Nazi Economics

It doesn’t add up!

Slow but sure start

• 1933 – 1935– Schacht

• Schacht is not a Nazi – He is a well respected Conservative Banker

• Slow but sure recovery• He promotes trade deals with other countries

– Raw materials for German Manufactured goods

• He controls expenditure

– But, Hitler is impatient!• He wants to rebuild the German Armed Forces• Schacht’s controls on expenditure frustrates Hitler’s

desire for strong armed forces.

Rearmament

• Germany’s new tactical warfare plans was called ‘Blitzkrieg’– What armaments were

required for this short and sharp kind of warfare.

– What are the advantages of Blitzkrieg to Hitler (page 60)

• Lebensraum– Hitler mentioned this in

‘Mein Kampf’ what was it? Where might the Germans find it?

Goering’s Four Year Plan• In 1936 Schacht was fired and

replaced by the Nazi Herman Goering

• The 4YP was to run from 1936 - 1940

• This idea was copied from Stalin’s 5 Year Plans– What was the 4YP designed to do

in those 4 years? Page 61

• Autarchy (Autarky)– What was it?– Why was Hitler so keen on it?

• What happens to the size of Germany Army (Sources C and D page 61)

1.4

5.6

3.7

2.3 2.11.6

0.9

0.20

1

2

3

4

5

6

1928 1932 1933 1934 1935 1936 1937 1938

Millions

German Unemployment

Copy Source B page 63

Did Nazi Economics Add up?

• Unemployment lowered dramatically– But…

• German industrial production rises– But…

• German Infrastructure is improved– But…

• The German armed forces were armed with many new weapons– But…

Did Nazi Economics Add up?• Unemployment lowered dramatically

– But, workers got less pay (Copy Source C page 63). Many men were forced to join the Armed Forces. Women and Jews were no longer included in official statistics

• German industrial production rises– But, they are not producing consumer products. (Source G page

63). They are allowing monopolies for Nazi-friendly companies

• German Infrastructure is improved– But, these are designed for the military

• The German armed forces were armed with many new weapons– But, they made many strategic mistakes i.e. No long range

bombers, battleships rather than U-boats, Narrow tracked tanks

‘Strength through Joy?’

• Without Trade Unions, German workers could no longer strike or bargain for better pay and conditions.– Pay was frozen from 1933– Plot a graph to show how

German wages moved between 1928 and 1938

• Source C page 63

• In what ways did the Nazis encourage their workers without having to give them a pay rise?– Page 65– Source I

• What would you prefer to receive? Cash or Prizes?

It took so long to save up enough vouchers to be given a VW Beetle, that not a single car was ever given away!

Did You Know:Hitler Couldn’t Drive

Type of Event Number of events Number of people involved

Theatre performances 21,146 11,507,432

Concerts 989 705,623

Hikes 5,896 126,292

Sports Events 388 1,432,596

Cultural events 20,527 10,518,282

Holidays and cruises 1,196 702,491

Museum tours 61,503 2,567,596

Exhibitions 93 2,435,975

Week-end trips 3,499 1,007,242

Courses/Lectures at the German Adult Education Office

19,060 1,009,922

Running out of money

• Germany was spending a fortune on defence.

• Germany was not producing any consumer goods that other countries wanted to buy.

• Autarky was an expensive and inefficient way of producing goods.

• Small farms were inefficient

The most serious problem for the Nazis: The German Budget doesn’t balance.

05

1015202530354045

1928/9 1932/3 1933/4 1934/5 1935/6 1936/7 1937/8 1938/9

Revenue Expenditure National Debt

How does Germany stop itself from running out of money?

1) Asset Strip the Jews

• Steal their resources• Make them pay to leave Germany

2) Invade other countries and take their money and resources!

Asset Stripping the Conquered Countries

• Artwork was looted and taken to Germany• Factory Machinery was taken to Germany • Other Factories were converted to armaments

production• Forced Labour in Concentration Camps• Invaded countries were charged for being

occupied– France paid 400 million marks a day

• Jewish assets were completely stolen

Did Nazi Economics Add up?

• By 1939, Germany still imported 33% of its required raw materials

• Government income had been 10 billion Reichsmarks in 1928. In 1939, it was 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939.

• From 1933 to 1939, the Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Resichsmarks.

• Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures. The only increase was in rye bread, cheese and potatoes.

• Real earnings in 1938 were all but the same as the 1928 figure. (Real earnings are wages adjusted to allow for inflation).