Economic Miracle Flashcards
(15 cards)
Why did Hitler focus on the Economy?
that is what he has promised to the people
- Said he would deliver work and bread
- Knows the people are going to judge him off of this
- Needs to be popular to survive as a dictator
What is the Economic background before the Third Reich?
- Exports hit by the slump in world trade
- Lack of foreign currency/no international credit rating to pay for many imports
- Almost bankrupt from WW1 reparation payments
- Confidence and investment were low (ie factories closed, not enough money to pay wages, benefits cut as government couldn’t afford them)
Six million Germans were unemployed at the end of the Weimar Republic (1/3 of working population)
What are Hitler’s economic aims?
- Achieve full employment
- Economic recovery to rebuild German military
- Self-sufficiency (autarky)
- To develop a Wehrwirtschaft (defence economy- rearmament began 1935)
Understand the reason Germany lost WW1 was due to British Blockade and lack of materials
- Needed a self sufficient economy so the home front wouldn’t collapse (still very hard even in that time)
What are the phases of the Nazi Economy from 1933 to 1945?
RECOVERY: 1933-36- Schacht the dominant figure
REARMAMENT: 1936-1939- Goering dominant
WAR: 1939-45- Speer dominant from 1942
What impact did Hitler placing emphasis on wanting to solve unemployment have?
This would provide political stability and help to ensure his position. It was hoped that the experience of the private sector would generate economic growth. However, private business had limited success and so the Nazi state became increasingly involved in the economy.
Don’t want state control, wants to leave it to the Conservatives/Economists (the experts)
What year did Hitler reject the SA?
1934
When is Schacht given power?
In March 1933 Hjalmar Schacht became President of the Reichsbank.
In August 1934 Hitler made him Economics Minister
What was the impact of the Autobahn construction 1934-35?
- Building motorways employs a lot of people
- Shows Germany to be modern and futuristic
- Long, good, wide roads can help quickly transport the military across the country
Meant unemployment went down
How was the economy different under Schacht/Hitler compared to Bruning?
Government powered economy ie Similar to Roosevelt in America
Why did Unemployment fall?
· Increased public expenditure and investment e.g. public works schemes initiated in 1932 were extended
· Tax concessions and grants e.g. to newlyweds
· Women & Jews encouraged / forced out of the work place
· Destruction of trade unions and dynamic government created confidence
· Government subsidies for companies that took on workers
· RAD (Youth Service) took the young off the unemployment list (Unpaid government labourers for 2 years)
· Conscription in 1935 (all 18-25 men for two years) -> against the Treaty of Versailles
· Cyclical improvement in the world economy
What take did France + Britain have on Germany at the time (ie trying to expand its military)?
Appeasement, didn’t do anything that would upset Germany, Japan or Italy
- Weak policy which only emboldened dictators
- Could’ve invaded but Britain is suffering from Great Depression, lack of economic backing
- British people wouldn’t support another war so soon (horrific times from WW1)
How did Germany pay for the economic expansion in the Recovery period (33-45)?
· Deficit financing (The government spends more money than it receives in order to expand the economy. The resultant expansion should then improve the govt’s tax revenues which would help to restore the govt’s finances)
Deficit Financing, used in the Kaiserreich
Short term loss for long term gain
· Mefo bills (Credit notes that were converted into RM after five years. They funded about half of Germany’s rearmament programme during 1933-38. They helped to disguise military expenditure and avoid inflation in the short term) Mefo bills- delayed payment, partial payment + rest with credit notes · Ending of reparations payments arranged by Bruning
What was the Balance of Trade problem 1934?
By 1934, Germany was importing more than it was exporting. As a result, foreign currency and gold reserves were reducing.
Consumer market is becoming more restricted due to protectionism + encouraging more German made things
How did Schacht propose to fix the Balance of Trade problem 1934?
Schacht tackled this through the New Plan (1936-40) (Government regulation of all imports). Also a series of bilateral trade agreements were made with other countries such as the Balkan states; strategic raw material imports would be part paid through barter (exchange of goods) to save scarce foreign currency.
Was the 1936-40 New Plan successful?
This was only partly successful due to increased rearmament. Schacht resigned as Economics Minister in 1937 and from the Reichsbank in 1939.
Resigned as he was sidelined
- Told Hitler he couldn’t accelerate rearmament
- Social darwinism- Survival of the fittest, if you will it it will happen (Hitler) BUT Schacht was a realist so was sidelined
