The Nazi Ecomomy 1933-1939 Flashcards
Hitlers aims for the nazi ecomomy
-No knowledge of economics himself. Hitler made clear what he wanted
SHORT TERM: Bring down unemployment to deliver on promise of ‘a massive and comprehensive attack on unemployment’ as failure to do so would make him seem untrustworthy and incompetent
LONG TERM: Create a war economy to allow Germany to wage ‘total war’ in the ‘eternal struggle’
Timeline of significant economic events 1933-1937
1933: Opening of the ‘Battle for work’
1934: Schacht’s ‘New Plan’
1936: ‘4 Year Plan’ launched under direction of Goering
1937: Schacht’s resignation as Minister of Economics
Eliminating employment 1933-1936- The ‘Battle for work’
- Lead by Hjalmar Schacht (Chief of Germany’s national bank 1933, Minister of Economics 1934)
- Unemployment when Hitler elected was 4.8 million
- 4.8-0.1 by 1939
How did the nazis eliminate unemployment in the ‘Battle for Work’?
- Economic depression bottomed out in 1932-3 leading to ‘natural’ recovery. Consumer spending/investment picked up. Effect mirrored in Britain, shows not wholly due to policy
- Schacht’s public works: 1000s of Kilometres of roads which propaganda claimed lessened unemployment, jobs created not that many. Lower profile job creation schemes (house building, road repair) responsible for this
- Rearmament: munitions/war vehicles/barracks constructed. T.O.V. disregarded. Hidden from allies as rearmament kept off published accounts in 1933-5 by paying with ‘mefo bills’ - government credit to be cashed in at national bank
- Figures doctored: Dismissed jews/Women under ‘marital loan scheme’ not accounted for. Young people taken off in 1935 when they did 6 months unpaid work for Reich Labour Service. Rearmament made public in 1935 which cut unemployment total, though this was not the aim of rearmament
‘Mefo bills’
- Government credit
- Cashed in at the national bank
- Used to pay industrial managers to keep spending on rearmament off government records and keep it covert
Schacht’s ‘New Plan’ September 1934
- German rearmament=raw materials required
- Raw material exporters suffering from import taxes/tarrifs so expensive to export. Left Germany with trade deficit (import value>export value)
- Solution: ‘New plan’ - no one may import goods without permission from ministry of economics
- Solved immediate problems, but bad for normal Germans as fewer imports of food=food shortages
Did Germany experience an economic miracle after 1933?
- Some support Hitler inspired ‘economic miracle’, arguing his job creation schemes were responsible for the upturn and that those before him (Bruning) had not thought of
- However job creation schemes were not especially beneficial
- Largely due to the ‘natural’ recovery
- Figures had been doctored: jews/women under ‘marital loan scheme’/16-25 year olds in the 1935 compulsory work schemes….
- –> therefore NO
Four year plan
- Hitler prepared memorandum for close colleagues saying Germany must be ready for war in 4 years
- Plan launched at 1936 Nuremberg rally
- Aims: To increase size/firepower and to make Germany self sufficient so as to not be starved by its enemies (mindful of British naval blockade 1914-1918) -Autarky
- Schacht alarmed, looses influence due to complaints and resigns 1937, replaced by Goering with no prior experience in economics but determined
Four year plan - How did Goering try to achieve economic self sufficiency?
- Aimed to reduce import of foods and raw materials
- German farmers encouraged to grown more with grants for cultivation
- Industry made to use German raw resources first even if of lower quality ie with iron ore
- Replace natural products with artificial replacements. Ie Coal–> motor oil (Germany had lots of coal) and rubber -ersatz goods
- Labour retrained to ensure Germany had good workforce
Four Year Plan - Goering’s relationship with the big businesses?
- Goering expected cooperation with industry giants as they could profit extensively eg IG Farben contracted to make ersatz rubber/motor oil and supplied Zyklon B
- If businesses refused to cooperate they were bypassed with new state ones
- ->eg 1937: Ruhr ironworks refuse to invest in new blast furnaces for low grade German iron ore. Goering creates Hermann Goering works which has 600 000 by 1940, and branched out into armaments and coal mining
How successful was the Four Year Plan?
Successful
- Hitler did not expect complete self sufficiency as impossible to feed Germany without foreign imports. Justifies need for lebenstraum or ‘living space’
- Agriculture seen as less important than industry. Labourers drafted into factories. 1.4 million left land for cities 1933-9. 1933 Reich Entailed Farm Law aimed to preserve size of farms by saying they could only go to one heir, not be split among many
- German steel production increase in later 1930s,
- Successful production of synthetic rubber with 96 000 tons by 1942
Unsuccessful
- Disappointing rise for iron
- Motor fuel only 6260 tons, lower than target of 13 380
- Budget deficit (spending>taxation)
- 1/3 of resources still imported
Was Germany ready for war in 1939?
Maybe?
-4000 000 men, 3000 warplanes
No.
- But due to mismanagement/lack of raw resources, army not sufficiently provided for (ie with ammo)
- Not capable of fighting multiple enemies due to lack of guaranteed supplies. Very little oil
- Hitler impatient, sacked army chiefs Blomberg/Fritsch
German economy in 1933
- Economy shrunk by 40%
- Estimated 8000 000 unemployed
- Demand for German product low
- Weak banking sector (5 collapses in 1931)
- Agricultural sector in recession
How successful was Schacht?
- Unemployment fell by 1.5 million by 1936
- Production up by 90% 1932-1936
- Public investment tripled, government spending up 70% 1933-1936
However, failed to resolve balance of payments problem as import>export
