1.3 - Economic development and policies, 1918-89 Flashcards
1
Q
What were the main economic events/crises in the German economy between 1919-79?
A
1919-post-ww1 economy, inflation had made the mark worthless
1929-Great Depression
1933-Nazis in power, signed agreement with I.G.Farben, to subsidise production of synthetic oil
1937-full employment
1945-post-ww2 economy, food rationed and people starving
1973-Arab oil states cut off trade with any country that had pro-Israeli foreign policy
1979-European Monetary System/European Economic Community in operation to prevent worldwide financial crisis
2
Q
How did the amount of marks in circulation change from 1914 to 1918?
A
June 1914, 6,300 million marks
December 1918, 33,000 million marks
3
Q
How many printing firms and presses were there by the end of www1?
A
150 printing firms
2,000 printing presses
Working day and night to make enough bank notes. Wages and savings all lost value
4
Q
How was trade and production impacted by ww1?
A
Trade all over Europe disrupted by war, job losses. Worsened by the end of the production of war goods and ammunition. Farm production -20% during the war. Agricultural and industrial land lost post-ww1 due to TOV
5
Q
What type of market developed post-ww1?
A
A black market, inflation had shot up and goods had become scarce
6
Q
What did soldiers leaving the war mean for the economy?
A
The end of war production and soldiers leaving the army, drove up the number of those employed, and many employers cut wages (only worsened inflation)
7
Q
Did the Weimar gov introduce social welfare post-ww1?
A
Gov set up retraining schemes for those who had fought in the war, and provided loans to help those leaving the army until they found work. Weimar gov = liberal, wanted to provide for all, national committees to oversee care in the Lander
8
Q
How many veterans were there disabled/non-disabled post-ww1?
A
1,537,000 disabled
1,945,000 non-disabled
9
Q
Who were the gov supporting post-ww1 (statistics)?
A
768,000 disabled veterans, 420,000 war widows, 1,020,000 children and 190,000 parents
10
Q
What percentage of the German population relied on federal welfare payments in the early WR?
A
10%
11
Q
What did the Weimar gov owe by the end of ww1?
A
They owed 150 billion marks, three times what it had owed in 1914
12
Q
What negotiations surrounding reparations ensued from the TOV?
A
Put the gov even deeper into debt, from 1921 in negotiation with allies regarding how much it would pay, and when. Allies especially France felt that Germany was trying to evade paying them, argued that all European economies had financial problems
13
Q
Until 1924 how were reparations paid?
A
Paid in goods, such as coal, wood and railway carriages
14
Q
What was the Ruhr Crisis and how did it begin?
A
January 1923, Germany failed to pay reparations in full, Allies would occupy Ruhr if Germany defaulted because it was vital to the German economy, for coal production. French and Belgian troops occupied the Ruhr. German gov rebelled by telling workers to engage in passive resistance, working slowly or striking. France replied by cutting Ruhr off from rest of Germany, didn’t benefit France or Germany. New German gov of 1923, called for a stop to passive resistance
15
Q
What did the Ruhr Crisis contribute to?
A
The hyperinflation crisis, spiralled out of control
16
Q
How did the price of a newspaper change during hyperinflation?
A
1 mark, 1 May 1922
100,000 marks, 1 September 1923
700 billion marks, 17 November 1923
17
Q
What methods of payment did people turn to during the hyperinflation crisis?
A
Increasingly reliant on bartering and the black market, but as more people used the black market, it couldn’t accommodate for everyone
18
Q
What was Notgeld?
A
‘Emergency money’, black market, towns and regions began to issue their own currencies
19
Q
Who had their jobs cut during the hyperinflation crisis, and what else was cut?
A
750,000 federal and government employees lost their jobs and all of those on fixed payments (social welfare), suffered as payments lost value
20
Q
Example of a ‘well-off’ family being impacted by hyperinflation?
