Nazi Economy Flashcards
Backdrop to Nazi Economy
They did not have to face the issue of reparations as in 1932 Brüning had said that Germany could not pay them back due to the depression
Schwartz had however fallen back on foreign borrowing with the USA in 1934 ; trade with US collapsed but this didn’t matter much as Schacht drew up the “New Plan” making trade treaties with countries such as Hungary and Yugoslavia which involved exchanging goods rather than paying for imports
Priority for the Nazis was securing political security (assurance - day at Potsdam)
How did Nazis have such a big effect on employment stats?
Depression had turned around and businesses were now employing again.
Nazis manipulated the stats as the definition of “workforce” changed dramatically as Jewish people were no longer allowed to work in the civil service ; married women who left work/were sacked did not count either
Thirdly - Nazis created work schemes and encouraged brisknesses to do the same. Reichsarbeitsdienst (RAD) schemes for unemployed men and women provided a lot of manual work with basic food and accommodation in labour camps. BUILDING THE AUTOBAHNS AND INCREASED AUTOMOBILE MANUFACTURE CREATED WORK AND IMPROVED COMMUNICATIONS WHICH HELPED TO MOVE GOODS AND RAW MATERIALS MORE EFFICIENTLY
Employment stats
1932 - at its height there were 29.9% unemployed
1036 - 7.4%
Managing agriculture
Very important for Nazi desire for autarky - agricultural reforms were part of the first 4 year plan and in his first weeks in office, the minister of agriculture, Hugenburg, increased import tariffs on agricultural produce - making German produce cheaper
He banned banks repossessing farms from farmers in debt to keep them farming
Richard Darré set up the Reich Food Estate in May 1933 to regulate food production and distribution of farm produce, as well as setting prices and farm wages
RNS set up Reich agencies to control the importing of farm produce and work creation schemes sent people (young women) to work on farms too and these measures of telling farmers what to produce and what to sell it for worked with German farmers providing 80% of all farm produce by 1934
Managing business
Big businesses such as the iron and steel industry and IG Farben (chemicals) supported the Nazis while others (who depended on their exports) were less happy - many suffered from the measures implemented to help small businesses with department stores making 80% less in 1934 than in 1929
This was due to the Law for Protection of Retail Trade which stopped the building of new stores and banned the expansion of existing ones ; Nazi propaganda discouraged using department stores because small businesses had supported Hitler
How did they manage unions?
Unions had been a big problem for business in Weimar due to wage disputes and arbitration courts + lockouts ; this meant the loss of millions of working days with more than 36000 million in 1924
Nazis had to balance the attitudes of big IG Farben with workers who had backed them ; they made 1st May an official holiday in 1933 (traditional socialist day). On 6th May they announced that there was now only one union - DAF (led by Robert Ley)
It became increasingly difficult for non-members of the DAF to get work and it allowed big businesses to exploit workers more as they could set their own working conditions ; it became a very popular force
Crisis of 1935-1936
Schacht’ shifting of Germany’s trade to south east Europe and his use of exchanging goods meant that trade initially improved but by 1935 many countries were demanding cash instead of goods ; Bulgaria demanded cash for their oil
This was bad as Germany was still not self-sufficient and it needed to import raw materials and there was also a growing need to import food
In 1935 Schacht had to choose between food and raw-material imports and this was a significant crisis ; out of this he founded the basis of the 4 year plan of 1936
Nazi economic legislation 1933-36
1st June 1933 - Law to reduce unemployment ; Reinhardt Programme, to provide employment was drawn up by Fritz Reinhardt in the Ministry of Finance and became the RAD where the women were given marriage loans if they left work to marry
29th November 1933 - Law for Construction of German Craft Trades say skilled workers have to be properly trained and members of a Nazi-run trade guild
What is a command economy?
Where the state decides what and how much to produce - Nazis worked towards this from the start, setting up state control over industry and agriculture as they rebuilt the economy
First 4 year plan
?
Second 4 year plan
Had a tight focus on autarky and preparing for war ; Goering was in charge of the plan and had control of all business and agricultural production. His office had 6 departments ranging from raw materials to foreign exchange matters ; the rubber for example was replaced by a synthetic “Buna” which meant building new factories and thus results were not as rapid as was hoped - there were technical difficulties at first with 6 tonnes of coals needed to produce 1 tonne of synthetic fuel
Guns or butter
Germany had a constant problem reconciling the needs of rearmament and the needs of the people for food, fuel and other necessities ; Hitler believed that rearmament was crucial but at the same time it was vital for the Nazis to have the support of the people and it was clear that rationing would lead to unpopularity and many remembered the starvation of Weimar and WW1
Nazi election had promised work and bread and they had to provide both to stay popular
Nazis tried to re-educate people on eating less meat and fat with propaganda aiming to change their eating habits
Guns or butter debate
How early was he planning for a war economy
This is complicated because of coal, steel and other war materials can also be used in non-military ways but Hitler’s speeches from the start focused on rearmament so some historians have argued that he exploited this ambiguity to seem more butter focused and avoid a conflict
But after 1936 war was the only focus with Schat resigning in 1937 because he disagreed with the focus of the 4 year plan and his ministry had no power once the office of the 4 Year Plan was created
Situation in 1939
Nazis had tight control of the economy - farming and industry did not always meet the 4 Year Plan targets set by the command economy as they were often unrealistic.
By 1938-39 Germany was still importing 17% of its agricultural needs and this didn’t help their mission for autarky ; propaganda was churned out to persuade people from eating meat to eating fish and switching to preservatives
This was less successful than had been hoped and the shift to a command economy had made the Nazis unpopular among groups that had previously supported it but resented Nazi levels of control (big industrialists and manufacturers)
They were not as ready for war as they would’ve been if they had been able to focus entirely on war production
Rearmament conclusion
Had been significant and had been achieved without pushing up prices of wages and without provoking widespread public protest at having goods that factories might otherwise be making such as toys/electrical goods in short supply
