Economic and Social Policies 1924-1929

The economic and social policies in 1924-1929 included:

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

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.  

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. 

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.

However:

• These changes were resented by employers, so in order to save money, they fired workers. 
• This caused unemployment to rise. 

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.

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.