Nazi - Economy Flashcards
Autarky
The idea that Germany should be self-sufficient, this was closely linked to ideas of nationalism.
Primacy of Politics
Hitler believed that economic policy should serve political objectives
Hjalamar Schact
Reichsminister of Economics (1934-37)
Financial Expert who was trusted by industrial leaders
Loyal to Hitler before the Nazis rose to power.
Former head of the Reichsbank
Key policies of Hjalmar Schact
New Plan
MEFO bills
Public Spending
Tax Cuts
Reinhardt Programme
The inital methods of Nazi economic development
Indirect Stimulus - Tax Cuts / Subsidies to promote spending - leading to greater levels of employment
Direct Stimulus - Public Work Schemes to boost employment
Examples of Indirect Stimulus
Tax cuts for; Farming, Small Industry + Heavy Industy
Govt. Grants - Newly weds, Businesses to pay off debt + homeowners
Examples of Direct Stimulus
Reinhardt Programme (1933) - Commited 1 million reichsmarks to public work schemes, eg. road construction, railways + waterways
Govt. Spending on Work Creation (1932-1933)
1932 - 1.5 billion RM
1933 - 2 billion RM
Job Creation (1933-1934)
2.8 million jobs created
Unemployment (1929 - 36)
1929 - 1.8 million
1932 - 5.6 million
1936 - 1.2 million
MEFO Bills
Schact created a private company which would place orders for military goods.
Mefo GmbH paid for these orders with Mefo bills, which delayed the payment until later in the 1930s.
They accounted for around 1/5 of German military spending, 12 million RM.
New Plan (1934)
Protectionist policy - eg. Import Quotas
Trade with developing countries - eg. Peru, which allowed for Germany (the bigger economy) to negociate better terms and enter into barter agreements.
Success of the New Plan
Britian + USA did not impose quotas on Germany in retaliation.
Global Economic recovery
Resolved Balance of Payments deficit
Import Quotas negatively affected some industries, eg. textiles importing raw materials.
Guns or Butter
The debate between importing food, eg. grain/butter or rearmament
Goering - “Guns make the country strong, butter makes you fat”
Hitler’s resolution of the Guns vs Butter debate
Short-Term = Increased food exports
Long-term = Began to establish a command economy
4 Year Plan (1936)
The German army would be ready for war in 4 years
Germany would become self-sufficient in 4 years.
Goering was made Plenipotentiary of the plan
Establish a Command Economy
Radicalisation (Schact vs Goering)
Schact - Tradional Nationalist, utilised his advisors in order to make well-informs (sometimes creative) economic decicions
Goering - An extremely loyal nazi, committed the political objectives of the party.
Command Economy
Vast state control over industry
Market forces replaced with government instruction
Successes of the 4 Year Plan
Coal production increased - 319.7 million (1936) to 380.9 million (1938).
Goering nationalised steel companies leading to small increases in output. 19.2 million tonnes (1936) to 22.6 million tonnes (1938)
Failures of the 4 Year Plan
Only 300,000 / 750,000 tonnes of steel required by the army monthly was achieved.
Labour shortages - eg. coal miners
Only produced 20% of the Ersatz oil required (1939)
Aircraft production fell in Year One - Goering rejected production lines, wanted German craftmanship
Ersatz rubber was inefficent to produce, ie. it was cheaper to import
The army advised Hitler that they would not be ready for war until 1943 due to lack of resources.
Excessive spending had led to inflationary pressures
Living Standards - Working Class
The lack of trade unions prevented wage negociations
Average working week rose from 43 to 47hrs (1933-39)
The DAF was ineffective in aiding workers.
German Labour Front (DAF)
Replaced trade unions in May 1933.
One Govt. controlled union
DAF did not negociate for workers’ pay / rights
Volksgemeinshaft
The ‘people’s community’ with racial connotations.
The Nazis interpreted this as all classes working together to benefit the Aryan race.
Strength through Joy (KDF)
Established within the DAF for the spread of Nazi ideals and leisure
Subsidised sports, opera/theatre tickets, Art exhibtions + holidays.
By 1937, the KDF had a budget of 29 million RM.
KDF holidays were bad - poor sanitation / little privacy
Female Workers - Living Stanadards
The number of Women Workers increased from 11.4 million (1933) to 14.8 million (1939).
Women were encouraged to take clerical jobs
Average women’s wages were half of men’s
Wages were so low that many women were forced into prostitution.
Industrialists - Living Standards
The destruction of trade unions meant that costs were kept relatively low (no wage negociations)
Long working days increased productivity
Large firms benefitted from Govt. contracts
IG Farben helped with the creation of the 4 year plan and benefitted greatly from it.
Small Businesses - Living Standards
Benefitted from low labour costs - no trade unions
Hugo Boss (small) - used for Nazi uniforms
Lost out to big business due to Govt. contracts
Textile firms were banned from importing raw materials
Middle Class - Living Standards
Nazi economic policy was largely beneficial to the middle class.
They benefitted from the KDF, eg. cheap opera tickets
The middle class were encouraged to recognise their race over their class
Govt. Spending on Job creation
RM 1.5 bn (1932)
RM 2 bn (1933)
3 Key impacts of War
Administrative Chaos
Contradicting Priorities
Impossible plan
Administrative Chaos during WW2
Overlapping organisations led to inefficiency - eg. 4 Year Plan Organisation, Ministry of Munitions, Ministry of Economics.
Goering held many positions - eg. Head of the Luftwaffe, Plenipotentiary of the 4 Year Plan, Army Field Marshall, Minister of Prussia.
Goering was addicted to morphine - affecting his work
Germany’s Priorities during WW2
The Final Solution was expensive and required lots of labour - not beneficial to the war effort.
Goebbels’ film Kolberg (1944) withdrew men from the frontline to serve as extras.
The military were focused on R+D, eg. V1 + V2 rockets which never truely materialised / not as effective as expected.
The pursuit of Autarky made war production inefficient, eg. Ersatz materials were more expensive than imports
Impossible Plans
Germany’s economic plans were built on the assumption that Germany would win WW2.
They had unrealistic aims for the army size - eg. they wanted the Luftwaffe to be 21,000 planes, never exceeded 5,000
Hitler accounted for resources that they would collect from conquered terriotry in their plans. Collecting these resources was expensive and inefficient. For example - they lacked skilled labour to extract oil from Stalingrad.
Key Successes of Albert Speer
Increased military production - eg. Ammo output increased by 97%
Increased labour productivity - 500,000 women changed jobs for more productive jobs, introduced 3 shifts in a day.
He built temporary housing quickly for workers whose houses had been bombed to continue output.
Blackmailed the Gauleiters to get their full suppory towards the war effort
He standardised ammo production - overcoming the issue of using the wrong ammo on the front line.
Halted the production of non-essential goods - stamped with “Return to sender - irrelevant to war effort”
He made efficient use of labour from conquered territory / concentration camps.
Key Failures of Albert Speer
Failed to stop conscription of key skilled labourers - breaking the promise Hitler had made him in 1943.
Speer’s plans were often halted by Nazi infighting - Hanke was not made Labour deployment commissioner.
He was late to the war effort - reforms did not begin until 1942.
Allied bombing was damaging to morale - Dresden (1945)
Reasons that the German Economy collapsed by 1945
- Allied bombing ruined infrastructure
- Rapid escalation of rearmament ruined other sectors
- Economic leaders were often un qualified - eg. Albert Speer = Architect
