1 00:00:17,560 --> 00:00:21,479 Speaker 1: Pushkin too quick. No, it's perfect push kid stuff. You 2 00:00:21,600 --> 00:00:33,320 Speaker 1: got it. 3 00:00:35,239 --> 00:00:37,400 Speaker 2: Where are we gonna start this story, Jacob. The place 4 00:00:37,480 --> 00:00:41,040 Speaker 2: is Hollywood, The time is the late nineteen sixties. We 5 00:00:41,120 --> 00:00:44,600 Speaker 2: are on the lot of a big Hollywood studio. They're 6 00:00:44,600 --> 00:00:48,280 Speaker 2: making a racing picture and they need to figure out 7 00:00:48,440 --> 00:00:51,519 Speaker 2: what car the hero is going to drive. They know 8 00:00:51,560 --> 00:00:56,360 Speaker 2: it's going to be something small, sporty foreign. That's what 9 00:00:56,400 --> 00:00:59,400 Speaker 2: they do is they get a bunch of candidate It's 10 00:00:59,400 --> 00:01:00,960 Speaker 2: a bunch of possible cars. 11 00:01:00,760 --> 00:01:03,680 Speaker 3: So maybe an Aston Martin, like a little Fiat yeah, 12 00:01:04,000 --> 00:01:08,120 Speaker 3: Volkswagen Beetle, and they park them on the studio lot 13 00:01:08,560 --> 00:01:11,880 Speaker 3: right outside the commissary and they just let like the 14 00:01:12,080 --> 00:01:14,800 Speaker 3: ordinary people who work at the studio check out the 15 00:01:14,880 --> 00:01:17,760 Speaker 3: cars as they're coming and going, and they watch how 16 00:01:17,800 --> 00:01:20,280 Speaker 3: the people react to the cars. 17 00:01:20,800 --> 00:01:24,440 Speaker 2: And with most of the cars, people do what you expect. 18 00:01:25,160 --> 00:01:27,280 Speaker 2: Maybe they kick the tires. Is that actually a thing? 19 00:01:27,360 --> 00:01:28,480 Speaker 2: Is it just a metaphor? No? 20 00:01:28,600 --> 00:01:31,440 Speaker 3: I think it's like back when rubber was bad, like 21 00:01:31,440 --> 00:01:32,600 Speaker 3: your foot would go through. 22 00:01:32,720 --> 00:01:34,440 Speaker 2: Is that what it was? I don't know. You want 23 00:01:34,440 --> 00:01:36,920 Speaker 2: a little bounce on the time, Okay, they like, you know, 24 00:01:37,400 --> 00:01:41,479 Speaker 2: play with the steering wheel whatever. But when the people 25 00:01:41,640 --> 00:01:46,000 Speaker 2: get to the Volkswagen Beetle, they act in an entirely 26 00:01:46,080 --> 00:01:49,400 Speaker 2: different way. They treat it not so much like a 27 00:01:49,440 --> 00:01:55,880 Speaker 2: car as like a cute little puppy. They're like petting it, tapping. 28 00:01:55,960 --> 00:02:01,400 Speaker 2: They and the producers see this and they think, oh, 29 00:02:01,720 --> 00:02:05,760 Speaker 2: this car is different, This car has charisma, this car 30 00:02:06,280 --> 00:02:09,320 Speaker 2: is a star. And they were originally going to call 31 00:02:09,400 --> 00:02:15,720 Speaker 2: the movie Carboy Girl. Why not sixties? Yeah, sure, but 32 00:02:15,800 --> 00:02:18,560 Speaker 2: they loved the Beatle so much that they ended up 33 00:02:18,600 --> 00:02:22,120 Speaker 2: calling the movie The love Bug, Herbie the love Bug. 34 00:02:22,160 --> 00:02:25,400 Speaker 2: I remember this from my childhood. I remember Herbie Goes Bananas, 35 00:02:25,480 --> 00:02:28,600 Speaker 2: the sequel. It had the novelization, which I bought at 36 00:02:28,600 --> 00:02:33,760 Speaker 2: the book fair and liked. The movie was a hit, 37 00:02:34,560 --> 00:02:37,680 Speaker 2: I think, the second biggest grossing movie of nineteen sixty nine, 38 00:02:37,760 --> 00:02:40,040 Speaker 2: right behind Butch Cassidy and The Sun Dance Kid. Not 39 00:02:40,120 --> 00:02:44,080 Speaker 2: a classic, and of course, so was the Beatle late 40 00:02:44,120 --> 00:02:47,440 Speaker 2: sixties peak Beetle. The car is in fact about to 41 00:02:47,480 --> 00:02:50,440 Speaker 2: become in a few years the best selling car of 42 00:02:50,560 --> 00:02:53,919 Speaker 2: all time, a record that it still holds. And maybe 43 00:02:54,040 --> 00:02:58,360 Speaker 2: my favorite thing about the Beatle in a perverse way, 44 00:02:58,520 --> 00:03:02,840 Speaker 2: this cute little puppy dog hippie car was dreamed up 45 00:03:03,000 --> 00:03:07,760 Speaker 2: by Adolf Hitler in part to conquer and subjugate his 46 00:03:07,840 --> 00:03:11,680 Speaker 2: European neighbors. I'm Jacob Goldstein and I'm Robert Smith. And 47 00:03:11,680 --> 00:03:15,440 Speaker 2: This is Business History, otherwise known as boy Boy Podcasts, 48 00:03:15,520 --> 00:03:17,680 Speaker 2: otherwise known as a show about the history of business. 49 00:03:17,840 --> 00:03:20,640 Speaker 3: These days, we talk a lot about industrial policy, the 50 00:03:20,720 --> 00:03:24,920 Speaker 3: rule of government in commerce. When should a government intervene 51 00:03:25,400 --> 00:03:29,080 Speaker 3: in the free market and decide what to manufacture? You know, 52 00:03:29,080 --> 00:03:32,560 Speaker 3: pick winners and losers, determine the prices of things. Even 53 00:03:33,080 --> 00:03:36,520 Speaker 3: Hitler tried to do all three and it was a disaster. 54 00:03:37,200 --> 00:03:39,400 Speaker 3: Except for the car itself, it turned out to be 55 00:03:39,480 --> 00:03:41,040 Speaker 3: pretty successful, the. 56 00:03:40,960 --> 00:03:43,160 Speaker 2: Most successful car in the history of cars. 57 00:03:43,600 --> 00:03:46,960 Speaker 3: In the nineteen thirties, Germany was a wreck. It had 58 00:03:47,000 --> 00:03:51,040 Speaker 3: lost World War One, had unsustainable reparations put on it, 59 00:03:51,360 --> 00:03:54,360 Speaker 3: the three year Versailles. It had the inflation of the 60 00:03:54,440 --> 00:03:58,600 Speaker 3: nineteen twenties and the violation of all inflations, wheelbarrels full 61 00:03:58,600 --> 00:04:01,360 Speaker 3: of money, you've seen the pictures. And then coming in 62 00:04:01,400 --> 00:04:05,240 Speaker 3: the nineteen thirties, there is a global depression and Germany 63 00:04:05,400 --> 00:04:10,000 Speaker 3: is just hitting the skids. It's got thirty percent unemployment, 64 00:04:10,800 --> 00:04:15,720 Speaker 3: utter poverty, and Adolf Hitler comes in with his promises. 65 00:04:16,000 --> 00:04:19,400 Speaker 2: Yeah, so nineteen thirty three, Hitler comes to Power, of course, 66 00:04:19,440 --> 00:04:22,880 Speaker 2: promising that he's gonna, you know, make Germany the greatest 67 00:04:23,000 --> 00:04:27,160 Speaker 2: nation on earth. And one important part of his promise 68 00:04:27,600 --> 00:04:32,400 Speaker 2: is material prosperity. Right Germany is it's not just a 69 00:04:32,400 --> 00:04:34,520 Speaker 2: country in the depression, not just a country that has 70 00:04:34,560 --> 00:04:38,800 Speaker 2: been burned with reparations. It is much poorer than France, 71 00:04:38,880 --> 00:04:41,960 Speaker 2: the United Kingdom, and much much poorer than the United States. 