A
The head of the von Lingans family who owned significant amounts of land and lots of servants, had to close house sack all servants. Moved to Berlin to take a job in a ball bearing factory, significant loss of wealth and prestige
21
Q
What was Stresemann’s policy regarding the German currency?
A
Mark withdrawn, temporary currency was the Rentenmark, until October 1923, low value against gold. Emergency money was banned. Introduction of Rentenmark overseen by Schacht, made president of the Reichsbank, December 1923. Prices settled and eventually currency changed to Reichsmark in August 1924
22
Q
Why was foreign policy important for the recovery of businesses and some examples?
A
Made Germany an acceptable power again, other countries happier to lend Germany money and make trade agreements. Examples include Dawes and Young Plan, made reparations more manageable, longer and less to pay.
23
Q
Bankruptcies statistic from 1924?
A
In 1924, more bankruptcies than in the previous five years together
24
Q
What were ‘cartels’ and what did they do for the economy?
A
A group of businesses in same industry agreed to control prices, provided pricing stability, however they could also set higher prices than if they were working separately. Biggest cartel was I.G.Farben, set up in 1925, included various chemical-based firms, chemical industry producing 1/3 more in 1925 than 1913 and 2/3 more by 1930
25
What problems were there in business in the Weimar period?
Significant levels of dispute, workers pressing for better conditions and owners trying to cut wages and extend working hours, strikes and lockouts common
26
What was state arbitration, and when was it brought into effect?
Set up on October 1923, significant change to policy negotiated with Ebert, arbitration meant that gov settled wages and other matters in the dispute. Initially they favoured the employers but became more neutral in 1924
27
What was isolationism and what period did it occur within?
Interacting as little as possible with other countries, politically and economically, US post-ww1
28
What was German trade like post-ww1?
Difficult for Germany to establish trade links, especially with France and Britain, simultaneously a shift in trade worldwide, isolationism from the US sparked increased tariffs on foreign goods and Germany faced especially high tariffs
29
How did German exports/trade return to a normal level post-ww1?
Germany was producing the steel and chemicals that other countries needed and with Germany's admission to the League of Nations (and Stresemann's other agreements) German exports were back to their 1913 levels of ten billion marks by 1926 and by 1929 exports were 34% higher than in 1913
30
In the 1920s how many agricultural workers were there?
Between 1/3 and 1/4 of all workers were agricultural
31
How did the farmers fare post-ww1?
Bigger farms managed better than smaller farms, as they were able to invest in new machinery and farming techniques. Many small farers were in debt and couldn't afford to pay the interest on their loans, big landowners blocked reforms that didn't benefit them, such as the 1918 Reich Settlement Act, where wealthy landowners were to redistribute their land to the poorer tenants (blocked by the likes of Hindenburg)
32
What was Germany's economy built on post-ww1?
Foreign loans and intense amounts of subsidisation, funded through taxation, many people less well off so resented tax rises
33
What percentage made up the lowest tax band in 1913, 26 and 28?
1913, 47%
1926, 62%
1928, 55%
34
What was another way that economic recovery was flawed post-ww1?
Amount of people in lowest tax band meant that the government had to borrow money, economic recovery therefore built upon foreign borrowing. Additionally, industrial expansion and production was damaged by the constant disputes between businesses and workers, affected productivity and drove wages up until depression when people were willing to work for any wage
35
How did the Wall Street Crash/GD impact Germany, what was the subsequent spiral?
-Businesses sold fewer goods (lay off staff, buy fewer supplies) and therefore unemployment rose (people had less money to spend)
36
What was Germany's industrial output in 1932?
By the end of 1932, it was half of its 1928 levels, unemployment rose in the same time period and wages fell by about 20-30%, prices also fell so wages only fell by about 14%
37
How did the coalition cope with the Great Depression?
Parties in the Grand Coalition couldn't cope without stresemann and the coalition collapsed and was replaced in 1930 by one led by Bruning
38
What was the response to Bruning's gov?
