Economic Policies

• Short Term:

  • reduction of unemployment
  • prioritised economic recovery
  • boost popularity
  • consolidate power
• Long term:

  • self-sufficient
  • rearmament
  • economic autarky
  • achieve short term policies
• Public works and the creation of Jobs:

  • wanted to solve unemployment in 4 years
  • 1 billion Reichsmark spent on public work schemes
  • 40% increase in car production
  • 1935 -> conscription
  • Voluntary Labour Service
  • Law for the Reduction of Unemployment
  • Reich Labour Service
  • Women pushed out of work
• Voluntary Labour Service:

  • Bruning established it in 1931
  • State sponsored employment
  • Provided services to civic
  • By 1932, 300 000 men enrolled
• Reich Labour Service:

  • amalgamation of various labour organisations
  • official state labour service
  • reduce the impact of unemployment on the economy
  • June 1935 men had to serve for 6 months before going into military service
• Recovery from depression:

  • subsidies to private firms
  • Mefo bills
  • pump money into the economy to build new homes
  • New Plan 1934
  • tax concessions and grants to particular groups
• Hjalmer Schacht 1877-1970:

  • Highly respected financier and economist
  • Stabilised the economy in the 1920s and was the President of the Reichsbank
  • Resigned due to the Young Plan
  • Returned 1933
  • Minister of Economics in 1934 and he drew up and oversaw the new plan
  • Resigned from Reichsbank in 1939, Resigned as minister in 1937 as he was losing power due to not agreeing with rearmament
  • Links with resistance and 1944 assassination attempt, sent to concentration camp but he survived
• Schachts New Plan of 1934:

  • He decided to help the economy by encouraging heavy state spending (deficit financing) -> resulted in 70% increase in government spending from 1933-1936
  • Balance of trade deficit -> Germany was importing more raw material but didn't increase the exports.
  • THE NEW PLAN: gov control of foreign trade, tariff and currency exchange. Priority to heavy industry. Traded with South-East Europe and South America and they only allowed them to buy goods with German currency.
• NEW PLAN CONTINUED:

  • Mefo Bills: paid for military using credit notes, raise funds by offering them at a 4% interest rate, banks forced to invest. Balance of payment problems worsened by 1936.
  • Guns or butter was a phrased used to describe the debate whether Germany should focus on rearmament or consumer goods.
  • Hitler rejected Schats arguments, so he appointed Goring as Commissioner for Raw Materials and Currency
• Autarky: nation that operates self sufficiently
• Rearmament and the creation of war economy:

  • Hitler Youth would collect pots and pans for raw materials
  • Food shortages
  • Lower living standards
  • Goering was to solve issues through his 4 year plan
  • 1939 under stress
• Gorings 4 year plan:

  • increase armament and achieve autarky
  • increase food and agriculture -> Reich Food Estate (Reichsnährstand). It strictly regulated what farmers could produce, guaranteed prices for farmers’ produce and gave subsidies to encourage more food production.
  • develop ersatz/substitute goods for things such as rubber
  • create a war economy -> preparing for war
  • setting production targets
• Gorings 4 year plan continued:

  • Anschluss- union with Austria which was forbidden by the TOV but was achieved in 1938 and allowed all Austrian companies to be taken over -->> Sokda works
  • Most targets not met
  • Only ready for Blitzkreig
  • Not a war economy when war broke out
• Nazi policy towards management of the industrial elites:

  • stopped trade unions, which helped industrial elites as they didn't have to listen to workers rights
  • Fritz Thyssen and Alfred Hugenburg helped hitler who reassured them to not be scared of the socialist elements of the NSDAP
  • many companies didn't like state interference
  • I.G. Farben (company) benefitted from the 4 year plan as it went from 71 million RM to 240 million RM
  • Ruhr Iron Industries didn't like Goering Hermann Steel Works
• To decrease unemployment, Jews, women, homosexuals etc were apart of the invisible unemployed
• Alot of the economic recovery was based on Brunings ideas
• 1.5 million invisible unemployed
• Official figures showed a decrease in unemployment figures
• Counted Reich Labour scheme as part time work
• Conscription, rearmament and preparations for war:

  • conscription in 1935, this reduced unemployment
  • 1/4 of workforce was involved in the rearmament programme
  • this caused economic problems =>> economy was expanding to quickly
  • shortages growing in a multitude of sectors like food, labour and goods
  • wages were pushed up
  • discontent in the working class was rising
  • 2/3 of German investment had been directed to rearmament
  • by 1939 the economy was dominated by rearmament
• Conscription, rearmament and preparations for war continued:

  • the economy was only prepared for short wars -> Blitzkrieg
  • Blitzkrieg meant lightning war, which was used to avoid static war like in 1914-1918
  • The government was not ready for a long,drawn out war with France and Britain
• Living standards:

  • propaganda was used to portray a peoples community, and to show that the Nazis had 'improved' working conditions
  • increase in wages as they needed more skilled labour
  • longer working hours ->47 hours from 43 hours
  • German Labour Front
  • Welfare organisations
  • price increase due to food shortages
• German Labour Front (DAF):

  • 32 million members in 1938
  • Run by Dr Robert Ley
  • Workers rights limited as the DAF looked out for the employer not employee
  • 2 main aims: to win the workers over to the Volksgemeinschaft and to encourage workers to increase production
  • Established strength through joy
  • Propaganda showed that working was for helping the community even if it was hard
• Strength through Joy (KdF):

  • Created by Robert Ley
  • Nazis wished to please workers so they didn't turn against them through industrial action like striking
  • Organise leisure time, which was a way to indoctrinate workers
  • social equality
  • offered subsidised holidays in Germany and abroad, sporting activities as well as theatre and cinema visits at reduced prices.
  • 7000 paid employees of the organisation by 1939.
• Beauty of Labour (SdA):

  • part of the KdF made to improve workplace conditions
  • encourage workers to work harder
  • create a sense of community
  • new canteens, washing facilities and gardens
  • The regime claimed that, by 1938, 34,000 companies had improved their working conditions and facilities
• The DAF, KdF and SdA were not as successful as we are lead to believe. Many workers were communist and socialist, so it would've been hard to gain their support. The KdF was quite successful, but not to indoctrinate, most workers liked the free winnings as it allowed them something to do instead of boredom. But, trade unions had been banned meaning workers couldn't say their true opinions.
• The Volkswagen (the People's Car) scheme was apart of the KdF (Kraft durch Freude), and it offered the people a car if they paid toward it, however no cars were actually given out
• Autobahn employed thousands of workers, but only 125 000 directly. These workers created 3870km of Autobahn. But they were hardly used.
• Successful or Unsuccessful?

  The Nazis had been able to virtually eradicate unemployment, which had been one of Hitler's targets. However, this was only achieved due to 1/4 of the workforce was apart of reich labour force. It was prepared for short-term war, but not long term war. 17% of GNP was spent on the military. Import targets were not met even with a good increase. Overall, it had limited success.
• Robert Ley (1890-1945):

  • Head of both labour and slave labour in WW2
  • He abolished trade unions