After the war, Wagener was involved in the planning of an attack against the city of Posen (now Poznań, in Poland), but had to flee to the Baltic countries to avoid arrest. There he merged all Freikorps associations into the German Legion, and assumed leadership after its leader, Paul Siewert, was murdered. After returning to Germany, he was active in Freikorps operations in Upper Silesia, Saxony, and the Ruhr area.
In 1920 he studied economics and managed to broaden his knowledge by traveling abroad. In 1929 Wagener joined the Nazi Party and the Sturmabteilung, having been recruited by his old Friecorps comrade Franz Pfeffer von Salomon. As Kershaw explains, Wagener was able to put his business acumen and contacts to good usage for the Nazis, in this case for the SA:
Wagener had used his business contacts to persuade a cigarette firm to produce "Sturm" cigarettes for SA men -- a "sponsorship" deal benefiting both the firm and SA coffers. Stormtroopers were strongly encouraged to smoke only these cigarettes. A cut from the profit went to the SA ....
He functioned as SA Chief of Staff from October 1929 through December 1930, assuming effective command of the SA for a few months in the wake of the Stennes Revolt until the assumption of command by Ernst Röhm as the new Chief of Staff in early January 1931.[Note 1] In 1933 he became a member of the Reichstag.
In January 1931, Wagener led the Political-economic Department of the Nazi Party, and in September 1932 he was appointed the Führer's personal economic advisor. Hitler appointed him Reich Commissar for the Economy from April to June 1933.
By late 1930 or early 1931 Wagener had made a mark on Nazi economic policy. As Patch notes (p. 201-02):
Wagener formulated an original set of economic policies based on corporatist and leadership principles in confidential talks with Hitler and succeeded in recruiting many middle echelon industrial managers and owners of small factories for the NSDAP....[A confidential draft by Wagener] embraced the ideal of the corporatist "company union" (Werksgemeinschaft) and described the employer as the "Fuhrer" within his factory. All disputes over wages and working conditions would be settled within the "family" of the individual company in the National Socialist state of the future. Trade unions would be responsible merely for vocational training.
Wagener was replaced in his role as Commissioner for Economic Questions by Wilhelm Keppler, as Wagener had become embroiled in "coordination" disputes with leaders of industry after the Nazi assumption of power in January 1933, even forcibly occupying the industry-run trade association Reich Association of German Industry with the intention of shutting it down.
Internal conflicts led to legal proceedings against Wagener in 1933 and 1934 in a case brought before the USCHLA (Party tribunal). After the Night of the Long Knives, Wagener was detained for a short time. Nevertheless, he was rehabilitated, and he went back into the army.
In the Second World War, Wagener served at the front, rising to the rank of major general and division commander. After the war, Wagener found himself first in British and later, from 1947 to 1952, Italian prisoner of war camps. He died in Chieming.
In 1946, while being held by the British, Wagener wrote his memoirs about Hitler and the Nazi Party's early history, entitled Hitler aus nächster Nähe. Aufzeichnungen eines Vertrauten 1929−1932 (known in English as Hitler: Memoirs of a Confidant). His work was not published until six years after his death, in 1977. His memoirs are used, to some degree, by Third Reich historians.
- Knight's Cross of the Iron Cross on 5 May 1945 as Generalmajor and commander of the Division Insel Rhodos[Note 2]
- After the first Stennes Revolt in August 1930, Hitler assumed Supreme Command of the SA, having cashiered Wagener's friend and war comrade Pfeffer von Salomon as SA head. Wagener was the de facto leader of the SA from this time until Röhm's return in January 1931. See Stennes Revolt.
- The Knight's Cross presentation to Otto Wagener was unlawfully made by the Dönitz Government after 8 May 1945. This can be verified by documented radio communication dated on 21 May 1945. The presentation date was backdated by Walther-Peer Fellgiebel.
- Kershaw p. 348.
- See Lambert p. 237.
- Evans p. 384.
- Fellgiebel 2000, pp. 434, 507.
- Scherzer 2007, p. 182.
- Fellgiebel, Walther-Peer (2000). Die Träger des Ritterkreuzes des Eisernen Kreuzes 1939–1945 – Die Inhaber der höchsten Auszeichnung des Zweiten Weltkrieges aller Wehrmachtsteile [The Bearers of the Knight's Cross of the Iron Cross 1939–1945 — The Owners of the Highest Award of the Second World War of all Wehrmacht Branches] (in German). Friedberg, Germany: Podzun-Pallas. ISBN 3-7909-0284-5.
- Kershaw, Ian (1999). Hitler 1889–1936: Hubris. New York: W. W. Norton & Company. ISBN 0-393-04671-0.
- Patch, William L. (1985). The Christian Trade Unions in the Weimar Republic, 1918-1933: The Failure of Corporate Pluralism (illustrated edition). Yale University Press. ISBN 0-300-03328-1.
- Scherzer, Veit (2007). Die Ritterkreuzträger 1939–1945 Die Inhaber des Ritterkreuzes des Eisernen Kreuzes 1939 von Heer, Luftwaffe, Kriegsmarine, Waffen-SS, Volkssturm sowie mit Deutschland verbündeter Streitkräfte nach den Unterlagen des Bundesarchives [The Knight's Cross Bearers 1939–1945 The Holders of the Knight's Cross of the Iron Cross 1939 by Army, Air Force, Navy, Waffen-SS, Volkssturm and Allied Forces with Germany According to the Documents of the Federal Archives] (in German). Jena, Germany: Scherzers Miltaer-Verlag. ISBN 978-3-938845-17-2.