Economy: Controlling the economy Flashcards
Nazi Economy (103 cards)
1
Q
What was the nature of Nazi economic policy? - N
A
- Reasonable standard of living in order to guarantee support
- Rearmament resources
- Autarky
- Sufficient resources for major architectural projects in order to remake Germany into a country fit for the master race.
2
Q
What was the aim of Nazi economic policy? - N
A
To serve destiny of the Aryan race and lead to German dominance in Central Europe.
3
Q
What did the ‘primacy of politics’ mean in regards to Nazi economic policy? - N
A
Meant that economic policy should serve political objectives.
- Saw that economics should serve the good of the race, making Aryans stronger financially, politically and militarily.
- Hitler believed that his political goal of rearmament took priority over economic issues such as the level of government spending or Germany’s balance of payments.
4
Q
How did Germany’s defeat during WW1 influence the Nazis’ economic policy? - N
A
Hitler believed that the economic factors had played a big role in Germany’s defeat (e.g striking unions, Naval Blockade).
- He saw it as important to break up Germany’s unions and create a decent living standard in order to preserve morale.
- He saw that economic self-sufficiency would mean that Germany could never again be starved into submission by a blockade.
5
Q
How did Hitler overcome his lack of knowledge in regards for economics? - N
A
He delegated economic policy to experts and civil servants like Hjalmar Schacht.
6
Q
How did Schacht increase employment and devote more money to rearmament? - N
A
By increasing government borrowing.
7
Q
Why did Schacht help attract support from German businesses? - N
A
He was appointed President of the Reichsbank and became widely represented by business leaders who trusted him to implement policies that helped business.
- Businesses were willing to accept tax breaks, grants and employ more workers as a result of their confidence in him.
8
Q
What was Mefo GmbtH? - N
A
A private company that would place orders for military production. They paid for the armaments with Mefo Bills.
9
Q
What were Mefo Bills? - N
A
IOUs that allowed the government to buy the armaments and delay payment until the late 1930s.
10
Q
What fraction represents how much Mefo Bills financed military spending between 1933-39? - N
A
1/5
(Around RM 12 billion)
11
Q
How did Mefo Bills improve employment rates? - N
A
It created jobs as many of Germany’s industrial companies were producing armaments for Mefo GmbtH.
12
Q
What trade agreements were made through the ‘New Plan’? - N
A
Trade with developing countries in Eastern Europe and Latin America - Peru, Brazil, Latvia, Estonia, etc.
13
Q
What was the advantages of these trade agreements? - N
A
Germany had more powerful economy than its new trading partners which meant more favourable deals than with Britain and the USA.
It also meant they were able to negotiate barter deals with these countries → trade without money leaving Germany.
14
Q
What direct measures were made to improve the economy? - N
A
- Schemes that employed people to work on government projects.
- Financed construction and industrial development to create jobs.
- Reinhardt program (1933): one of the biggest new economic initiatives which committed RM1,000 million to public works schemes such as road building, bridge repairs and construction improvement of waterways.
- Employment of unskilled, semi-skilled workers in railway and postal service.
15
Q
How many jobs were created from 1933-34? - N
A
2.8 million jobs (20% through government schemes)
16
Q
What did the ‘New Plan’ import quotas entail? - N
A
Consumer imports were limited in order to ensure there were sufficient funds to continue importing goods crucial for rearmament.
This involved: wool, cotton, leather, fur, precious metals.
17
Q
How did Schacht enforce import quotas in 1934? - N
A
He made 25 new departments in the Ministry of Economics to issue import licenses (illegal without one) which prioritised arms industry imports.
18
Q
How effective were import quotas? - N
A
Trade came back into balance by mid 1935 but it didn’t solve the issue of money to trade freely with Britain and the USA.
19
Q
What policies were introduced to boost government spending and increase employment? - N
A
Tax cuts in: farming, small businesses, heavy industry
Grants given to:
- Businesses to allow them to repay debts and buy new machinery and employ more workers.
- Home-owners to finance home improvement, repairs or the employment of domestic servants.
- Newly married couples.
20
Q
By 1936, how many Germans were unemployed in comparison to 1933? - N
A
1936 - Unemployment of 1.6 million.
