Economic Policies Flashcards
Hjalmar Schacht
- minister of economics
- between 1934-37
- concerned about long-term sustainability of Nazi economic policies
Schacht’s aims
- he aimed to maintain economic growth
- he wanted to develop the Wehrwirtschaft (defence economy) to prepare Germany for war in 4 years
- also wanted to establish autarky, a self-sufficient economy
- wanted to avoid inflation
Autarky
- required Germany to produce its own important commodities necessary for war so that it wasn’t reliant on imports
- the development of ersatz/substitute products that Germany couldn’t easily produce was also required
Schacht v. Hitler
- Schacht worried that rearmament was distorting the economy since there was too much emphasis on this and not enough on consumer spending
- imports were fuelled by government expenditure on rearmament
- Instead of listening to Schacht, Hitler set up the Office of the 4 Year Plan, putting Goering in charge
The New Plan - problems
- (4 year plan)
- Germany was still getting imports at a high rate
- the balance of trade deficit was increasing
- continued high level rearmament spending by the government caused debt to increase as well
- other economy sectors were being ignored, e.g. consumer goods, non-military industry
Main aims of the four year plan
Making Germany ready for war
- rearmament, autarky in food and industrial production were top priorities
- there was an emphasis on developing raw materials and machinery to increase armaments ready for war
The actuality of autarky
- Germany wouldn’t be completely self-sufficient, they just wouldn’t rely on imports for key commodities e.g. iron, oil, explosives, food, coal, etc.
- resources were used to develop ersatz goods
Economic position of Germany in 1939 and 1942
1939
- Germany imported 1/3 of its raw materials
- Germany self-sufficient for grain and potatoes
- almost self-sufficient in meat and vegetables
- imported 43% of fats
1942
- only brown coal import/production target had been met
- oil was at 45% of target
- hard coal at 79% of target
- steel at 85% of target
Regulations of the Office of the Four Year Plan
set out regulations controlling:
- foreign exchange i.e. imports
- raw materials
- labour
- also set specific industry targets
Impact of the 4 year plan on consumers
- wasn’t possible to channel all resources into Wehrwirtschaft since it was necessary for moral to maintain a level of consumer demand
- it was still a source of tension
- fear of unrest was also a factor limiting Wehrwirtschaft
1939 economic statistics
unemployment - less than 200,000
real wages - 7% higher than 1936 rates
industrial production - 25% increase on 1928
military expenditure - made up 38% of GNP
imports - 5.4 billion reichmarks in 1938, down from 14 billion in 1928
prices - 5.8% higher in 1938 that they had been in 1913
government expenditure - went from 18.4 billion in 1933 to 37.1 billion in 1938
People benefitting from Nazi economic policy
- unemployed
- armed forces
- families (marriage loans)
- large and heavy industry
- large arable farms
- people were generally more optimistic about the economic of 1939 than 1933
People losing out from Nazi economic policy
- small businesses: 300,000 went bankrupt
- working class families: consumption of pretty much all food stuffs fell
- livestock farmers
- small farmers unable to get loans
- private steel companies
- women in professional services who lost jobs
Germany’s preparedness for war in 1939
Germany not prepared for the scale of the war
- supply problems from December 1939
- unable to replace lost aircrafts in 1940 Battle of Britain
- German troops not supplied enough for USSR invasion 1941
- economic organisations were inefficient and wasteful
