Please enable JavaScript.
Coggle requires JavaScript to display documents.
Topic 15- Economic Policy: - Coggle Diagram
Topic 15- Economic Policy:
Nazi economic priorities:
AH had promised to end Depression and reduce unemployment without making specific pledges on policy
By 1935, official unemployment had fallen from 6m to 2m, and by 1939 there were labour shortages
Nazi propaganda claimed this was an economic miracle
Nazi Aims from Economic Policy:
reduce unemployment- to increase popularity and stabilise country
Begin to put economy on 'war footing'- gear production towards rearmament
Achieve autarky- make Germany self-sufficient to reduce reliance on foreign imports
Roles of Schacht and Goering in the implementation of Nazi economic Policy:
Recovery from the Depression:
Schacht worked as President of the Reichsbank 1933-1936 and economics minister 1934-1937, and he was a non nazi that was loyal to the regime
borrowed from international banks to invest large sums into Germany
cut taxes to encourage spending
Tightly controlled wages and prices
Rearmed using credit notes with industry- IOUs
Mefo Bills could be exchanged by businesses for cash at the Reichsbank but if they were not cashed for 5 years they earned significant interest
rearmament was started in 1935 without funds to pay for it so could be hidden from govt expenditure
The New Plan 1934- foreign trade increased with economic growth in 1933 and 1934 which led to imports growing faster than exports, which in turn led to a shortage of foreign currencies needed to buy foreign goods.
Schacht placed controls on imports and access to foreign currencies
Also initiated a series of trade agreements with foreign countries, especially states in the Balkans and South America, where Germany was supplied with food and raw materials paid for in German Reichsmarks (these countries could then only use this money to buy German goods)
Schacht and Mefo Bills- to finance rearmament the nazis need to borrow money whilst avoiding dangers of runaway inflation
Schacht devised a brilliant scheme where the government paid for military equipment through credit notes, or mefo bills.
these mefo bills could be cashed in at reichsbank ensuring that private companies would have confidence they would get their money, and if they deferred for 5 years they would gain interest adding an incentive for companies to defer asking for payment
rearmament was therefore started 1935 when the govt did not actually have the funds to pay for it, which had the added benefit that rearmament could be kept secret as it did not appear on government expenditure
'The Battle for Work':
the economy had been improving before Hitler took office but this was accelerated with increased government spending construction projects- see section on autobahn
In 1935 the Reich Labour Service was introduced, along with conscription quickly reducing unemployment.
reich labour service forced 16-25 year olds to do 6 months work in farming or construction for poverty
1936: unemployment was 2 million
1938: Unemployment was 1 million
1939: Unemployment officially 0
Misleading Statistics however:
jobs were created by persuading married women to give up jobs through marriage loans
These women, and enemies of the state were not included in statitics
Statistics counted those in occasional employment, e.g. those sent to do unpaid agricultural work, counted as permanently employed
Evans estimates that 'invisible unemployment' was around 1.5 million workers
Rearmament and Creation of a war economy
emphasis on preparing for war put a strain on ordinary germans living standards: food shortages and rising prices
this was called the struggle between 'guns and butter' aka consumer goods economy vs war economy
Many saw self sufficiency as the answer to this struggle, but Schacht opposed this and by 1936 was sidelined in favour of Goering
Goerings 4-Year Plan to prepare for War:
Govt Control of labour supply, prices, industrial production
Production targets for private business
setting up state owned industries, e.g. Hermann Goering Steelworks
Massive increase in production of iron steel and chemicals
reducing imports by producing substitute products, e.g. rubber
Policy towards big business:
many businesses, but not all, welcomed Nazi seizure of power- the crushing of unions 1933 was in their favour and many of the elite were relieved about the crushing of the socialist elements in Nazi party
however from 1936 4 year plan, there was more govt interference in the economy but this was cushioned for businesses by the ability to bid for government contracts as part of huge rearmament programme
Any business opposition was met with demands to invest in huge state enterprises such as Hermann Goering Steelworks
Autarky
fitted with Nazi propaganda of a 'national awakening'- a self sufficient aggressive nation free from trading with inferiors
a massive campaign followed to persuade people to only buy German goods
Reality of autarky was that there was a drive in 1937 to collect scrap metal to be melted down- the regime had ran out of raw materials
1939- Germant still imported 1/3 of its goods and war production had to be slowed down to produce consumer goods to avoid mass discontent
probably why Poland was invaded in 1939 as resources were desperately needed
living standards:
nazi propaganda emphasised the duty of all germans to make sacrifices on behalf of the volksgemeinschaftf, through working harder and for longer hours and by accepting a squeeze on wages
des[ite attempts to hold down money wages, incomes for many workers did increased 1933-1939- some employers were prepared to pay bonuses to get around the freeze to attract more skilled workers
pay increased due to longer hours being worked but on the other hands workers wages were subjected to decreases through compulsory contributions to German Labour Front
consumption of higher value foods e.g. meat and fruits declined while consumption of lower value foods such as potatoes and rye bread increased
although the fact sacrifices for rearmament never created massive opposition indicates the successes of propaganda such as 'battle for production'