1933 - 4.8 million
21
Q
Why was rearmament problematic for the German economy? - N
A
It was prohibited by the Treaty of Versailles and was very expensive, something that Schacht had acknowledged from the beginning as something that the economy couldn’t fully support.
The government was already in debt and now was funding an expensive work creation scheme.
22
Q
What was the crisis of 1935-36? - N
A
Poor harvests which led to a change in the availability of food.
23
Q
What did the economic crisis of 1935-36 expose about the Nazi economy? - N
A
It exposed that it wasn’t strong enough to produce for arms and food produce.
24
Q
Why didn’t the government just raise food prices in order to import food? - N
A
Schacht didn’t want to increase government spending.
25
What happened to butter in 1935? - N
It was rationed.
26
By what percentage did the price of pork and ham rise to from 1934-36? - N
30%
27
What does the term 'guns and butter' refer to? - N
It was a phrase used by Nazis to discuss economic priorities in speeches or propaganda campaigns.
Goering famously argued that as the German people couldn't have both arms and food, they should choose guns as guns make a strong nation whereas butter makes the nation fat.
28
What was Hitler's short-term solution to the food crisis? - N
To authorise more food imports in order to keep prices low and avoid rationing.
29
What was Hitler's long-term solution to the food crisis? - N
To create a command economy.
30
What was the success of the 'New Plan' mostly reliant on? - N
The recovery of global economy → greater demand for German goods in Britain and the USA.
31
What else could be argued to have contributed to the success of the 'New Plan'? - N
Neither the British nor Americans responded to the import controls by limiting their trade with Germany.
32
What was unsuccessful about the 'New Plan'? - N
Standard of living dropped due to prioritising rearmament in early the 1930s.
Furthermore, limiting imports meant the German textiles industry (which employed 20% of industrial workers) failed to recover after the Depression.
- The price of clothing rose much faster than other goods.
33
To what extent can the Nazi's economy be seen as an 'economic miracle'? - N
- The Nazis were just building on policies between 1930-32 so can’t take full credit for the governments at the time who lay down the foundations to recovery.
- General global recovery during the period.
- Expansion of RAD, and it being compulsory in 1935, provided many young people with work but did not count them as unemployed despite not having paid jobs.
- False unemployment figures not including part-time workers or Jews.
34
What is a command economy? - N
An economy that responds to the commands of the government.
35
Why did the crisis of 1935-36 lead to a radicalisation of Nazi economic policy? - N
Hitler's policy of Lebensraum required greater spending on rearmament. However, it threatened to lower the living standards of the German people.
In order to ensure that the German economy could rearm and that living standards remained reasonable, Hitler authorised the 4-Year Plan.
36
Which ambitions led Hitler to create a command economy and subsequently a 4-Year Plan? - N
Conquering Czechoslovakia, Poland and subjugating their 'racially inferior' populations.
37
What was the 4-Year Plan designed to ensure? - N
- The German armed forces would be ready for war in approximately 4 years.
- The German economy would achieve autarky in a similar period.
38
What was Hitler's rationale behind the 4-Year Plan? - N
He argued that Europe was being menaced by the Soviet Union.
He viewed war in Europe as inevitable and believed Soviet victory over Germany would lead to a complete annihilation of the German people.
39
What is autarky and how did Germany hope to achieve it? - N
Autarky is economic self-sufficiency.
It would require:
- a greater exploitation of Germany's existing resources, including greater coal mining and greater iron and steel production
- replacing imports of oil, gas, wool and cotton with synthesised materials
40
How did the Nazi government replace imports of oil, gas, wool and cotton? - N
They invested in Ersatz rubber, fabrics and fertilisers and processes to turn coal into gas and oil.
41
What is the significance of Hermann Goering being appointed plenipotentiary of the 4-Year Plan? - N
It made him the new head of the organisation, giving him supreme economic authority.
42
Why did the creation of the 4-Year Plan mark a turning point in the Nazi regime? - N
Until 1936, Hjalmar Schacht and senior officials at the Ministry of Economics had played the leading role in German economic policy.
Goering's involvement meant that a committed Nazi would be playing a huge economic role.
43
Why was Schacht's resignation significant? How did economic priorities change as a result? - N
Schacht resigned as he was unable to stop the growth of Goering's power over the economy.
