15 - Economic Policies

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  • Economic Policies
    • The Roles of Schacht and Goering in the implementation of Nazi policies
      • Recovery from the Depression
        • The Battle for Work
          • Large sums of money were spent on building roads
            • Increased industrial production through loans + tax relief
          • 1935 - a Reich Labour Service was created
            • Unemployed young men could do 6 months labour in farming/construction
          • 1935 military conscription was introducted
        • The 'New Plan' of 1934
          • Foreign trade increased
            • Imports grew faster than exports
            • Led to a shortage of foreign currencies
              • Schacht placed controls on imports + access to foreign currency
          • Schacht initiated trade agreements with other countries
            • Germany was supplied with foriegn goods which were paid for with Reichsmarks
              • These countries could then buy German goods
        • Schacht and the use of Mefo Bills
          • Nazis needed to borrow money but avoid inflation
          • Schacht devised that the government paid for military equipment with credit notes/mefo bills
            • The bills could be exchanged for cash at the Reichsbank
              • So companies were sure they would get their money
            • There was a 4% interest on the bills if the companies kept them for five years
              • This allowed rearmament to be started in 1935 with little funds + in secret
        • 1933-36 under Hjalmar Schacht, first President of the Reichsbank and then Economics Minister, the economy recovered by
          • Money to build homes and autobahns
          • Tax concessions and grants to groups to stimulate consumer demand
          • Subsidies to private firms to encourage them to take on more workers
          • Controls and wages and prices
          • 1934 'New Plan' to control trade and balance of payments
          • Mefo bills took steps towards rearmament
      • Rearmament and the creation of a war economy
        • The Four Year Plan
          • Aimed to make Germany ready for war
            • Gearing up German economy for war
          • Rearmament + autarky would be achieved by
            • Controls on labour supply, prices, raw materials and foreign exchange
            • Production targets for private companies
            • Establishing State-owned industrial plants
            • Increased production of key goods (irons, steel, chemicals)
            • Encouraging research in the production of alternative products
              • Artificial rubber, extracting oil from coal - this reduced Germany's dependance on imports
        • Economic Autarky
          • Four Year Plan aimed to achieve autarky in food production + vital raw materials
            • To prepare for war
          • Autarky's links to national pride fit in well with Nazi ideology
            • Autarky would 'free Germany from the chains of international capital'
          • Propaganda encouraged people to buy only German goods + use German materials in work
            • Propaganda encouraged saving, as savings could be invested in production
          • 1937 - campaign to collect scrap metals from people's homes by the Hitler Youth
        • Economic revival led to food shortages, rising prices + lower living standards for ordinary Germans
          • Growing diollusionment with the regime
        • Food shortages could be solved with more imports
          • But this removed foreign currency reserves which Germany was saving for rearmament
            • Guns or butter choice
              • Led to the decision to aim for economic autarky + the Four Year Plan
        • Results of the Four Year Plan
          • German industry didn't meet regime targets
          • By 1939 Germany import 1/3 of its raw materials
            • Food production had similar failings
          • To maintain levels of consumption + avoid alienating people had to be diverted from war industries
    • 4 Aims
      • 1 - Solve unemployment
      • 2 - Autarky - making Germany self-sufficient
      • 3 - Preparation for War
      • 4 - Control workers and their leisure time
    • Nazi Policy towards management and the industrial elites
      • Not all German business leaders welcomed the Nazi takeover
        • Fritz Thyssen + Alfred Hugenberg helped Hitler's takeover
          • Hitler reassured businessmen they needn't be alarmed by Nazi socialist messages
      • Many early Nazi policies supported businesses
        • Suppression of free trade unions, establishment of political stability, economic revival
          • Overall Nazi regime got the support of big business in its economic policies
            • Nazi controls on labour, raw materials + price controls weren't welcomed by some
      • Nazi controls on labour, raw materials + price controls weren't welcomed by some
      • The Four year plan gave opportunities for business profits in the rearmament programme
      • Some companies were sceptical of the plan
        • Rur iron and steel firms were reluctant to invest in new steelworks to produce steel from poor quality + expensive German iron-ore
      • The establishment of the Hermann Goering Steelworks bypassed this problem
    • The Degree of Economic Recovery achieved by 1939
      • Speeches + radio claimed that the 'battle for work' had been won by 1936
        • After 1936 'battle for work' was no longer mentioned - unemployment was no longer a problem
      • A rise in living standards was shown through advertisements for the people's car + cruise holidays
      • Military parades showed latest equipment
        • Patriotic campaigns encouraged buying only German goods to achieve autarky
      • The Reduction of Unemplyment
        • There were several flaws in Nazi unemployment figures
          • Economic recovery had begun before 1933 - some schemes weren't the Nazis'
          • Married women were persuaded o give up their jobs - marriage loans made more jobs for male workers
          • 1935 conscription was introduced
          • Those who only had occasional employment were counted as permanently employed
          • Those drafted into unpaid agricultural work were also counted as employed
        • Richard Evans estimated there were 1.5 million invisible unempoyed
          • The 1936 estimate of only 1.6 million unempyed would be increased to over 3 million
        • However rearmament beginning in 1936 led to an employment boom + labour shortages
      • Living Standards
        • Propaganda emphasised making sacrifices for the State eg. working harder, longer hours, smaller wages
          • Propaganda also emphasised better living standards, working conditions + welfare provisions for workers
        • 1933-39 many wages did increase
          • Some employers paid bonuses to get around wages freezes
        • Pay increased due to longer hours
          • But wages were subjected to increased deductions because of compulsory contributions to the German labour Front
        • Workers in armaments were better off than those in less important sectors
        • 1930s prices rose + some shortages of key goods
          • German families could afford few luxuries
        • Consumption of higher value foods (eggs, fruit) declined but consumption of chepaer foods (potatoes + rye bread) increased
        • Gestapo + Sopade reports sometimes showed discontent with the regime
        • The regime succeeded in managing rearmement without mass opposition
        • Late 1930s saw price controls + rationing of some key goods
          • But few signs of unrest
        • The People's Car
          • The Volkswagen was promoted through the 'Strength Through Joy' programme
          • Persuaded workers to save up ot buy one
          • The cars never went not full production + only Nazi elote could buy the few made

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