How successful was Hitler’s economic policy in the period from 1933 to 1945?
Student Answer (A Grade)
In order to judge the success of Nazi economic policy it is essential to establish their aims so that economic developments can be judged against them. Hitler had come to power largely as a result of the consequences of the Depression and therefore his initial aim was to restore Germany to full employment. This would win Hitler much support and help consolidate the Nazi regime. At the same time economic recovery would mean more resources would be available and this would allow Hitler to rebuild German military power, allowing him to pursue his other priority of territorial expansion. In order to achieve this, Hitler believed that it was important for Germany to be self sufficient and geared for war; this was seen as essential following the disasters of the blockade during World War One.
Hitler was very successful in achieving his aim of reducing unemployment. When the Nazis came to power there were close to six million unemployed, yet by 1934 this had dropped to 2.3 million and was down to 0.2 million by 1938. Through public works schemes such as housing, land improvement schemes, the building of canals, rail and motorways, large numbers of jobs were created and the number of people in employment also rose. For many Germans this was Hitler’s greatest achievement and won him widespread support, one German commented: ‘I would have made a pact with the devil if it meant work’, so desperate was the situation when Hitler came to power. At the same time as this reduction in unemployment, industrial production rose by a staggering 60% and GNP rose by 40%. However, although jobs were created, some of them paid very little and were very mundane in nature and the introduction of compulsory labour service in 1935 introduced further control over the workers. At the same time, although the recovery cannot be denied there are certainly question marks over how far it was due to Nazi economic policies. Many of the public work schemes were already underway under Weimar and the Nazis simply expanded these. The trade cycle and the world economy had reached their lowest points before the Nazis came to power and afterwards it began to improve, helping the Nazi position. Despite these advantages it was the public investment, led by the state, which did most to aid the recovery. The increased public spending stimulated demand and increased national income, but just as importantly Schacht was able to achieve this without inflation through his control of prices and wages. Therefore, through careful management, there is little doubt that the Nazis did much to bring about recovery and take advantage of a favourable situation to bring about full unemployment, even if 25% of those employed were in the armaments industry.
It is almost impossible to separate economic issues from foreign policy as Hitler’s main concern was to rearm Germany for war. Although Germany went to war in 1939, suggesting that economic preparations in this area had been successful, this is far from the case. There is little doubt that the initial stages of rearmament created serious problems for the economy and revealed structural weaknesses that had been hidden in the early years. Until 1936 the balance of payment problem had been hidden by Schacht, but as the demand for rearmament increased, balance of payments went further into the red. This was reflected in the crisis of 1935-6, when German farmers’ failure to produce enough food meant that imports were needed. The government had to allow the imports as they feared the reaction to the introduction of food rationing. This raised the ‘Guns or Butter’ debate and clearly showed that in 1936 the German economy was unable to meet both demands.
The attempt to solve these problems through the introduction of the Four Year Plan in 1936 was of limited success. The aim was to ensure that the German economy was ready for war within four years. However, the response was very mixed. Although there was increased production in the aluminium and explosives industries, production levels fell short in the key commodities of rubber and oil and certainly never reached the levels demanded by the armed forces. However, the plan did stop any further increased reliance on imports, but even at the start of the war Germany still needed a third of its raw materials from abroad. It can even be argued, as Mason does, that the driving pace of rearmament was creating such strains within the economy that it was in danger of expanding too quickly. There is certainly some evidence that that there were shortages in food and consumer goods and labour shortages among skilled workers which forced wages up. Most importantly these problems created such social discontent among the workers that Hitler went to war as the only way out of the economic problems. If this argument is correct then the period from 1936 to 1939 saw serious failures in economic policy.
Hitler was determined to avoid the mistakes Germany had made in the First World War and ensure that the economy was geared for ‘Total War’, but in this area his policy was a failure. Although early victories suggest that his policy was a success and that the economy had not been overstrained, the economy was well short of being mobilised because, as Overy argues, Hitler did not want war until 1943, therefore his policies were doomed to fail. This is reflected in the December 1939 decrees when Hitler outlined vast programmes for many aspects of war production which went beyond the demands of Blitzkrieg and a limited war. German military expenditure doubled, but Britain was able to treble hers in the same period and Germany also had to introduce food rationing at an early stage. German economic policy was initially unable to bring about a great increase in arms production; major projects were not completed due to inefficiency and poor co-ordination and confusion between departments. As a consequence the German economy was not ready for total war when the USSR was invaded. However, the appointment of Speer did see some improvement as there was a 97% increase in ammunition production, tank production rose by 25% and arms by 59%, so that by the second half of 1944 there had been a three-fold increase since 1942. Despite his successes, Germany had the potential to produce even more and at the same time they failed to use efficiently the resources of conquered lands. The failings were made even worse by the success of allied bombing from 1943, which prevented Germany from increasing arms production and resulted in resources being diverted to the building of anti-aircraft installations and underground industrial sites. As a result Germany never achieved a total war economy.
Hitler’s economic policy was a failure. His main aim was to prepare Germany for war and in this he failed to harness the German economy to his requirements. He was unable to ensure that the economy was able to rise to the demands of total war and the failings of his economic policy are reflected in the economic collapse of 1945. The Nazis did not bring about the economic miracle that was seen in the 1950s, perhaps the only achievement was to bring about the reduction in unemployment levels that won Hitler popular support and helped to consolidate the regime.