72 00:04:42,560 --> 00:04:47,359 Speaker 2: And so part of Hitler's program, his promise is to 73 00:04:47,440 --> 00:04:50,599 Speaker 2: figure out how Germans can get the kind of mass 74 00:04:50,600 --> 00:04:53,440 Speaker 2: produced goods that ordinary people in the United States are 75 00:04:53,440 --> 00:04:56,080 Speaker 2: now buying. And that's exactly what the Germans wanted to 76 00:04:56,120 --> 00:04:58,839 Speaker 2: hear at this time. Sure, and in particular, you know, 77 00:04:59,720 --> 00:05:03,359 Speaker 2: mass production and mass consumption is built on this idea 78 00:05:03,400 --> 00:05:05,920 Speaker 2: of sort of the people, the mass of people, right, 79 00:05:06,320 --> 00:05:11,440 Speaker 2: and the mass of people is really important for Hitler 80 00:05:11,520 --> 00:05:15,719 Speaker 2: and the not There is this German word vulcan like folk, 81 00:05:16,400 --> 00:05:18,960 Speaker 2: and it can mean people or it can mean nation. 82 00:05:19,839 --> 00:05:22,240 Speaker 2: The Nazis have this term. And I will say, now 83 00:05:22,320 --> 00:05:24,279 Speaker 2: I don't speak German, as you will hear in this show, 84 00:05:24,560 --> 00:05:27,960 Speaker 2: but the Nazis have this term Volksga mind shaft, which 85 00:05:28,000 --> 00:05:32,040 Speaker 2: means people's community, and it is their dream of the 86 00:05:32,160 --> 00:05:34,960 Speaker 2: Vulcan as a nation. And of course, crucially right for Hitler, 87 00:05:35,120 --> 00:05:37,440 Speaker 2: the Volcan doesn't mean all the people in Germany. No, 88 00:05:37,640 --> 00:05:40,240 Speaker 2: it means the Aryans and not the Jews and not 89 00:05:40,279 --> 00:05:44,520 Speaker 2: all the other undesirables. So Hitler comes to power with 90 00:05:44,600 --> 00:05:48,520 Speaker 2: this promise of prosperity, and he starts promising all this 91 00:05:48,800 --> 00:05:53,280 Speaker 2: Volk's stuff. There's the you can do it, you can 92 00:05:53,400 --> 00:06:00,920 Speaker 2: volks kim Fonger Radio, the People's radio, volkskul Schrank people's refrigerator, 93 00:06:01,000 --> 00:06:06,800 Speaker 2: that's the volks Fractor tractor factor. Yeah, and then maybe 94 00:06:07,279 --> 00:06:11,040 Speaker 2: the fewer's favorite, in fact, the Volk's vagin. 95 00:06:11,800 --> 00:06:16,160 Speaker 3: And it's interesting because that Hitler really prioritizes this, you know, 96 00:06:16,360 --> 00:06:18,159 Speaker 3: just a few weeks after it takes power in nineteen 97 00:06:18,240 --> 00:06:22,560 Speaker 3: thirty three, he goes to the Berlin Motor Show, which 98 00:06:22,560 --> 00:06:24,159 Speaker 3: is amazing, right, but I mean, I guess at the 99 00:06:24,200 --> 00:06:25,880 Speaker 3: time is right, it's not a lot to do. 100 00:06:26,080 --> 00:06:28,280 Speaker 2: Yeah, and he's like, what do we need to do? First? 101 00:06:28,600 --> 00:06:29,360 Speaker 2: A car? 102 00:06:30,200 --> 00:06:33,160 Speaker 3: And maybe because of the similar prosperity, or maybe because 103 00:06:33,160 --> 00:06:37,120 Speaker 3: he's already thinking about what a car can do. And 104 00:06:37,160 --> 00:06:39,280 Speaker 3: it's at that motor show nineteen thirty three that he 105 00:06:39,279 --> 00:06:42,080 Speaker 3: announces this dream of the Volkswag. 106 00:06:42,160 --> 00:06:44,640 Speaker 2: Yeah, and this dream for him, like it means a 107 00:06:44,680 --> 00:06:46,840 Speaker 2: lot of things, right. There is also this idea that 108 00:06:46,920 --> 00:06:50,719 Speaker 2: like when the vulcan have cars, it will help unite 109 00:06:50,760 --> 00:06:52,919 Speaker 2: them as a people. Right if you think of traditional 110 00:06:53,000 --> 00:06:55,599 Speaker 2: rural poverty, like you don't have a car, it's hard 111 00:06:55,640 --> 00:06:58,200 Speaker 2: to go from town to town. But if everybody has 112 00:06:58,760 --> 00:07:00,760 Speaker 2: a Vagan, then all the vulk they can go and 113 00:07:00,760 --> 00:07:03,799 Speaker 2: see the beautiful countryside, they can go and visit their neighbors. 114 00:07:03,839 --> 00:07:06,880 Speaker 3: They are distinct regions and in fact we're separate countries 115 00:07:06,880 --> 00:07:09,520 Speaker 3: at one point long before this, Yes, so it brings 116 00:07:09,560 --> 00:07:12,440 Speaker 3: them together as a country. And then there's another part 117 00:07:12,440 --> 00:07:15,720 Speaker 3: of the plan, which is at this point, because there 118 00:07:15,760 --> 00:07:18,080 Speaker 3: are not a lot of cars in Germany, not a 119 00:07:18,120 --> 00:07:22,080 Speaker 3: lot of Germans know how to drive, and Hitler has 120 00:07:22,200 --> 00:07:25,720 Speaker 3: this desire to take new territory and in order to 121 00:07:25,720 --> 00:07:28,240 Speaker 3: do that, he is going to need young men with 122 00:07:28,440 --> 00:07:31,040 Speaker 3: guns who can drive somewhere, and Germany. 123 00:07:30,720 --> 00:07:32,720 Speaker 2: Really is far behind here, right Like in the US 124 00:07:32,760 --> 00:07:34,880 Speaker 2: at this point, there's something like one car truck for 125 00:07:34,920 --> 00:07:38,800 Speaker 2: every five people and in Germany it's more like one 126 00:07:38,880 --> 00:07:42,680 Speaker 2: car truck for every one hundred and fifty people. Amazing. 127 00:07:42,960 --> 00:07:46,640 Speaker 3: And it's interesting because Germany invented the car. They invented 128 00:07:46,640 --> 00:07:48,679 Speaker 3: the car, and there were other small cars for sale, 129 00:07:48,680 --> 00:07:52,360 Speaker 3: but they were really expensive. They're almost just bespoke hobby vehicles. 130 00:07:52,440 --> 00:07:55,120 Speaker 2: Right, Yeah, Like even a cheap car in Germany at 131 00:07:55,120 --> 00:07:59,160 Speaker 2: this point costs something like two thousand reichs marks, which 132 00:07:59,200 --> 00:08:03,280 Speaker 2: is around two year salary for a typical worker, and 133 00:08:03,480 --> 00:08:06,600 Speaker 2: much more expensive, I should say, than basic cars in 134 00:08:06,640 --> 00:08:08,560 Speaker 2: the US were at this point. Right, Germany had not 135 00:08:09,040 --> 00:08:12,360 Speaker 2: mastered the mass production of the good cheap car the 136 00:08:12,400 --> 00:08:15,160 Speaker 2: way for it and GM had in the United States. 137 00:08:15,240 --> 00:08:18,920 Speaker 3: So Hitler's dream car manufacturing and that it be cheap 138 00:08:19,040 --> 00:08:22,960 Speaker 3: enough that the German people can afford it. So Hitler says, no, 139 00:08:23,080 --> 00:08:26,560 Speaker 3: it cannot be two thousand reich marks. It should be 140 00:08:27,960 --> 00:08:30,680 Speaker 3: nine hundred and ninety rex marks. I love this, like 141 00:08:30,720 --> 00:08:32,920 Speaker 3: he's at a ninety nine sided Star nine hundred and 142 00:08:33,040 --> 00:08:36,360 Speaker 3: ninety rex marks, which is less than half the price 143 00:08:36,720 --> 00:08:40,000 Speaker 3: of the going car. And according to Hitler, like he 144 00:08:40,079 --> 00:08:42,319 Speaker 3: has all these ideas for it, it should seat four or 145 00:08:42,319 --> 00:08:44,839 Speaker 3: five people. So a German family can travel around, right, 146 00:08:45,200 --> 00:08:47,120 Speaker 3: it should go at least fifty miles an hour, you know, 147 00:08:47,400 --> 00:08:50,640 Speaker 3: that way you can get to Moscow in a timely way. 148 00:08:50,920 --> 00:08:53,520 Speaker 3: Put the Blitz in the Blitz Creek exactly right. And 149 00:08:53,679 --> 00:08:56,600 Speaker 3: he says you should be able to mount machine guns 150 00:08:56,640 --> 00:08:59,760 Speaker 3: on it. Sure not for the family vacation, but you know, 151 00:08:59,840 --> 00:09:00,600 Speaker 3: for other things. 