Nazi Economy,
- Created by: PhoebeM
- Created on: 02-02-20 14:09
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- Nazi Germany (1933-45)
- Reasons for economic policy changes:
- Needed to appeal to farmers/workers: farmers were bankrupt.
- Unemployment at 30%
- Needed economy geared towards rearmament.
- German to be self-sufficient = economy needed to provide this (to carry out a long war)
- The New Plan
- Schacht (Head of reichsbank) created New Plan to provide Germany with raw materials needed for rearmament and public work self-sufficiently.
- (1934) strict import quotas on wool, leather, fur, etc
- (1934) Schact created 25 new Ministry of Economics departments - increase the control on goods.
- importing goods without official licence made illegal
- Effective: trade back in balance by mid-1935
- stimulated trade with developing countries (Latin America, Eastern Europe)
- got more affordable trade deals than with more developed economies (USA + UK)
- Consequences:
- Standard of living fell
- Quotas on wool = German textiles industries weren't able to recover its pre-Depression levels.
- price of clothing rose much faster
- 4-Year Plan
- German armed force would be ready on 4 years
- + economy would achieve autarky + self-sufficiency
- Goering aimed to increase food production, raw material suffuciency
- Successes:
- Coal production increase - 380.9million tonnes (1938)
- Self-sufficient in bread, sugar, potatoes
- Nationalising biggest steel companies = Europe's biggest steel company.
- 22.6 million tonnes (1938)
- Failures:
- By 1938 - labour shortages in all areas of industry
- Germany only produced 20% of the oil needed in 1939
- Aircraft production limited by lack of fuel workers
- Military leaders advised Hitler that the army wouldn't be ready for major war until 1943
- Country about to have another inflation crisis (1939)
- govt was pushing massive amounts of money into the economy - to pay for the arms program
- Ultimately, only way to rearm was through keeping standard of living low for majority of Germans
- By 1938 - labour shortages in all areas of industry
- German armed force would be ready on 4 years
- Crisis in 1935-36
- Schacht's policies successful in reducing imports + prioritising rearmement
- Agricultural problems created an economic crisis
- Poor harvests (1934) led to food shortages
- Schacht refused to increase imports in food
- price of pork and ham rose by 30% by 1936
- exposed fundamental problem: economy not strong enough to produce both 'guns and butter'
- Schacht refused to increase imports in food
- Poor harvests (1934) led to food shortages
- Reasons for economic policy changes:
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