Nazi - Economy Flashcards
(36 cards)
Autarky
The idea that Germany should be self-sufficient, this was closely linked to ideas of nationalism.
Primacy of Politics
Hitler believed that economic policy should serve political objectives
Hjalamar Schact
Reichsminister of Economics (1934-37)
Financial Expert who was trusted by industrial leaders
Loyal to Hitler before the Nazis rose to power.
Former head of the Reichsbank
Key policies of Hjalmar Schact
New Plan
MEFO bills
Public Spending
Tax Cuts
Reinhardt Programme
The inital methods of Nazi economic development
Indirect Stimulus - Tax Cuts / Subsidies to promote spending - leading to greater levels of employment
Direct Stimulus - Public Work Schemes to boost employment
Examples of Indirect Stimulus
Tax cuts for; Farming, Small Industry + Heavy Industy
Govt. Grants - Newly weds, Businesses to pay off debt + homeowners
Examples of Direct Stimulus
Reinhardt Programme (1933) - Commited 1 million reichsmarks to public work schemes, eg. road construction, railways + waterways
Govt. Spending on Work Creation (1932-1933)
1932 - 1.5 billion RM
1933 - 2 billion RM
Job Creation (1933-1934)
2.8 million jobs created
Unemployment (1929 - 36)
1929 - 1.8 million
1932 - 5.6 million
1936 - 1.2 million
MEFO Bills
Schact created a private company which would place orders for military goods.
Mefo GmbH paid for these orders with Mefo bills, which delayed the payment until later in the 1930s.
They accounted for around 1/5 of German military spending, 12 million RM.
New Plan (1934)
Protectionist policy - eg. Import Quotas
Trade with developing countries - eg. Peru, which allowed for Germany (the bigger economy) to negociate better terms and enter into barter agreements.
Success of the New Plan
Britian + USA did not impose quotas on Germany in retaliation.
Global Economic recovery
Resolved Balance of Payments deficit
Import Quotas negatively affected some industries, eg. textiles importing raw materials.
Guns or Butter
The debate between importing food, eg. grain/butter or rearmament
Goering - “Guns make the country strong, butter makes you fat”
Hitler’s resolution of the Guns vs Butter debate
Short-Term = Increased food exports
Long-term = Began to establish a command economy
4 Year Plan (1936)
The German army would be ready for war in 4 years
Germany would become self-sufficient in 4 years.
Goering was made Plenipotentiary of the plan
Establish a Command Economy
Radicalisation (Schact vs Goering)
Schact - Tradional Nationalist, utilised his advisors in order to make well-informs (sometimes creative) economic decicions
Goering - An extremely loyal nazi, committed the political objectives of the party.
Command Economy
Vast state control over industry
Market forces replaced with government instruction
Successes of the 4 Year Plan
Coal production increased - 319.7 million (1936) to 380.9 million (1938).
Goering nationalised steel companies leading to small increases in output. 19.2 million tonnes (1936) to 22.6 million tonnes (1938)
Failures of the 4 Year Plan
Only 300,000 / 750,000 tonnes of steel required by the army monthly was achieved.
Labour shortages - eg. coal miners
Only produced 20% of the Ersatz oil required (1939)
Aircraft production fell in Year One - Goering rejected production lines, wanted German craftmanship
Ersatz rubber was inefficent to produce, ie. it was cheaper to import
The army advised Hitler that they would not be ready for war until 1943 due to lack of resources.
Excessive spending had led to inflationary pressures
Living Standards - Working Class
The lack of trade unions prevented wage negociations
Average working week rose from 43 to 47hrs (1933-39)
The DAF was ineffective in aiding workers.
German Labour Front (DAF)
Replaced trade unions in May 1933.
One Govt. controlled union
DAF did not negociate for workers’ pay / rights
Volksgemeinshaft
The ‘people’s community’ with racial connotations.
The Nazis interpreted this as all classes working together to benefit the Aryan race.
Strength through Joy (KDF)
Established within the DAF for the spread of Nazi ideals and leisure
Subsidised sports, opera/theatre tickets, Art exhibtions + holidays.
By 1937, the KDF had a budget of 29 million RM.
KDF holidays were bad - poor sanitation / little privacy