152 00:09:00,720 --> 00:09:04,800 Speaker 2: Never other plans. Right. And now there are German car 153 00:09:04,840 --> 00:09:08,120 Speaker 2: makers in Germany, right, there's still a private industry at 154 00:09:08,120 --> 00:09:11,320 Speaker 2: this point in the country. And they look at Hitler's 155 00:09:12,040 --> 00:09:17,760 Speaker 2: specs and price and they say, no way, you know. 156 00:09:17,880 --> 00:09:20,600 Speaker 2: They they are of course aware that that cheaper cars 157 00:09:20,600 --> 00:09:23,160 Speaker 2: are made in the US. But the German market is 158 00:09:23,280 --> 00:09:26,520 Speaker 2: way smaller than the US. There are fewer Germans. Germans 159 00:09:26,520 --> 00:09:30,120 Speaker 2: are much poorer. So even if the automakers could get 160 00:09:30,160 --> 00:09:32,720 Speaker 2: all of the knowledge, could build a factory like the 161 00:09:32,760 --> 00:09:35,480 Speaker 2: ones in the United States, there just isn't a German 162 00:09:35,679 --> 00:09:39,160 Speaker 2: market big enough to get the economy of scale to 163 00:09:39,280 --> 00:09:41,960 Speaker 2: sell a car this good at a price this low. 164 00:09:42,320 --> 00:09:44,240 Speaker 3: And the car makers, you know, they get together and 165 00:09:44,280 --> 00:09:48,480 Speaker 3: they're like, so, who's going to tell the fuer Adolf 166 00:09:48,559 --> 00:09:50,360 Speaker 3: Hitler that we can't do it? 167 00:09:51,840 --> 00:09:55,760 Speaker 2: We have some some notes on s Volkswagen on your 168 00:09:55,760 --> 00:09:59,600 Speaker 2: big plan. You've told everybody at the auto show. No, 169 00:09:59,600 --> 00:10:00,520 Speaker 2: nobody's gonna do that. 170 00:10:00,640 --> 00:10:03,760 Speaker 3: So what does a company do when it doesn't want 171 00:10:03,800 --> 00:10:05,160 Speaker 3: to deliver the bad news. 172 00:10:06,120 --> 00:10:08,480 Speaker 2: They hire a consultant. Yes, that's what they're for. 173 00:10:08,880 --> 00:10:11,560 Speaker 3: Yeah, they're going to have the consultant write a report 174 00:10:11,600 --> 00:10:14,160 Speaker 3: to the far that says, as an independent observer, it 175 00:10:14,240 --> 00:10:16,040 Speaker 3: is not possible to make the car and sell for 176 00:10:16,080 --> 00:10:17,360 Speaker 3: nine hundred ninety rex marks. 177 00:10:17,880 --> 00:10:21,480 Speaker 2: And pretty soon they find their man, an automotive engineer 178 00:10:21,559 --> 00:10:25,080 Speaker 2: by the name of doctor Ferdinand Porsche. We'll talk about 179 00:10:25,120 --> 00:10:51,960 Speaker 2: him after the break, we will. Okay, that's the end 180 00:10:51,960 --> 00:10:55,640 Speaker 2: of the ad. When we left, the German automakers had 181 00:10:55,679 --> 00:11:00,960 Speaker 2: just decided to hire as their consultant one doctor Ferdinand Porsche. 182 00:11:01,240 --> 00:11:04,280 Speaker 2: I'm guessing he is not a medical doctor. He's not 183 00:11:04,440 --> 00:11:09,920 Speaker 2: even an engineering doctor. He's an honorary engineering doctor. But 184 00:11:10,040 --> 00:11:11,000 Speaker 2: the doctor's important. 185 00:11:11,000 --> 00:11:12,760 Speaker 3: Maybe it gets the respect to the fer He can 186 00:11:13,040 --> 00:11:14,960 Speaker 3: lay the truth to him and just say that it 187 00:11:15,000 --> 00:11:17,000 Speaker 3: is not economically possible to build a cheap car. 188 00:11:17,080 --> 00:11:20,080 Speaker 2: Well, yeah, and certainly Porsche is like legit at this point, 189 00:11:20,120 --> 00:11:23,120 Speaker 2: he's been working in the auto industry for decades. He's 190 00:11:23,120 --> 00:11:26,240 Speaker 2: in his mid fifties, he designed cars for Daimler. He 191 00:11:26,280 --> 00:11:28,720 Speaker 2: worked on racing teams, and at this point he is 192 00:11:28,800 --> 00:11:31,599 Speaker 2: in fact a consultant. He's running a consultancy and he 193 00:11:31,640 --> 00:11:34,760 Speaker 2: gets this call from the automakers to be the you know, 194 00:11:34,880 --> 00:11:38,880 Speaker 2: bad news consultant, and he takes the job. He says, yeah, sure, 195 00:11:38,920 --> 00:11:41,920 Speaker 2: I'll study this, I'll write a report. But he's like, no, 196 00:11:42,440 --> 00:11:45,360 Speaker 2: I'm not gonna tell the fuer No, I'm gonna tell 197 00:11:45,400 --> 00:11:47,880 Speaker 2: him yes, hell yeah, hell yes, And I'll be the 198 00:11:47,920 --> 00:11:51,520 Speaker 2: man to make his Volkswagen dream come true German hero. 199 00:11:52,480 --> 00:11:56,160 Speaker 2: And so he gets to work designing the people's car 200 00:11:56,200 --> 00:11:59,160 Speaker 2: of Hitler's dreams and pretty quickly comes up with this 201 00:11:59,320 --> 00:12:04,200 Speaker 2: little scale model. And there are these amazing photos of 202 00:12:04,280 --> 00:12:07,120 Speaker 2: Porsche and Hitler looking at a model that's like, I 203 00:12:07,120 --> 00:12:10,599 Speaker 2: don't know a foot long of what will become the 204 00:12:10,640 --> 00:12:14,200 Speaker 2: Beatle described this car, except you have seen it. It 205 00:12:14,240 --> 00:12:17,920 Speaker 2: looks exactly like every Volkswagen Beetle you have ever seen 206 00:12:18,080 --> 00:12:21,920 Speaker 2: from the very beginning. It's that round, little hedgehog looking car. 207 00:12:22,200 --> 00:12:24,720 Speaker 2: And in this photo you can see Porsche is on 208 00:12:24,760 --> 00:12:29,800 Speaker 2: the left and Hitler like full on Hitler swastika armband 209 00:12:29,920 --> 00:12:34,640 Speaker 2: mustache slick down here. He's like petting the bumper. 210 00:12:35,000 --> 00:12:37,480 Speaker 3: Just like the people at the movie studio that thirty 211 00:12:37,520 --> 00:12:38,000 Speaker 3: years later. 212 00:12:38,080 --> 00:12:40,120 Speaker 2: Yeah yeah, And so I we can talk about the 213 00:12:40,160 --> 00:12:43,640 Speaker 2: design itself for a sec because it is so iconic 214 00:12:43,640 --> 00:12:45,320 Speaker 2: as an over us word, but it really is, and 215 00:12:45,360 --> 00:12:47,040 Speaker 2: they just nail it from the jump. 216 00:12:47,679 --> 00:12:50,560 Speaker 3: Remember at the time, American cars in the nineteen thirties 217 00:12:50,840 --> 00:12:55,040 Speaker 3: are long and sort of flat. I mean, if you 218 00:12:55,080 --> 00:12:58,280 Speaker 3: picture it right, there is a flat radiator grill on 219 00:12:58,320 --> 00:13:01,480 Speaker 3: the front, and then a long flat hood where the 220 00:13:01,520 --> 00:13:04,240 Speaker 3: engine is, and then the top tends to be flat 221 00:13:04,280 --> 00:13:07,320 Speaker 3: and long. It looks those cars look like a coffin 222 00:13:07,360 --> 00:13:09,840 Speaker 3: if you can imagine the kind of boxiness of them. 223 00:13:09,760 --> 00:13:14,800 Speaker 2: Right Yeah. Whereas the Beatle it's incredibly round. And so 224 00:13:14,880 --> 00:13:16,760 Speaker 2: there are a few things going on here, right. One 225 00:13:16,880 --> 00:13:19,680 Speaker 2: is at the time this roundness, I mean, it is 226 00:13:19,720 --> 00:13:23,960 Speaker 2: in fact aerodynamic. It conveyed modernity, right and in design, 227 00:13:24,400 --> 00:13:26,280 Speaker 2: the Germans loved modernity. 