Nazi Economic Policies Flashcards
What were the two periods of Nazi economic policies?
. Recovery (1933-36)
. Rearmament (1936-39)
What were Hitler’s ultimate aims behind his economic policies?
Reducing unemployment and preparing country for war
How did Nazis have a big opportunity to positively impact economy and get support following their coming to power?
. Germany low on materials, didn’t have currency strength to pay for imports, exports were low and confidence and investments were low too (clearly it would take very little for Germans to be impressed with German policies following such drastic events such as Great Depression)
What was Hjalmar Schacht’s role in Nazi regime?
March 1933: became president of Reichsbank
August 1934: becomes Economics Minister
What were Schacht’s main economic policies (super good)?
. The battle for work
. The ‘New Plan’ of 1934
. Mefo Bills
What was the aim of the Battle for work and what did it do?
It’s aim was primarily to reduce unemployment
. Loads spent on buildings roads and public buildings (first Autobahn built)
. Loans and tax relief to private companies stimulated greater industrial production
1935: Reich labour service set up compulsorily for 18-25 year old unemployed men to do 6 months labour in farming/construction (almost seen as pocket money)
What was Hitler’s secret motive behind the RAD besides helping unemployed young men?
It created military discipline to prepare for war
What are the limitations of the policies in the Battle for Work?
. Economy was already recovering a bit when Hitler came to power, so the impact of the battle for work may be slightly exaggerated
. People were forced into RAD
. Unemployment statistics were manipulated and didn’t include women or minorities at all
What was the aim of the ‘New Plan’ of 1934?
To fix shortage of foreign currencies needed to purchase imported goods as imports were growing faster than exports as foreign trade increased with the recovery of the German economy between 1933 and 1936
What actions were made in the ‘New Plan’ of 1934?
. Controls on import and access to foreign currency
. Series of trade agreements with foreign countries such as South America, where Germans paid in Reichsmarks to be supplied with food and raw materials
- these countries could only use this money to buy German goods
Why did Germany decide to become reliant on foreign agreements for good trade in the New Plan and how was this limiting?
Germany refused to make another European power rich, however these foreign countries economies were extremely volatile
What was the aims of the Mefo Bills?
To finance rearmament safely by borrowing money without risking another hyperinflation crisis
How did Mefo Bills work?
Government paid for its military equipment using these Mefo Bills (credits)
- the bills could be cashed in, meaning private companies were reassured they could get their money
- to make sure the Bills were used and not immediately cashed in, there was a 4% interest per year on the bills if they were kept for a full five-year term as an incentive to not cash in.
What were the strengths of using Mefo Bills?
The rearmament programme could be started in 1935 without government having all the funds the finances it
- as the programme had to be kept secret, they were good as Mefo Bills didn’t appear in government accounts
How were the Mefo Bills a bit of a scam?
As you had to hold onto them for a full five-year term to get full interest, war had broken out by this time and it took ages to get your money back as they weren’t prioritised at the time
Why was Schacht sacked as Economic Minister and who took over?
Schacht became concerned with high public spending and Hitler didn’t like this criticism
- Goering replaced Schacht on 4th September 1936 (no economic experience)
What was Goering’s economic role from 1936-39?
In charge of the Office of the Four Year Plan
- aimed at making Germany ready for war in 4 years (rearmament phase)
- aimed for a policy of Autarky (German self-sufficiency)
Why was the aim of Autarky completely unrealistic?
Germany’s had always relied on imports and foreign trade, and Germany’s land mass was too small to completely rely on itself.
What was the Guns vs Butter Debate?
The idea that rearmament and increasing consumer goods and links with other countries couldn’t work together, so one part of the economy would always fall short
How did big businesses feel about Nazi economic policies?
. Major landowners benefitted from growing demand of food in Autarky
. Industrialists benefitted from the ending of independent labour movements and the expansion of the economy for rearmament
- it seemed as though big businesses were willing to tolerate the huge amount of state intervention as it benefited them enough
Which big business firms were particularly against Nazi economic policies?
Coal firms, therefore in 1937: Nazi government threatened to sabotage some industrialists if they opposed Autarky
Which big businesses particularly benefitted from Nazi economic policies?
. Daimler-Benz aircraft’s (benefitted by rearmament) from 1932-41, it’s production increased over 800%
. IG Farben
How did Thyssen lose out from Nazi economic policies?
Was an iron baron who fled to Switzerland in 1939 as he claimed Germany would soon look like Bolshevik Russia (didn’t agree with state interventions)
Why was steel so important to Nazi economic policy?
Crucial for military equipment, so it needed autarky principles to be strictly followed
Why did Nazi’s intervene in steel industry?
It was showing reluctancy to process low-quality domestic ores
- Nation Herman Goering steelworks established (RWHG)
How was RWHG such a good example of the strength of Nazi state intervention on big businesses?
