Nazi economic policies Flashcards
What were the aims of Nazis’ economic policies in 1933?
Reduce male unemployment Strong economy = Strong Germany Increase standards of living Control workers Unity of purpose Protect traditional + pure German communities: farmers, artisans and small shopkeepers
What economic areas did the policies look at?
Rearmament
Employment
Four-Year Plan
What policies were put in place to reduce unemployment?
1 billion Reichsmarks were invested in public work schemes-saw the building of roads, canals and houses
Introduction of conscription in 1935 absorbed a large number of young employed
Gov continued the Voluntary Labour Service, by 1935 this employed 500,000 men
Law for the Reduction of unemployment took some women off labour market by offering loans to those about to marry if they gave up jobs
What evidence is there that the policies to reduce unemployment were successful?
by 1938 there was virtually full employment
industrial production doubled
What evidence is there that the policies to reduce unemployment failed?
Although unemployment had fallen to 2.5 million by 1934, it did not fall again until 1936 following the introduction of conscription + rearmament
Much of the work was poorly paid + involved hard labour often in poor conditions. Therefore although statistics suggest the problem was solved-they didn’t consider the human effects
Who was Hjalmar Schacht?
Appointed Minister of Economics from 1934-37 to help with recovery
What did Schacht do to bring about recovery?
Encouraged heavy state spending following a policy of deficit financing
resulted in gov spending rising by 70% from 1933-36
What did Schacht’s actions (heavy state spending + policy of deficit spending) and public work schemes lead to?
led to fall in unemployment, but also accompanied by a balance of trade deficit as Germany was importing more raw materials and failing to increase exports
What did Schacht’s actions (heavy state spending + policy of deficit spending) and public work schemes lead to?
led to fall in unemployment, but also accompanied by a balance of trade deficit as Germany was importing more raw materials and failing to increase exports
What is a balance of trade deficit?
Occurs when a country’s imports exceed its exports during a given time period
When was Schacht’s new plan introduced?
September 1934
What did Schacht’s new plan do?
Gave gov control of all trade tariffs, capital and currency exchange
Priority given to imports for heavy industry
A series of bi-lateral trade treaties were signed, particularly with South-East Europe and South America
Rapid increase in spending created prospect of inflation but avoided this through mefo bills
What bi-lateral trade treaties mean?
German purchases were paid for in Reichsmarks, which the countries then had to use to buy German goods.
The rapid increase in spending created
What were mefo bills?
Credit notes used to pay armament factories
Didn’t leave paper trail-allowed them to rearm
Could be exchanged to Reichsmarks on demand
added to national debt
What were the positive impacts of Schacht’s policies?
Industrial production doubled Full employment (of a sort) Industrialists satisfied they could work with the Nazis Investment in infrastructure
What were the negative impacts of Schacht’s policies?
Balance of trade crisis
Run on foreign currency and gold reserves
Real earnings in 1938 all but the same as 1928 figure
Schacht’s policies would lead to overheating of the economy by 1939
Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures
What was the aim of Göring’s Four Year Plan?
Increase armaments production, achieve autarky
What were the driving factors of the four year plan?
Preparation for war
Autarky
Infrastructure preparation
radicalisation
How did he plan to achieve these aims?
By increasing agricultural and industrial production, developing ersatz and regulating imports and exports so that armaments were favoured over agriculture
Clarified that Hitler was moving towards creating a total war economy
Who was given responsibility for rearmament?
Göring
Led to Schacht resigning in November 1937
What else did the plan aim to do?
Increase the production in key war industries such as synthetic rubber, fuel, oil and iron ore.
How did they increase production in key war industries?
By building large plants
In 1938, Austrian companies were taken over the Anschluss
Took over the Skoda works in Sudetenland after annexation
What evidence supports that the Four Year Plan was successful?
Industrial production rose at considerable rate in some industries eg aluminium increased from 172,000 tons in 1933 to 434,000 in 1939
Germany rearmed
Inflation kept under control
Army tanks
In 1938 the German economy was almost 40% larger than in 1928 but spent less on consumer goods and exports declined by 57%
What evidence supports that the Four Year Plan failed?
Most targets not met, particularly for oil and rubber + demands of armed services not satisfied
By 1939 when war broke out, Germany still relied on foreign supplies for 1/3 of its war materials, therefore economy not ready for total war