228 00:13:26,880 --> 00:13:29,400 Speaker 3: There's also a fact about a circle, which is a 229 00:13:29,400 --> 00:13:32,800 Speaker 3: circle has the most area inside it for the least 230 00:13:32,840 --> 00:13:35,760 Speaker 3: amount of circumference. So if you're building a car and 231 00:13:35,800 --> 00:13:38,040 Speaker 3: you're trying to make it cheap, you can use less 232 00:13:38,080 --> 00:13:41,760 Speaker 3: metal to make it circular and make it feel inside 233 00:13:41,760 --> 00:13:42,560 Speaker 3: like there's more space. 234 00:13:42,679 --> 00:13:45,040 Speaker 2: There's one other photo here that's amazing and it goes 235 00:13:45,080 --> 00:13:48,320 Speaker 2: with what we're talking about. Same scene. In this instance, 236 00:13:49,120 --> 00:13:52,120 Speaker 2: Porsche is like lifting up the back what would be 237 00:13:52,160 --> 00:13:55,560 Speaker 2: the trunk in a normal car, and Hitler is like 238 00:13:55,640 --> 00:13:58,640 Speaker 2: eeezing over to look, and he's delighted. And I have 239 00:13:58,720 --> 00:14:03,160 Speaker 2: to say, I find happy Hitler scarier than angry Hitler. 240 00:14:03,400 --> 00:14:07,480 Speaker 3: He is kind of laughing his ass off because when 241 00:14:07,520 --> 00:14:09,920 Speaker 3: you open the trunk of the car, what you see, 242 00:14:09,960 --> 00:14:12,120 Speaker 3: in fact is the engine. And I know if you've 243 00:14:12,120 --> 00:14:14,640 Speaker 3: ever seen this in Volkswagen Beetle, but the engine is 244 00:14:14,679 --> 00:14:17,680 Speaker 3: in the back, which is an innovation at the time and. 245 00:14:17,800 --> 00:14:21,640 Speaker 2: Well, and also the putting the engine in the back 246 00:14:21,800 --> 00:14:24,680 Speaker 2: is part of what allows the front to be so round, right, 247 00:14:24,720 --> 00:14:27,000 Speaker 2: and other cars at the time the engine was in 248 00:14:27,000 --> 00:14:28,520 Speaker 2: the front, the radiator was in the front, so you 249 00:14:28,600 --> 00:14:33,160 Speaker 2: needed that big rectangle and the air cooled piece of 250 00:14:33,200 --> 00:14:36,600 Speaker 2: this is key because there's not like modern anti freeze yet. 251 00:14:36,840 --> 00:14:41,200 Speaker 2: The Germans don't have garages, and so it would basically 252 00:14:41,240 --> 00:14:45,040 Speaker 2: freeze in the winter, particularly if you were like driving. 253 00:14:44,680 --> 00:14:47,960 Speaker 3: Say to Moscow or just outside of Moscow if ten 254 00:14:48,000 --> 00:14:50,840 Speaker 3: miles outside of it, yes, exactly. Let's do one more picture. 255 00:14:51,240 --> 00:14:53,440 Speaker 3: This one is from a few years later. Portia has 256 00:14:53,480 --> 00:14:57,600 Speaker 3: now built a full sized prototype of the Volkswagen Beetle. 257 00:14:57,680 --> 00:15:00,000 Speaker 3: It is a convertible and you can see in this 258 00:15:00,080 --> 00:15:02,760 Speaker 3: photo Hitler is sitting in the back. And this is 259 00:15:02,800 --> 00:15:05,720 Speaker 3: a detail I just love about this photo. There are 260 00:15:06,280 --> 00:15:09,960 Speaker 3: bars behind the front seat, the sort of bars that 261 00:15:10,040 --> 00:15:13,080 Speaker 3: you might see on a roller coaster, right, And these 262 00:15:13,120 --> 00:15:15,240 Speaker 3: were made so that Hitler could ride in the back 263 00:15:15,280 --> 00:15:18,640 Speaker 3: of a Volkswagen and stand up and hold onto the 264 00:15:18,640 --> 00:15:22,400 Speaker 3: bar with one hand and with the other hand, well, 265 00:15:22,440 --> 00:15:24,640 Speaker 3: you know, you know what's gonna happen with the other hand. 266 00:15:24,720 --> 00:15:28,520 Speaker 2: Yeah, heile me sieg, heile. I don't know what Hitler 267 00:15:28,560 --> 00:15:31,960 Speaker 2: says when he does the Heil Hitler. Yes, so it's 268 00:15:32,000 --> 00:15:34,880 Speaker 2: the hil Hitler Mobile. And of course he loves it. 269 00:15:35,320 --> 00:15:38,120 Speaker 2: He of course he loves it. But a prototype does 270 00:15:38,360 --> 00:15:41,600 Speaker 2: not mean that you can actually build this car or 271 00:15:41,600 --> 00:15:44,320 Speaker 2: build it cheaply. That's what Porsche is not telling it. Well, right, 272 00:15:44,400 --> 00:15:49,560 Speaker 2: and this is like one of the great lessons of manufacturing, right, Like, 273 00:15:49,920 --> 00:15:53,000 Speaker 2: it's actually not that hard to build a prototype, right, 274 00:15:53,040 --> 00:15:56,120 Speaker 2: to design a car. What they have to do now 275 00:15:56,840 --> 00:15:59,920 Speaker 2: is build a factory, which really means kind of invent 276 00:16:00,000 --> 00:16:03,800 Speaker 2: a factory, right Like, optimizing a factory to build quality 277 00:16:03,840 --> 00:16:09,440 Speaker 2: products at scale cheaply is a profoundly hard problem. And 278 00:16:09,800 --> 00:16:12,240 Speaker 2: this is the problem that the German auto industry knew 279 00:16:12,280 --> 00:16:13,880 Speaker 2: all along was going to be there. They knew all 280 00:16:13,920 --> 00:16:16,480 Speaker 2: along that sure you could design a prototype, but you 281 00:16:16,520 --> 00:16:18,840 Speaker 2: can't build it profitably and sell it at the price 282 00:16:18,960 --> 00:16:23,720 Speaker 2: Hitler insists on selling it at We have some some 283 00:16:23,960 --> 00:16:28,280 Speaker 2: SUTs about see folks fagin. Yeah, they basically drag their 284 00:16:28,320 --> 00:16:30,600 Speaker 2: feet right there because they know, like to try and 285 00:16:30,800 --> 00:16:32,840 Speaker 2: build this factory and make this car and sell it 286 00:16:32,880 --> 00:16:34,800 Speaker 2: at the right price would drive them out of business. 287 00:16:35,200 --> 00:16:39,280 Speaker 3: So Hitler sees this happening and he's like, no, we're 288 00:16:39,320 --> 00:16:40,480 Speaker 3: going to make this car. 289 00:16:41,040 --> 00:16:42,120 Speaker 2: And so he goes back to. 290 00:16:42,080 --> 00:16:45,680 Speaker 3: His favorite place, the Auto Show in nineteen thirty six 291 00:16:46,000 --> 00:16:48,240 Speaker 3: and gives another speech. I have to say, I just 292 00:16:48,320 --> 00:16:50,920 Speaker 3: never knew this part of Hitler's obsession. 293 00:16:50,960 --> 00:16:53,000 Speaker 2: But he did give a lot of speeches. Yeah, but 294 00:16:53,080 --> 00:16:55,120 Speaker 2: we knew that. I just didn't know the Auto show 295 00:16:55,160 --> 00:16:55,800 Speaker 2: part of it, right. 296 00:16:55,840 --> 00:16:59,880 Speaker 3: And so here is what he says to the assembled 297 00:17:00,320 --> 00:17:04,960 Speaker 3: auto manufacturers I have given orders to pursue the preparations 298 00:17:05,000 --> 00:17:09,680 Speaker 3: for the creation of the German People's Car with relentless determination, 299 00:17:10,560 --> 00:17:14,639 Speaker 3: and I will bring them to a conclusion. And that, gentleman, 300 00:17:14,960 --> 00:17:17,800 Speaker 3: will be a successful conclusion. 