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The Nazi Economy

The Nazi Economy. Starter. ‘I was unemployed for many years, I’d have made a pact with the devil to get work. Hitler came along and got me work, so I followed him’

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The Nazi Economy

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  1. The Nazi Economy

  2. Starter • ‘I was unemployed for many years, I’d have made a pact with the devil to get work. Hitler came along and got me work, so I followed him’ • German worker in 1985 explaining why he joined the Nazis in 1930 – what does this tell us about the economy and the reasons why people supported the regime?

  3. Key Features of the Nazi Economy • Recovery – Hjalmar Schacht • Rearmament – Herman Goering • War – Albert Speer

  4. Pre-1933 • What were Hitler’s ideas and thinking in regards to the economy? • 1) Public work schemes – create jobs and then stimulate the economy. (Not new ideas had been used by Roosevelt in the USA and even started in Germany in 1932 by Papen and Schleicher) – This was done to improve conditions for millions of Germans and create a broad feeling of optimism (and help Hitler secure his reign politically) • 2) Defence economy – geared to the demands of total war. Autarky (self-sufficiency). Views that had legacy from WWI and Germany’s defeat (stemmed from realisation that Germany had lost World War One due to an economic blockade)

  5. Jan 1933 • In many ways Nazi economic policy evolved out of the demands of the situation rather than being the result of careful planning. • Schweitzer highlighted: • ‘no single unified economic system prevailed throughout the entire period of the Nazi regime’ • Why does this seem perhaps surprising or strange? • Or is it as you expected? • Why can the economy bring about a clash between ideology and policy / pragmatism?

  6. The situation in 1933 • How would you describe the economic situation in Germany in 1933? (Use page 31 (Layton) to help you • Depression 1929-1933 • Trade – value of exports fell by 62% (13.5 billion Reichmarks in 1929 to 4.9 billion in 1933) • Industry – 50,000 businesses in Germany went bankrupt between 1929-1933. • Employment – total out of work in 1932 was 8 million. • Agriculture – Many farms sold off as agricultural prices fell. • Finance – foreign investment disappeared and in 1931 5 major banks collapsed.

  7. Economic recovery 1933-1936 • What did Hjalmar Schacht do? Consider the following and assess why they are significant: • Banking and control of capital • Assistance for farming and small businesses • State investments – public works • The balance of payments problem

  8. How did the Nazis stimulate economic recovery? • 1) Tighter control of banking systems (able to set interest rates). • 2) Assistance for farming and small business. (reducing debts/tariffs – stimulate economic growth). • 3) Public works – motorisation, building etc. 1928 40% of all cars sold in Germany were foreign by 1935 only 9%. • 4) Balance of Trade problems – Germany was importing more than it was exporting. ‘New Plan’ to tackle this. Bilateral trade treaties (barter), Mefo bills (credit notes) – masked the problem.

  9. New Plan • Balance of trade deficit redressed with New Plan (1934) • Bilateral trade agreements, e.g. with Balkan states where products & raw materials were bartered rather than bought or sold • Increased economic influence over regions, e.g. Austria, Czechoslovakia & Balkans

  10. By mid 1936: Unemployment fallen to 1.5 million. Industrial output increased by 60%. GNP increased by 40% 1928 40% of all cars sold in Germany were foreign by 1935 only 9%. By 1939, Germany still imported 33% of its required raw materials. Real earnings in 1938 were all but the same as the 1928 figure. Government debt stood at over 40 billion Resichsmarks. Was this an ‘economic miracle’? The Nazis certainly thought it was. Their propaganda machine was quick to publicise this ‘Nazi recovery’ and highlight Hitler as the saviour. What do you think? Impact

  11. Unemployment • Women were no longer included in the statistics. • The unemployed were given a very simple choice: do whatever work is given to you by the government or be classed as "work-shy" and put in a concentration camp. • Jews lost their citizenship in 1935 and as a result were not included in unemployment figures. • Many young men were taken off of the unemployment figure when conscription was brought in (1935) and men had to do their time in the army etc.

  12. Historians • Overy – ‘’it would be a mistake to attribute everything, as propagandists did to the efforts of the Nazi regime.’ • Mason – ‘propaganda masterpiece and an optical illusion achieved by statistical manipulation.’ • Burleigh points out that many of these projects were in the filing cabinets of the agencies of the Weimar Republic. • Implementation often brutal – concentration camps, taking Jews out of jobs and off statistics.

  13. Why did Hitler succeed where Weimar had failed? • Hitler was lucky – inheriting an improving economic climate. • But also Hitler was prepared to reject a liberal, free market approach (Weimar) and adopt state intervention and deficit financing. • This was easier as there was no real constraints on his power. (Enabling Law) • Hitler was also determined to reduce unemployment.

  14. On the one hand… Nazi economic miracle. On the other hand… Quite clearly nothing of the sort. Debate – The Nazis achieved an economic Miracle – To What extent do you agree with this view

  15. The Four Year Plan – 1936 Onwards • By 1936 Schadt was becoming concerned that Germany’s deficit financing programme was becoming unsustainable • Thus, Hitler became impatient and replaced Schadt with Herman Goering and instructed him to have the German economy and armed forces ready for war in 4 years

  16. What was the Four Year Plan? • Expand re-armament • Develop a policy of Autarky (self sufficiency in both food and industrial production) • Regulate imports and exports (with preference on strategic sectors • Control key sectors of labour force • Increase production of raw materials • Increase agricultural production • Very much a planned economy

  17. Herman Goering • Study the biography of Goering on page 221 and list the reasons why he was so successful within the Nazi regime – what were his failings? • Can you find any examples of Nazi hypocrisy?

  18. Hermann Goering (1893-1946) • WWI ace fighter pilot • 1922 joined NSDAP, wounded during Munich Putsch, 1 of 3 original NSDAP ministers in Jan 1933, involved in N of the Long K • 1935 C-inC Luftwaffe • 1936 Plenipotentiary for 4 Y Plans • 1946 Nuremberg trials, committed suicide, cremated at Dachau How was Goering’s lifestyle another example of Nazi hypocrisy?

  19. Activity • Draw up a chart that assesses the successes and failures of the 4 year plan up to the start of the war • Find evidence that will help you analyse whether or not autarky was successful • Find 3 differing historical views on the four year plan and assess the question of ‘Did Germany have a war economy in peacetime? • Was there an economic crisis in Germany in 1939? • If so did it push Germany into war?

  20. Production of key materials (Aluminium and Explosives grew) Hitler’s reliance on imports did not increase Targets for Oil and Rubber remained a long way short of required needs The production of arms never rose as high as anticipated 1/3 of all raw materials were still imported Success of the Four Year Plan?

  21. Historian Views • Klein – Linked into Blitzkrieg theory • Mason – Marxist Viewpoint • Overy – Diplomacy and international relations

  22. Germany became strained under need for rearmament As such regime felt insufficiently secure to demand the sacrifices needed from the normal public who would not put up with wage restrictions and food shortages Only way out was to wage war and plunder from conquered territories Marxists always over exaggerate the effects on the working classes There were problems but they hardly amount to a crisis There is little evidence of social unrest during the period Indeed it was Hitler’s miscalculations on the international stage that led to war Mason vs Overy

  23. Success or failure of Four-Year Plan • Aims of autarky were to increase production of key commodities, e.g. iron & food • Develop ersatz products, e.g. using coal to produce oil • By 1939 Germany still dependent on foreign imports for 1/3 of raw materials • Expansionism replaced autarky Hitler & Goering, eye-up chemical products to be used for ersatz production

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