Jack Haddow
How successful were Hitler and the Nazis in securing a strong economy up to and during world war two
Germany has faced ongoing economic problems since the end of the First World War. However, the sheer scale of the world economic depression that began in 1929 meant that Germany undoubtedly suffered. By 1932 over 30 percent of the German workforce was unemployed and Germany relied heavily on overseas trade for vital raw materials and food supplies not only this but Germany had to put a huge amount of workers into rearming the country after the war.
Hjalmar Schacht was in charge of rebuilding Germany’s economy. To tackle unemployment he created state investment in public works which consisted of: reforestation, land reclamation, motorisation – improving roads (autobahns) and building. Investment for these came in the form of Mefo bills part of Schacht’s ‘new plan’ where Mefo bills were an alternative business currency that disguised government spending. The law to reduce unemployment (RAD) was also renewed and expanded to employ 19-25 year olds.
The effect of these policies was to triple investment between 1933 and 1936 and to increase government expenditure by nearly 70 percent. By 1936 the economy was recovering so emphasis began to turn to rearming.
Schacht also realised that as the demands for rearming and consumption of goods increased the German balance of payments would go deeply into the red. To combat this he suggested a reduction in arms expenditure in order to increase the production of industrial goods that at least could be exported so as to earn foreign exchange. This idea was called Autarky or self-sufficiency. The idea was to reproduce the products such as oil in order to cut costs and make Germany economically independent. Although it was a very good idea, during the war, Germany was still importing a third of its raw materials meaning that Germany was not self sufficient.
It was essential to prevent price inflation when...