How effective were Hitler’s economic policies? Flashcards
(8 cards)
What were the aims of Hitler’s Economic Policies for Nazi Germany and Initial Policies
After their election, the aims of the Nazi Government was
-to achieve economic growth in order to build up Germany’s military strength and gain further support from the German public
. In order to do so, policies were put in place to reflate the economy with government spending.
Public works were carried out, creating jobs for unemployed Germans, subsidies were given out to private firms and the Nazi Government placed large rearmament orders, sparking German industry.
- Unemployment
-Reduce unemployment, which was
at 6 Million in 1933 - Autarky
– self sufficiency
Germany was preparing for war. They
needed to produce as many things as they
could at home, so they did not rely on
imports - Rearm Germany
-Build up German armaments
industry to make Germany ready for
war. - Remove Jews from workplace
-Get Jews out of jobs and give them to
unemployed Germans.
What were the Initial problems encountered by the Nazis
-Despite their best efforts and some improvements, this policy led to two main problems.
-Firstly, there was a deficit in the balance of payments as the economic recovery resulted in the rising demand for consumer goods and rearmament led to an increasing demand for raw materials which required large amounts of capital to obtain; from importing and mining within Germany itself.
-Secondly, there was a danger of inflation as there was an increased demand for goods and the supply of money increased.
How did the New Plan meet Hitler’s Economic aims and respond to the great depression
How the New Plan met Hitler’s Economic aims
His New Plan focused on getting Germany out of economic depression, cutting spending on welfare and focusing government resources on industry in order to work towards Autarky. It also introduced vigorously controlled bilateral trade agreements, such as the one with Hungar
-Reduce Unemployment
* He invented jobs to reduce unemployment, such as getting people to build new roads and buildings.
The Nazis also acted upon their campaign promises to significantly reduce unemployment, which had been at 6 million people in 1933. In doing so, they invested in public works, such as education, healthcare and transportation systems, such as the Autobahn, which both directly and indirect, contributed to the employment of up to 250,000 people, peaking at just over 120,000 people at one time. Although this policy did help to reduce the number of unemployed people, the workers had little control over where they worked, what they worked on and how much they received as wages.
* Compulsory Labour service for 18-25 year olds – 6 months.
* Conscription to the army in 1935
* Sacked Jews from important jobs
-Build up industry for war
* He felt that Germany could not afford to rearm and put money into other areas.
-Make Germany Self Sufficient (Autarky)
* Various trade agreements with other countries to get
money into Germany.
* Imports were limited to encourage Germany to produce what it needed itself.
* Raw Materials brought in from abroad.
-In September 1934, Hitler’s government (through Hjalmar Schacht) brought in a New Plan for the economy. This plan gave the government full control over what Germany could import (buy from other countries) and how much foreign currency could be spent.
The main idea of the plan was:
Stop importing things people use in everyday life (like cotton and wool for clothes).
Instead, focus on importing things needed for building up the military and factories (like steel, oil, and machinery).
-By the end of 1935 Germany had achieved a trade surplus, while industrial production was up by almost 50 per cent since 1933. However, these successes were limited· and Schacht himself was aware that his measures were only short-term solutions.
There was no significant increase in exports or efficiency and consumer production failed to expand. In particular, his policy of printing secret
government bonds (known as ‘ mefo ‘ bills) to conceal the true expenditure on
armaments was inflationary. -Also, despite the drive to self-sufficiency, Germany
still needed to import raw materials for its rearmament program me. This was
especially worrying as the cost of these products was increasing while Germany ‘s reserves of gold and foreign currency were declining.
-In 1936 a new economic crisis a rose over the state of the balance of payments, and Schacht argued that this problem could only be solved by reducing spending on
rearmament in order to increase exports and Germany’s reserves of foreign currency.
-These proposals ran counter to the Nazis’ plans - from 1936 Hitler had insisted on a faster expansion of military strength - and were opposed by the armed forces
Schacht’s plan solved the Economic problems
and gave Hitler the money to build up the army. However, Hitler sacked him because he
wanted the country to re-arm faster.
How did Hitler respond to the great depression?
Hitler had two Economic ministers in the lead up to the War. These men were in charge of Germany’s money,
imports, exports and production.
This was done through
-Schact’s new plan
-The four year plan
The Nazi’s used four different ideas in order to tackle the issue of unemployment. Which were they ?
DAF – Deutsche Arbeitsfront
(German workers front)
* Every German worker and
employer had to join the DAF
* Any disputes between employees and their workers were settled by
the DAF
* Any German who became
unemployed was put to work by the DAF, building roads, hospitals, or other public buildings
Strength through Joy – KDF (Kraft
Durch Freude)
* Part of Volksgemeinchaft
* The Nazi’s did not want people
spending their leisure time outside of Nazi control.
* KDF arranged holidays, day trips, concerts, sports groups, clubs, etc so workers could enjoy Nazi
approved leisure time
* Highly successful
RAD – Reich Labour Service
* Basically forced labour
service for all German men
* Like National service – all
men aged between 18-25
had to do 6 months
compulsory state labour
* Building roads, schools, etc
* Unpopular as work was very
hard and with low pay
Beauty of Labour
* This organisation was
aimed at persuading
private employers to give
workers better
conditions”
* Nazi’s “looking out for the
workers”
* They arranged campaigns
such as “good ventilation
in the workplace” or “hot
meals at lunch”
Men on RAD duty
How did the Four Year Plan meet Hitler’s Economic aims
-Despite the successes in Schact’s New Plan, which favoured increasing exports, while sacrificing the rate of rearmament, Goering and Hitler disagreed as they wanted Germany to undergo a rapid rearmament.
