At a certain level I don't know whether we can really distinguish economic illiteracy from philosophic illiteracy (assuming by economics we mean the hundreds of years old scholarly tradition of prose analysis of the logic of exchange, and not the more recent mathematical predictive models) - so shrinking markets doesn't hold much tension against Peikoff's work in my view
Discussion
That's right. Peikoff's explanation of Hitler's raise to power is purely philosophical. He says it was driven by ideas. Not by economics.
I have now read the book and do find it quite persuasive
That said, it explains more the general brutality of the regime & the means by which it was able to garner wide support, as opposed to the specific pathologies & their support by even the rational remnant of the German intellectual class
Peikoff attributes the general trend to general ideas, which I think is hard to argue against
But specific trends and specific manifestations should probably be explained by specific ideas, as I have tried to do above
Yes, good point
He talks about deepest philosophical ideas that made it possible: mysticism, altruism, collectivism
Your points add specific issues at a time, that surely could also have contributed