How successful was Nazi Economic Policy?

1. How successful was Nazi Economic Policy? Noel Dube 12R

2. HITLER v.s. WEIMAR • Hitler was determined & lucky. • German & World slump already had bottomed out 1932 • Economy was already improving before the handover • It was difficult to take action under the Weimar constitution • Weimar had already ended reparation payments which helped psychologically • Reject orthodoxies of economic liberalism that constrained Weimar Politicians • State intervention & deficit financing

3. STIMULATING ECONOMIC RECOVERY (1933-1936) SOLUTION: Lack of raw materials~ Developing Ersatz I.e. Buna: artificial rubber from acetylene SOLUTION: No foreign currency to pay for imports~ Deficit Financing & Mefo Bills Government spends more money than it receives in revenue + credit notes with interest to pay for things • Problems: • Short of essential raw materials • No foreign currency to pay for imports • Exports at a slump • Confidence lost • Investment low • High unemployment SOLUTION: High unemployment~ Public work schemes & increased public expenditure and investment. I.e. construction of autobahns & homes

4. STIMULATING ECONOMIC RECOVERY (1933-1936) • Schacht’sothersolutions: • Provided orders & subsidies for private companies to take on more workers • Some groups no longer eligible to register for unemployment relief (Jews) • Dept repayments were suspended • The unemployed were conscriptedintothearmy German Armed Forces: 1933: 100,000 1939: 1,400,000

5. STIMULATING ECONOMIC RECOVERY (1933-1936) • Trade problem solutions: • Bilateral Trade Agreements • Especially with the Balkan States • Supplied most of Germany’s raw material imports • New Plan of 1934 • Gave the government power to regulate imports through controlling allocation of foreign exchange

6. REARMAMENT:THE FOUR-YEAR PLAN 1936 TheGermanarmedforcesmustbeoperationalwithinfouryears TheGermaneconomymustbefitforwarwithinfouryears Theextentofthemilitarydevelopmentofourresourcescannotbetoolarge,noritspacetooswift AnextractfromtheFour-YearPlanMemorandum,August1936 • September4,1936GoeringReplacedSchacht • HitlerwantedGermanyreadyforwarin4years • Prioritygiventorearmament • •Achievedbyautarky • Self-sufficientfoodandindustrialproduction • Drivetodeveloprawmaterialsandmachinery • -Regulationsofforeignexchange,labor,rawmaterials,prices,etc

7. REARMAMENT:AUTARKY • Wasitsuccessful? • Autarkywascrucialtoavoiddamageinflictedbyaneconomicblockade,howeverGermanywasnoabletoloseitsdependenceonothercountriesforkeycommodities. • Theydid,however,increaseproductiongreatly.

8. Guns or butter? Tension between putting economic resources into rearmament or into consumer goods. While there was a strong urge for rearmament, there was evident concern to ensure even supply of both aspects. THE IMPACT OF THE DRIVE FOR REARAMENT • Extra resources into industries related to rearmament contributed to economic recovery • Focus on militarization was a sign of the radicalization of the regime • Only small scale war was intended, so when the UK and France stepped in, Hitler had to rush rearmament are gear the whole economy to war. • GUNS OR BUTTER

9. GUNS OR BUTTER

10. DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS? • Blitzkrieg 1939-41 • Austria and Czechoslovakia were obtained: helped with Autarky (1938-39) • 1939 invasion of Poland resulted in the UK and France joining the war • Germany was not yet fully prepared for a major war • So…Blitzkreig period-Economy was well suited to Germany’s military needs

11. DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS? • Germany at War 1942-45 • Nazi Armies stopped in Moscow 1941-Nature of the war began to change • Massive economic drain • Despite changes in economic policy to relax constraints on industry, with increased output, the economy could not keep up with the military strain.

12. WHO GAINED THE MOST FROM THE NAZI ECONOMY? The Elite and Big Business -Growing demand for food -Nazis smashed independent labor movement -Military industries grew: airplane factories, chemical companies BENEFITTED THE MOST! “Profits went above all to the industries who were prepared to collaborate actively with the regime” Hiden, Republican and Fascist Germany, 1996, p129

13. The Workers • -increasing • -demand for skilled labor increased • -Armament industry workers  better living conditions • -1936, 35marks a week (6,000,000x better than before) • -DAF improved workers’ leisure opportunities • MANY PEOPLE FELT THEY HAD A BETTER LIFE UNDER THE NAZIS • “The German labor front…for all working people without reference to their economic and social position” • Government statement on the role of the DAF in Nov. 1933 WHO GAINED THE MOST FROM THE NAZI ECONOMY?

14. The Mittelstand -The small farmer/trader -tight credit, influence of big business, slowness of official agencies to pay bills resulted in many going bankrupt -cannot compete with larger firms • ROLE IN ECONOMY DECLINED “Shortages of goods restrict their turnovers…cannot respond by putting up their prices…raw material shortages…burden of taxes…” SOPADE report 1939 WHO GAINED THE MOST FROM THE NAZI ECONOMY?

15. HOW SUCCESSFUL WAS NAZI ECONOMIC POLICY? VERY SUCCESSFUL! • Recovery from the Great Depression • Hitler restored full employment to Germany • Built economic strength to dominate Europe by 1941 Not as successful as one might think… • Autarky was not achieved • Rearmament was wasteful and disorganized • Rearmament priorities meant the mass of people failed to benefit greatly from economic growth

16. Dank fürihrezeit!