- Economic policy became more radical and the 4-Year Plan extended government control significantly.
- Under the plan, Goering set priorities for industry, issued production targets and had the power to nationalise businesses that didn't meet their targets.
44
How successful was Germany in achieving autarky? - N
Successes: Germany became self-sufficient in bread, sugar and potatoes.
Failures:
- Production of ersatz rubber was expensive
- Germany produced only 20% of ersatz oil required in 1939 due to labour shortages.
- Working with uneconomical iron deposits meant that the steel that was produced was more expensive than imported steel.
45
How did the rearmament program increase inflation? - N
To pay for the arms, the government pumped massive amounts of money into the economy. However, as no new consumer goods were being produced, the new money simply pushed up prices.
46
How did the command economy prevent Germany from being prepared for WW2? - N
- Aircraft production was held up by a lack of fuel, steel and workers.
- The 4-Year Plan Organisation was unable to deliver the 750,000 tonnes of steel per month that the military requested, only giving them less than 1/2.
47
How much did coal production increase from 1936 to 1938? - N
In 1936, coal production was at 319.7 million tonnes whereas in 1938 it was at 380.9 million.
48
How much did steel production increase from 1936 to 1938? - N
In 1936, steel production was at 19.2 million tonnes whereas in 1938 it was at 22.6 million.
49
To what extent can it be argued that the standard of living for the working class deteriorated under the Nazis? - N
- Destruction of the union movement meant that workers had little influence over their pay and conditions, trade unions were replaced by the DAF which were under the control of the Nazis.
- Power to set wages and resolve disputes were passed to regional trustees of labour who were appointed by government officials working in the Ministry of Labour.
- Average working week rose from 43 hours to 47 hours.
- Average hourly wages were 3% lower in 1933 than they had been in 1932 and they were still 2% lower in 1939.
- KDF holidays had basic facilities with little to no privacy or poor sanitation. Workers also had little choice in their entertainment.
50
To what extent can it be argued that the standard of living for the working class improved under the Nazis? - N
- Take home pay increased in 1938 and 1939 (although this was partly due to the fact that workers were putting in longer hours)
- Increases in pay for those working in skilled jobs in armament industries.
- Pay for workers in other industries didn't reach pre-Depression levels.
- KDF brought benefits of culture and leisure to working people. It had a budget of RM 29 million and subsidised more than 1.7 million short holidays for workers.
51
To what extent can it be argued that the standard of living for the middle classes deteriorated under the Nazis? - N
- Small firms lost out due to Nazi emphasis on rearmament.
- Clothing firms were hit hard by the ban in import of textiles.
- Small firms struggled to compete with big firms for labour as they held alterative government contracts and could pay higher wages.
52
To what extent can it be argued that the standard of living for the middle classes improved under the Nazis? - N
- Owners and managers of major firms benefitted as the DAF meant they could keep wages low and increase the working day.
- They also used government contrasts to produce munitions, military uniforms and synthetic goods.
- Small businesses benefitted from the lack of unions and the increase of employment.
53
To what extent can it be argued that the standard of living for women deteriorated under the Nazis? - N
- The average wage for women was around 1/2 of the average man's wage.
- Women were often employed in jobs with the lowest pay and status.
- Female textile workers in Waldenburg, e.g, earned less than 1/2 the average woman's wage.
- Wages were so low that women were forced into prostitution.
54
To what extent can it be argued that the standard of living for women improved under the Nazis? - N
- Most women who had been employed between 1930 and 1932 found employment under the Nazis.
- Increased female employment from 11.4 million in 1933 to 14.8 million in 1939.
55
To what extent can it be argued that the standard of living for farmers deteriorated under the Nazis? - N
- Price controls on food - reduced profits
- Reich Food State supervised their sale of food and sometimes took a cut which was sometimes more than 25%.
- Banks refused to offer farmers loans based on their land's value.
56
To what extent can it be argued that the standard of living for farmers improved under the Nazis? - N
Reich Entail Farm Law: made it illegal to sell large and medium sized farms.
- Ended the practice of family farms being bought out by big landowners, ensuring that families were guaranteed ownership of their farmland.
57
Why did Schacht believe about the German economy as early as 1938? - N
That the economy was heading for an inflation due to massive government spending on munitions.
