Nazi economic policies (AQA GCSE History): Revision Notes
Nazi economic policies
Introduction
From 1936 onwards, Nazi Germany's economic policies became increasingly focused on preparing the nation for war. The government pursued two main goals: achieving rearmament to build up military strength and establishing self-sufficiency to reduce dependence on foreign imports. These policies had significant impacts on German society, bringing both benefits and serious drawbacks for ordinary people.
The shift to war-focused economic policies in 1936 marked a crucial turning point in Nazi Germany's domestic and international trajectory, setting the stage for the conflicts that would follow.
The Four-Year Plan (1936-1940)
Hitler launched this ambitious economic programme in 1936, placing Hermann Göring in charge as the plan's key architect. Göring, who had been made Minister for the Economy in 1937, was given extensive powers to implement these sweeping changes.
The plan had two primary objectives. First, it aimed to achieve rapid rearmament by providing the weapons, vehicles, and equipment needed for Germany's expanding army, navy, and air force. Second, it sought to make Germany self-sufficient in raw materials and food production, hoping to avoid the economic problems that had plagued the country during World War One.
Despite its ambitious goals and enormous cost, the Four-Year Plan proved to achieve only limited success. While it boosted certain economic sectors and created employment, Germany failed to reach its targets for self-sufficiency and military production by 1940.
Self-sufficiency (autarky)
The Nazi government's attempt to achieve economic independence ultimately failed. Despite significant efforts and investment, Germany remained heavily dependent on foreign imports. By 1939, the country still relied on other nations for one-third of its essential raw materials.
The government tried various strategies to reduce this dependence. Farmers received subsidies and access to cheap labour through the Reich Labour Service (RAD), which helped increase food production somewhat. The Nazis also launched campaigns encouraging Germans to purchase domestically-made goods rather than foreign imports, though these met with only partial success.
Strategies for achieving autarky included:
- Import controls to limit foreign goods
- Subsidies and cheap labour for farmers through the RAD
- Campaigns promoting domestic goods over imports
- Scientific research into synthetic substitutes for scarce resources
- Development of synthetic oil, rubber, and cotton alternatives
Import controls were introduced to limit foreign goods entering Germany, but luxury items actually increased during this period, undermining the policy's effectiveness. The government funded scientific research to develop substitutes for resources Germany lacked, such as synthetic oil, rubber, and cotton, but these efforts had limited practical success.
Rearmament programme
German rearmament began secretly in 1933 but remained hidden from the public until 1935. From 1936 onwards, military spending increased dramatically as part of the Four-Year Plan. Armament spending rose from virtually nothing in 1933 to approximately 25 billion marks by 1939.
This massive military buildup had mixed effects on German society. Some businesses, particularly those involved in designing, manufacturing, and supplying military equipment, experienced significant growth and profits. The programme created numerous jobs, and the government even used prisoners from labour and concentration camps as workers to meet production demands.
By 1939, the rapid expansion had created serious labour shortages across the economy. The focus on military production meant that resources were diverted away from consumer goods and civilian needs, creating significant economic strain.
Economic impacts on German society
Positive effects
The Nazi economic policies did bring some tangible benefits to Germans. Unemployment dropped significantly, and most men found work during this period. Average weekly wages increased from 86 marks in 1932 to 109 marks in 1939, despite government restrictions on wage increases.
Several groups benefited from the economic changes:
- Some businesses prospered from increased investment and new opportunities in the expanding economy
- Large businesses particularly gained from wage restrictions and the elimination of trade unions, which reduced their labour costs
- Infrastructure improvements came through Public Works Programmes, providing better transportation, services, and housing
- Some farmers saw their incomes rise due to higher food prices, increased government subsidies, and access to cheaper labour
Negative consequences
However, these policies also created serious hardships. The cost of food rose significantly, effectively cancelling out wage increases for many families. Working hours increased substantially, especially after 1936, as the economy focused more heavily on war preparation.
Some businesses found the new restrictions burdensome and resented government interference in their operations. The emphasis on buying German-made goods sometimes meant that available products were of inferior quality compared to foreign alternatives.
The Four-Year Plan placed enormous pressure on the economy, leading to shortages of food and other essential goods during the late 1930s. This created a contradiction between the policy's goals and its practical effects on ordinary Germans.
Certain groups suffered disproportionately - for example, Jewish businesses faced boycotts and were eventually forced to close, destroying livelihoods and contributing to the persecution of Jewish Germans.
Timeline of major events
Key Milestones in Nazi Economic Policy:
- 1933: Secret rearmament programme begins
- 1935: Rearmament programme becomes public knowledge
- 1936: Four-Year Plan launched under Hermann Göring's leadership
- 1937: Hermann Göring becomes Minister for the Economy
- 1939: Labour shortages become apparent; Germany still imports one-third of raw materials
- 1940: Four-Year Plan period ends with targets largely unmet
Remember!
Key Points to Remember:
- The Four-Year Plan (1936-1940) aimed for rearmament and self-sufficiency but achieved only partial success at enormous cost
- Germany's attempt at autarky failed - the country still imported one-third of its raw materials by 1939
- Rearmament created jobs and reduced unemployment but led to labour shortages and economic pressure by 1939
- While wages increased from 86 to 109 marks (1932-1939), rising food costs offset these gains for many families
- The economic policies benefited some groups (certain businesses, some farmers) while harming others (Jewish businesses, consumers facing shortages)