. Produced a rival operation to rest of steel industry and pressurised private steel industries to invest 130 million of 400 million marks to the project
. RWHG had priority as an industry over well-established private industries
How successful was RWHG?
Very successful: By 1939, it was the largest industrial firm in Europe
Despite RWHG’s success, how was it still not enough for German rearmament?
Failed to meet steel production target in 4 year plan (maybe the target was too unrealistic in the first place)
Which big business were the biggest winners under the Nazis and what were they?
IG Farben - chemical firm that had historically been very cautious of Nazi regime in 1920s but won under Nazi rule
When did Nazis become more interested in IG Farben?
In 1933: it experimented with synthetic manufacturing of oil and rubber
- Farben lent its knowledge to the office of the 4 year plan, receiving over 50% of government investment in return
- played a huge role in four year plan and onwards
How did IG Farben still benefit Nazis later on and how are they significant?
. Produced gas for extermination camps later on
- example of how businesses become riddled with Nazi values and beliefs all for some big profits (greedy)
Overall, how did big businesses generally fare from Nazi economic policy?
Generally benefitted, especially those willing to actively collaborate with the regime
Why did most Mittlestand vote for the Nazis and what did this mean about their expectation of Nazi economic policy?
They were doing so badly during the depression years, so expected a lot of change to come from the Nazis
Which Nazis mainly advocated for policies to protect the interests of the Mittlestand?
Nazi theorists such as Otto Wagner
How did the Nazis help initially benefit the Mittlestand?
1933 Law to Protect Retail Trade
- placed special taxes on large stores and banned new department stores, drawing people towards Mittlestand and retail local shop businesses
How did the role of the small businesses of the middle stand decline in the long-term?
. Tight credit
. Influence of big businesses
. Slowness of official agencies in paying bills
All of this led to bankruptcy for these small businesses
What happened to the number of independent artisans from 1936-39 and why?
Went down from 1.6 million to 1.5 million (but the value of the trade doubled, making it a more professional role) as many went bankrupt due to increased wage cuts and couldn’t compete with larger firms when prices were fixed
How did the peasants/farmers somewhat benefit from Nazi economic policy?
. Nazis prevented rural farmers from losing land due to debt
- Nazis reduced/wrote off peasant debts, preventing large scale foreclosures that were experienced in Weimar Republic
. Some gained from the Reich entailed farm law
How did peasants/farmers not benefit from Nazi economic policy?
. Suffered from labour shortages, meaning not enough workers for farm production (not a big role anymore)
. Life on farms required long hours with low income
. Began to resent government restrictions for not allowing the modernising of their land due to the Reich entailed farm law preventing farmers from using their land to get loans
. Nazi state set fixed prices for agricultural goods, stopping famers’ ability to negotiate market prices
How did the Nazis fail to hold their promise for the peasants/farmers?
Nazi rhetoric had claimed that the rural population were the backbone of the nation (‘blood and soil’)
- in reality, the rural population fell from 21-18% of the population and they weren’t really benefiting from the economic policies at all
What was the Reich entailed farm law
Designed to protect traditional small farms, affecting around 35% of all farms in Germany
What did the Reich entailed farm law do?
. The farms under this law couldn’t be sold or mortgaged, they were to be fixed in ownership and passed onto people
- this tied peasantry to the land and discouraged modernisation (keeping farms traditional)
This all meant peasants struggled to get new loans as they couldn’t use their farms for financial security, making it hard for farmers to prosper
What were the ‘Nazi’ figures on unemployment by 1939?
Only 35,000 out of 2 million MALE workers were officially unemployed
- this typically excludes females
What happened to wages under the Nazis?
Frozen at 1933 levels
What became an important skill for many industrialists and workers due to the wage freezes in Nazi germany?
. Getting round restrictions
- many gave Christmas bonuses
- some employers even provided their workers with free motorcycles
This was all to attract higher skilled workers
How did living standards vary for workers?
. Some industries such as armaments were much better off
. Wages in consumer industries and agriculture were a long way behind
What was the only way workers really experience higher take-home pay?
Through overtime, not through higher pay
What were wages like for workers in 1936 compared to the depression years?
. Average of 35 marks/week
- 10 times more than the dole that 6 million were on in 1932
What happened to figures for paid holidays per year during the Nazi regime?
1933 - got three days per year average
1939 - between 6 and twelve days a year
What did historian Grunberger argue about the truth of wages in the third Reich?
. Hourly wages only increase by 1% a year during Nazi regime
. Workers real incomes were lowered by payments to membership for the DAF
- Winterhilfe further reduced real incomes
How were workers overall affected by Nazi economic policy?
. Generally lost freedom (e.g no free trade unions and DAF)
- many improved facilities in the DAF
- strength through joy was a benefit
The rapid improvement in unemployment and small rise in living standards was viewed as better than the depression years, but that isn’t much of an achievement
