Economic policy during the period 1933-1939 suffered immensely due to its necessity to adapt to Nazi ideology which was seen as considerably more important. Its low priority would explain why much of the policies were created simply to incorporate Hitler’s ideology.
In particular, rearmament and genocide took priority in this ideology especially after 1936, where the consistent economic policy under strong governmental control was suddenly replaced by a more radical and aggressive system. The significance of this change makes it necessary to analyse this time period in two separate periods, 1933- 36 and from 1936-39.During our first period 1933-36, it is necessary to full understand the position Hitler was in while implementing his key objectives. Firstly there was the Wall Street crash of 1929, an international disaster which left the German economy bankrupt, secondly Hitler had not fully consolidated his power and would find it hard due to the many new problems this crisis had brought.
Hitler knew that if he did not solve Germany’s economic problems, including reducing Germany’s 5 million angry unemployed, he would not be able to create the dictatorship he dreamt of.Hitler knew that he needed the support and co operation of big business and in order to do that had to initiate capitalism in heavy industry. Hitler believed that there was no need for socialism and in source 3, Collier and Pedley recognise this “Industrialists, particularly those engaged in construction, car manufacture and iron and steel, prospered during the public works programme after 1933”.Nazi economic policy was very much focussed around three main objectives. The primary economic aim was, implemented to counter Germany’s dependence on other nations, particularly the US, especially after the Wall Street crash.
Hitler was intent on creating Autarky the creation of a trading or economic community under the dominating influence of Germany. This community could be developed to rival the other great economic powers, and make Germany an economically self-sufficient nation! Hitler believed that by producing artificial raw materials of her own and producing substitutes for those she couldn’t produce, she would no longer need to rely on other nations.Secondly Hitler recognised the need to create a Wehrwirtschaft (defence economy), in which prioritising his foreign policy ambitions above his economic ones.
This type of peacetime economy would be geared to the demands of total war, so as to avoid the repetition of the problems faced during the First World War!! (Economic Collapse that is)Thirdly, attention was given to the emerging idea of deficit financing. Hitler and Schacht, the President of the Reichsbank and Minister of economics, used this to attempt to solve the mass problem of unemployment. The idea was that via government intervention in the financing of the economy, using various schemes, many jobs would be created which would then act as an artificial stimulus to increase demand within the economy. One of these various schemes was motorway construction; thousands of unemployed were lured into full-time work as workers. These schemes turned out very successful, and created a massively beneficial circle of events for the German economy, which resulted in significant financial improvement.
By 1936, due to the insecure feeling in international affairs, Hitler felt that it was necessary to take a more aggressive, rearmament orientated economic policy. Schacht’s work had indeed, helped the economy to recover, but it was not advancing and consequently Schacht found his influence on the wane and was gradually removed. The politico economic crisis of 1936 was resolved by the introduction of the four year plans which found Goring as a virtual economic dictator! Its aim was to make the German armed forces and economy ready for war in four years. The plan highlighted four top priorities: an increase in agricultural production, the re training of key sectors in the labour force, government regulation on import and exports, and above all, the achievement of self sufficiency in raw materials such as oil, rubber and metals. Nazi control over industry became much tighter. In source 4, Hitler predicted that the 4 year plan would effectively maximise Germany’s efficiency, ‘Just as we are now producing 700, 000 or 800,000 tons of petroleum, we could be producing 3 million tons’.
It is fundamental to remember that whilst looking into the Nazi economic policies, that economics were not the priority of the Nazi leaders, particularly not for Hitler. Foreign policy and ideology took precedence over the workings of the economy, and this influenced many of the economic policies pursued by the regime, particularly after the introduction of the 4-year plan under Goring. It is this under lying factor which divides the time period into two, and when comparing the two periods there are many differences, in particular the emphasis on the drive for rearmaments in the 4year plan which was previously unseen during the recovery period. It is imperative to realise that during every objective Hitler pursued his over riding goal was rearmament and total domination of Europe.