against Poland and France, was a means of forestalling the necessity of full mobilization. According to the pre-Tooze narrative, the great change, induced by the protracted war in the East and America’s entry in the war, came with the appointment of Albert Speer as armaments minister in February 1942. Speer’s appointment was accompanied by the full mobilization of the economy that led to the “armaments miracle” in the final years of the war. This very episodic treatment of the Nazi economy has typically emphasized the regime’s polycratic character, the competition and conflicts among its leaders, and the seeming incoherence of the Nazi conduct of the war.

According to Mr. Tooze, whose argument is buttressed throughout by new and important archival findings, “it is possible to reconstruct an intelligible and consistent strategic logic behind Hitler’s actions.” Although Mr. Tooze sometimes gives the impression that all his arguments are new, it has long been recognized that Hitler’s efforts to fight unemployment were borrowed from his predecessors and that the recovery from the Depression was already in progress when he came to power. What has been less remarked upon by other historians is the extraordinary increase in public expenditure for military purposes between 1933 and 1935, and the regime efforts to reduce its commercial engagements with France, England, and America, thus ending the policies pursued by Gustav Stresemann in the Weimar Republic.

Reichsbank President Hjalmar Schacht designed the “New Plan” of 1934 to subsidize exports and relieve the foreign exchange crisis, which, however, remained chronic. As Mr. Tooze shows, Hitler had very little interest in producing consumer goods or raising actual living standards if for no other reason than that he considered such efforts futile so long as his imperial goals were not realized. Faced in 1936 with a decision of whether to push forward and continue sacrificing the civilian to the military economy or to stabilize the strained economy with more exports, Hitler chose to create the war economy. The economic pressures springing from this policy, which led to a setback in airplane production in 1939, were such that Hitler saw no point in waiting to go to war since the ultimate economic inferiority of Germany could only increase and America would inevitably join the Allies.

For Hitler, the expectation of America’s entry into the war was linked to his delusional belief that a world Jewish conspiracy was working to produce the coalition against Germany. Mr. Tooze provides considerable evidence that this anxiety about such an alliance was widespread in the Nazi leadership. In any case, what Hitler lacked both before and after the defeat of Poland and France was any kind of coherent plan as to how he was to defeat the Anglo-American bloc. Both the pact with Stalin in 1939 and the invasion of the Soviet Union in 1941 were efforts to forestall full confrontation with a western alliance backed by America but the pursuit of Lebensraum in the East was always part and parcel of a the same grand project.

Mr. Tooze also provides a detailed account of the last years of the war, when Germany created a war economy that rested on plunder, massive exploitation of slave labor, and a deliberate policy of starvation of native populations of which the Holocaust became an intrinsic part. Nevertheless, this economy was no match for the forces arrayed against Germany. Thus the fears that had generated Hitler’s policy in the first place were realized. One of Mr. Tooze’s greatest achievements, however, is to destroy the mythology surrounding Albert Speer and the “armaments miracle” by demonstrating that it never existed. There never had been a drop in production prior to his coming to office. Rather, there had been a shift in priorities in what otherwise was a steadily developing war economy.

Of no less significance, however, is the evidence Mr. Tooze presents belying the pretension of Speer and his henchmen that they were nothing but technocrats trying to do their jobs in a nest of Nazi fanatics. As Mr. Tooze shows in his powerful analysis of the documentation, Speer and Himmler were allies pursuing common political goals, along with Fritz Sauckel, who was in charge of labor mobilization, and Herbert Backe, who implemented the Hunger Plan for Eastern Europe, and a host of military men and industrial managers who unhesitatingly pursued Hitler’s goals at the cost of countless innocent lives. Mr. Tooze rightly notes that one cannot use the language of the Holocaust when dealing with the bombing of Germany, which was an act of war and was far more effective than its critics maintain. “Wages of Destruction” definitively shows that the economic history of the Third Reich from beginning to end was inextricably bound up with its politics and had as its inevitable consequence the ruin of 1945.

Mr. Feldman is a professor of modern European history at the University of California, Berkeley.