Assessing the Impact: Nazi Economic Policy's Response to the Great Depression
TITLE
Analyse the effectiveness of Nazi economic policy in dealing with the effects of the Great Depression.
ESSAY
The Great Depression had a profound impact on Germany, leading to widespread unemployment, business failures, and economic instability. The Nazi regime, under Adolf Hitler, capitalized on the economic hardships facing the country and implemented various economic policies to address the effects of the Depression. This essay will analyze the effectiveness of Nazi economic policy in dealing with the consequences of the Great Depression.
One of the key aspects of Nazi economic policy was the focus on trade-based recovery, as evidenced by Hjalmar Schacht's New Plan. Schacht, who served as Minister of Economics and President of the Reichsbank, implemented measures aimed at boosting German exports and reducing dependence on international trade. While Schacht was skeptical of deficit finance and public works, the government did introduce a range of policies that included public spending on infrastructure and rearmament. These measures contributed to the gradual recovery of the German economy and helped create jobs.
Additionally, the Nazi government took steps to protect certain sectors of the economy, such as agriculture, which had been particularly hard hit during the Depression. Measures to prevent forced sales or foreclosures of hereditary properties helped stabilize the agricultural sector and provided a degree of economic security for farmers. The emphasis on rearmament also played a significant role in job creation and economic recovery, as the military buildup required considerable investment and contributed to increased production and employment.
Moreover, the Nazis employed propaganda and rhetoric focused on national revival to instill confidence in the public and encourage investment and consumer demand. The Reich Labour Service and other programs aimed at reducing unemployment and improving infrastructure also helped to boost morale and create a sense of economic stability.
However, despite these measures, the Nazi policy of Autarky, which aimed to reduce Germany's dependence on foreign imports, was not entirely successful. The economy became increasingly reliant on state spending and the priorities of rearmament, leading to new economic challenges and limitations.
Overall, while some aspects of Nazi economic policy were effective in addressing the consequences of the Great Depression and spurring economic recovery, not all policies were equally successful. The regime's focus on military buildup and rearmament, as well as its propaganda efforts, played a significant role in improving the economic situation in Germany. However, the long-term consequences of these policies, including increased state control and dependence on government spending, raised new challenges for the German economy. Ultimately, the Nazi economic approach can be seen as a mix of successes and shortcomings in dealing with the effects of the Great Depression.
SUBJECT
HISTORY
PAPER
A LEVEL
NOTES
Analyse the Effectiveness of Nazi Economic Policy in Dealing with the Effects of the Great Depression
The effects of the Great Depression on Germany could be seen as primarily a rise in unemployment to over 6 million at the height of the crisis. The banking system ran into a period of instability and there were business failures. The middle classes already hit by the inflation of 1923 now found the opposite problem with deflation. Government retrenchment policies meant a cut back in the widespread expenditure by local government on welfare and exacerbated the restriction of demand. Certain sectors already suffering from structural problems like elements of agriculture and smaller trades – the so-called Mittelstand – found themselves suffering as much as the industrial working classes as both internal and external demand fell. Trade and exports were hard hit as the Depression became global. There were considerable hardships both physical and psychological.
The Nazis made considerable political capital out of this hardship and blamed Germany’s dependence on international trade and finance, the capitalist system and also Jewish economic domination. The socialist side of the movement attacked the role of big business but once in power, the policies tended towards economic orthodoxy rather than radical economic restructuring. Schacht’s New Plan aimed at a trade-based recovery and he was suspicious of deficit finance and public works, though these did feature in a raft of measures. The restructuring and even anti-Semitic side of the rhetoric was not translated to immediate action and measures against department stores were limited for fear of further economic disruption.
Cyclical recovery was already happening by the end of 1933 though this took a while to translate to a large fall in unemployment. Immediate moves by restricting women in work and by anti-Semitic measures gave the impression of action to protect male workers. Government spending on infrastructure and the financing of rearmament played some role in recovery. There were somewhat belated measures to protect agriculture and ensure hereditary properties were not broken up by forced sales or foreclosures.
The recovery of world trade helped, and the confidence created by the new government and the rhetoric of national revival together with measures to alleviate elements of unemployment like the Reich Labour Service were effective in changing the public mood and encouraging more investment and consumer demand. However, the rearmament-led policies were probably of greater significance in terms of creating jobs. Attempts to deal with the dependence on foreign imports, the dangers of which were seen in the Depression were addressed by a programme of Autarky which was less than effective.
The economy was not put into state hands but became increasingly dependent on state spending and the priorities of rearmament and it could be said that the problems of the Great Depression gave way to different economic problems. Not all policies were equally effective and not all of the recovery depended on Nazi policy though the propaganda claimed credit for recovery for well-publicised public works like the autobahn programme. The bitter poverty and sense of despair and of being at the mercy of fluctuations in the capitalist system, however, did not reappear and to that extent Nazi policies can be seen as effective even if the price tag was huge.