Economic policies Flashcards
Chapter 15
What was German economy like by 1935?
Unemployment had fallen to 2 million
Nazis hailed this success as an ‘economic miracle’
What was the German economy like in Jan 1933?
In depths of depression, nearly 6 million people unemployed
What were Hitler’s short term aims to do with the economy?
Economic recovery from Depression and reduction of unemployment (this was known as the ‘Battle for work’
What were Hitler’s long term aims to do with the economy?
To create an economy capable of sustaining a major rearmament programme and geared to the needs of a future war, needed to be self-sufficient (economic autarky)
What was the New Plan in 1934?
Imports were growing faster than exports leading to a shortage of foreign currencies needed to purchase imported goods
Schacht placed control and made trade agreements where Germany received materials paid for in Reichsmarks so suppliers could use money to only buy German goods
How did Schacht stimulate economic recovery?
Pumping money into economy to build homes
Giving subsidies to private firms to encourage to take on more workers
Control of wages and prices to control inflation
Introduces ‘New Plan’ 1934
First steps to rearmament using mefo bill
What was the Mefo Bill?
Borrowed money was needed to finance rearmament but wanted to avoid inflation
Schacht got gov to pay for military equipment using credit notes (mefo bills)
Private companies were given incentives to defer asking for payment back by offering them 4% interest
Rearmament able to start in 1935 without gov having funds to finance it and expenditure didn’t appear in gov accounts
What were new problems after reviving the economy?
Food shortages
Rising prices
Lower living standards
All led to growing disillusionment
Conflict in priorities - ‘guns vs butter’ - decided to strive for economic self-sufficiency
What was the four year plan in 1936?
Aimed to make Germany ready for war in next 4 year
Priorities were rearmament and economic autarky, did this by:
Controlling labour supply/prices/raw materials
Setting production targets for private companies
Increasing production of key commodities (Iron, steel…)
Results of plan didn’t meet target, by 1939, economy under strain
How did Nazis manage industrial elites?
Many business leaders welcomed Nazi takeover as policies benefited them:
Suppression of free trade unions
Establishment of political stability
Revival of economy
Others didn’t welcome controls on supply of raw materials and prices
How did Goebbels manage the image of Nazi economic success?
Speeches and broadcasts of Hitler
Claimed the ‘battle for work’ had been won
Propaganda convinced that unemployment wasn’t issue
Military parades showed off latest equipment and presented Germany as ready for war
What were the flaws in Nazi economic recovery?
Recovery started before Nazis in 1933
Reduced unemployment figures were achieved by persuading married women to give up jobs
Reintroduced conscription in 1935 - took youth out of labour market
Figures were inflated (e.g partially employed people were counted as permanently employed)
What were living standards like?
Income for workers did increase and some employers paid bonuses
Hard to generalise standard of living as some industries (armament) were doing better than others (producing consumer goods)
Consumption of expensive food decreased, cheap food increase
Price control and rationing helped alleviate pressure of food shortages
