Nazi Economy Flashcards
When the Nazis came to power what was their primary aim and why?
Unemployment + ‘Mittlestand’;
- Hitler’s élection promise had been ‘bread and work’, to appeal to the middle class
- Nazis pledged to reduce unemployment, improve quality of life and revive business
- after always blaming the Weimar Republic for Germany’s problems and economic difficulties Hitler had to prove that he was superior
—> unemployment was one of the main reasons for failure of the Weimar Republic
—> the effects of the Great Depression mostly effected the German middle class
After Wall Street Crash, peak Great Depression statistics
(6)
- demand for GR goods declined; 1929-1933 value of exports dropped by 62%
- 1929-1933; 10,000 businesses went bankrupt per year
- average number of working hours in a day fell from 7.6 to 6 = less earnings
- 1932, 8 mil unemployed (including unregistered unemployment)
- rural poverty; farmers’ wages + incomes sharply decreased
- middle class forced to rely on soup kitchens as state welfare favoured factory workers
How did the Nazi Regime try and solve the economic crisis?
(5)
to reflate economy through gov. spending;
- gov. spent money on public works
- gov. offered subsidies to private firms
- controlled inflation
= creation of jobs + stimulated market demand
Who was behind the Regime’s early economic policies?
(4)
Hjalmar Schacht
- President of the Reichsbank 1933
- Reich Minister of Economics 1934
- given dictatorial powers of the economy, July 1934
- Inspired by Keynes (deficit financing)
What is deficit financing?
state spending on public work schemes –> creates employment –> stimulates economy + creates demands
(state intervention to stimulate economy)
How did Hitler’s economic policy 1933-1936 compare?
continuation of Weimar economic policy ;
- encouraging gov. and public spending to create employment, while vigorously controlling prices and wages (Von Papen + Schleicher)
= considerably developed the work of the Weimar Republic
How did the Regime put in place deficit financing, outside of public works?
(4)
- gov. set low interest rates
- rescheduled large scale debts of local authorities
- maintained tariffs on imported produce to preotect GR farmers
- Reich Entailed Farm Law; reduced debts through tax concessions + lower interest rates
How did the Regime put in place deficit financing (public works)?
(4)
- June 1933, Law to Reduce Unemployment renewed and expanded (introduced by Von Papen)
- direct gov. work schemes; Autobahn (7,000KM of motorways), reforestation, land reclamation, etc.
- business subsidies given to labour intensive schemes
- ‘Battle for Work’ propaganda campaign
—> creation of the Labour Service and Emergency Relief Schemes
What were the effects of state investment in public works?
(3)
- 1932-1935; 5 billion RM invested in work schemes by gov.
- gov. expenditure increased by 70%
- 1936, 1.6 mil registered unemployment
unemployment stats
- 1933, 3.7 mil –>1938, 200,000
- excluded Jews + women = skewed
What other factors decreased unemployment?
(2)
- upturn in the world economy
- 1936 onwards, increasing reliance on rearmament
= creation of many jobs
As employment increased, what happened to working conditions?
(5)
According to surveys carried out by the League of Nations in the 1930s;
- German standards of living lower than half of that of America
- long working hours
- primitive working conditions
- low wages determined by set wage level for each industry
—> by 1939, wages 1/4 - 1/3 lower than in 1932
- some workers benefitted from creation if competition as they were poached and offered higher wages
The New Plan’s aims
(3)
September 1934, introduced by Schacht;
- gov. to control all aspects of trade + currency exchange
- aimed to prevent excessive imports; GR to export more than import
- partly aimed to achieve autarky; to avoid GR being over-reliant on the world economy
The New Plan policies
(4)
- creating Bilateral trade agreements; barter agreements with Romania + Yugoslavia
- prioritising key industries in distribution of scarce raw materials
- export subsidies; lower prices of GR goods to compete on international market
- Mefo bills; gov. bonds people could invest in, fixed rate of interest
What kind of policies were those of The New Plan?
(2)
- direct interventionist economy
—> gov. commanding structure of the economy
= rather left-wing - economic nationalism
