chapter 15 - economic policies Flashcards
number of people unemployed in jan 1933
nearly 6 million
number of people unemployed in 1935
fallen to 2 million
what were there in 1939
labour shortages in key industries
what were hitlers aims ? short and long term
short term - priority was economic recovery and to reduce unemployment
this boosts the popularity of the regime
long term - create an economy capable of sustaining a major rearmament programme geared to the needs of the future war
needed to be self sufficient in the production of food and vital raw materials - nazis referred to this as economic autarky
what did nazi propagandists hail the success of the regimes policies as ?
an economic miracle
schacht
recovery
goering
rearmament
things done under schacht
recovery -
mefo bills
building of homes and autobahns
tax concessions - breaks where there is no tax
subsidies to private firms to encourage them to take on more workers
putting control on wages and prices to control inflation
new plan - 1934 - control germanys foreign trade
autobahns
one of the most durable propaganda exercises mounted by the third reich
thousands of workers were employed to help the project
visible signs of economic revival and national renewal
in reality -
employed relatively few people
at peak of construction only 125,000 were directly employed
construction slowed after 1938 and stopped altogether in 1942
3870km of road had been constructed
few germans owned cars so the autobahns were underused
battle for work
nazis first priority after coming to power in 1933 was to reduce unemployment - a project labelled as battle for work
large sums of money were spent on the building of roads and public buildings and increased industrial production was stimulated through loans and tax relief to private companies
when the nazis came into power the economy was already beginning to revive but the measures they put into place helped to reduce unemployment faster than what it would have
battle for work -
what was introduced in 1935 ?
a reich labour service
unemployed young men were compelled to do six months labour in farming or construction
later the same year military conscription was reintroduced for young men
the new plan
foreign trade increased and this led to imports growing faster than exports
this led to a shortage of foreign currencies which were needed to purchase imported goods
schacht placed controls on imports and on access to foreign currency
he initiated a series of trade agreements with foreign countries especially states in the balkans and south america whereby germany was supplied with food and raw materials, which were paid for in german reichsmarks
supplying countries could then only use this money to buy german goods
mefo bills
under schacht
to finance rearmament the nazis needed to borrow money whilst also trying to avoid the dangers of runaway inflation
schacht devised a scheme in which the government paid for its military equipment using credit notes or mefo bills
these could be exchanged for cash at the reichsbank - this ensures private companies had confidence they would get their money
companies were given an incentive to defer asking for payment by the offer of 4% per annum interest on the bills if they kept them for the full 5 year term
in this way, the rearmament programme could be started in 1935 without the government having the fun to finance it
the rearmament programme could be kept a secret since the expenditure did not appear in the governments accounts
the four year plan
aim of this plan was to make germany ready for war within 4 years
the gearing of the german economy for war in the four year plan was the first explicit indication that the regime was planning for war
four year plan -
aims and priorities
priorities were - rearmament and economic autarky
achieved by =
- creating a managed economy with controls on labour supply, prices, raw materials and foreign exchange
- setting production targets for private companies
- establishing new state owned industrial plants such as the hermann goering steelworks
- increasing production of key commodities such as iron, steel and chemicals
- encouraging research and investment in the production of substitute products such as artificial rubber and extracting oil from coal, thereby reducing germanys dependance on imports
economic autarky
four year plan aimed to achieve economic autarky (self sufficiency) in food production and vital raw materials to prepare the german economy for war
autarky fitted well with the aims of the nazi ideological aims
it would free germany from the chains of international capital
effort to increase production was presented as a battle in which the whole people community had to participate
what did propaganda campaigns persuade people to do?
