The Nazi Economic miracle?

Pre-1933

• What were Hitler’s ideas and thinking in regards to the economy?

• 1) Public work schemes – create jobs and then stimulate the economy. (Not new ideas - had been used by Roosevelt in the USA and even started in Germany in 1932 by Papen and Schleicher).

• 2) Defence economy – geared to the demands of total war. Autarky (self-sufficiency). Views that had legacy from WWI and Germany’s defeat.

• But there was no real direction and potential issues and problems with a defence economy. Any ideas?

Jan 1933• In many ways Nazi economic

policy evolved out of the demands of the situation rather than being the result of careful planning.

• Schweitzer highlighted:• ‘no single unified economic

system prevailed throughout the entire period of the Nazi regime’

• Why does this seem perhaps surprising or strange? Or is it as you expected?

The situation in 1933• How would you describe the economic

situation in Germany in 1933?

• Depression 1929-1933.• Trade – value of exports fell by 62% (13.5

billion Reichmarks in 1929 to 4.9 billion in 1933)

• Industry – 50,000 businesses in Germany went bankrupt between 1929-1933.

• Employment – total out of work in 1932 was 8 million.

• Agriculture – Many farms sold off as agricultural prices fell.

• Finance – foreign investment disappeared and in 1931 5 major banks collapsed.

Economic recovery 1933-1936

• What did Hjalmar Schacht do?

• 4 key things (p.30-34 Layton)

1. Banking and the control of capital

2. Assistance for farming and small businesses

3. State investment – public works

4. The balance of payments problem and Schacht’s ‘New Plan’

How did the Nazis stimulate economic recovery?

• 1) Tighter control of banking systems (able to set interest rates).

• 2) Assistance for farming and small business. (reducing debts/tariffs – stimulate economic growth).

• 3) Public works – motorisation, building etc. 1928 40% of all cars sold in Germany were foreign by 1935 only 9%.

• 4) Balance of Trade problems – Germany was importing more than it was exporting. ‘New Plan’ to tackle this. Bilateral trade treaties (barter), Mefo bills (credit notes) – masked the problem as disguised government spending.

Impact • By mid 1936:

• Unemployment fallen to 1.5 million.

• Industrial output increased by 60%.

• GNP increased by 40%• 1928 40% of all cars sold in

Germany were foreign by 1935 only 9%.

• By 1939, Germany still imported 33% of its required raw materials.

• Real earnings in 1938 were all but the same as the 1928 figure.

• Government debt stood at over 40 billion Resichsmarks.

• Was this an ‘economic miracle’?

• The Nazis certainly thought it was. Their propaganda machine was quick to publicise this ‘Nazi recovery’ and highlight Hitler as the saviour.

• What do you think?

Unemployment

• Women were no longer included in the statistics.• The unemployed were given a very simple

choice: do whatever work is given to you by the government or be classed as "work-shy" and put in a concentration camp.

• Jews lost their citizenship in 1935 and as a result were not included in unemployment figures.

• Many young men were taken off of the unemployment figure when conscription was brought in (1935) and men had to do their time in the army etc.

Historians

• Overy – ‘it would be a mistake to attribute everything, as propagandists did to the efforts of the Nazi regime.’

• Mason – ‘propaganda masterpiece and an optical illusion achieved by statistical manipulation.’

• Burleigh points out that many of these projects were in the filing cabinets of the agencies of the Weimar Republic.

• Implementation often brutal – concentration camps, taking Jews out of jobs and off statistics.

Why did Hitler succeed where Weimar had failed?

• Hitler was lucky – inheriting an improving economic climate.

• But also Hitler was prepared to reject a liberal, free market approach (Weimar) and adopt state intervention and deficit financing.

• This was easier as there was no real constraints on his power. (Enabling Law)

• Hitler was also determined to reduce unemployment.

DEBATE

• On the one hand…

• Nazi economic miracle.

• On the other hand…

• Quite clearly nothing of the sort.

Homework – the four year plan (up to 1939)

• Make notes on The Four Year Plan (p.36 – 40 Layton)

1. Guns or Butter debate2. What was the Four Year Plan?

3. How successful was it?

Due: 11/11