HOW SUCCESSFUL WAS NAZI ECONOMIC

POLICY?Noel Dube 12R

Hitler was determined & lucky. German & World slump already had bottomed out

1932 Economy was already improving before the

handover It was difficult to take action under the

Weimar constitution Weimar had already ended reparation

payments which helped psychologically Reject orthodoxies of economic liberalism

that constrained Weimar Politicians State intervention & deficit financing

HITLER v.s. WEIMAR

STIMULATING ECONOMIC RECOVERY (1933-1936)

Problems: Short of essential raw materials No foreign currency to pay for imports Exports at a slump Confidence lost Investment low High unemployment

SOLUTION: Lack of raw materials~

Developing Ersatz

I.e. Buna: artificial rubber from

acetylene

SOLUTION: No foreign currency to pay for imports~Deficit Financing & Mefo Bills

Government spends more money than it receives

in revenue + credit notes with interest to pay for thingsSOLUTION: High unemployment~

Public work schemes & increased public

expenditure and investment.

I.e. construction of autobahns & homes

STIMULATING ECONOMIC RECOVERY (1933-1936)

Schacht’s other solutions: Provided orders & subsidies for private

companies to take on more workers Some groups no longer eligible to register for

unemployment relief (Jews) Dept repayments were suspended The unemployed were conscripted into the

army

German Armed Forces:1933: 100,000

1939: 1,400,000

STIMULATING ECONOMIC RECOVERY (1933-1936)

Trade problem solutions: Bilateral Trade

Agreements Especially with the

Balkan States Supplied most of

Germany’s raw material imports

New Plan of 1934 Gave the government

power to regulate imports through controlling allocation of foreign exchange

REARMAMENT: THE FOUR-YEAR PLAN 1936

September 4, 1936 Goering Replaced Schacht

Hitler wanted Germany ready for war in 4 years

Priority given to rearmament• Achieved by autarky

- Self-sufficient food and industrial production- Drive to develop raw materials and

machinery- Regulations of foreign exchange, labor, raw materials, prices, etc

1.The German armed forces must be operational within four

years2. The German economy must be

fit for war within four yearsThe extent of the military

development of our resources cannot be too large, nor its pace

too swift

An extract from the Four-Year Plan Memorandum, August 1936

REARMAMENT: AUTARKY

Was it successful? Autarky was crucial to avoid damage

inflicted by an economic blockade, however Germany was no able to lose its dependence on other countries for key commodities.

They did, however, increase production greatly.

Commodity Actual Output (in thousands of tons)

1936 1938 1942 Four-Year Plan

Target

Aluminum 98 166 260 273Buna

Rubber1 5 96 120

Nitrogen 770 914 930 1040Explosives 18 45 300 323

Steel 19,216

22,656 20,480 24,000

Iron ore 2255 3360 4137 5549Brown Coal 161,3

82194,98

5245,91

8240,5

00Hard Coal 158,4

00186,18

6166,05

9213,0

00Oil 1790 2340 6260 13,83

0

Extra resources into industries related to rearmament contributed to economic recovery

Focus on militarization was a sign of the radicalization of the regime

Only small scale war was intended, so when the UK and France stepped in, Hitler had to rush rearmament are gear the whole economy to war.

GUNS OR BUTTER

THE IMPACT OF THE DRIVE FOR REARAMENTGuns or

butter?

Tension between putting economic resources into

rearmament or into consumer goods.

While there was a strong urge for rearmament, there

was evident concern to ensure even supply of

both aspects.

Butter (more stress on consumer goods)

Guns (more stress on rearmament)

Advocates: Schacht, other industrialists

Strategy:Develop consumer

goodsDevelop exports

Limited rearmamentDevelop links with

other countries

Advocates: Goering

Strategy:Major rearmament

AutarkySiege Economy

GUNS OR BUTTER

DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS?

Blitzkrieg 1939-41Austria and Czechoslovakia were

obtained: helped with Autarky (1938-39)

1939 invasion of Poland resulted in the UK and France joining the war

Germany was not yet fully prepared for a major war

So…Blitzkreig period-Economy was well suited to Germany’s military needs

DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS?

Germany at War 1942-45Nazi Armies stopped in Moscow 1941-

Nature of the war began to changeMassive economic drainDespite changes in economic policy to

relax constraints on industry, with increased output, the economy could not keep up with the military strain.

WHO GAINED THE MOST FROM THE NAZI ECONOMY?

The Elite and Big Business

-Growing demand for food-Nazis smashed

independent labor movement

-Military industries grew: airplane factories, chemical

companiesBENEFITTED THE MOST!

“Profits went above all to the industries who were prepared to collaborate

actively with the regime”

Hiden, Republican and Fascist Germany, 1996, p129

WHO GAINED THE MOST FROM THE NAZI ECONOMY?

The Workers

-increasing-demand for skilled labor

increased-Armament industry workers

better living conditions-1936, 35marks a week

(6,000,000x better than before)-DAF improved workers’ leisure

opportunities

MANY PEOPLE FELT THEY HAD A BETTER LIFE UNDER THE NAZIS“The German labor front…for all

working people without reference to their economic and

social position”Government statement on the role of the DAF in Nov.

1933

WHO GAINED THE MOST FROM THE NAZI ECONOMY?

The Mittelstand

-The small farmer/trader-tight credit, influence of big business, slowness of official agencies to pay bills resulted

in many going bankrupt-cannot compete with larger

firmsROLE IN ECONOMY DECLINED

“Shortages of goods restrict their turnovers…cannot

respond by putting up their prices…raw material shortages…burden of

taxes…”

SOPADE report 1939

HOW SUCCESSFUL WAS NAZI ECONOMIC POLICY?

VERY SUCCESSFUL!

Recovery from the Great Depression

Hitler restored full employment to

Germany Built economic

strength to dominate Europe by

1941

Not as successful as one might think…

Autarky was not achieved

Rearmament was wasteful and disorganized

Rearmament priorities meant the mass of

people failed to benefit greatly from

economic growth

Dank für ihre zeit!