Economy, 1933-45 Flashcards
(25 cards)
How did economic policy change from the Weimar era to the Nazi era?
The Nazis were less reliant on foreign trade, compared to the Erfullungspolitik policy of Stresemann. In 1934, Germany fell behind on payback of US loans, and trade with the US collapsed.
What was the Nazis’ main priority?
Creating economic self-sufficiency and political security
What was the Nazis’ main economic issue?
Unemployment
Why did unemployment improve with the Nazis being in power?
- The Depression had hit its worst and then turned around as businesses were employing people again.
- The Nazis had also manipulated the employment stats, as Jewish people were no longer allowed in the civil service and other occupations, and women, especially married women, (doppelverdiener) were encouraged not to work and were left out of the stats, because women in industry took up available jobs for men, who in turn could not provide for their families.
- The Nazis created work through the RAD (Reichsarbeitsdienst/Reich Labour Service). It created schemes for the unemployed, for less pay than unemployment pay, like the road building schemes for the Autobahn. It helped move goods around more efficiently and thereby helped other industries like car and truck manufacturing
Autobahns
Usually accredited to the Nazi Party, it was not their idea initially, while they did execute it. It would allow them to move goods around more efficiently and at some point allow the army to move around.
- It did benefit businesses. Between 1934-36, 126,000 trucks were build, with 15,700 going to the army.
The autobahns were not as effective as you might think:
- It was slow to start, with only 84,000 or less workers at one time between December 1933 and January 1935.
- By 1941, only 3,800km of road were built, which was only half of the projected amount. The rate of building was supposed to be 1000km a year, this was not reached.
- The war almost ground the project to a halt
- Rising employment is probably more associated with jobs in arms rather than due to the autobahn project.
- It only had 120,000 jobs at its peak, despite being aimed at creating 600,000
Effect of job creation schemes - stats
Unemployment (% of workforce)
1930 - 3,076,000 (14.0%)
1932 - 5,603,000 (29.9%)
1936 - 1,593,000 (7.4%)
Managing agriculture
Agriculture is important for autarky. The minister for agriculture, Alfred Hugenburg:
- Increased import tariffs on produce, making German produce cheaper.
- Banned banks from repossessing farms for indebted farmers
- He made margarine manufacturers put butter from German farmers in their margarine.
Hugenburg resigned in May 1933. His replacement Richard Darré:
- Set up the Reich Food Estate, or RNS, to regulate food production and distribution of farm produce as well as setting prices and farm wages. You could be fined 100,000 Reichsmarks for not doing so.
Effect of managing agriculture - stats
1928 - German farmers provided 68% of all farm produce in the country
1934 - This was 80%
The effects of tariffs and the RND were profound, and clearly took Germany a step towards self-sufficiency
Managing businesses
I.G Farben and some other big businesses supported the Nazi Party. However, due to their prioritisation of autarky against foreign trade, businesses that relied on exports did not. Some department stores made much less in 1934 as they did in 1929 due to the 1933 Law for the Protection of Retail Trade. The Nazis encouraged shopping at small businesses as they supported Hitler.
1933 Law for the Protection of Retail Trade and its effect
Stopped the building of new retail stores and banned the expansion of new ones, therefore some department stores made 80% less in 1934 as they did in 1929.
Managing workers
Disputes over wages, hours, strikes and lockouts were common in the Weimar Republic. Businesses had hoped Hitler would have a strong hand against this, while workers voted Hitler as he would provide fair paying work and good conditions.
Hitler made May 1st a Socialist workers festival in 1933, and on the 6th. he announced that there would only be one union, the DAF (German Labour Front). This further controlled workers under the guise of a ‘union’. It did not negotiate wages, so workers gave up their freedome to negotiate and strike for some better working conditions and subsidies.
How many working days were lost as a result of disputes in the Weimar Period?
1924 - 36,198 million working days lost
1926 - 1,222 million working days lost
What was the purpose of the German Labour Front and what did it do?
The DAF was a union that replaced the several independent trade unions of the Weimar Era, in order to crack down on workers disputes and minimise the loss of working days. The KDF (Strength through Joy) used a ‘rewards’ system to control workers, while not giving them the full promise of good conditions. It began as ‘voluntary’ but it became increasingly difficult for non-members to find jobs. Workers effectively gave up their freedom for some subsidies and conditions.
Schacht’s “New Plan”
Mainly based around foreign trade and government spending, somewhat a continuation from the foreign policy of Stresemann who used trade relations to help recover the economy. However, they did not want to rely too heavily on imports and was trying to reach autarky. Germany made bilateral trade agreements with south and south-east Europe with countries like Bulgaria, Hungary and Yugoslavia to barter goods (like raw materials) instead of paying for them directly. This allowed them to deal with the strains of the Depression.
