Economic Policies

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Economic Policies and Recovery Between 1933 and 1936

Between 1933 and 1936, the main aim for the Nazis was to achieve economic recovery.

Economic aims

The Nazi's economic aims included: Economic recovery was the top priority
- Cut unemployment.
- Increase demand.
- Avoid inflation.
- Reduce Germany’s balance of trade deficit (Germany was importing more than it was exporting and so was paying out more currency than it was bringing in).

Key economic indicators

Industrial production rose from roughly 66% of the 1928 total to 107%.
Unemployment fell from 5.6 million to 1.6 million. Not all of this was due to job creation. Some groups were removed from the statistics.
Real wages rose by about 7.5%.
Public expenditure rose from 18.4 billion reichsmarks to 23.6 billion reichsmarks. The greatest increase was in rearmament spending which was up over five times.
Investment in the economy was up. By far the largest increase was rearmament.

Increasing demand

State intervention was used to create jobs and stimulate consumer demand.
Public works created jobs. Hitler extended the existing programmes of motorway and house building.
There were subsidies for private sector firms hiring workers.
Tax concessions and government grants, e.g. for newly-weds, encouraged consumer spending.

Reducing unemployment

Job creation in public works and incentives for the private sector for hiring labour.
Some married women and Jews in the public sector were made to leave work.
The armed forces grew form 100,000 in 1933 to 1,400,000 in 1939
Invisible unemployment:
- Groups such as married women and young men in the RAD (Youth Service) were not included in unemployment statistics.
From 1935 conscription took men aged 18-25 out of the unemployment statistics for two years.

Economic methods

Deficit financing:
- The Nazis used loans to create jobs and stimulate demand. As the economy grew, tax revenues increased, borrowing reduced and loans were repaid.
They avoided inflation by setting wage and price controls.
Restored confidence to encourage spending and investment. Independent trades unions were banned and Hjalmar Schacht’s appointment reassured big businesses.
The New Plan 1934.

The New Plan 1934

As demand grew, imports were sucked in to meet it. To pay for imports, German gold and foreign currency reserves were being used up.
The New Plan meant imports had to be approved by the government before importers could buy foreign currency.
The government prioritised producers of armaments and raw materials for firms.
The New Plan also established bilateral treaties between Germany and Balkan countries. The Balkan states were an important source of raw materials.

Schacht

Hjalmar Schacht was the minister of Economics for the Nazis between 1934 and 1937. He was concerned about the long term sustainability of Nazi economic policies.

Schacht's aims

Schacht's economic aims included:
- Maintain economic growth.
Develop the Wehrwirtschaft (defence economy) to prepare Germany for war in four years and as part of this establish autarky (self sufficient economy).
Avoid inflation.

Autarky

Autarky required Germany producing its own important commodities, necessary for war, so that it was not reliant on imports.
- Autarky also required the development or ersatz (substitute) products that Germany could not easily produce.

Problems with the New Plan

Despite the New Plan, Germany was sucking in imports at an alarming rate. The balance of trade deficit was increasing.
Continued high levels of government spending on rearmament was causing the government’s debt to increase too. Other sectors of the economy were being ignored – e.g. consumer goods, investment in non-military industry.

Schacht's clash with Hitler

Schacht was worried that rearmament was distorting the economy as there was too much emphasis on rearmament and not enough on consumer spending.
Government expenditure on rearmament was also fuelling imports.
Rather than listen to Schacht, Hitler set up the Office of the Four Year Plan and put Goering in charge.

1The Weimar Republic 1918-1933

1.1Establishment Of The Weimar Republic 1918-1924

1.1.1Post WW1

1.1.2Weimar Constitution

1.1.3Peace Settlement

1.1.4End of Topic Test - Germany Post WW1

1.1.5Economic Issues

1.1.6Economic Issues 2

1.1.7Social Issues

1.1.8End of Topic Test - Economic & Social Issues

1.1.9Extremist Threats

1.1.10Extremist Threats 2

1.1.11End of Topic Test - Extremist Threats

1.1.12Political Instability & The Invasion of the Ruhr

1.1.13Weimar Government by 1924

1.1.14End of Topic Test - Weimar Government by 1924

1.1.15A-A* (AO3/4) - Germany Post WW1

1.2The 'Golden Age' Of The Weimar Republic 1924-1928

1.2.1Economic Developments

1.2.2Industry & Agriculture

1.2.3End of Topic Test - Economic Developments

1.2.4Social Developments

1.2.5Social Developments 2

1.2.6End of Topic Test - Social Developments

1.2.7Political Parties

1.2.8Political Stability

1.2.9End of Topic Test - Weimar Politics

1.2.10Germany's International Position

1.2.11Germany's International Position 2

1.2.12End of Topic Test - International Position

1.2.13A-A* (AO3/4) - The Weimar 'Golden Age'

1.3The Collapse of Democracy 1928-1933

1.3.1The Impact Of The Depression

1.3.2Politics After The Depression

1.3.3The Appeal Of Extremism

1.3.4End of Topic Test - The Depression & Politics

1.3.5'Backstairs Intrigue'

1.3.6'Backstairs Intrigue' 2

1.3.7End of Topic Test - Backstairs Intrigue

1.3.8Political Developments

1.3.9The State by March 1933

1.3.10End of Topic Test - Political Developments

1.3.11A-A* (AO3/4) - The Collapse of Democracy

2Nazi Germany 1933-1945

2.1The Nazi Dictatorship 1933-1939

2.1.1Hitler's Consolidation Of Power

2.1.2The Terror State

2.1.3End of Topic Test - Consolidation of Power

2.1.4Opposition

2.1.5Propaganda

2.1.6A-A* (AO3/4) - Terror State & Propaganda

2.1.7End of Topic Test - Propaganda

2.1.8Economic Policies

2.1.9Economic Policies 2

2.1.10Impact Of Economic Policies

2.1.11Impact Of Economic Policies 2

2.1.12End of Topic Test - Economic Policies

2.1.13Social Policies

2.1.14Social Policies 2

2.1.15Volksgemeinschaft

2.1.16End of Topic Test - Social Policies

2.1.17A-A* (AO3/4) - Economic & Social Policies

2.2The Racial State 1933-1941

2.2.1The Radicalisation Of The State

2.2.2Anti-Semitism

2.2.3Development Of Anti-Semitic Policies

2.2.4Development Of Anti-Semitic Policies 2

2.2.5End of Topic Test - Anti-Semitism

2.2.6Treatment of the Jews in the Early Years of War

2.2.7Deportation & Anti-Semitism Evaluation

2.2.8End of Topic Test - Early Treatment of the Jews

2.2.9A-A* (AO3/4) - The Racial State

2.3The Impact Of War 1939-1945

2.3.1Home Front

2.3.2Impact On Society

2.3.3Impact On Society 2

2.3.4End of Topic Test - Impact of the War

2.3.5War Economy

2.3.6War Economy 2

2.3.7Policies Towards The Jews & Untermenschen

2.3.8A-A* (AO3/4) - Impact of the War

2.3.9End of Topic Test - War Economy

2.3.10Opposition

2.3.11Opposition 2

2.3.12Nazi State by 1945

2.3.13End of Topic Test - Opposition

2.3.14A-A* (AO3/4) - Opposition & The State in 1945

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