The Nazis and the German Economy

The Nazis and the German Economy

Germany’s economy was in a mess when Hitler was elected Chancellor in January 1933. Hitler and Nazi propaganda had played on the population’s fear of no hope. Unemployment peaked at 6 million during the final days of the Weimar Republic – near enough 33% of the nation’s working population. Now Hitler decreed that all should work in Nazi Germany and he constantly played on the economic miracle Nazi Germany achieved.

This "economic miracle" was based on unemployment all but disappearing by 1939.

Unemployment in Germany

Total

January 1933

6 million

January 1934

3.3 million

January 1935

2.9 million

January 1936

2.5 million

January 1937

1.8 million

January 1938

1.0 million

January 1939

302,000

But was this true or did the Nazi propaganda machine move into overdrive to persuade the nation and Europe that she had achieved something that other European nations had not during the time of economic depression?

A number of policies were introduced which caused the unemployment figures to drop.

Women were no longer included in the statistics so any women who remained out of work under the Nazi’s rule did not exist as far as the statistics were concerned.

The unemployed were given a very simple choice: do whatever work is given to you by the government or be classed as "work-shy" and put in a concentration camp.

Jews lost their citizenship in 1935 and as a result were not included in unemployment figures even though many lost their employment at the start of Hitler’s time in power.

Many young men were taken off of the unemployment figure when conscription was brought in (1935) and men had to do their time in the army etc. By 1939, the army was 1.4 million strong. To equip these men with weapons etc., factories were built and this took even more off of the unemployment figure.

With these measures in place the unemployment figure had to fall drastically and many saw the Nazi figures as nothing more than a book-keeping trick. However, many would have been too scared to speak out against the Nazis or pass negative comments on the published figures - such was the fear of the Gestapo.

However, there is no doubt that work was created. The Nazis introduced public work schemes for men who worked in the National Labour Service (Reichsarbeitsdienst or RAD). Their work would have included digging ditches on farms to assist irrigation, building the new autobahns, planting new forests etc. The men of the RAD wore a military style uniform, lived in camps near to where they were working and received only what we would term pocket money. However, compared to the lack of success of the Weimar government and the chronic misery of 1931 to 1932, these men felt that at least the Nazi government was making the effort to improve their lot.

To ‘protect’ those in work, the German Labour Front was set up. This was lead by Robert Ley. The GLF took the role of trade unions which had been banned. To an extent, the GLF did this. Ley ordered that workers could not be sacked on the spot but he also ordered that a worker could not leave his job without the government’s permission. Only government labour exchanges could arrange for a new job if someone did leave his employment.

However, the GLF increased the number of hours worked from 60 to 72 per week (including overtime) by 1939. Strikes were outlawed. The average factory worker was earning 10 times more than those on dole money and few complained – though to do so was fraught with potential difficulties.

The leisure time of the workers was also taken care of. An organisation called "Kraft durch Freude" (KdF) took care of this. Ley and the KdF worked out that each worker had 3,740 hours per year free for pursuing leisure activities - which the state would provide. The activities provided by the state were carefully and systematically recorded. For the Berlin area (1933-38) :

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

Cheap holidays and the offer of them was a good way to win the support of the average person in the street. A cruise to the Canary Islands cost 62 marks - easily affordable to many though most cruises were taken up by Nazi Party officials. Walking and skiing holidays in the Bavarian Alps cost 28 marks. A two-week tour of Italy cost 155 marks.

The KdF also involved itself in introducing a scheme whereby the workers could get a car. The Volkswagen - People's Car - was designed so that most could afford it. The Beetle, designed by Ferdinand Porsche, cost 990 marks. This was about 35 weeks wages for the average worker. To pay for one, workers went on a hire purchase scheme. They paid 5 marks a week into an account.

Hitler inspects a model of the Volkswagen Beetle

 Theoretically, when the account had reached 750 marks the worker would be given an order number which would lead to them receiving a car. In fact, no-one received a car. The millions of marks invested into the scheme were re-directed into the rapidly expanding weapons factories. This accelerated as World War Two approached. No-one complained as to do so could lead to serious trouble with the secret police.

Did the Nazis produce an economic miracle for Germany?

The Minister of the Economy was Hjalmar Schacht. He introduced his "New Plan". This plan intended to reduce imports, reduce unemployment, channel government spending into a wide range of industries and make trade agreements with other nations. Hermann Goering also wanted Germany to become self-sufficient in all industries so that as a nation she could survive a war. Were these plans successful?

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

government income had been 10 billion Reichsmarks in 1928. In 1939, it stood at 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939 - a difference of 15 billion Reichsmarks. 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.

balance of trade figures had gone into the red by 1939 by 0.1 billion Reichsmarks.

unemployment had fallen from 6 million in 1933 to 300,000 by 1939 and industrial production in 1939 was above the figure for Weimar Germany before the 1929 Wall Street Crash.

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.

MLA Citation/Reference

"The Nazis and the German Economy". HistoryLearningSite.co.uk. 2014. Web.






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