Suggested cuts in gov spending, social welfare, wages cuts and higher taxes. These policies were rejected by the Reichstag, Bruning therefore reluctantly returned to ruling by decree in July 1930 in order to put Bruning's policy into practice
39
What were the consequences of Bruning's policies?
Brought deflation, avoided devaluing the currency
40
What was the Hoover Moratorium?
Created on the 1 July 1931, was an international agreement that suspended the need for Germany to pay back their loans, or to pay interest on them-for a year, came as a result of the worsening effects of the depression on Germany
41
What were Bruning's attempts to boost the economy and did they work?
Another emergency decree, the introduced wage cuts, rent cuts and tax rises, these policies did not work and only deepened the recession
42
Economic statistics that showed the economy's decline in 1932?
Industrial production fell, prices fell and exports fell, all by around 50%, and unemployment rose to its highest level ever in 1932
43
Who was Bruning replaced by and what policy did they implement?
Replaced by von Papen, introduced some tax concessions and subsidies, improved economic output slightly, politics made it hard for gov to focus on economy during this time period
44
Who replaced von Papen/their policy?
December 1932, von Schleicher appointed a Reich commissioner for employment who drew up a list of public works to be financed by gov to promote employment
45
What was von Schleicher's budget for implementing his policy?
RM 500 million, but he did not put anything into effect before the Nazis came into power
46
What was K-brot and why was it necessary?
Severe food shortages during ww1, most of the food sent to the front, alternative foods created, such as 'K-brot', which was a bread substitute, made from potatoes, oats and even straw
47
How many children were malnourished in one district of Berlin in the early 1920s?
90%
48
What had disappeared by 1924 (working condition)?
8 hour working day, workers couldn't afford to press for it and employers had never wanted it
49
Living statistics for Berlin, post-ww1?
Had a population of just over 4 million in 1925, 130,500 people were lodgers, 44,600 just paid to sleep in a bed
50
Which particular sector lost male workers post-ww1?
Low-level clerical workers, men lost their jobs in this sector because employers could hire women to work for less pay
51
What was the Reich Pension law and when did it come about?
Regulated pensions, especially those paid to veterans, war widows and parents of dead soldiers, linked to the jobs that the soldiers had done before the war
52
What was the Labour Exchange Law/when?
February 1922, set up gov offices to train and help the unemployed, put forward the idea that people had a right to work
53
What were two pieces of economic legislation brought in in 1924?
February-Economic Enabling Act, restructured unemployment benefit and set rate for employers contributions
Reich Social Welfare-pulls together all of the different post-war benefits and relief systems, set up welfare offices to administrate the benefits
54
What was the unemployment insurance law/when?
July 1927, introduced unemployment insurance to give benefit to all those out of work, not just those unemployed due to sickness
55
What was the economic situation like upon the Nazis entering gov?
Promising economic recovery, reparation payments on pause, in 1934 Germany failed to pay and trade with the US collapses, didn't hurt nazis who wanted to focus on Autarky, economist Schacht drew up a 'New Plan'
56
What was Hitler/Schacht's 'New Plan'?
Made trade treaties with other countries such as Hungary and Yugoslavia, exchanging goods rather than paying for imports
57
What was the 'First Four Year Plan' and when was it introduced?
1 January 1933, aimed to achieve autarky, the most important targets were unemployment and agriculture
58
How did the Nazis have such an effect on employment statistics?
-Depression had hit its lowest point, and begun to turn around, meaning businesses were employing people again
-Nazis manipulated the statistics, women and Jewish people were removed/discouraged from employment
-The Nazis created work/work schemes
59
What was the Reich Labour Service/RAD?
Schemes of employment for unemployed men and women, 6 months manual labour, less pay than unemployment with very basic food and accommodation in labour camps, helped to build the autobahns
60
Who was the Minister of Agriculture and what policy did he implement?
