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At the start of the period, Hitler had to deal with a number of problems-when the /Nazis came to power the German economy was not in a very good state and Hitler had this as his foremost concern. However, with the recovery of the economy came a clearer focus on preparation for war, and after the introduction of the 4-year plan in 1936, we can consider that there was a significant leaning towards this aim.
In 1933, the German economy showed significant weaknesses in all its major areas. Although it was in fact at the end of the cycle of depression this was not yet clear and the recovery of the economy was of prime importance for Germany. Hitler himself also had little involvement at this stage- his interest was mainly ideological and he had limited economic understanding. Nazi economic policy in these early years revolved around traditional socialist principles; for example the nationalisation of industry, and focused on reducing unemployment and building up infrastructure.
Schacht, who was in charge of running Germany’s economy at the time, used deficit financing to encourage farming and small businesses with the aim of stimulating economic growth and promoting loyalty to the Nazis in a political twist to his policy. Tariffs were maintained on important produce to further protect German farmers. The German state also assumed greater control over capital within the economy, setting interest rates lower and rescheduling debts of local authorities. Public works schemes were set up, which helped the unemployment figure in Germany decrease substantially. All of these policies were concerned with the economic recovery of Germany rather than any clear preparations for war.
The old historical view of the massive increase in public investment on the public works schemes and the extension of the Reichsarbeitdienst to cover the age group from 19-25 year-olds was that it placed a heavy emphasis on rearmament. However, in the first three years, there was greater investment on work creation schemes such as motorisation and building in both the housing and commercial sectors. There is a possible link to the beginning of the war economy in the building of the motorways; the huge improvement that it made to the transportation network meant that once war came along, Germany had the ability to get troops and equipment where they were needed very quickly. By 1936, the economy had improved, enabling a change of emphasis to rearmament.
Other factors also suggest that the German economy was gearing up for war. Schacht’s new plan and the bilateral trade treaties it proposed meant that Germany began to exert a powerful economic influence over the Balkan states for some time before gaining political control. Hitler was determined to achieve Autarky, and this is reflected in the decline of imports from 1934. Schacht suggested a reduction in arms expenditure to prevent Germany’s balance of payment to go further into deficit in early 1936. Such an idea was endorsed by industries geared to exports, but to the Nazi leadership and the army it was unacceptable. This sparked the Guns or Butter debate as to whether the German economy should place greater emphasis on rearming or producing consumer goods.
The four-year plan of October 1936 indicated a turning point in the economy. Its policies were clearly geared towards war; such aims as the prioritisation of strategic imports such as chemicals and metals, increasing production of raw materials and developing substitutes for those that Germany had limited resources of clearly indicated a move towards production for war. Spending on rearmament increased from 5.4 billion RM in 1935 to 10.2 billion in 1936, clearly illustrating the emphasis on preparation for war.
The Hossbach memorandum gives further indication that the German economy was to be geared towards war. Hitler stated his intention to be ready for military action in 1943, when, according to the memorandum, he expressed an intention to take action. The memorandum has to be treated with a degree of caution though-none of the original copies exist and interpretations range from Shirer’s “Hitler had communicated his irrevocable decision to go to war” to A. J. P. Taylor’s view that it did not amount to a concrete plan and was simple “day-dreaming.”
However, even considering this, there is no doubt that the German economy certainly was now geared towards war. Production of raw materials underwent vast expansion and it was seen as “no longer a case of producing economically, but simply producing.” Despite this, Germany was still falling short of Hitler’s autarkic ideal-the country still depended on imports for 1/3 of all raw materials.
Towards 1939, Goering faced problems with labour shortages, and as the country went to war, despite huge expenditure on the military, production remained relatively low. War decrees outlined vast programmes for war production going far beyond the demands of Blitzkrieg, yet other countries such as Britain were producing more-and example being aircraft-in 1940 Germany produced around 10,00 but Britain made 15,000. Food rationing was introduced in Germany right from the start of the war, whereas it started in 1940 in Britain. This again illustrates the German commitment to providing for war.
As the war went on into 1942, the German economy geared itself towards total war. Speer implemented further programmes to exploit Germany’s resources and labour force more effectively, wholeheartedly trying to supply the needs of war. He encouraged the employment of women in the arms factories and using the concentration camp prisoners as workers to help with this aim, and it showed positive results – production increased substantially. By 1944 production peaked at a level that was three times that of 1942.
Overall, Hitler’s and Nazi economic policies had a clear focus on preparation for war and then supplying its needs. There were some exceptions to this – the very early period from 1933-6 can be considered to have had a greater focus on economic recovery than providing for war with policies geared at reducing unemployment and stimulating growth. Throughout the war there was production not aimed at war, such as food, but this can also be seen to be part of Hitler’s aim for Autarky. However, with the introduction of the 4-year plan and the evidence of the Hossbach memorandum from 1936 we can see that the German economy became decidedly more focused on preparing for war and supplying its needs.