How did Schacht fund rearmaments between 1933-8?
Schacht created a company called MEFO, which issued credits which were convertible into Reichsmarks. This allowed Germany to use deficit financing to fund rearmament programmes without causing an inflation and it also kept military spending off of their books, as this would go against the Treaty of Versailles.
The crisis of 1935-36
Rearmaments and economic recovery had led to a rise in demand for raw materials which Germany needed to import and the price of these goods was increasing. Germany were in a balance of trade deficit. By 1935, many countries started demanding money for their exports, not goods, for example Bulgaria who wanted Germany to pay for their oil.
The government was split into two opposing factions: Schacht and others who wanted to decrease military spending and to create a free market, and Hermann Goring’s side of government, who wanted sustained military spending and increased focus on autarky. The latter was more in line with Hitler’s ideological interests, like Lebensraum. Therefore, from 1936, Goring led the Second Four Year Plan
The Second Four Year Plan
Centred around creating a ‘command economy.’ The new economic policy had a tight focus on autarky and preparing for war. It controlled areas of raw material production, agriculture, distribution, labour, prices and foreign exchange. Raw materials that Germany could not produce were replaced by synthetic alternatives, like “Buna” (synthetic rubber).
There were obvious teething problems to begin with, for example, it took 6 tonnes of coal which was needed to heat homes to produce 1 tonne of synthetic fuel, which was important for military transport.
Problems with the Four Year Plan
- Goring had to balance the needs of rearmament with the needs of the people, like food fuel and everyday necessities (guns or butter?) It was recognised that the Nazis needed the support of the people, and they would be unhappy if they had to return to rationing like that of the war. They made attempts to re-educate people to eat less and have different diets, like eating jam instead of sausage with toast, and eating fish instead of meat.
Evaluation of the Four Year Plan
- Germany could not reach all of the production quotas and was still importing 17% of agriculture, an improvement from 1934 (20%)
- They were less successful than they had hoped at changing peoples diets. Jam consumption had trebled between 1928-38.
- The plan overran 4 years, and even by 1942, they had not met the quotas for Buna production, only producing 96 tonnes out of 120.
- Commanding the economy was unpopular with industrialists who did not like this level of control
- However, rearmament was significant and all without rising prices and wages and without major protest from the people.
- Self sufficiency for most major food groups had rising from 1936, showing success in moving towards autarky
Living standards for “undesirables”
August 1939: All doctors and nurses had to report children under the age of 3 with physical/mental disabilities
October 1939: The Nazis began the T4 campaign to kill disabled children by sending them to ‘specialist clinics’. The T4 programme was extended up to 17 year olds and from January 1940, extended to old people, mentally ill and chronically sick. Over 70,000 people died in the T4 campaign.
October 1936 - July 1940: Asocials who failed to pay rent, keep a job or were alcoholics, were sent away for a year to be re-educated at Hashude, a fenced off housing estate which ran lectures and classes.
Living standards for the ordinary worker
Living standards initially improved for conformists. Unemployment dropped and real wages increased. The Strength Through Joy programme as part of the DAF provided extras for workers, like loans and medical care. However, wages were regulated so people did not have too much money to spend on consumables, as armaments was prioritised over consumer goods. As well as this, the idea of the Volkswagen never fully came into fruition due to the war.
Impact of war on Nazi economic policy
While still being more prepared for war than Britain and France, they were not as self sufficient as they had hopes. For example, the army wanted four months of supplies in store before the war: they had six weeks worth. Not much had changed in terms of policy, as they had been geared towards war since 1936.
They way the war economy was run was difficult, as there were several different organisations at play, making the running of the economy less efficient. Hitler appointed Fritz Todt minister of armaments and munitions, and he wanted centralised control to make the industry as efficient as possible. However, the other organisations refused to allow this before he died in a plane crash in February 1942.
The New System
The architect Albert Speer replaced Todt. He was more ambitious and his career as an architect and loyalist to Hitler made him an obvious replacement. He wanted to solve the problem of lack of centralisation and wanted to have supreme authority over armaments and munitions for not just the army but all forces. This was reluctantly given by Goering, after gaining support from Hitler. By April, he had set up the Central Planning Board made up of initially 3 members, then 4, and had supreme authority over allocation of raw materials and organisation of factories. Production was concentrated on several large factories, and they were adapted with the most efficient production techniques. Changes in military needs based on the course of war were made easier to adapt to by this new system, but still caused delays
Impact of the Central Planning Board during the war
Very dramatic effects:
From 1942 to 1943, ammunition production more than doubled
Aircraft production increased from about 14,000 to over 25,000
Production of tanks rose from 5,500 to 12,000.
Production continued to rise the following year, reaching a peak in the second half of 1944.