-As a result, Hermann Goering, who served as President of the Reichstag from the 30 August 1932 to 23 April 1945, was appointed to lead a “Four Year Plan” and was put in charge of implementing a War Economy.
-Hitler began to plan for his key goal of Lebensraum as he issued a secret memorandum in August 1936 to senior Nazi officials. It essentially told officials to focus on rearmament, and achieving autarky for military development and advancing the industrial capabilities of the labour force. Essentially, he told them to be ready for War by the end of 1940.
-It is clear that rearmament was Hitler’s top priority as from 1936 to 1939, 6.4 billion Reichsmarks were invested into industrial development for War preparation, allowing for the steep (and almost total decline) in unemployment, although Jews and other persecuted minorities were not included in this figure. It even resulted in them working against their own ideology with over 37% of the German workforce being women by 1939.
-Massive amounts of state money were poured into
research and development, and into armaments production (equivalent to about 50 per cent of all industrial investment in the German economy in the years (1936-40)
Reduce Unemployment
* He invented new jobs – especially manning arms factories.
* Most men were conscripted in the army by this time.
* Forced Labour groups to build public essentials like roads
Build up industry for war
* Increased production of coal, Iron, oil and Metal – all
materials that are needed for war.
* Built new Industrial plants and armaments factories
* Massive building of ships, planes and Tanks
Make Germany Self Sufficient (Autarky)
* Businesses persuaded to produce fake rubber, oil and
textiles in case these things could no longer be imported.
* Imports from other countries were reduced much more.
* Tight controls on workers wages
What were the outcomes of the four year plan?
Goring’s Four-Year Plan had mixed results.
-On the positive side, the plan resulted in big increases in the production of some key industries, such as
aluminium. Many others also improved and this was done without significantly
worsening Germany’s reliance on the import of key raw materials. By the end of
1938, Germany’s total industrial production had increased by just over 100 per cent since 1933.
By this time, the official number of unemployed was down to 300,000.
-The continued decline of unemployment had much to do with the massive rearmament carried out under Goring’s plan.
HOWEVER…
Despite their propaganda the Nazis were far from having carried out an ‘economic miracle’ and there were several crucial failures.
-First, their aim to be “‘self-sufficient in raw materials (if necessary by the production of synthetic alternatives) was not met.
Though there was some improvement, it fell far short
of the desired figures, especially for oil and rubber. For instance, the production
of synthetic petrol only met 18 per cent of total needs; while 60 per cent of oil, 70
per cent of copper, 85 per cent of rubber and almost 100 per cent of aluminium
requirements still had to be imported. In all, over 30 per cent of Germany’s
important raw materials and 20 per cent of its food still came from abroad.
-Rearmament also failed to reach its set targets.
Thus by 1939, Germany was not in a position to fight any major long- lasting war, which was the purpose of
Goring’s plan.
Did the Nazi’s achieve an economic miracle? point out the failures and successes
GOVERNMENT SPENDING
* The Government’s income
rose steadily throughout
the 1930’s.
* Government spending also
increased throughout the
1930’s
Problems
* Expenditure (money going out)
was always higher than money
going in (income)
* In 1937 expenditure went up
rapidly due to rearmament.
* As a result, Germany’s debt was 4 times higher than in 1932
GOVERNMENT SPENDING AREAS
* rearmament started in
1933.
* By 1938 rearmament was
taking up twice as much
money as anything else
- As a result, work creation
schemes, which reached a peak in 1934, were receiving no money by 1936. - This is because most men had jobs – in the army, in making arms, or in ex-Jewish businesses
WAGES
* Wages had reached an all
time low in 1932, the last
year of the Weimar
Republic
* They increased
immediately when Hitler
got into power in 1933
Problems
* However, many argue that
wages would have started
to increase anyway.
* Wage levels in 1938 only
managed to reach the level
they had been in 1928
before the Wall Street Crash
INVESTMENT
* Investment (the Government
putting money into industry)
was very low in 1932
* Hitler had millions of
Reichsmarks invested in
industry – 22 million in 1938,
much more than 10 years ago
Problems
* As you can see from the income
graph earlier, the Nazi’s had to
borrow a lot of this money.
* You can also see from the other
spending areas graph that most
investment was in rearming –
not building up the country
INDUSTRIAL PRODUCTION
This means how much Iron, steel, coal, textiles and other raw materials Germany was making.
As you can see, unemployment fell
to almost nothing in 1938, while production at his best level ever.
This link’s to the Nazis investment – lots of
money was being pumped into industry
However, most of this industry was for
rearmaments – not producing things that
Germans could buy.
Unemployment fell because of conscription
GENERAL PRODUCTION
-Most industries, such as motor vehicles, chemicals, textiles, coal and machinery had easily overtaken 1928 levels of production by 1934.
Many reached double 1928 levels
Problems
The Nazi’s focussed on quite a small sector of industry – producing things
that could help with rearmament.
This meant they didn’t have any decent goods to sell when they needed the money
Economy - SUCCESS
* Imports were lower than
exports by 1935
* Germany successfully rearmed and was strong enough to conquer Europe by 1939
* Unemployment was reduced to almost zero
* Industrial production almost doubled.
* Government investment in
industry was higher than during the “Golden age” of Weimar.
* Wages started to rise.
FAILURE
* The Nazis failed to achieve
Autarky (self sufficiency) – they still needed materials from abroad.
* Decrease in unemployment was mostly because of conscription and forced labour groups.
* Investment in industry was
centred on rearmament,
neglecting more vital things.
* Wages were only as good as
during the Weimar Republic,
while people actually had less
food.
