1. You can’t always get what you want…
Hitler’s Economy
You can’t always get what you want…

2. Background
It can be argued that Hitler’s economic policies were pragmatic rather than ideological-why?
Inconsistent policies, lack of direction initially, evolved out of situational needs, subordinate to political and military goals
Describe Germany’s economic situation in 1933 when Hitler was appointed Chancellor.
Great Depression, low exports, huge unemployment, rural poverty, low agricultural prices, serious problems with financial institutions

3. http://pages. uoregon. edu/dluebke/Germany342/Unemployment1928-1938

4. What were Hitler’s economic goals?
Recover from the Great Depression
Solve the unemployment crisis
Make Germany more self sufficient
Autarky
Wanted to avoid the problems of WWI
Prepare for rearmament
and war
The economy needed to
serve the interests of the
military and the Volk

5. Economic Policies: Phase I
Who was Hjalmar Schacht?
What were some of the early policies Hitler adopted to jumpstart the economic recovery?
Were they successful?
1933 Reinhardt Plan: public works, tax breaks, autobahn, “let’s get to work” spectacles
Farm and small business
assistance
Low interest rates, deficit
financing
Job growth, increased gov. expenditures

6. Economic Policies: Phase II
What was the purpose of Schacht’s “New Plan,” which was introduced in September of 1934?
Sought to rectify Germany’s unfavorable balance of payments (they were importing much more than exporting, and had inadequate funds to pay for it all)
Increased state control over the economy
Established quotas on imports
For example, cotton was limited but metals were ok because they would help with rearmament
Tried to increase foreign trade, particularly in the Balkans
Driven by the need for raw materials to move Germany closer to autarky and the desire to exert influence over territories Hitler wanted to conquer later anyway
Though not part of the New Plan, it was at this time that Hitler started funding rearmament and began to grow interested in developing synthetic materials in order to reduce dependence on raw materials

7. Economic Policies: Phase III
In 1935, Hitler publicly denounced the disarmament clause of the Treaty of Versailles and officially began to rearm Germany
Despite all the benefits of the New Plan, by 1935 Germany faced a serious problem: how to provide both “guns and butter” simultaneously
Schacht disagreed with Hitler’s spending on synthetic materials and the pace of rearmament, so Hitler looked for a different economic director and a different plan: Hermann Goring and the 1936 Four Year Plan

8. Economic Policies: Phase III (con.)
What were the objectives of the Four Year Plan?
That the German army be operational and the economy be fit for war (attain autarky) within 4 years
Continue to regulate Imports and exports
Prevent Inflation
Increase agricultural, raw and synthetic material production
Meant to be a temporary plan until the acquisition of Lebensraum, which would provide more resources
Threatened force against anyone who did not fully cooperate and warned the private sector of a government takeover if they could not do the job
Why is this plan considered to be a turning point in Nazi economic policy?

9. Economic Policies: Phase III (con.)
How successful was the Four Year Plan?
Mixed results
Some material production did increase, but not at the levels needed to sustain the type of war Hitler was planning
Production of synthetic oil was one of the greatest failures
By 1939, Germany still relied on imports for 1/3 of its raw materials
Some big businesses thrived
Created a massive military machine, but Hitler unwilling to create a war economy and kept the people relatively content (strength through joy programs, etc.)- perhaps a fatal flaw…

10. Economic Policies: Phase IV
How did World War II affect Germany’s economy?
: Blitzkrieg
Hitler’s hope was to rapidly defeat his enemies and procure needed supplies from those conquered countries, thus sparing the German economy from strain
Plus, many of the Four Year Plan targets were not due to be ready
A total war economy was not introduced in these early years of WWII
The German government, plagued by inefficiency and overlapping bureaucracies, could not achieve the necessary levels of armament production

11. Economic Policies: Phase IV
How did World War II affect Germany’s economy?
: Total War
Hitler appointed Albert Speer (his architect) as the Minister of Armaments in 1942
Speer tripled armament production from 1942 to 1943 by eliminating waste and streamlining programs, though he faced opposition from other leading Nazi officials, who prevented him from implementing total mobilization of resources until 1944
Women workers and prison laborers began to be used more efficiently for the war effort
Allied bombings began to disrupt industrial capabilities after 1943
A total war economic mentality was introduced too late to prevent Germany’s defeat

12. Questions To what extent were Hitler’s economic policies successful?
What role did ideology play in Hitler’s economic policies?
Compare and contrast the economic policies of Stalin and Hitler.

13. Stalin and Hitler: Similarities
Ran command economies
Were anti-capitalist (although for different reasons)
Developed their economies in relative isolation
Desired autarky (though the Soviets didn’t use that term)
Viewed the economy as a means to achieve other goals: social utopias, military defense, prosperity
Focused on industry over consumer goods
Key to success was coercive nature of the system
Economic sabotage (obstruction, shoddy work, etc) was punished, esp. in the USSR
Invested heavily in military spending (guns over butter)
Majority of workers did not benefit (for example, wages remained close to pre-WWI levels)

14. Stalin Hitler
Marxist ideology: need a socially owned and operated economy
State needs to break power of capitalism by direction from above
USSR needs a strong economy to preserve itself in a hostile world-it is the key to its survival
Hardships of the Soviet people were extraordinary (famine, etc.)
Economy needs to serve the Volk-it is a means to preserve the master race
Germany’s lack of resources means it needs to conquer other lands and seize their resources; therefore economics is tied directly to foreign policy aim of lebensraum and ideological belief in social Darwinism
Capitalist entities cannot be trusted to act in the Volk’s interest, therefore the state needs to control economy
Private businesses can exist if they serve the state