HIST2125 Hitler’s Germany Lecture 11: Economic policies, November 2012

Basic Factors Conservative German state socialism as tradition NS party program 1920: Strong emphasis on economic questions with certain socialist flavour Hitler’s guarantee of protection of private property Economy only secondary to politics since 1933

3 Phases NS ‘economic miracle’ & rearmament, Four Year Plan & early war economy, Total War economy: Era Speer,

NS ‘Economic Miracle’ (1) World-wide economic recovery ‘Policy of deficit financing’ (J.M. Keynes): 1)Capital investments into key sectors 2)Tax relieves for key sectors 3)Labour programs (RAD) 4)Loans for female staff to quit their jobs = domestic market oriented strategy

Labour Service Reichsarbeitsdienst (RAD) Since WW I: Tradition of ‘work students’ 1931: Volunteer Labour Service 1934: Compulsory Labour Service for male students (for female students voluntarily until 1939) 1935: Compulsory 6 months Labour Service for all males from years of age (for all females voluntarily until 1939)

Labour Service aims To considerably lower high unemployment figures To create sense for honourable labour & service To strengthen sense for NS national community (Volksgemeinschaft) of young Germans after HJ To reduce society class divisions

Labour Service results Contributed to drop of unemployment figures Cheap handwork labour: melioration, forestry, building of infrastructure (superhighways = Autobahnen), military facilities Total costs much higher than real earnings Pre-military training in peace + military training during war

NS ‘Economic Miracle’ (2) ‘Policy of autarky’: Schacht’s New Plan (1934): 1) Promotion of exports 2) Quotas on foreign exchange trade 3) Strictly bilateral trade + payments = foreign markets oriented strategy

NS ‘Economic Miracle’ (3) Short-term economic policy to resolve the economic crisis ? OR Long-term economic policy to support rearmament ? ► Interdependent process with emphasis on rearmament

NS ‘Economic Miracle’ (4) Drastically drop of unemployment figures Strong rise of heavy + light industry Less rise of consumer good industry A miracle? → World-wide economic recovery → RAD + compulsory military service → Rearmament as stimulus

Four-Year Plan (1) Centralized control of German economy Aimed to make army + economy ready for war 4 priorities: 1) Increase in agricultural production 2) Retraining of labor force in key sectors of industry 3) Import + export regulation 4) Self-sufficiency in raw materials

Four-Year Plan (2) Hermann Göring as ‘economic dictator’ New NS bureaucracy to control economy Founding of NS holding enterprises (‘Reichswerke Hermann Göring’) Limited freedom of private enterprises = Centrally regulated market economy

Four-Year Plan: Results Difficult balance of consumer good + armament production, Autarky partly achieved in 1939 Only short ‘Blitz wars’ possible, 1939/40 Long war only possible by expansion + occupation + plundering, since 1941