Increased import tariffs on agricultural produce, German produce = cheaper, and banned banks repossessing farms from farmers in debt
61
What was the RNS, what did they do?
The Reich Food Estate, regulated food production and distribution of farm produce, set prices and farm wages. Able to fine up to RM100,000 to those not conforming, set up Reich agencies to control the importing of farm produce
62
What % of farm produce in Germany did German farmers produce?
1928-68%
1934-80%
63
What is an example of a business suffering as a result of Nazi measures to support small businesses?
Department stores made 80% less in 1934 than they had in 1929, because the 1933 Law for the protection of Retail Trade stopped the building of new stores and banned the expansion of existing ones
64
How many working days were lost in 1924/26?
36,198 million - 1924
1,222 million - 1926
65
When did the Nazis announce the DAF and what was it?
6 May, 1933 - The German Labour Front, joining was voluntary but it became difficult for non-members to get work. The DAF allowed big businesses to further exploit workers as DAF allowed them to set their own working conditions. Became a powerful force in the Nazi reward system
66
By 1935 how had German trade changed?
Many countries were demanding cash, no longer an exchange in goods, Bulgaria wanted cash for their oil. Growing shortage of food meant Schact had to choose between food and raw-material imports
67
What is a command economy?
Where the state not business or agriculture decides what and how much to produce, this is what the Nazis worked towards
68
What are the 'Reich Trustees of Labour' and when is this set up?
May 1933, set up to regulate the working conditions under the Minster of Labour
69
What is the Law to Reduce Unemployment and when is it introduced?
June 1933, RAD set up, women given loans to spend on household goods if they leave employment
70
When is the building of the autobahns introduced?
June 1933 law to build autobahns is introduced
71
What is the Reich Entailed Farm Law and when is it introduced?
September 1933, sets up 700.000 farms, each at least 7.5 hectares, given to German families to pass down to their eldest son
72
What were the 6 focuses of the Second Four-Year Plan?
Raw material production, agricultural production, distribution, labour, prices and foreign exchange matters
73
What were some of the synthetic replacements to raw materials?
Rubber was replaced by 'Buna'
74
How much coal was necessary to make 1 tonne of synthetic fuel?
Six tonnes of coal -> one tonne of synthetic fuel
75
What was the Guns vs Butter debate?
Problems reconciling the need for rearmament with the need for food and other necessities, although rearmament was the most important concern the population feared a return to WWII rationing. Felt anger as the party had promised 'work and bread'. Nazis needed to provide food to remain popular. Tried to red-educate people to eat less/meat
76
How much was Germany importing in 1938-9 compared to 1934?
Importing 17% of agricultural needs, improvement from 1934, 20%
77
How did food propaganda change the way people ate?
Switch from eating meat to fish, eating jam instead of sausage with bread -> jam consumption trebled between 1928-38
78
How did Nazis begin to completely marginalise those they deemed as 'undesirable'?
-From August 1939, all medical professionals had to report any children under 3 that showed signs of physical/mental disability
-October 1939, T4 campaign, killed disabled children at specialist clinics
-From January 1940, T4 extended to hospitals, institutions, old, mentally ill an chronically ill
79
How many people died from the T4 programme?
Over 70,000
80
What happened to 'asocial' families?
Between October 1936-July 1940, asocial families 're-educated', at Hashude a fenced off housing estate for 78 families, lectures and classes given
81
What was the 'Strength Through Joy' programme?
Provision of loans, medical care, extra food and vitamins for 'suitable' mothers
82
What was the NSV and when was it introduced
Social welfare programme, introduced the National Socialist People's Welfare, divided the needy into those who 'deserved' hep and those who did not
83
What programmes did the NSV introduce?
-Ran Mother and Child programmes, creches and kindergartens = a chance to influence children's upbringings
-By the end of 1938, 10,800 of these
-Responsible for housing
84
How many voluntary workers did the NSV have in 1939?
Over a million voluntary workers and 500,000 block wardens, responsible for 30-60 houseolds
85
How many donations did the NSV receive upon its creation?