propaganda campaigns to persuade people to buy only german goods, eat only german food and use only german raw materials in their work presented these targets as the patriotic duty of all german citizens
nazi policy towards management and the industrial elites
most of germanys business leaders welcomed the nazi takeover of power in 1933
thyssen and hugenburg had helped hitler in his bid to take power and hitler was careful to offer reassurance to business leaders that they need not be alarmed by the more socialist elements in the nazi party programme
in early months of the nazi regime -
many of the policies were to benefit businesses : supression of free trade unions, the establishment of political stability and the revival of the economy all helped to create an environment favourable to business
as nazi economic policies began to develop there were many business leaders who did not welcome the greater state intervention in the economy with its control on the supply of labour and raw materials and price controls
LG Farben
firm that benefitted enormously
heavily involved in the research and production of synthetic materials
one of the directors of LG Farben held a key post in the administration of the four year plan and between 1935 and 1939 the profits of LG Farben increased from 71 million to 240 million reichsmarks
comparison -
some companies were sceptical of the plan
many of the ruhr iron and steel firms were reluctant to invest in a new steelworks to produce steel from poor quality and expensive german iron ore rather than use cheaper and superior imported ore
—> regimes response to bypass them altogether by establishing a very large state-owned steelworks - the hermann goering steelworks
degree of economic achieved by 1939
goebbels and the nazi propaganda machine used all their resources and skills to project an image of the success of the nazi economic policies
speeches and radio broadcasts by hitler repeatedly claimed that the battle for work had been won by 1936
battle for work not mentioned after 1936 reflecting the success of propaganda in convincing people that unemployment was no longer a problem
advertising campaigns for products such as the peoples receiver, the peoples car and for cruise ship holidays gave the impression that germans were experiencing an unprecedented rise in their living standards as a result of the regimes policies
military parades showing off the latest equipment and patriotic campaigns to persuade germans to only buy german goods were designed to show that germany was achieving autarky and was ready for war
element of truth in the claims but propaganda exaggerated the successes and covered up the failures in nazi economic policies
reduction of unemployment
dramatic reduction in the number of unemployed by 1934 and continued to fall after that
basis of the claim that the battle for work had been won due to nazi economic policies
flaws in the claims (reduction of unemployment)
economic recovery had already begun before the nazis took to power in jan 1933 many of the job creation schemes used by the regime to reduce unemployment were based on policies introduced by chancellor brüning in the early 1930s
part of the reduction in unemployment figures was achieved by persuading married women to give up their employment by the use of marriage loans to release jobs for unemployed male workers
reintroduction of conscription in 1935 for young men aged 18-25 took a large number of young males out of the labour market
official figures also showed a dramatic increase in the number of germans in employment. partly achieved through various statistical devices to inflate figures. those who only had occasional employment were counted as permanently employed while those drafted into unpaid work in agriculture were also counted as employed
living standards
nazi propaganda emphasised the duty of all germans to make sacrifices on behalf of the peoples community by working harder and for longer hours and accepting a squeeze of wages
propaganda also stressed the benefits that the nazi regime bestowed on workers through improved working conditions, better social and welfare provision and access to goods and services that had previously only been available to the privileged few
incomes for many workers increased during the years 1933-39
some employers were prepared to pay bonuses and other benefits to get round the freeze on wage levels and so attract more skilled workers
pay increased due to more hours being worked but workers wages were subject to increased deductions because of the compulsory contributions they had to make to the german labour front and to welfare organisations
living standards - prices
prices rose during the 1930s and there were shortages of some key commodities
german consumers were able to buy enough food to feed their families but could afford few luxuries
the consumption of higher value foods such as meat, fruit and eggs declined while the consumption of cheaper foods such as potatoes and rye bread increased
pressure on living standards and gestapo and sopade reports occasionally show some discontent with the regime
the fact the regime succeeded in persuading the population without triggering a wages explosion or mass opposition indicates the success of propaganda campaigns such as the battle for production
the peoples car
volkswagen was a pet project of hitlers
car promoted by strength through joy with a huge campaign advertising a car for everyone
successfully persuaded workers to pay into a savings scheme to purchase one
was one of the great successes of nazi propaganda
cars never went into full production during the nazi regime and only nazi elite were able to acquire the few models that were actually made
