The Nazi Economic miracle?

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

How would you describe the economic situation in Germany in 1933? 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) Banking and the control of capital Assistance for farming and small businesses State investment – public works 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.

Was this an ‘economic miracle’? 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) Guns or Butter debate What was the Four Year Plan? How successful was it? Due: 11/11