RM2 million
86
What was the Volkswagen programme?
By the end of 1939, 270,000 people had entered a scheme for workers to save money for a car, lent the state RM110 million, no one ever receive a car from it
87
How many weeks of supplies did the German army have prior to WWII?
Wanted four months worth, in September 1939 there were six weeks worth
88
When was Todt appointed and for what?
February 1940, minister of armaments and munitions, he needed centralised control and no other departments would accept that. Died in a plane crash in 1942
89
What did Hitler's 1941 memorandum state?
December 1941, Hitler wanted to simplify and improve the armaments industry. Wanted to rationalise needs, update factories and equipment to produce the most efficient weapons
90
Who replaced Todt?
Albert Speer
91
What did Hitler's 1942 decree state?
Set up a central planning board to distribute raw materials, build a new factory/extend an existing one and to organise transportation. Hitler = the only one capable of overriding the Board's decision
92
How much of the workforce was in the army in 1929-44?
1.4% - 13%
93
What was the monthly production of searchlights in the 1940s?
1942-20
1943-80
1944-150
94
Why was manufacturing/production difficult for Germany within the war?
In the first year of war, important to produce planes and armoured vehicles, when France fell Hitler needed U boats and longer range planes. To fight the USSR he needed tanks and armoured vehicles, all caused delays in production
95
How far the German economy been damaged by WWII?
-Allied bombing wiped out factories, mines, towns and transport
-Lose or land that had provided raw materials (upper Silesia)
-Damage to electricity, gas and water supplies
-Sabotage by foreign workers, deliberate mistakes to damage equipment and machinery
-Food production damaged, loss of workers
-Black market had taken over
96
How did the Second World War end?
A march to Berlin East to West, occupation by the Allies, meeting at Potsdam to decide next moves
97
What industries were banned for Germany post-WWII?
Munitions, chemical (any war-related)
98
How were reparations taken?
Taken in equipment and machinery, French and Soviets dismantled remaining factories for reparations, undermining any chance of economic recovery
99
Why/how was the black market thriving?
Riechsmark almost worthless, 1kg is sugar = RM1 only obtained on the black market for RM120-180
100
How many German prisoners of war decided to stay in France?
160,000
101
How many German people became refugees ahead of Soviet takeover?
10 million, expelled from Eastern Europe
102
What was the Marshall Plan and what did it cause?
Marshall Plan 1948, gave 1.4 mil dollars to West Germany, helped create the Deutschmark (DM), helped to stabilise economy and break up black market. Created further divide with East Germany
103
Who was Erhard, when did he come in and what type of economy did he want?
Director of economic administration in March 1948, believed in the idea of a social market economy (free market with elements of social support)
104
What did the Economic Council allow Erhard to do?
June 1948, gave him the power to abolish all but essential rationing and price controls, wages fixed until November 1948
105
What did the change to rationing mean?
People stopped hoarding goods, and began selling them and began to shop with more careful concern for price, confidence in supply
106
What was the Equalisation of Burdens Act?
1952, system of compensation for the war
107
What was the effect of the currency reform on producers?
Started producing and trading again, had to replace machinery and trade workers. Some businesses failed after the reform as they were unable to pay wages
108
What was the unemployment rate across 1948-55?
1948-450,000
1949-900,000
1950-1,800,000
1955-1,000,000
109
What was car production in 1950 vs 1959?
4.5 times greater
110
What opposition did Erhard face to his economic reform?
Opposition from the Economic Council, Britain also opposed (USA supported), industrialists weren't all supportive. Socialists opposed because they wanted the nationalisation of industries, didn't want the capitalist market to set its own prices
111
What was co-determination?
Right of workers to take part in the management of the business they worked for, introduced in 1951
112
How did the Korean War contribute to the Economic Miracle?
