Notes on the Nazi economy 1933 – 1945

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Notes on the Nazi economy 1933 – 1945
Dealing with the economic crisis

Hitler knew that if Germany was to become powerful again and to recover the land that she lost in 1919 she needed to be economically strong. The Nazis had three aims to their economic policy.

  • To reduce unemployment that stood at six million.

  • To build up the German armaments industry in order to expand the army, navy and airforce.

  • To make Germany economically self sufficient so that she could not blockaded in the event of war.

Long term problems with the German economy

The Nazis also had three serious economic problems that they needed to solve as soon as possible.

  • It was difficult to export goods because all countries were suffereing from the economic depression.

  • Germany was short of some essential raw materials.

  • Germany could not afford to pay for imported goods.

The New Plan – Dr Hjalmar Schacht

When the Nazis came to power they made Dr Schact the Head of the Reichsbank and in 1934 he was put in charge of the economy. He was an excellent economist who was respected all around the world – he was trusted by everyone and came up with a “new plan” to put Germany back on her feet.

  • Imports were limited – raw materials importation and use was tightly controlled.

  • Trade agreements were made the individual countries to supply raw materials to Germany in exchange for German goods.

  • Government spending was ploughed into industry although the Nazis did not ake control it at the time.

  • Unemployment was reduced by creating public works projects, compulsory Labour Service, conscription into the army was introduced in 1935 and people filled the jobs left by people who had been thrown into prison or concentration camps by the Nazis.

Between 1934 and 1936 this solved the immediate economic crisis inherited by the Nazis and it enabled Germany to rebuild her armed forces in preparation for war. Schacht was also helped by the pick up in the world economy. Although the plan was successful Hitler wanted to prepare for war and wanted rearmament to occur at a faster rate – Schacht told Hitler that Germany could not afford to build an army at a faster rate. Schacht resigned in 1937 and was put into a concentration camp. He was replaced by Goering.
Herman Goering’s Four Year Plan

Goering was the second most important Nazi after Hitler and was in charge of the air force. Despite this he was not an expect in economics or business. The aim of the Four Year Plan was to prepare for war – Hitler was aware that Germany had been crippled by a blockade during World War One. The FYP aimed to make Germany self sufficient in oil, rubber and steel at the end of the plan. This policy became known as Autarky. This is how it worked.

  • Production of raw materials such as coal, oil, steel and explosives was increased.

  • Big business was persuaded to produce new synthetic forms of rubber, fuel and textiles.

  • Imports were reduced even further.

  • Wages and prices were tightly controlled.

  • Forced labour was used from the concentration camps if necessary,

  • New industrial plants were built to cope with the increased demands.

The plan cost a lot to put into place but by 1939 Germany still imported one third of her raw materials. “Arms not butter” became the slogan of the Nazis party – arms production took precedence over agriculture. The only way in which Germany could become fully self sufficient was to conquer countries which had an abundance of the necessary raw materials.
Were people better off under the Nazis?
Many people claim that there was little opposition to the Nazis because people felt better off – her are examples of four of the main groups and how they fared under Nazi rule.

  • Small businesses – many of these people supported the Nazis in the 1920s and 30s. The Nazis helped them by banning the setting up of new department stores and to stop existing ones from growing. Between 1936 and 1939 the number of small businessmen dropped by 300 000 but the income of the remaining ones doubled.

  • Farmers – the Nazis cancelled some debts incurred by Germanys farmers and all benefited from an increase in food prices. Many resented government interference – for example the Nazis ordered that each hen had to lay 65 eggs a year. They also suffered from a labour shortage as the workers moved from the countryside to the towns.

  • Big business – large companies benefited from rearmament and the destruction of the Trade Unions. Big profits were made and the salaries of managers rose by 70% by 1938. Yet there was a price to pay as government took control of prices and wages. They also ordered companies to produce certain products at certain times and prices.

  • Unskilled workers – these were hardest hit by the depression and formed most of the 6 000 000 unemployed. As soon as Hitler took power these popel were forced to go on government work programmes – they had no choice. If they didn’t accept their benefits were stopped. Some wages on these schemes were lower than the benefits. But these provided a lifeline for many families who could now fend for themselves – councils also provided new housing which gave them houses and work in building them.

The working classes and the Nazi economy

Most working class people had supported the Social Democrats or Communists before 1933 – the Nazis needed to control this group or they could be brought down by a national strike. After the unions were banned all workers had to join the German Labour Front (DAF) – this organisation organised labour for government projects and forced employers and employees to accept their decisions. To help win over the workers Robert Ley (the leader of the DAF) set up two initiatives – he encouraged the employers to improve conditions in the workplace and set up a movement called “Strength Through Joy” which helped to provide activities for the workers to do in their spare time.

All 18-25 year old men had to join the Reich Labour Service and had to do six months work service – this was unpopular because it was poorly paid and hard work. The Nazis used this service to indoctrinate young men. Attitudes to the Nazis varied amongst the workers - some were happy with having a job but others resented the restrictions on workers freedoms.

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