301 00:17:20,560 --> 00:17:22,639 Speaker 2: No, I have successful seclusion. 302 00:17:22,720 --> 00:17:25,920 Speaker 3: Notes that quote, by the way, comes from bernharder Reich, 303 00:17:25,960 --> 00:17:29,119 Speaker 3: gives a great book, The People's Car, a global history 304 00:17:29,119 --> 00:17:30,160 Speaker 3: of the Volkswagen Beetle. 305 00:17:30,840 --> 00:17:34,280 Speaker 2: So we're at this stalemate, right. Hitler wants the car, 306 00:17:34,840 --> 00:17:38,520 Speaker 2: none of the companies that build cars in Germany want 307 00:17:38,520 --> 00:17:43,640 Speaker 2: to build it. And into this stalemate steps the Deutsche 308 00:17:44,240 --> 00:17:49,720 Speaker 2: arbites Front, which is the Nazis' national labor organization. And 309 00:17:49,760 --> 00:17:52,400 Speaker 2: by this point mid thirties, they are rich and powerful 310 00:17:52,520 --> 00:17:56,720 Speaker 2: because when Hitler took power, what they did was they 311 00:17:56,800 --> 00:18:00,959 Speaker 2: threw the heads of Germany's unions into concentration camps and 312 00:18:01,080 --> 00:18:04,199 Speaker 2: took all the money from the unions. And instead of 313 00:18:04,240 --> 00:18:06,560 Speaker 2: using that money for the benefit of their union workers, 314 00:18:07,200 --> 00:18:10,760 Speaker 2: they decide they're going to use this money to get 315 00:18:10,760 --> 00:18:13,800 Speaker 2: the Furei's favor right to do what he wants, and 316 00:18:13,840 --> 00:18:16,040 Speaker 2: to put money into a factory. Yeah, they are going 317 00:18:16,080 --> 00:18:19,360 Speaker 2: to build the factory to build the People's Car, and 318 00:18:19,960 --> 00:18:22,879 Speaker 2: to run the project. They pick some kiss ass they 319 00:18:22,880 --> 00:18:26,320 Speaker 2: found off the street, doctor Ferdinand Porsche. Yes, yes, so 320 00:18:26,359 --> 00:18:29,639 Speaker 2: where are we now? Porsche has his design, Yes, he 321 00:18:29,680 --> 00:18:32,240 Speaker 2: has this source of capital. He has money, but he 322 00:18:32,400 --> 00:18:37,840 Speaker 2: lacks human capital. Right, this very important piece of industrialization 323 00:18:38,000 --> 00:18:41,720 Speaker 2: of progress. Right, Nobody in Germany knows how to build 324 00:18:41,720 --> 00:18:44,439 Speaker 2: the factory that's efficient enough to make cars at the 325 00:18:44,440 --> 00:18:47,239 Speaker 2: scale that Hitler is dreaming of, and as efficiently as 326 00:18:47,320 --> 00:18:50,120 Speaker 2: Hitler is dreaming of. Like, nobody knows how to do it. 327 00:18:50,480 --> 00:18:53,840 Speaker 3: This is one of those unappreciated facts about industrialization and 328 00:18:53,880 --> 00:18:54,760 Speaker 3: the Industrial revolution. 329 00:18:55,040 --> 00:18:58,160 Speaker 2: You think it's just the machines. It is not the machines. 330 00:18:58,359 --> 00:19:00,159 Speaker 3: It is people who can run the machines in a 331 00:19:00,200 --> 00:19:02,919 Speaker 3: really productive, effective way. And the way you set up 332 00:19:02,920 --> 00:19:04,920 Speaker 3: the machines and the way they all communicate with each 333 00:19:04,960 --> 00:19:08,479 Speaker 3: other is something that is proprietary knowledge. 334 00:19:08,520 --> 00:19:10,960 Speaker 2: It takes years to do. Yeah, I mean the classic 335 00:19:11,280 --> 00:19:15,159 Speaker 2: framework for economic growth was land, labor and capital, and 336 00:19:15,200 --> 00:19:19,560 Speaker 2: then like one hundred years in somebody Paul Rumer actually 337 00:19:19,600 --> 00:19:22,680 Speaker 2: I think, was like no, no, it's land, labor, capital 338 00:19:22,840 --> 00:19:23,679 Speaker 2: and knowledge. 339 00:19:24,080 --> 00:19:27,560 Speaker 3: So who knows how to build a big factory with 340 00:19:27,680 --> 00:19:31,919 Speaker 3: an assembly line to make cars by the hundreds of 341 00:19:31,960 --> 00:19:33,360 Speaker 3: thousands for the masses. 342 00:19:34,280 --> 00:19:38,920 Speaker 2: Henry Ford, who literally invented mass production of cars, kind 343 00:19:38,920 --> 00:19:40,320 Speaker 2: of invented modern mass production. 344 00:19:40,440 --> 00:19:43,960 Speaker 3: He has perfected this in an amazing way. Yeah, of course, 345 00:19:44,000 --> 00:19:47,200 Speaker 3: Henry Ford is really famous for two things. That assembly 346 00:19:47,280 --> 00:19:52,920 Speaker 3: line you mentioned and hating the Jews, famous anti semi yeah. 347 00:19:52,720 --> 00:19:55,040 Speaker 2: And like not just like oh everybody used to hate 348 00:19:55,080 --> 00:19:58,160 Speaker 2: the Jews. Like he really put his heart into it, 349 00:19:58,200 --> 00:20:02,959 Speaker 2: really did. He industrialized the jew hating. He paid for 350 00:20:03,000 --> 00:20:07,080 Speaker 2: this newspaper, the Dearborn Independent that published this series called 351 00:20:07,320 --> 00:20:10,840 Speaker 2: The International Jew. Was that pro or con International Jew? 352 00:20:11,400 --> 00:20:15,240 Speaker 2: Let me clarify. They consolidated the series into a book, 353 00:20:15,280 --> 00:20:18,760 Speaker 2: and the book was called The International Jew, The World's 354 00:20:19,040 --> 00:20:22,000 Speaker 2: Foremost Problem. Hitler was a fan of the book. He 355 00:20:22,000 --> 00:20:24,800 Speaker 2: actually had copies of it in his office in the twenties, 356 00:20:25,040 --> 00:20:28,560 Speaker 2: translated into German, and he also had on his wall 357 00:20:29,000 --> 00:20:32,119 Speaker 2: a portrait of Mainheinrich of Henry Ford. 358 00:20:32,400 --> 00:20:34,919 Speaker 3: You know, it's bad if you have a picture of 359 00:20:34,960 --> 00:20:38,120 Speaker 3: Adolf Hitler on your wall, But even worse is if 360 00:20:38,119 --> 00:20:41,080 Speaker 3: adaf Hitler has a picture of you on the wall. 361 00:20:41,440 --> 00:20:44,400 Speaker 2: Like that's as bad as it's peak, that's peak. So yes, 362 00:20:44,480 --> 00:20:47,080 Speaker 2: so doctor Portia and a few of his colleagues are 363 00:20:47,119 --> 00:20:52,719 Speaker 2: able to travel to Michigan to see Henry Ford's incredible plant, 364 00:20:52,840 --> 00:20:57,040 Speaker 2: incredible sort of temple of mass production and efficiency, learn 365 00:20:57,119 --> 00:21:01,440 Speaker 2: from it and go back to Germany to build the factory. 366 00:21:02,200 --> 00:21:05,600 Speaker 3: And what they saw really was a miracle at the time. 367 00:21:05,640 --> 00:21:10,280 Speaker 3: The River Rouge plant where raw materials like ross seel 368 00:21:10,280 --> 00:21:13,639 Speaker 3: would go in one end. They had power plants, transformational 369 00:21:13,720 --> 00:21:16,440 Speaker 3: all of the all of the industrial machinery. 