Download Case for the achievement of an economic miracle by the

Case for the achievement of an economic miracle by the Nazis
Level of investment
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Hitler had decided to place emphasis on the need to solve unemployment as a
guarantee for political stability
There was a suitable environment for businesses to grow, hoping that the private
business would create a economic revival (DID NOT HAPPEN!), this happened
due to reliance of Hitler on the experience of businesses
Regime increasing their spending permanently on the economy, from 17,9 per
cent spending in 1932 they went on to spend 33.5 per cent in 1938. (accelerated
after 1936 when the four year plan and policy of rearmament were launched.
To help solve the unemployment problem, Hitler decided to embark on a vast
building programme which was an infrastructure that people would relate to the
thousand year Reich. (Hitler thought that a higher standard of living for Germans
would follow)
Rearmament for a peacetime economy was particularly high, this would require
restructuring to wage a war.
Companies which benefited with the war:
o Iron
o Steel
o Chemicals
o Basically all heavy industries
Level Of Employment
 ‘Battle For work’ policy was very successful, combined with an upturn in the
trade cycle.
 1929 depression ended due to this.
 Unemployment fell rapidly from the 1932 figure of 5.6 million to a labour
shortage of 0.4 million by 1938.
Level Of Prosperity in Agriculture
 Farmer benefited marginally from the revival.
 Cost of food stuffs was allowed to rise more than farm costs. (except for labour)
 Farmers' incomes went up by 41 per cent between 1933 to 1938.
 Modest compared to the 116 per cent rise for trade and industry , but substantial
compared with that of industrial workers (25 per cent).
Case against the achievement of an economic miracle
Source 3
This source states how the Nazis had to compromise to make some economic problems
work, it also states that the lash of dictatorship, the level of economic activity has been
greatly increased. Labour increased; female employment increase.
-These comments were made by an SPD analyst, July 1938
For the worker
 ‘Battle for Work’ was achieved without any change in the actual inequality of the
workers.
 Only skilled workers benefited.
 E.g.- Road-building workers had pay levels lower than under welfare, but lived in
barracks, subjected to harsh discipline as well.
 1930s a great many were employed on airfield and were paid the lowest rates.
 Leaving school at 16 increased
 Between 1936 and 1939 the number of women increased in employment
especially in electrical engineering on armament orders.
 Standard of living in Germany was lower than Britain by a third and than America
by a half.
 1928-33, many gained by being in work, but their rise in the standards of living
did not go up as well.
 ‘full employment was Hitler’s sole gift to the masses’ – over –statement, workers
dud work for long hours, but with low wages and poor conditions.
 1938 Food consumption increased marginally from those in the crisis year (1932)
 Life only marginally better in 1933-9 compared with 1931-2.
 As a way to combat inflation, Hitler decided to control wages and direct labour so
people who quit and were in breach of contracts were threatened with temporary
loss of the work books (vital for employment)
 Set levels of wages in key industries, so by 1939 wages had fallen by a quarter to
a third.
 Rearmament boom produced fierce competition for scarce labour and raw
material, this competition led to the ‘poaching’ of workers and offers of wage
increases in defiance of the regime’s attempts to contain wage increases to control
inflation.
 Those employed in the consumer-based industries suffered most.
 State spending shifted from consumer industries to other major sectors of the
economy.
 The overriding aim of rearmament of ‘guns before butter’ led to a fall in private
consumption as a percentage of national income
For the Farmer
 People employed on the land shared the deterioration in condition.
 Reich Food Estate- Over-regulate and expensive to administer (highly unpopular)
 Livestock farmer were at a disadvantage due to this and had to rely on imported
fodder.
 Rise in agricultural debt (especially smaller farms)
 Greater reliance on barter and the black market to obtain products.
 Those employed on land were faced with a heavier workload combined with an
increase in duties.
 Shortage in labour had to be met by using foreign labour and compulsory labour
service. Not enough so the regime had to rely on women who worked 75 t0 100
hours a week.
For the business People
 Small businesses did not benefit as much as did heavy industry (especially
consumer goods).
 Performances by late 1938 were lower than in the 1920s.
 Small-scale business people who had voted Nazi became disillusioned, many
closed up and moved to the armament sector in the late 1930s
 Attracted by the prospect of secure jobs and high pay. Those who did not want to
cooperate went to Switzerland.
 Shortage of foreign exchange meant difficulty in exporting enough finished
industrial goods to pay for vital raw materials and foodstuffs.
 Schacht attempted to promote trade and save foreign exchange by signing
bilateral trade treaties met with limited success.
 With the demands of rearmament and consumptions increasing the German
balance of payments would go deeply into debt (to stop they would have to reduce
arms expenditure and increase production of industrial exports to earn foreign
exchange. Which was not acceptable to the army or Nazi leadership.
 Therefore Schacht’s influence declined and was replaced by Walter Funk.
 Increased power was given to the chemicals firm I.G., this company persuaded
the government to increase its investment on them, on the promise that it could
help Germany achieve self-sufficiency, in return they made and increased
economic contribution to the party and had top Nazis on their board.
 Self-sufficiency was not achieved by 1939.