What Methods Did Hitler Use To Achieve His Economic Aims How Successful Was He
When Hitler came to power in 1933, the Germany economy was in a desperate state and still reeling from the effects of the 1919 Treaty of Versailles and the 1929 Wall Street Crash. Hitler decided that a revival of the economy was a necessity in order to achieve his ideological aims for the future of Germany. He even stated that ‘the needs of the state, varying according to time and circumstances are the crucial factor’, and Hitler believed that Germany was a great state, and therefore needed a strong economy in order to achieve her potential, which arguably Hitler perceived, as world power. There were four basic aims for the economy. Firstly, Hitler wished to tackle the depression which Germany was suffering from, and to generate employment, as unemployment was close to six billion in 1930. This policy also had other advantages, as by reducing unemployment, a climate of optimism would be generated in Germany and Hitler would be able to consolidate the power of his regime. The other principal aim for the economy was to create a Wehrwirtschaft, a defence economy in order to fulfil the desire for territorial expansion and Lebensraum. Therefore, war resources would need to be made (a job for the unemployed) and substitutes for imports would need to be found in order to achieve self reliance, which was termed autarky. Another minor aim was to aid the economic interests of the Mittelstand, which was where Hitler’s strongest opposition lay. It is apparent that although Hitler wished to fulfil the destiny of Germany, this was to be done on his own terms.
One of the methods used by Hitler to achieve his economic aims was the creation of employment, which would thereby reduce state benefits, increase public expenditure and investment and stimulate consumer demand; all crucial for a healthy economy. Public Works Schemes were begun which meant the building of Autobahns and homes. This meant that a large number of jobs were created. Tax concessions and grants were provided, which stimulated demand to further strengthen the economy. More jobs were created in government bureaucracy and subsidies were given for hiring workers in the private sector. In terms of employment, Nazi ideology was most definitely not neglected, shown by the fact that jobs for Jews and married women became limited. Likewise, the RAD (Youth Service) took young people off the unemployment register and then all 18-25 year old males were removed from conscription in 1935 and placed in military service. This meant that the numbers in the armed forces grew from 100.000 in 1933 to 1.400.00, in order to prepare for the arguably inevitable war, thereby partly fulfilling the aims of a Wehrwirtschaft.
Other developments included the appointment of Schacht as Minister of the Reichsbank in 1933 and then as Economics Minister in 1934. Schacht had strong links with the elite, which meant that this appointment would not only hopefully improve the German economy, but also please the elite and thereby theoretically strengthen Nazi power. Schacht introduced the policy of deficit financing, which was the governmental spending of more money than it was receiving in order to boost the economy. This was achieved through the introduction of factors such as mefo bills, which were issued to industry in return for goods, which were then repaid with interest. Mefo bills, although a risky means of financing an economic revival, were responsible for the funding of approximately half of Germany’s rearmament programme. The historians Noakes and Pridham emphasise, that this means of financing the Wehrwirtschaft, would result in a ‘serious economic crisis’.
Some methods however, clearly helped the strengthening of the German economy. In 1932, Bruning successfully negotiated the ending of reparations payments and suspended debt repayments. This would no doubt, ironically aid the development of a Wehrwirtschaft. Bilateral trade agreements were made, for example with the Balkans which meant Germany had access to the raw materials needed for rearmament. In terms of achieving autarky, bartering was introduced to gain goods without the use of currency, and the 1934 New Plan meant that imports could be regulated. Crucially, in 1936 the Four Year Plan was introduced and Goering was made head of the Office of the Four Year Plan, the aim of which was to make Germany prepared for war within four years time and once again priority was placed upon rearmament and autarky. Targets were created which industry had to meet; a policy which can be likened to that in Soviet Russia.
