Theme 3- Controlling the Economy 1933-1945 Flashcards
What is the myth about the German economy after the Great Depression?
That the Nazis fixed the German economy (although people at the time believed this). Most recovery policies were already in place from Weimar Germany and the USA and Europe’s recovery also contributed to German recovery.
What was the Nazi attitude to the economy?
They believed in leaving private business alone but socialising the German people into one collective group. They didn’t follow set rules or ideology. Command economy.
What was the Nazi understanding of economics?
Hitler had little interest in or understanding of economics. He believed that economic statistics, economic laws and forces were insignificant compared to decisive action guided by his genius. He also believed in primacy of politics meaning economic policy should serve political objectives. He also thought that economics should serve the good of the Aryan race by making them financially, politically and militarily stronger.
What were the Nazis’ aims in relation to the economy?
- Ensure a reasonable standard of living to maintain public support
- Provide resources for rearmament to ensure German military might
- Move towards autarky to guarantee strength and independence
- Provide resources for major civic and architectural projects
What indirect and direct stimulus policies did the Nazis have for economic recovery?
Indirect- Cut tax in farming, small business and heavy industry as well as giving grants to businesses to buy new machinery or hire new workers.
Direct- Financed construction and industrial development like Reinhardt Programme which committed RM 1000 million to public works schemes.
What trade policies did the Nazis have for economic recovery?
The New Plan limited import quotas for consumer imports, excluding imports crucial to rearmament like steel. By August 1934, there were 25 departments to issue import licenses.
Also increased trade with developing countries like Brazil and Yugoslavia where Germany could get better trade deals than with the USA or Britain.
How successful were trade policies?
German trade came back into balance by mid 1935 and the economy continued to rearm. However, prioritising rearmament meant living standards fell in the early 1930s. For example, the price of clothing rose significantly as imports had been limited on wool, cotton and leather. The textile industry suffered massively.
What was the ‘guns or butter’ debate?
Poor harvests in 1934-35 led to food shortages and butter had to be rationed in 1935. This showed the problem that Germany was not strong enough to produce both guns and butter. Darre (agricultural minister) insisted that more money should be spent on agriculture whereas Goering argued that resources should be devoted to the military.
What did Hitler do to settle the agricultural crisis in 1935?
He authorised more food imports in the short term to keep prices low and avoid having to ration bread. In the long term, he began the process of creating a command economy.
How successful were the Nazis in their economic aims up until 1936?
Successful in rearmament as steel imports were never limited. Successful in architectural and civil projects- Autobahn, Olympic Stadium, construction of waterways. Partially successful in living standards as they created employment and cut taxes although there was inflation and food shortages. Partially successful in autarky as imports were limited although Hitler had to increase food imports in the agricultural crisis.
What was the DAF?
The German Labour Front- an Nazi organisation that replaced trade unions. However, it had no right to negotiate with managers in order to win better pay or conditions for workers.
What was the RAD?
National Labour Service which provided unpaid work for young people aged 19-25. It was effectively compulsory by 1935 and counted as employment in official statistics although it was unpaid.
What was the KdF?
Strength Through Joy- an organisation that brought the benefits of culture and leisure to working people. By 1937, it had a budget of RM29 million and was responsible for half the theatre booking in Berlin and subsidised more than 1.7 million short holidays (although the facilities on them were VERY basic).
What was the Four Year Plan designed to do?
-Ensure that Germany’s armed forces would be ready for war in 4 years
-Ensure Germany’s economy would achieve autarky in 4 years
Very difficult to do both simultaneously (needed to import steel for military development).
What happened to leadership and control as a result of the Four Year Plan?
Schacht and Goering had disagreements over rearmament vs economy and Goering effectively took control of the economy even though he had limited economic knowledge. Goering nationalised the country’s biggest steel companies, creating Europe’s largest steel company- Reichswerke Hermann Goering.