The Korean War, needed supplies, FRG banned from producing these (their industrial, chemical, steel and electrical goods all in demand). After joining NATO in 1955 they were allowed to rearm
113
How did New Investment contribute to the economic miracle?
Business recovered enough by the 1950s able to invest in new more efficient equipment. Concentrated on producing high-quality goods whilst keeping prices low to compete. This grew exports
114
How did workers contribute to the economic miracle?
Influx of refugees and guest workers, once trained became an efficient addition to the workforce, large pool of workers kept wages low
115
What type of workers joined the FRG?
In the 1950s 3.6 million more workers came to the FRG from the GDR, mostly young, skilled and highly educated. Employed on short term fixed contracts, savers gov money on education costs
116
What was a problem that arose for German growth?
Growth couldn't keep going at a rapid rate, Berlin Wall prevented workers crossing into FRG, reduced the number of 'free' professionals
117
Why did the gov have to intervene in the economy in the 1960s?
Economic growth was moving at a lower rate from 1966, gov had to intervene-Bundesbank managed the money supply and a new system of national and regional budgeting
118
How much did the gov spend on social welfare in 1965/70?
1965-DM 46.7 million
1970-DM 115.9 million
119
What caused the recession of 1966-67?
-Number of guest workers began to fall, 1966-1.3 million and 1967-991,000.
-Productivity began to fall, gov began to spend more and public spending spiralled out of control
120
How did the gov respond to the recession of 1966-67?
-Increased gov planning, intervention and control, subsidies for the coal and agriculture industries
-Reintroduced cartels to prevent price rises
-1967 Economic stabilisation Law, allowed gov intervention in times of economic crisis to limit regional spending, introduced a 5 year plan for all gov spending
-1968, Basic Law change, money could be moved between Lander, money from wealthy ones used for the poor
121
What were the oil crises of 1973 and 1978?
-Reliant on oil, spent DM10.8 billion on 140 million tonnes of oil (1972)
-Fourth Arab Israeli War broke out and OPEC put oil prices up, 40% of German oil sourced through them
122
What was the cost of 140 million tonnes of oil in 1973 and 78?
DM32.8 billion
DM49 billion
Crisis worsened by baby boomers joining job market, guest workers banned
123
Why were Germany not hit as hard by the crisis?
-Car-free Sundays, speed limits on the autobahns reduced use of oil
-Investment in atomic power
-German gov didn't subsidise oil prices let them rise in line with actual costs, expensive and encouraged cutbacks
-Public spending cuts and higher income tax
124
What were some of the economic challenges associated with the 1980s?
-Gap between rich and poor rose
-Unemployment 1.7 mil in 1981, highest since 1950
-Productivity levels were falling, led to welfare cuts, cut to maternity and public holidays, reduced retirement age to 58
125
When was unemployment at its lowest?
1989
126
What was the OEEC/when?
April 1948-Organisation for European Economic Cooperation, set up to manage European economic recovery, administered the Marshall Plan
127
What was GATT/when?
1951-FRG joined General Agreement on Tariffs and Trade, established favourable trade amongst members
128
What is the ECSC/when?
April 1951-FRG joins with European Coal and Steel Community, sets up preferential trade links with Italy, Belgium, Netherlands and Luxembourg
129
What is IMF/when?
August 1952-FRG joins International Monetary Fund, to oversee stability of world currencies
130
When does FRG join NATO?
May 1955, an anti-communist alliance
131
What is the Treaty of Rome/when?
March 1957-found the European Economic Community
132
Statistics regarding housing post-bombing?
1/5 of all housing bombed flat
1/3 damaged but standing
133
How many people had a fridge, TV and washing machine across FRG period?
1963- 63% F, 42% TV, 36% W
1985- 82%, 82%, 87%
134
How many people were covered by healthcare/benefits in the 1980s?
90%
135
How had social inequality deepened in the FRG?
1960s-1% of all household owned 35% wealth
1973-1% owned 78% wealth
1988-1% owned 45%
