controlling the economy, 1933-45 Flashcards
LO: attempting economic recovery, creating a command economy, impact of war
what was Hitler’s overaching goal for the economy?
to support the Aryan race by ensuring a reasonable standard of living, providing resources for rearmament, moving towards autarky, and funding major architectural projects for the master race
what did the ‘Primacy of Politics’ mean in Nazi economic policy?
Nazi economic policy prioritised political goals, such as rearmament, over economic issues like govt spending, rejecting both capitalism and communism in favour of serving the Aryan race
what was Hitler’s primary economic focus between 1933-36?
job creation to reduce unemployment, with a strong emphasis on propaganda to claim credit for the recovery
how did Hjalmar Schacht contribute to Nazi economic policy?
he was a skilled economist, and helped solve economic issues by increasing govt borrowing to fund rearmament and employment, making the economy more stable
what types of economic stimulus did the Nazis use?
indirect stimulus (tax cuts for farming, small businesses, and heavy industry), and direct stimulus (construction projects like the Reinhardt Programme with RM1,000 million for public works
how did unemployment change under Nazi policies?
unemployment dropped from 6 million in 1932 to 1.6 million by 1936, with 2.8 million jobs created, 20% of which were through govt schemes
what were Mefo bills, and how did they help boost rearmament?
Mefo bills were IOUs issued by a private company to finance military spending, delaying payments. they financed about 20% of military spending between 1933-39 (around RM12 billion)
what were the main features of Schacht’s 1934 New Plan?
included to import quotas to prioritise military imports and trade agreements with countries like Peru and Brazil, facilitating barter deals to avoid using foreign currency
how successful was Schacht’s New Plan?
it was successful in balancing trade, solving the balance of payments issue, and supporting rearmament, despite limiting the textile industry’s recovery and lowering the standard of living
what is a command economy?
one that responds to the commands of the govt. govt decides on amount of production, the prices, and what it produces in the first place (socialist policy)
what was the crisis in German agriculture in 1935-36?
poor harvests in 1934-35 led to food shortages, with butter rationed and pork/ham prices rising 30%
the crisis showed the nazi economy could not balance “guns and butter”
what were the conflicting solutions of Darré and Goering for the crisis?
Darré pushed for more agricultural spending, while Goering and Blomberg prioritised military resources
Hitler opted for food imports in the short term, moving toward a command economy long term
what was Hitler’s solution for food and rearmament priorities in the 1935-6 crisis?
he authorised more food imports to prevent rationing and aimed for a command economy in the long term, balancing rearmament and living standards
what was the aim of the Four-Year Plan, 1936?
it aimed for military readiness in 4 years and economic self-sufficiency (autarky), increasing domestic resource exploitation like coal, iron, and steel
what was the conflict regarding Goering’s appointment to the Four-Year Plan?
Goering was given supreme economic authority over the plan, causing conflicts with Schacht, who still controlled import policies.
this intensified as Goering’s economic control grew
how did the Four Year Plan radicalilse Nazi economic policy?
it gave Goering significant control, moving away from Schacht’s conventional approach, leading to more govt control over industry, production targets, and nationalisation
what were the successes of the FYP?
coal production rose from 319 million tonnes (1936) to 380 million tonnes (1938)
Germany became self-sufficient in bread, sugar, and potatoes, and steel production rose from 19 million tonnes (1936) to 22 million tonnes (1938)
creation of Reichswerke Hermann Goering = biggest steel company in Europe
production of ersatz rubber increased by 500% between 1936-8
what were the failures of the Four Year Plan?
steel was more expensive than imports, and military steel demands were unmet (300,000 tonnes instead of 750,000)
by 1939, labour shortages, inflation, and raw material imports still plagued the economy
turning coal into ersatz oil required more coal miners (up to 30,000 miners)
aircraft production declined
labour shortages = 20% ersatz produced
wouldn’t be ready for war until 1943
what was Albert Speer’s role?
minister of armaments
how did he rationalise the economy?
creation of Central Planning (1942-45)
exclusion of skilled workers from the military
encouraged employment of women and use of concentration camp labour
munitions production standardised to improve coordination
what were the successes of Albert Speer’s rationalisation of the economy?
ammunition production increased by 97%, total arms production by 59%, and tank production by 25%.
by 1944 munitions productivity increased by 60%
how did Albert Speer contribute to the war effort using slave labour?
Speer utilised concentration camp labour, saving the economy from collapse and providing resources for the Ardennes offensive, a surprise attack in December 1944
what was Speer’s response to Hitler’s sorched eath policy?
he saved many factories and farms to ensure survival post-defeat, as Hitler’s scorched earth policy aimed to destroy everything that might fall into enemy hands
what were the key failures and weaknesses in Nazi economic policy during WW2?
a polycratic govt structure caused inefficiency, with four economic power centers competing for control.
this led to a lack of coordination and ineffective resource management
how did Hermann Goering’s role hinder Nazi economic management?
Goering’s multiple roles, including head of the Luftwaffe and the FYPO, coupled with his morphine addiction, hindered effective economic leadership and led to unrealistic goals
what were some of the unrealistic economic plans under Hitler?
Hitler overestimated resources, such as wanting 21,000 Luftwaffe planes, but production never exceeded 5,000
the Stalingrad invasion aimed to capture oil fields, but there was insufficient skilled labour and machinery
how did the Allied economies affect Nazi Germany’s economy?
by 1941, Germany was at war with the USA, Soviet Union, and Britain = three of the most powerful economies
this worsened Germany’s economic situation
what economic priorities contributed to the weaknesses in Nazi economic policy?
the costly Final Solution drained resources, military priorities overshot budgets (e.g. $6 million spent on weapons in 19440) and production of unnecessary goods like cosmetic affected war efficiency
how did Germany’s consumer economy struggle during the war?
lack of labour for agriculture and failed efforts to import food led to food shortages
by april 1942, the meat ration dropped below 500g per week, affecting the German population’s wellbeing
