Economic and Social Policies 1924-1929

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Economic and social policy 1924-1929

The economic and social policies in 1924-1929 included:

  • Foreign Investments. 
  • Industry
  • Social Welfare
  • Strengths
  • Weakenesses
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Foreign Investments

Between 1924-1929, there was a deficit in the German economy:

  • This was because the govt was spending more money than they were making.
  • In addition, trade suffered as Germany was importing more goods than exporting them.
  • The govt borrowed money from foreign countries, to fund its spending.
  • This would not last forever, and was made worse during the Wall Street Crash in October 1929.  
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There was economic growth in this period, industry:

  • This was because prices were steady, as a result of the introduction of the new Rentenmark. 
  • This allowed Germany's currency to be stabilised following hyperinflation.
  • There was an increase in the growth of German industry, whilst agriculture was still declining. 
  • However, German industry was falling behind the rest of the world. 
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Social Welfare

The govt increasing social welfare spending:

  • This mainly benefited the workers. 
  • For example, compulsory unemployment insurance was introduced, in 1927.
    • This covered 17 million workers. 
    • This was the largest scheme of its kind in the world. 
  • There was a further increase in conditions for workers.
  • This was because trade unions had successfully increase wages for workers.


  • These changes were resented by employers, so in order to save money, they fired workers. 
  • This caused unemployment to rise
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Strengths of the economic and social policies

The economic and social policies were successful because:

  • There was a new currency, called the Rentenmark, was stable.
  • It was introduced to deal with hyperinflation. 
  • The economy grew by foreign investments.
    • E.g. Nearly 5 billion dollars was invested into Germany. 
  • As trade unions succeeded in improving wages and the increase in social welfare spending, workers' conditions improved.
  • Exports were getting stronger:
    • It increased by 40% from 1925 to 1929.
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Weaknesses of the economic and social problems

On the other hand, the economic and social policies of 1924-1929 had its weaknesses:

  • Agriculture was still in decline. 
  • Due to the increased wages, unemployment increased and employers cut spending. 
    • This led to many workers being laid off
  • Although it had helped Germany's economy, Germany was dependent on the foreign investments and foreign economy. 
  • Public spending was much higher than the govt's income. 
    • This led to a deficit, which was paid for by money invested from other countries. 
  • Even though exports increased, imports did also. 
    • E.g. in 1927-28, Germany were importing more than they were exporting. 
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