58
How did the nature of the Nazi government - a 'polycratic monocracy' - impact the management of the economy? - N
Chaotic nature of the government, Goering's inability to manage the economy, the fantastic nature of Nazi military plans and economic strengths of Nazi opponents meant that in 1941, some senior Nazis already recognised that the war couldn't be won - led to a policy of Total War.
59
How did Hitler's approach to government impact upon economic planning and policy?
Fostered rivalries and created organisations with similar and overlapping powers meant that economic planning was inefficient.
There was little effective coordination between the 4 centres of economic power (4-Year Plan Organisation, Fritz Todt’s Ministry of Munitions and Todt Organisation, Ministry of Economics, the SS).
60
How did the chaotic nature of the Nazi government - “a polycratic monocracy” - impact the management of the economy? - N
Goering’s inability to manage the economy, the fantastic nature of Nazi military plans and economic strengths of the Nazi’s opponents meant that in 1941, some senior Nazis already recognised that the war couldn’t be won.
- This led to the policy of total war.
61
Why was there conflict between senior Nazis and big businesses/industrialists? - N
Georing and other senior Nazis set unrealistic targets and encouraged businesses to work in a way that was uneconomic.
- This meant that businesses resisted Goering’s control.
- Military leaders fought over scarce resources.
62
What major roles did Goering have within the Nazi administration?
- Head of Luftwaffe
- Head of the 4-Year Plan Organisation
- Field Marshall in the army
- Minister for Prussia
63
Why was Goering’s numerous involvements within Nazi administration problematic for the economy? - N
It meant that he couldn’t devote his attention to all aspects of his different roles and therefore was unable to manage all his tasks effectively.
He was also reluctant to delegate any of his responsibilities, wanting to safeguard his power.
64
Why was Goering reluctant to delegate many of his roles? - N
He fears that the people he delegated his roles to would undermine him.
65
What does Goering’s reluctance to delegate his roles reveal about the nature of Nazi government? - N
It reveals the Nazi government to have power hungry leaders.
66
How were Goering’s decisions, promotions and personal conduct symptomatic of Nazi government? - N
He promoted people who were of no threat to hum, rather than talented people who could help improve the war effort.
67
What example could you give which presents Hitler’s targets for arms production to be impossible to achieve? - N
He wanted to increase the size of the Luftwaffe to 21,000 planes.
Inefficiencies in German aircraft production and the small economy meant that the Luftwaffe never exceeded 5,000 aircraft.
68
What did Hitler and Goering overestimate? - N
The ease with which they could extract foreign resources.
69
Why did Hitler and Goering plan an invasion of Stalingrad? - N
In order to seize control of Soviet oil fields.
70
What was overambitious about the invasion of Stalingrad? - N
Nazi leaders assumed that it would be a simple matter to extract the oil and feed it into the Nazi economy, but the shortage of labour and drilling machinery meant that they were unable to extract significant quantities of oil.
71
Why did Hitler go ahead with the invasion of the Soviet union in 1941? - N
Goering assured him that the Luftwaffe would be able to supply the German army as it advanced across Soviet territory. But, the Luftwaffe was too small to be able to fulfil this promise.
72
In 1938-39, why were international banks unwilling to lend money to Germany? - N
Their economy was in huge debt.
73
Why did the strength of the Allies cause problems for the Nazi war effort? - N
- USA was the richest country with a huge workforce and advanced manufacturing techniques.
- Britain was at the centre of the worlds largest empire with access to money, workers and resources.
- The USSR was one of the fastest growing economies in the world and due to its size, it had a huge workforce and access to large reserves of natural resources.
74
How did the Final Solution and Goebbel’s propaganda machine cause economic problems for the Nazis by diverting resources from the war effort? - N
The Final Solution was expensive and served no military purpose.
Propaganda demanded more expenses and labour in order to make films, e.g Kolberg.
75
How dod Goering’s propaganda film ‘Kolberg’ prove the Nazi’s lack of economic priorities during WW2? - N
Money was wasted on the making of the film although it had no contribution to the war effort.
76
Why did the military prioritisation of developing weaponry hinder the Nazi war effort? - N
Military prioritised research and development of new weaponry meant that the army was continually updating its weapons, which was expensive.
