8. Nazi Economic Policy

Why did the Nazi’s care about the economy?

Hitler wanted to deliver on the promises he had made to improve the economic situation, especially after the Wall Street crash, and realised this was a key component of winning the German people round to Nazi rule

Who was put in charge of the economy when the Nazis came into power?

Dr Hjalmar Schacht, who was made President of the Reichsbank and the following year he was made Minister of the Economy

How did Schacht improve the economy?

he introduced the “New Plan”, focused on economic recovery

What were the aims of the New Plan?

• reducing unemployment

• autarky: making Germany self sufficient so that it could survive future wars even if it was blockaded

Was the result of the New Plan?

• it was successful, mainly because it coincided with a revival in the world economy

• Schacht succeeded in limiting German imports, and made trade agreements with individual countries who were supposed to supply Germany with raw materials in return for German goods

• by 1935 Germany had a small trade surplus and production had increased by 50% since 1933

What was the fate of Schacht?

he was sacked in 1937 because he spoke against Hitler’s plans to rearm quickly, he argued that the economy was not strong enough yet. He ended up in a concentration camp

What was Nazi economic policy like from 1936?

• increasingly controlled by Herman Goring, a leading Nazi, head of the Luftwaffe and with no economic expertise

• the focus on the economy switched from recovery to rearmament, with a Four Year Plan

What did the Four Year Plan aim to do?

prepare Germany for war in only four years

How did the Four Year Plan work?

• by 1938 1/3 of gov spending was on rearmament

• there was still a focus on self sufficiency, but especially in materials essential for war, such as rubber, steel and oil

• businesses were persuaded to produce synthetic raw materials such as rubber, fuel and textiles, making textiles from pulped would, rubber and petrol from coal and coffee from acorns to try and make Germany self-sufficiency

• new industrial plants, such as mining and metal works, were set up, often using slave labour from concentration camps

• arms production was given priority over consumer goods and agriculture (policy called “Guns not Butter”

How successful was the Four Year Plan?

• their self sufficiency was not very successful and in 1939 Germany was still dependent on foreign imports for its raw materials and oil

• Guns not Butter led to food shortages in Germany and by 1939 butter was rationed, along with other staples, such as meat, bread and sugar

What was done to reduce unemployment?

• from 1933 job creation schemes were started up, using them for construction, like how over 7000km of motorways were built in this period, creating jobs and improving German infrastructure

• they subsidised private firms, especially in the construction industry, and investing the the car industry

• 6 months of National Labour Service was compulsory for men 18 to 25, building motorways, draining marshes, planting trees and building coastal walls

• conscription to the armed forces was also reintroduced

What were the positives of Nazi employment policy?

• by 1939 unemployment in Germany had fallen from a peak of over 6 million to less than 500,000

• by 1938 the German army had grown from 100,000 in 1933 to 1400000

• construction industries such as the autobahns (motorways) helped improve the efficiency of German industry and prepare for war, allowing the swift transport of troops across the country

What were the negatives of Nazi employment policies?

• the National Labour Service was unpopular as workers were often paid very low wages and had to put up with living in tented camps and long hours of boring work

• marginalised groups (Jews, Women) were being forced to give up their jobs

• the invisible unemployed were a big problem

Who were the invisible unemployed?

• people not officially classed as unemployed but who had lost their jobs or were in labour service without proper jobs

• this included married women dismissed from their jobs, unmarried women tempted by state marriage loans to quit

• Jewish people dismissed from their jobs, especially in professions like law and medicine

• unmarried men under the age of 25 forced to serve in the National Labour Service

• opponents of the Nazi government, like communists, in concentration camps

What is the Strength through Joy organisation?

• an org that was set up to provide workers with activities when they were not working

• they offered cheap holidays and a car, sports facilities, theatre visits and financially supported travelling cabaret groups

• they also did a scheme where people could apply to get a cheap car “Volkswagen”, the Peoples Car, paying for it through a hire purchase scheme and paying 5 marks a weeks into an account

What were the pitfalls of the Strength Through Joy Organisation?

• the German worker paid for these benefits through compulsory deductions, it wasn’t just straight from the government

• no one received a car via the Volkswagen scheme, it was all redirected into the rapidly expanding weapons factories

What are ways that the Standard of Living improved under the Nazi’s economic policies?

• most German men were in work

• the Strength Through Joy organisation provided better leisure activities and holidays for workers

• the Beauty of Labour department improved working conditions and encouraged employers to provide canteens serving hot meals as well as leisure facilities

• your wages were paid according to how much work you did, which helped the young and healthy

• from 1933-1939, wages increased

• the new German Labour Front ran the Strength Through Joy and Beauty of Labour divisions

• farm debts were written off and farmers benefitted from a rise in food prices

• the Nazis helped small businesses by passing laws to curb the growth of large department stores

• big businesses really benefitted from Nazi rule since they didn’t have to worry about trade unions or strikes, and saw growths and large profits

What are ways that the Standard of Living improved under the Nazi’s economic policies?

• the canteens and leisure facilities for workers were paid for by their wages and were built by them in their spare time

• wages being paid according to how much work you did made if more difficult for older or less able people

• wages only increased because people were working longer hours, and the actual buying power decreased since everything was more expensive

• the Nazis hated trade unions since they could organise strikes and were closely associated with Communists, so they were banned in May 1933 and replaced with the German Labour Front led by Robert Ley

• members of the DAF (virtually all employers and employees, but especially employees) could not negotiate about wages or hours

• while the Nazis gained strong support from farmers in the years after 1927, they suffered labour shortages as workers left for better jobs in the towns