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HOW SUCCESSFUL WAS NAZI ECONOMIC
POLICY?Noel Dube 12R
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
HITLER v.s. WEIMAR
STIMULATING ECONOMIC RECOVERY (1933-1936)
Problems: Short of essential raw materials No foreign currency to pay for imports Exports at a slump Confidence lost Investment low High unemployment
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 BillsGovernment spends more money than it receives
in revenue + credit notes with interest to pay for thingsSOLUTION: High unemployment~
Public work schemes & increased public
expenditure and investment.
I.e. construction of autobahns & homes
STIMULATING ECONOMIC RECOVERY (1933-1936)
Schacht’s other solutions: 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 conscripted into the
army
German Armed Forces:1933: 100,000
1939: 1,400,000
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
REARMAMENT: THE FOUR-YEAR PLAN 1936
September 4, 1936 Goering Replaced Schacht
Hitler wanted Germany ready for war in 4 years
Priority given to rearmament• Achieved by autarky
- Self-sufficient food and industrial production- Drive to develop raw materials and
machinery- Regulations of foreign exchange, labor, raw materials, prices, etc
1.The German armed forces must be operational within four
years2. The German economy must be
fit for war within four yearsThe extent of the military
development of our resources cannot be too large, nor its pace
too swiftAn extract from the Four-Year Plan Memorandum,
August 1936
REARMAMENT: AUTARKY Was it successful? Autarky was crucial to avoid damage
inflicted by an economic blockade, however Germany was no able to lose its dependence on other countries for key commodities.
They did, however, increase production greatly.
Commodity Actual Output (in thousands of tons)1936 1938 1942 Four-Year
Plan Target
Aluminum 98 166 260 273Buna
Rubber1 5 96 120
Nitrogen 770 914 930 1040Explosives 18 45 300 323
Steel 19,216
22,656 20,480 24,000
Iron ore 2255 3360 4137 5549Brown Coal 161,3
82194,98
5245,91
8240,5
00Hard Coal 158,4
00186,18
6166,05
9213,0
00Oil 1790 2340 6260 13,83
0
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
THE IMPACT OF THE DRIVE FOR REARAMENTGuns 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.
Butter (more stress on consumer goods)
Guns (more stress on rearmament)
Advocates: Schacht, other industrialists
Strategy:Develop consumer
goodsDevelop exports
Limited rearmamentDevelop links with
other countries
Advocates: Goering
Strategy:Major rearmament
AutarkySiege Economy
GUNS OR BUTTER
DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS?
Blitzkrieg 1939-41Austria 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
DID THE ECONOMY SATISFY GERMANY’S WAR NEEDS?
Germany at War 1942-45Nazi Armies stopped in Moscow 1941-
Nature of the war began to changeMassive economic drainDespite changes in economic policy to
relax constraints on industry, with increased output, the economy could not keep up with the military strain.
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
WHO GAINED THE MOST FROM THE NAZI ECONOMY?
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?
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
firmsROLE 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
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
Dank für ihre zeit!