NAZI ECONOMIC POLICY Flashcards
(13 cards)
1
Q
Context
A
- January 1933 economy was in depths of depression- nearly 6 million unemployed
- Hitler promised decisive action on economy
- 1935- official figures showed unemployment of 2 million
- 1939- labour shortages in key industries
> basis for economic miracle
2
Q
AIMS
A
- No planned and coherent policy
- key aims were economic recovery and reduction of unemployment
- Autarky was key goal- for rearmament and self-sufficiency for food and raw materials
3
Q
Schacht
A
- President of Reichsbank
- 1934- Economics minister
- Stimulated economy 1933-36:
> pumped money to build homes and autobahns
> stimulated consumer demands by giving tax concessions and grants
> gave subsidies to private firms to take more workers
> put controls on wages and prices to control inflation
> “New Plan” 1934- controlled Germany’s foreign trade and country’s balance of payments
> MEFO bills
4
Q
AUTOBAHNS
A
- Evans: “most durable propaganda exercises”
- Photographs and posters visible sign of economic revival
- in reality: peak of construction only had 125,000 people; construction slowed after 1938 and stopped at 1942
- Underused as few Germans owned cars
5
Q
Battle for work
A
- first priority
- large sums spent on building of roads and public buildings, increased industrial production stimulated through loans and loans and tax relief
- economy already relieving when they came into power- but measures helped reduce unemployment
- 1935- Reich Labour Service made unemployed men do 6 months’ labour
- 1936- conscription reintroduced
- Women encouraged to leave positions for men- marriage loans 1933
6
Q
New Plan
A
- 1934
- Foreign trade increased- imports grew faster than exports leading to shortage of foreign currencies
- New plan- Schacht placed controls on imports and access to foreign currency
- Imports to be paid in German Reichsmarks- supplying countries could only use this money for German goods
7
Q
Mefo Bills
A
- Money needed to be borrowed for rearmament while avoiding inflation
- Schacht- government paid for money using Mefo bills exchanged for cash at Reichsbank
- companies given incentive to defer payment by 4% per year if kept for 5 year term
- expenditure did not appear in government’s accounts, rearmament could begin in 1935 without funds
8
Q
issues with rearmament
A
- Schacht’s measures succeeded in reviving the economy but new problems rose
- Shortage of foreign exchange, food shortages, rising prices, lower living standards
- Reports show growing disillusionment with regime 1935-36
- Priorities questioned- food shortages could be resolved through imports but use up reserves of valuable foreign currency needed for raw materials- “guns or butter”
> decision to strive for autarky- basis for 4-year plan in 1936
> Schacht opposed autarky and was marginalised- role passed onto Göring
9
Q
4 YEAR PLAN
A
- Aimed at autarky to achieve war in 4 years by having:
> managed economy with controls on labour supply, prices, raw materials, foreign exchange
> setting production targets for private industries
> establishing new state-owned industrial plants (Hermann Göring steelworks)
> increasing production of key commodities (iron, steel, chemicals)
> creating substitutions like artificial rubber - Autarky encouraged with propaganda persuading Germans to save more- 1937 campaign to collect scrap metal; fences, park railings, iron lampposts melted down, pots and pans collected
- results did not match propaganda claims
> 1939: 1/3 of raw materials still imported
10
Q
Management and industrial elite
A
- Most business leaders welcomed Nazi takeover- Hugenberg had helped in bid for power
- Hitler assured business leaders to not be alarmed by socialist policies
- As economic policies developed many leaders did not welcome greater state intervention
- 4 year plan had opportunities for businesses to make profit- I.G. Farben benefited enormously with research into synthetic materials- 1935-1939- increase from 71M to 240M
> many Ruhr iron and steel firms reluctant to invest- bypassed with Hermann Göring Steelworks
-> owned by state, but private companies forced to invest and finance it- largest industrial enterprise in Europe by 1939
11
Q
ECONOMIC RECOVERY
A
- Propaganda used all resources and skills to portray success- claimed battle for work had been won by 1936
- Volkswagen and paid cruise ship holidays gave people impression of unprecedented rise
- Official unemployment figures showed dramatic reduction from 6 million to 2 million by 1935
YET
> economy already recovering pre 1933, job creation schemes based on Brüning’s policies early 1930s
> Married women persuaded to give up jobs
> statistical devices inflated figures- included occasional employment and those drafted for unpaid work
> Evans estimates that invisible unemployment was as high as 1.5M (1936 figure should be 3M)
12
Q
Volkswagen
A
- Project of Hitler
- Promoted by Strength through Joy
- persuaded workers to pay into savings scheme to purchase one
- Cars never went into full production- only Nazi elite had them
13
Q
LIVING STANDARDS
A
- propaganda emphasised duty of sacrifice for people’s community
- Propaganda also stressed benefits of Nazi regime
- Incomes did increase (despite efforts) 1933-39, some employers paid bonuses and other benefits to get above wage freezes to attract skilled workers
- Pay increased due to konger workers- but forced contributions to German Labour Front and welfare organisations led to reductions
- workers in key industries like armaments were better off
- Prices rose during 1930s and there were shortages on key commodities
- Few luxuries could be afforded, but citizens had enough money for food
- consumption of cheaper foods increased- eggs, meat, fruit declined
> rationing and price controls helped to alleviate the pressure - Pressure on living standards- Gestapo and Sopade reports occasionally show discontent with regime
- Propaganda nevertheless effective- rearmament achieved without triggering mass opposition
