THE NATIONAL SOCIALIST ECONOMY AN ECONOMIC MIRACLE?

A WORLD-WIDE CRISIS… The Wall St Crash in October 1929 shocked the developed world. Businesses everywhere suffered either because they depended on US investments or because they needed the trade that growing unemployment simply prevented. Queues of unemployed in 1930

…NOT JUST A GERMAN ONE 6 million Germans [a third of the total workforce] became unemployed. Millions more ate sub- standard diets. In the UK socialists became popular, in Germany & Balkan states fascists came to power. Unemployment in millions in 1933

HITLER’S ELECTION PROMISES “History will judge us according to whether we have succeeded in providing work.” He did it by: 1.A 4-year plan that broke the Treaty of Versailles. 2.Forcing women & Jews out of jobs but not registering them as unemployed.

THE 1 ST 4-YEAR PLAN Led by the banker, Hjalmar Schacht. Aim: to reduce unemployment. Methods: expanding the public works schemes already begun by Bruning and von Papen. Chancellor Heinrich Bruning

WHAT WERE PUBLIC WORKS? Jobs paid for by the government, not private businesses. The main purpose was to provide work &, at the same time, build up Germany’s armed forces again. “Lebensraum,” Hitler’s aim, would require force to invade other countries. Mass tank production, despite Versailles

HOW WAS IT DONE? Railways, roads & ports were improved, & the autobahn were built. The armed forces & munitions factories employed millions, eg. Army grew from 100,000 to 1,400,000 in 2 years (1936). How one of Schacht’s schemes looks today

HOW IT WAS DONE contd. 2 year conscription was introduced. Reich Labour Service Act: “Arbeitsdienst.” Trade Unions were abolished (kept wages low – never above 1932 levels). Kraft Durch Freude gave poor workers incentives and bonuses to raise morale.

AUTARKY To prepare for war & stop foreign trade sanctions preventing expansion, Germany needed: Autarky (economic independence). This was the aim of the 2 nd 4-Year Plan. Hermann Goering, leader of the 2 nd 4-Year Plan

THE 2 ND 4-YEAR PLAN Was led by Hermann Goering. Aim: to increase at any cost production of scarce & strategic materials, eg: 1.Iron ore 2.Fuels 3.Fats

AN ECONOMIC MIRACLE? Employment: 5 million jobs were created & virtually full employment was reached in 2 years. By 1939 there was a labour deficit. But the jobs were public-funded & did not create wealth by manufacturing goods for sale & export; they actually cost money! Balance of trade deficit was huge: 432M marks in 1938 alone, meaning that Germany was really bankrupt! Autarky: always failed to reach targets, so they anticipated annexing resources from conquered enemies.