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Why were Jews blamed for Germany's problems?

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This is a complex question.

Anti-Jewish or anti-semitic activities had been rampant in Europe for centuries before WWII. Germany was no exception to this attitude.

Hitler was a strong nationalist, meaning he thought his nation - Austria/Germany - was the best on the planet and by inference that all other nations were inferior. The opposite of being a Nazi/nationalist is to be a Communist. Communism by definition does not support the nationalist state but believes in a 'commune' relationship or one world government ('brotherhood of man'). The only Communist nation on earth in the 1920s and 30s was Russia/Soviet Union.

Many, perhaps a quarter or so, of the original top Soviet Communist leadership was ethnic Jewish. All kinds of conspiracy theories flourished. (These conspiracy theories never mentioned the fact that in Russia the government itself was rabidly anti-Jewish from 1881-1917, so it was not at all surprising that quite a number of Jews joined the Bolsheviks). Hitler and many other Nazis felt a deep hatred for Jews. In fact, the major war effort in WWII by Germany was against Russia in an attempt to destroy Communism and the Jews, whom he believed supported and led them. He also believed that the Jews were the biological root of Communism. (Marx was an ethnic Jew).

Many including Hitler believed that Jews had played a major part in Germany's defeat in WWI. Jews were prominent in some very influential in some sectors of the economy around the world such as banking/finance, cinema, and war industries. Many felt that the influence of these industries was used to push Germany towards defeat and, as part of a world conspiracy, to install Communism in Russia and Germany.
(Additionally: It can also be said that Hitler also targeted Jews for their material wealth - many of the Jewish possessions were seized, quoting figures in the hundred millions. )

If one looks closely at anti-Jewish claims and rhetoric, at the stereotypes, it is clear that the prejudices are fundamentally anti-modern. Not surprisingly, sections of society that felt squeezed by economic and social changes in the period from about 1910-33 - such as the lower reaches of the landowning aristocracy, owners of small shops and workshops - contained some of the most rabidly anti-Jewish elements.

There was also a regional dimension to this. Hostility to Jews was strongest in Bavaria, where Jews had played a prominent part in the revolutions of November 1918-May 1919. Hostility to Jews was also strong in the Danube region.

These various anti-Jewish forces and beliefs reached an almost religious zeal in the Nazi movement and culminated in the holocaust.

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