370 00:21:16,440 --> 00:21:19,239 Speaker 2: They had a foundry and cars roll at the other end. 371 00:21:19,400 --> 00:21:21,960 Speaker 3: Yeah, Like it is a miracle at the time, and 372 00:21:22,000 --> 00:21:23,200 Speaker 3: they think, uh. 373 00:21:23,680 --> 00:21:25,840 Speaker 2: We got to build this for the funera. Yeah, And 374 00:21:25,880 --> 00:21:29,040 Speaker 2: so they go out to basically the countryside where nothing exists, 375 00:21:29,119 --> 00:21:32,440 Speaker 2: and they start building. They build, you know, the factory, 376 00:21:32,480 --> 00:21:35,960 Speaker 2: but they also build a power plant and a foundry 377 00:21:36,000 --> 00:21:38,760 Speaker 2: and houses where the workers are going to work. And 378 00:21:38,800 --> 00:21:42,320 Speaker 2: the workers, by the way, are not just anybody. The 379 00:21:42,400 --> 00:21:45,439 Speaker 2: workers themselves are going to be the Vulcan. It's going 380 00:21:45,480 --> 00:21:47,680 Speaker 2: to be the car by the Vulcan for the vult 381 00:21:47,720 --> 00:21:50,680 Speaker 2: So everybody they're recruiting are like Hitler youth. 382 00:21:51,000 --> 00:21:54,360 Speaker 3: It is a fascinating experiment in a way, right because 383 00:21:54,920 --> 00:21:59,359 Speaker 3: the Henry Ford plant was the product of the free market. Competition. 384 00:21:59,880 --> 00:22:01,800 Speaker 3: Workers came and learned it the plant, but could work 385 00:22:01,840 --> 00:22:04,440 Speaker 3: in other car manufacturers or bring back skills from other 386 00:22:04,480 --> 00:22:08,040 Speaker 3: car manufacturers to the Henry Ford plant. Here's Hitler saying, well, 387 00:22:08,080 --> 00:22:11,359 Speaker 3: I know what it should look like, so let's just 388 00:22:11,440 --> 00:22:14,560 Speaker 3: do it without competition. Let's not bring the best workers, 389 00:22:14,560 --> 00:22:17,200 Speaker 3: but the most loyal workers. The arean youth like, let's 390 00:22:17,240 --> 00:22:21,000 Speaker 3: bring them. Let's set the price, let's make this happen. 391 00:22:21,160 --> 00:22:24,000 Speaker 2: The dream was to build one hundred and fifty thousand 392 00:22:24,080 --> 00:22:26,800 Speaker 2: cars in the first year, going up to one point 393 00:22:26,920 --> 00:22:29,600 Speaker 2: five million cars a year, which is like more cars 394 00:22:29,640 --> 00:22:32,399 Speaker 2: than there are in all of Germany at this point. 395 00:22:32,480 --> 00:22:35,640 Speaker 2: And so in nineteen thirty eight, Hitler goes to this 396 00:22:35,960 --> 00:22:39,600 Speaker 2: ceremony to lay the cornerstone at the factory, and he 397 00:22:39,720 --> 00:22:44,240 Speaker 2: gives wait for it, a speech defending the idea and 398 00:22:44,640 --> 00:22:48,040 Speaker 2: talking about the haters. Actually he says something like, you know, 399 00:22:48,440 --> 00:22:51,960 Speaker 2: people told me this was a terrible idea, impossible. But 400 00:22:52,080 --> 00:22:54,920 Speaker 2: here they are breaking ground on the factory. Hitler says, 401 00:22:54,960 --> 00:22:58,679 Speaker 2: in fact, I hate the word impossible. And around this 402 00:22:58,720 --> 00:23:01,119 Speaker 2: point they decide to rename the car they've just been 403 00:23:01,160 --> 00:23:04,159 Speaker 2: calling it the Volkswagen, like the Volks everything else. But 404 00:23:04,320 --> 00:23:06,159 Speaker 2: around this time they decide they're going to call it 405 00:23:06,200 --> 00:23:11,400 Speaker 2: the the coughed dersh Freude, the Strength through Joy Wagon 406 00:23:11,600 --> 00:23:13,560 Speaker 2: Katie for short. It's amazing. 407 00:23:13,600 --> 00:23:15,639 Speaker 3: I just want to say it again, Strength through Joy. 408 00:23:15,680 --> 00:23:17,920 Speaker 3: And this is nineteen thirty eight, so there's not a 409 00:23:17,960 --> 00:23:21,440 Speaker 3: lot of joy left these days in Germany. That's how 410 00:23:21,480 --> 00:23:24,000 Speaker 3: you know when they start to name the car the 411 00:23:24,119 --> 00:23:25,280 Speaker 3: Strength Through Joy. 412 00:23:25,560 --> 00:23:30,400 Speaker 2: I mean, it is so like amazingly Orwellian, and they're like, oh, right, 413 00:23:30,480 --> 00:23:32,200 Speaker 2: this is what Orwell was right, this is what he 414 00:23:32,280 --> 00:23:36,080 Speaker 2: was talking about, is right. And in fact KDF Strength 415 00:23:36,080 --> 00:23:39,439 Speaker 2: through Joy was like a brand for the Nazis at 416 00:23:39,440 --> 00:23:42,040 Speaker 2: this point. There was like KDF cruise ships and the 417 00:23:42,240 --> 00:23:45,680 Speaker 2: r BYTES front this labor group that remembers bankrolling the factory. 418 00:23:45,680 --> 00:23:48,960 Speaker 2: They're like into KDF, and part of the idea, I 419 00:23:49,000 --> 00:23:53,480 Speaker 2: think is they are basically underpaying the workers but trying 420 00:23:53,520 --> 00:23:56,200 Speaker 2: to like kind of make it up or keep them 421 00:23:56,200 --> 00:23:59,240 Speaker 2: happy enough by giving them these little bobbles, like little 422 00:23:59,320 --> 00:24:02,160 Speaker 2: KDF vacations and hopefully a car. 423 00:24:02,520 --> 00:24:05,239 Speaker 3: So at the end of this ceremony where they're going 424 00:24:05,280 --> 00:24:07,560 Speaker 3: to start building the factory, Hitler drives off in one 425 00:24:07,600 --> 00:24:10,760 Speaker 3: of these KDF cars for Nan Porsche sat beside him. 426 00:24:10,840 --> 00:24:14,840 Speaker 3: Porscha's sun is the crowd of fifty five thousand people 427 00:24:14,880 --> 00:24:17,000 Speaker 3: goes wild. The New York Times says this is a 428 00:24:17,040 --> 00:24:20,640 Speaker 3: public relations coup, and they call the car when they're 429 00:24:20,680 --> 00:24:24,000 Speaker 3: describing it in New York Times the in language a 430 00:24:24,080 --> 00:24:27,640 Speaker 3: shiny little beetle ah, which is the first time we 431 00:24:27,680 --> 00:24:30,160 Speaker 3: hear this referred to as an adorable bug. 432 00:24:30,960 --> 00:24:34,080 Speaker 2: So they've just laid the cornerstone. The factory is not 433 00:24:34,280 --> 00:24:37,520 Speaker 2: built yet, but uh, doctor Porsche, not a real doctor. 434 00:24:37,560 --> 00:24:40,879 Speaker 2: And the our bites front, they have this clever sales model, 435 00:24:41,480 --> 00:24:46,879 Speaker 2: actually a model that Henry Ford had used earlier, and 436 00:24:46,920 --> 00:24:51,280 Speaker 2: that is this ordinary Germans could sign up for like 437 00:24:51,320 --> 00:24:55,520 Speaker 2: a savings plan where they pay in five reichs marks 438 00:24:55,600 --> 00:24:58,359 Speaker 2: a week, which is like, you know, a typical German 439 00:24:58,440 --> 00:25:00,679 Speaker 2: makes maybe twenty five reis marks a week, so like 440 00:25:00,680 --> 00:25:04,439 Speaker 2: a significant chunk. And once they'd saved seven hundred and 441 00:25:04,520 --> 00:25:06,399 Speaker 2: fifty reichs marks or so, so this is like a 442 00:25:06,400 --> 00:25:09,399 Speaker 2: few years of savings, they would get an order number 443 00:25:09,520 --> 00:25:13,040 Speaker 2: for their brand new strength through joy Vagin. 