Creating a Command Economy 1936-39

Designed to ensure that the German armed forces would be ready for war in approximately 4 years, and that German economy would achieve autarky, (economic self-suffiency) in a similar period. 

Goering was plenipotentiary (supreme economic authority) which led to conflict between Shachts policies of import control and Goerings new economic policies (ersatz goods and increasing military expenditure.)

To create an autarky, it required replacing imports of oil, gas, wool and cotton with synthesised material - ersats, rubber etc.

Radicalisation - the creation of The Four Year Plan was a radical break from the past as it gave Goering, a committed Nazi, a huge economic role. Overall, allowed the Nazis to gain control over German economic policy.

Success -

• Coal production increased from 319.7 million tonnes in 1936 to 380.9 million tonnes in 1938
• Increase in steel production (19.2 million tonnes in 1936 to 22.6 million tonnes in 1938)
• Self-sufficient in terms of bread, sugar and potatoes

Failure -

• Created major new economic problems, eg turning coal into ersatz oil, required more miners (20,000-30,000). However, by 1938, the German industry were facing labour shortages therefore they only produced 20% of the required artificial oil in 1939.
• Aircraft production declined
• Ersatz rubber was expensive
• As military leaders were unable to acquire the steel, oil and workers needed, they advised Hitler they would not be ready for a major war until 1943.
• Massive amounts of money spent on rearmament meant that by 1939 the country were on the brink of another inflation crisis
• Nazi rearmament drive distorted the economy - only able to rearm if living standards of the majority of Germans was kept low