How important was government intervention/prosperity in the success of the German economy 1871-1990 Flashcards Preview

Germany booklet 7 > How important was government intervention/prosperity in the success of the German economy 1871-1990 > Flashcards

Flashcards in How important was government intervention/prosperity in the success of the German economy 1871-1990 Deck (5)
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1
Q

Bismarck era

A

Role of government-

  • Protectionist policies pursued by Bismarck against the National Liberals ensured the wealth of the Junkers and land owners were protected as well as raising revenue for germanys economy during a recession
  • tariffs were also put in place on heavy industry which became the driving force of Germanys economy after 1880s, with 1 million more workers in construction
  • protection of industry allowed Germany to become technologically advanced in Europe, such as in electrical output and chemical industries, with Germany producing 20% more electricity than GB, italy and France combined by the turn of the century
  • the building of a large navy only catalysed Germanys economic boom as it provided even more jobs and created yet another market in which Germany rivalled GB, owing to the success of government intervention

other factors/ limitations- protectionist polices in the short term were beneficial for agricultural prices and some heavy industry but in the long term it meant that Germany lacked the materials to allow them to instigate total war in WW1 and ultimately led to their failure as they could not finance the war either, suggesting government intervention was not beneficial in the Kaiserreich era throughout

2
Q

Weimar Germany

A

Government polices/ intervention

  • new currency under Stresemann and Schacht helped fix the effects of hyperinflation after the war, and allowed Germany to enjoy a sustained period known as the Golden years
  • as a result of government action and rehabilitation of the economy, German output reached pre war levels by 1927 and GNP grew massively in the second half of the period

other factors/ limitations-

  • it was the governments lack of intervention to increase taxes and decrease reliance of war bond during the war which saw them inherit 140,000million marks of war debt, suggesting that they hadn’t done enough during the war to uphold the prosperity felt in the years prior to the war, and therefore maybe the golden years of Germany were only so great because of how bad Germany was in the war
  • they also got help from the US in the form of the Dawes plan, which provided $25billion worth of help towards reparations, massively reducing the debt Germany faced
3
Q

Nazi Germany

A

Government intervention

  • the Nazis were most effective in the earlier years as they had the aftermath of the Wall Street crash to contend with, in which 3 major banks collapsed and $1billion was withdrawn from the economy
  • the supervisory office for banking stabilised the financial situation and 5billion RM investments into public work schemes eg the RAD boosted the economy and helped solve mass employment ie 35,000 out of 25 million males unemployed by 1935
  • Schact’s ‘new plan’ from 1934 regulate imports by signing a series of trade agreements to ensure a constant supply of raw materials, as they geared towards rearmament, as well as making these developing countries dependent on German industry and trade
  • Mefo bills financed 50% of arms expenditure between 1934 and 1936, without causing economic collapse

limitations- it was the war which saved the nazi economy from collapse by 1940, as the rate at which nazis took land and therefore took materials from other countries exceeded the rate at which the economy faced growing economic burdens.

  • Hitler was too focused on securing his own position that ministries overlapped in Germanys economy and had a confused direction towards war
  • by the end of 1944 20% of the workers in Germany were migrants and didn’t want to help the war effort, there were many attempts to save the war effort but ultimately collapsed by the end of the war
4
Q

West Germany

A

Government intervention/policies

  • EEC involvement from 1955 abolished tariffs between member states which allowed Germany to rebuild its status as a European superpower, and it established itself as the leading member of the EEC
  • CAP introduced to encourage trade of commodities and agricultural products which kept prices low for consumers as prices were fixed between states lower than the current price in west Germany, increasing quality of life for Germans
  • Germany had become so prosperous that they were subsidising the price of other EEC members food, suggesting that membership had been successful for Germany despite their declining agricultural sector

Limitations-

  • the effect of marshall aid can not be understated in Germans short economic miracle up until the mid 1960s; It paid for 37% of Germanys imports as well as modernising railway, electrical and steel industries
  • W Germany received $1.3 billion in the 40s and 50s and has been regarded as the kick start that Germany needed to re-establish its position as a European leader after the war
5
Q

Judgement/ criteria

A

-it could be argued that government policies equally helped Germany become prosperous and also provided them with many economic obstacles, as their failure in world war one was down to government policies to keep tax low and rely and war bonds, and the failure of the Nazis in world war 2 was down to initiating war too soon and not being ready enough