444 00:25:13,640 --> 00:25:16,439 Speaker 3: I can see the advertising campaign I'm assuming at this 445 00:25:16,440 --> 00:25:20,160 Speaker 3: point in nineteen thirty eight, it's a little encouraged by 446 00:25:20,200 --> 00:25:23,600 Speaker 3: authorities to give up your wages for this car that 447 00:25:23,680 --> 00:25:24,640 Speaker 3: may or may not come. 448 00:25:25,080 --> 00:25:28,840 Speaker 2: I mean, it is certainly good business. Let's set aside 449 00:25:28,920 --> 00:25:30,639 Speaker 2: at the point of the gun for a moment, just 450 00:25:30,680 --> 00:25:33,320 Speaker 2: to say, if you can get people to pay for 451 00:25:33,400 --> 00:25:36,080 Speaker 2: a thing where you haven't even built the factory, that 452 00:25:36,240 --> 00:25:38,560 Speaker 2: is good for you, right, because now they are providing 453 00:25:38,600 --> 00:25:40,600 Speaker 2: the capital that you need to build the factory to 454 00:25:40,640 --> 00:25:44,919 Speaker 2: deliver the car, and in fact, through compulsion or otherwise, 455 00:25:45,040 --> 00:25:50,119 Speaker 2: people do sign up. They have something like two hundred 456 00:25:50,160 --> 00:25:52,480 Speaker 2: and fifty thousand orders come in, which is a lot, 457 00:25:52,560 --> 00:25:55,399 Speaker 2: although to be clear, not nearly enough to make the 458 00:25:55,480 --> 00:25:59,800 Speaker 2: car economically feasible. Right, They're gonna need to build so 459 00:26:00,000 --> 00:26:03,640 Speaker 2: many more if they ever want to sell it at 460 00:26:03,760 --> 00:26:06,080 Speaker 2: the nine hundred and ninety Reichs marks that Hitler said, 461 00:26:06,160 --> 00:26:07,879 Speaker 2: and not go bankrupt. 462 00:26:08,400 --> 00:26:11,360 Speaker 3: If you're taking notes at this point saying well, I mean, 463 00:26:12,080 --> 00:26:13,720 Speaker 3: it seems like a good idea. You're taking all this 464 00:26:13,760 --> 00:26:16,679 Speaker 3: money from people building the factory promising the cars. They're 465 00:26:16,920 --> 00:26:20,959 Speaker 3: actually creating construction jobs. You know, you had this economically 466 00:26:21,000 --> 00:26:25,159 Speaker 3: devastated Germany, which now is seeing action. Right, people have jobs. 467 00:26:25,200 --> 00:26:28,119 Speaker 3: Money is flowing all this sort of stuff. I should 468 00:26:28,160 --> 00:26:31,160 Speaker 3: say that if you have a command and control economy 469 00:26:31,200 --> 00:26:33,600 Speaker 3: like this, you can make the economy. 470 00:26:34,200 --> 00:26:36,200 Speaker 2: Have a sort of sugar high very quickly. 471 00:26:36,280 --> 00:26:38,080 Speaker 3: Right, you can get people to work in all of this, 472 00:26:38,200 --> 00:26:43,760 Speaker 3: But long term, you are producing a car that costs 473 00:26:43,800 --> 00:26:45,960 Speaker 3: more than you're going to sell it for like eventually, 474 00:26:46,119 --> 00:26:47,960 Speaker 3: like I think Germany could have come up with a 475 00:26:47,960 --> 00:26:50,560 Speaker 3: great cheap car, but it would have required a lot 476 00:26:50,680 --> 00:26:55,400 Speaker 3: of different companies competing and finding you know, incremental progress 477 00:26:55,480 --> 00:26:56,000 Speaker 3: rather than this. 478 00:26:56,760 --> 00:26:58,159 Speaker 2: We're going to lay out the whole plan and do 479 00:26:58,200 --> 00:27:01,680 Speaker 2: it immediately. But you know, as it happens, long term 480 00:27:01,760 --> 00:27:04,200 Speaker 2: economic growth is not going to be the main question 481 00:27:04,800 --> 00:27:08,120 Speaker 2: in Germany in the years following nineteen thirty eight. 482 00:27:08,640 --> 00:27:11,760 Speaker 3: Yes, because in nineteen thirty nine, I know what happens Germany, 483 00:27:11,760 --> 00:27:13,400 Speaker 3: and it's Poland, it's World War two. 484 00:27:14,480 --> 00:27:16,520 Speaker 4: Let's take a quick break and then we'll continue with 485 00:27:16,560 --> 00:27:34,480 Speaker 4: the story. 486 00:27:40,800 --> 00:27:46,640 Speaker 2: And so initially this KDF factory starts making just very 487 00:27:46,680 --> 00:27:51,720 Speaker 2: sort of classic war things like aircraft wings and fuel tanks. 488 00:27:52,119 --> 00:27:54,320 Speaker 2: But it's not going well. You know, it wasn't built 489 00:27:54,359 --> 00:27:58,639 Speaker 2: to build whatever aircraft wings and so doctor Porsche not 490 00:27:58,760 --> 00:28:01,800 Speaker 2: a real doctor says, Remember, Fury, you had the idea 491 00:28:01,840 --> 00:28:04,720 Speaker 2: of like the machine guns and like building it to say, 492 00:28:04,760 --> 00:28:08,119 Speaker 2: invade Poland. Why don't we do that? Why don't we 493 00:28:08,119 --> 00:28:11,280 Speaker 2: take this cute little round Volkswagen and turn it into 494 00:28:11,359 --> 00:28:13,000 Speaker 2: like a attack Wagan. 495 00:28:13,119 --> 00:28:14,880 Speaker 3: And I've seen a picture of it, and it's amazing. 496 00:28:14,920 --> 00:28:18,159 Speaker 3: You can still see the beetle shape under it, but 497 00:28:18,200 --> 00:28:21,240 Speaker 3: it looks as if a hedgehog is sort of wearing 498 00:28:21,520 --> 00:28:25,800 Speaker 3: medieval armor. It's much more boxy. The car is jacked 499 00:28:25,880 --> 00:28:27,879 Speaker 3: up a little bit higher, you know, so that it 500 00:28:27,880 --> 00:28:30,680 Speaker 3: could drive over I don't know, the fields of Poland 501 00:28:30,840 --> 00:28:31,639 Speaker 3: and attack people. 502 00:28:31,920 --> 00:28:34,679 Speaker 2: They call it the kubel Wagan, the bucket car. And 503 00:28:34,720 --> 00:28:38,120 Speaker 2: there's one modification that's just interesting to me that they make, 504 00:28:38,160 --> 00:28:40,200 Speaker 2: which is they actually have to make it so that 505 00:28:40,240 --> 00:28:43,280 Speaker 2: it can drive slower, I guess without stalling out right, 506 00:28:43,680 --> 00:28:45,600 Speaker 2: because it has to drive at the speed that the 507 00:28:45,720 --> 00:28:49,920 Speaker 2: army marches. So now they have the model of the 508 00:28:49,960 --> 00:28:52,360 Speaker 2: car they're going to build to further the war effort. 509 00:28:53,200 --> 00:28:56,600 Speaker 2: But all those Hitler youth who were working in that 510 00:28:56,720 --> 00:29:00,920 Speaker 2: KDF factory are now off fighting the war. They are gone. 511 00:29:01,080 --> 00:29:05,320 Speaker 2: And so here is where it starts to get much worse. Frankly, 512 00:29:05,440 --> 00:29:08,480 Speaker 2: this is a story about the Nazis. Perhaps unsurprisingly, it's 513 00:29:08,480 --> 00:29:11,680 Speaker 2: gonna get bad right now. So the Nazis arrange for 514 00:29:13,040 --> 00:29:16,840 Speaker 2: basically enslaved Polish women. Poland has been conquered by this point, 515 00:29:16,920 --> 00:29:20,960 Speaker 2: enslaved Polish women to be sent in to be forced 516 00:29:21,040 --> 00:29:26,480 Speaker 2: laborers at this factory, hundreds of them, three hundred of them. 517 00:29:27,240 --> 00:29:30,040 Speaker 2: But it's not going that well. Of course. You know, 518 00:29:30,080 --> 00:29:32,680 Speaker 2: these women are being forced to make a car that 519 00:29:32,760 --> 00:29:35,280 Speaker 2: is being used to subjugate their own country, and they're 520 00:29:35,320 --> 00:29:39,320 Speaker 2: untrained and it's just not working out. So they fire 521 00:29:39,360 --> 00:29:41,440 Speaker 2: the guy who's running the factory and they bring in 522 00:29:41,480 --> 00:29:44,840 Speaker 2: Portia's son in law, a guy named Anton Piech, and 