77
How much had the German army spent on developing weaponry by 1940? - N
$6 million
78
In comparison to Germany, how much more aircraft had Britain produced? - N
50% more despite only spending $3.5 million on the war effort by 1940.
79
Why did the Nazis try to build factories underground? Why was the idea dropped? - N
The Nazis tried to build factories underground in order to protect them from bombings.
It was dropped due to a lack of labour and its expense.
80
How did the Nazi’s wartime consumer economy differ from that of Britain’s? - N
The Nazis continued to produce cosmetics and goods that were considered good for morale but served no military purpose.
Britain stopped producing products such as lipstick in 1939 as it was considered non-essential.
81
Why was the domestic consumer economy as problematic and damaging for the Nazi’s war effort as the war economy? - N
- Lack of resources and labour power.
- Food was an issue as German farm labourers joined the army in large numbers. Goering tried to import food from Germany’s allies but they didn’t have the foreign currency to be able to do this.
- Foreign labourers were in demand for all kinds of wartime production and therefore the supply for agriculture was limited and Goering’s war efforts to boost agricultural production failed.
82
Due to Goering’s failure to boost agricultural production, how much did the meat ration drop by a week? - N
500g
83
When was Total War implemented? - N
1942-45
84
When and how did Albert Speer get to be in charge of the Nazi wartime economy? - N
Hitler appointed Speer as head of the Todt Organisation and the Armaments and War Production Ministry after Todt died in 1942.
He became the most powerful figure in German war economy by persuading Hitler to issue a decree in March 1942 that recognised arms production as the top economic priority.
85
How was Speer’s power and control over the economy different to that of Todt’s? - N
He was a skilled technical administrator, regarded more of a technocrat than a Nazi.
Unlike Todt, Speer, in 1942 and 1943, believed that Hitler could still guide German to ultimate victory in WW2.
86
Why was the timing of Speer’s appointment significant? - N
It came in time when the German army was unable to defeat the USSR and was therefore in a drawn-out and difficult conflict in the East.
America had recently declared war on Germany and Todt had alerted Hitler to the widespread inefficiency of the economy.
87
What board did Speer create to rationalise the German war economy? - N
Central Planning Board
88
What did Speer introduce into speed up production? - N
Modern production methods
89
How did Speer give industrial managers more freedom to organise production? - N
By excluding military leaders from economic decisions.
90
Who did Speer encourage the employment of? - N
Women
91
What did Speer make greater use of to increase productivity? - N
Concentration camp labour
92
What did Speer establish to oversee standardisation of munitions? - N
The Armaments Commission
- This ensured different parts of the army could use the same ammunition.
93
By what percentage did ammunition production increase by? - N
97%
94
By what percentage did tank production increase by? - N
25%
95
By 1944, by what percentage did the productivity in the munitions industry increase by?
60%
96
Why were Speer’s efforts to reform and rationalise the German war economy not entirely successful? - N
He helped keep Germany fighting but didn’t change the direction of the war.
97
Why was the Allies’ advance into Germany a disadvantage to Germany’s war economy? - N
It meant they had fewer resources with which to keep fighting and to feed the people
Furthermore, allied raids destroyed factories, synthetic oil plants and roads and canals which meant that it became harder to produce and transport goods.
98
How did Speer’s organisation skills and exploitation of slave labour allow the Wehrmacht to mount an offensive against the Allies in late 1944? - N
It meant he was able to provide sufficient resources to mount that Ardennes offensive, a major surprise attack on British and American troops.
99
What crisis was the German war economy facing by the end of 1944? - N
A fuel crisis
100
By what percentage had economic production declined by the end of 1944? - N
60%
101
By the end of 1944, what could the German war economy no longer do in terms of armaments production? - N
It could no longer produce enough armaments to replace those captured or destroyed.
102
At the end of the war, what policy did Hitler order the Wehrmacht to adopt? - N
Scorched earth policy: destruction of all German factories and farms that would imminently fall into the hands of Germany’s enemies.
103
How did Speer react to Hitler’s ‘scorched earth policy’? - N
He worked with industrialists and managed to save a large number of factories and farms in order to ensure the survival of the German people in the immediate period after defeat.
