Autarky – a self-sufficient economy [EFICS]

There is no doubt that Hitler 'got the economy going' and that, for many Germans, the Nazi regime was a time of prosperity.  The goal was 'Autarky' – the aim that Germany should be self-sufficient, and in 1936 a 4-Year Plan was devised, first under Minister of Economy Hjalmar Schacht, then under Goering (it failed).

The Nazis revived the economy by massive government spending, paid for in what they called 'Mefo' bills (credit notes – the idea was devised by Schacht); in this way, for instance, the government bought 12 billion Reichsmarks’ worth of rearmament.  Economists know now that these policies cause massive economic problems. 

The Nazi promises (e.g. rebuilding Berlin, ‘Volkswagen’ motor cars, hospitals & swimming baths in every village) never happened.

Towards 1939, inflation began to increase and there was an economic crisis; the historian Tim Mason thinks that "Germany was in a financial mess in 1939, and Hitler went to war to cover it up".

Going Deeper

The following links will help you widen your knowledge:

BBC Bitesize webpages on employment and living standards in Nazi Germany

YouTube

Pete Jackson on the German Economy under the Nazis

1.  Employment

The Nazi goal was full employment, and in June 1933, the Nazis passed a Law to Reduce Unemployment.

• The RAD (National Labour Service) sent men on public works; eg the autobahns/ housing/ compulsory work camps for young men (e.g. environmental work).

• Government spending rose, 1932-38 from about 5 billion to 30 billion marks.

• Unemployment fell from nearly 6 million to virtually nothing.

• Hitler built up the armed forces (e.g. conscription took 1 million unemployed).

• The soldiers needed equipment, so this set steel mills, coal mines and factories back into production. The Luftwaffe gave jobs to fitters, engineers and designers.

• The Nazi state machinery needed thousands of clerks, prison guards etc.

• Jews were sacked from all employment, creating more jobs.

2.  Farming

• By the 1933 Farm Law, farmers were assured of sales and given subsidies.

• The government kept food prices at the 1928 level.

 

BUT:

• Farmers were organised into the Reich Food Estate and strictly controlled (e.g., one rule stated that hens must lay 65 eggs a year).

3.  Industry

• The New Plan of 1934 stopped imports, and subsidised industry.

• Production rose, especially of oil, steel, coal and explosives.

• By 1941, Germany had completed 2,400 miles of autobahns, with another 1,550 miles under construction.

• In 1936, Goering was put in charge. His Four Year Plan proposed to get the army and industry ready for war in four years.

• Employers were happy when workers were well disciplined.

BUT:

• Businesses were strictly controlled; they could be told to make something different/ were not allowed to raise wages/ workers could be sent to other factories.

• Towards 1939, the government increasingly directed production into re-armament, the German economy became about 'guns not butter'; Goering said: ‘Iron makes an empire strong; butter only makes people fat’.

4.  Conditions

• The Nazis tried to make people proud – e.g. the 'Beauty of Work' movement (SdA) gave people pride in what they were doing.

• Smoking was discouraged and there was screening for breast cancer.

BUT:

• Trade unions were illegal and all workers had to join the German Labour Front. They lost their right to strike for better pay and conditions.

• Wages actually fell.

• People who refused to work were imprisoned/ strikers could be shot.

• Wages and conditions on the RAD schemes were very poor.

5.  Strength through Joy (KdF) Movement

• Workers were offered cut-price holidays, theatre trips, picnis and concerts. In Berlin, 1933–38, the KdF sponsored 134,000 events for 32 million people (2 million went on cruises & weekend trips, and 11 million on theatre trips).

•  The KdF designed the Volkswagen (or ‘People’s Car’) ‘Beetle’, which it was planned to be able to buy for 5 marks a week.

•  The government made sure that everybody could get a cheap radio.