In terms of the success of the economy, whilst there were indeed successes there were also failures. The aim of employing the nation was a success, with only 0.2 million unemployed by 1938, and 0.8 million more employed in 1938 than in 1928; so not only did the Nazis drastically reduce unemployment, but they also succeeded in the fact that more were employed than under the Weimar government. However wages for the employed steadily decreased as a percentage of national income. The aim of achieving a Wehrwirtschaft was also a success and a failure, depending on how viewed. Autarky in basic food groups such as bread and vegetables was very close to being achieved, the production of goods nearly tripled between 1933 and 1938, national income nearly doubled and again, beat that of Weimar and crucially, Germany was indeed prepared enough to achieve European dominance by 1941. However, it should be pointed out that due to the policy of deficit financing government expenditure was nearly twice that of its revenue. Other failures are that as late as 1939, Germany was still reliant on foreign imports for a third of her raw materials needed to sustain a Wehrwirtschaft, especially iron, and Four Year Plan targets for oil and rubber were not met. Also in existence was the debate known as ‘guns or butter’ which divided the government over the issue of whether the people should be provided with all they needed, i.e. butter, or that Wehrwirtschaft would be pushed forward even further, i.e. guns. This emphasises that although there were successes in war preparation, the people may have suffered, as will be discussed later.
The successes of Hitler’s economic aims varied according to demographics. The protection of the economic interests of the Mittelstand did not really come about. Two laws, the 1933 Law to Protect Retail Trade meant that special taxes were placed on large stores, and the Reich Entailed Farm Law protected peasants and farms from creditors, yet there were no real benefits for the middle classes. Many went bankrupt, including artisans, whose number decreased, not helped by the cartelisation process. Long hours, low incomes and generally poor conditions own farms meant that the Mittelstand did not make the expected gains. SOPADE noted that ‘the small businessmen are in a condition of gloom and despondency’, so it can be said that overall the Nazi economy failed the Mittelstand. It would seem that the elite and big business were the social group who experience the greatest benefit from the new German economy. The income of big business increased by 116%, as rearmament benefited rich industrialists. Two examples of this success are the Daimler-Benz Aeroplane Company, which was state funded and their production rose by 800% and the IG Farben chemical company also benefited. The historian Hiden states that ‘profits went above all to the industrialists, who were prepared to collaborate actively with the regime’, indicating that success depended upon working with the Nazis such as by working long hours to reach targets. Conversely, this group had to tolerate more government intervention and therefore lost their political influence, which resulted in them becoming suspicious of the regime. In this way although the elite and big businesses benefited from this change to the economy, which for them was a success, the Nazi’s lost popularity with this group. The greatest improvement due to the economy for workers was employment and ‘Councils of Trust’ which represented their views in order to create a feeling of a Volksgemeinschaft, despite the abolition of trade unions. The Strength Through Joy movement provided incentives for good work and the Beauty of Work campaign financed the improvement of facilities. The Nazi Ley even went as far as acknowledging that ‘without the German worker, there is no German nation’. Yet, perhaps this only meant when creating a Wehrwirtschaft, as the general lifestyle of workers decreased, as they ate much less enjoyably and healthily, with less wheat bread and beer. By 1939 workers were under the control of the government who could direct them in any way they wished and employment was used against them, when they complained about the poor conditions.
The successes and the failures of the economy can all be seen and historians seem to hold this view. Overy states that whilst there was an ‘exceptional decline of the depression years’ the achievement was ‘not very remarkable’ and the ‘longer term prospects for growth were more muted’. Likewise Noakes and Pridham say that successes of the economy were that it was ‘without mass opposition’ and there was a ‘distinct improvement’ in people’s lives, mainly due to employment. However, crucial points are also made by them. They say that a defence economy ‘had not been realised’ as the economy still relied on some foreign imports and due to deficit financing, the economy was ‘operating beyond its capacity’.
In conclusion, the economy can be said to have been neither a great success nor a great failure, but rather a combination of the two which differed greatly depending on demographic. For example, it is clear that on the whole, big businesses benefited greatly from rearmament. In terms of reviving the economy, Hitler placed emphasis on what he believed to be the needs of the nation, as opposed to the needs of the people and demands from other party members, shown by the guns and butter debate. This can be used to argue that Hitler was resolute that Germany had to be strengthened principally in a militarily sense. Rearmament and autarky were always contradictory, as Germany had need of more raw materials than she possessed, which would mean looking overseas. Therefore, not all the aims of Hitler’s new economy could ever be realistically achieved and some failure would have to occur even before any of the policies had been put into action.