523 00:29:45,160 --> 00:29:48,040 Speaker 2: he just brings in all of the enslaved workers that 524 00:29:48,080 --> 00:29:52,800 Speaker 2: he can. He goes from hundreds to thousands. There are 525 00:29:53,080 --> 00:29:56,880 Speaker 2: Soviet soldiers who had been taken prisoner, but they are 526 00:29:56,920 --> 00:29:59,160 Speaker 2: like so badly treated and starved by the time they 527 00:29:59,200 --> 00:30:01,400 Speaker 2: get there that they can't do much and they start 528 00:30:01,440 --> 00:30:05,880 Speaker 2: to literally die off. There are Dutch students who refuse 529 00:30:06,000 --> 00:30:10,400 Speaker 2: to sign a loyalty pledge they are delivered to the factory, 530 00:30:11,000 --> 00:30:14,480 Speaker 2: and more and more they're bringing in Jews from concentration 531 00:30:14,640 --> 00:30:18,280 Speaker 2: camps along with their SS guards who are making them work. 532 00:30:18,440 --> 00:30:21,320 Speaker 3: At this point, the workers are making the Kubler Wagens, right, 533 00:30:21,600 --> 00:30:25,200 Speaker 3: They're also making military stoves, weapons parts for missiles. This 534 00:30:25,280 --> 00:30:29,520 Speaker 3: is a pure military industrial complex at this point, and 535 00:30:29,760 --> 00:30:33,160 Speaker 3: it is a profitable one, you know, the Porsche family 536 00:30:33,480 --> 00:30:36,280 Speaker 3: they are charging the Nazis to do all of this 537 00:30:36,480 --> 00:30:40,280 Speaker 3: and making a huge profit because they're not paying their workers. 538 00:30:40,400 --> 00:30:45,120 Speaker 2: Right. And there's one detail from the official history of 539 00:30:45,200 --> 00:30:47,840 Speaker 2: Volkswagen that I want to mention about what happens at 540 00:30:47,840 --> 00:30:51,800 Speaker 2: the factory around this time, and that is this some 541 00:30:51,880 --> 00:30:54,760 Speaker 2: of the enslaved women brought to the factory were pregnant 542 00:30:54,800 --> 00:30:58,000 Speaker 2: when they arrived, or became pregnant later. And what they 543 00:30:58,040 --> 00:31:01,920 Speaker 2: started doing was taking the babies from their mothers, you know, 544 00:31:02,080 --> 00:31:04,200 Speaker 2: right after they were born. And they said they were 545 00:31:04,240 --> 00:31:08,920 Speaker 2: putting them in a nursery, but really the nursery was 546 00:31:09,040 --> 00:31:12,560 Speaker 2: just abandoning them to die. Like here, vote from the 547 00:31:12,720 --> 00:31:15,840 Speaker 2: official history, it says by the end of the war, 548 00:31:16,320 --> 00:31:19,600 Speaker 2: three hundred and sixty five children died as a result 549 00:31:19,800 --> 00:31:24,880 Speaker 2: of neglect and inadequate nutrition. Basically every baby sent to 550 00:31:24,920 --> 00:31:30,000 Speaker 2: this facility died. It's late nineteen forty four. 551 00:31:30,000 --> 00:31:33,160 Speaker 3: At this point nineteen forty five, early nineteen forty five, 552 00:31:33,560 --> 00:31:36,400 Speaker 3: and the Allies are closing in on Germany. They are 553 00:31:36,440 --> 00:31:40,240 Speaker 3: starting to bomb the plant, the Volkswagen plant. They're moving 554 00:31:40,280 --> 00:31:42,520 Speaker 3: closer and closer to Germany itself. 555 00:31:42,680 --> 00:31:46,840 Speaker 2: So Portia and his son in Lapierre, they've actually been 556 00:31:46,920 --> 00:31:49,720 Speaker 2: like squirrelling away millions of reichs Marks this whole time, 557 00:31:49,840 --> 00:31:51,120 Speaker 2: and they flee to Austria. 558 00:31:51,680 --> 00:31:54,000 Speaker 3: And this is the chance, as the plant is falling 559 00:31:54,000 --> 00:31:57,040 Speaker 3: apart that the prisoners there have been waiting for. They 560 00:31:57,160 --> 00:31:59,080 Speaker 3: take over what's left to the factory and they start 561 00:31:59,120 --> 00:32:03,400 Speaker 3: to hunt down the worst of their oppressors, the guards 562 00:32:03,480 --> 00:32:06,320 Speaker 3: and the management that were like enslaving them. 563 00:32:06,360 --> 00:32:11,000 Speaker 2: And then finally, sometime around April fifteenth of nineteen forty five, 564 00:32:11,120 --> 00:32:15,200 Speaker 2: the Americans occupy the Volkswagen factory. They find the starving, 565 00:32:15,280 --> 00:32:18,920 Speaker 2: enslaved workforce and the nursery where the babies had died. 566 00:32:19,440 --> 00:32:22,800 Speaker 2: You know, they see everything. The Nazis have lost. The 567 00:32:22,880 --> 00:32:23,720 Speaker 2: Allies have won. 568 00:32:24,960 --> 00:32:28,120 Speaker 3: And one of the reasons the Allies won was what 569 00:32:28,200 --> 00:32:32,760 Speaker 3: Hitler wanted. The Allies outproduced the Germans, largely using factories 570 00:32:32,800 --> 00:32:37,560 Speaker 3: owned by GM, Chrysler and even Henry Ford main Heinrich. Right, 571 00:32:37,840 --> 00:32:40,840 Speaker 3: they built the bombers and the tanks and the jeeps 572 00:32:41,400 --> 00:32:43,840 Speaker 3: that allowed the US the Allies to win the war. 573 00:32:44,080 --> 00:32:46,360 Speaker 2: Yeah, I mean there is this there's this phrase people 574 00:32:46,440 --> 00:32:49,920 Speaker 2: use the arsenal of democracy, right, And it's really interesting, 575 00:32:50,040 --> 00:32:53,480 Speaker 2: like the American industrial economy, and in particular the car 576 00:32:53,520 --> 00:32:57,320 Speaker 2: makers that had developed in this competitive private market for 577 00:32:57,400 --> 00:33:01,720 Speaker 2: decades when the war came were turned to basically government 578 00:33:01,760 --> 00:33:05,240 Speaker 2: production to make military vehicles. But because of what they'd 579 00:33:05,280 --> 00:33:07,760 Speaker 2: honed in the private market, they were amazing at it 580 00:33:08,120 --> 00:33:11,760 Speaker 2: and they outproduced the Nazis and that was key to 581 00:33:12,680 --> 00:33:13,840 Speaker 2: the war. So how does this. 582 00:33:13,960 --> 00:33:18,600 Speaker 3: Utter failure of a plan by Adolf Hitler, no People's car, 583 00:33:18,840 --> 00:33:22,120 Speaker 3: destroyed factory a legacy of evil? How does that company 584 00:33:22,160 --> 00:33:26,120 Speaker 3: go on to make a cute car beloved by Americans. 585 00:33:26,600 --> 00:33:29,560 Speaker 2: That is the story for the next time, part two 586 00:33:29,680 --> 00:33:30,680 Speaker 2: of The Beatle. 587 00:33:30,800 --> 00:33:34,160 Speaker 3: When we bring this story to a conclusion, and that, gentlemen, 588 00:33:34,440 --> 00:33:36,760 Speaker 3: will be a successful conclusion. 589 00:33:38,520 --> 00:33:40,560 Speaker 2: Appreciate the commitment to the bet Yeah, tran. 590 00:33:41,520 --> 00:33:44,800 Speaker 3: Our producer is Gabriel Hunter Chang, our engineer is Sarah Bruguier, 591 00:33:45,280 --> 00:33:48,360 Speaker 3: and our showrunner is Ryan Dilly. I'm Jacob Goldstein and 592 00:33:48,360 --> 00:33:50,440 Speaker 3: I'm Robert Smith. We'll be back next week with another 593 00:33:50,480 --> 00:33:51,800 Speaker 3: episode of Business 594 00:33:52,000 --> 00:33:57,400 Speaker 2: History, a show about the history, wait for it, of 595 00:33:57,440 --> 00:33:58,800 Speaker 2: business