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How successful were Nazi economic policies in the years 1933-45?

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How successful were Nazi economic policies in the years 1933-45? When the Nazi Party came to power in 1933 it had two main aims - to solve unemployment, and to make Germany as strong an economic and military power as possible, so that the humiliating and devastating defeat of the First World War could never happen again. In order to do this, several areas had to be tackled. Firstly, unemployment was huge and rising steadily - in 1933 six million people were unemployed. Secondly, the party had promised better conditions for workers, and this had to be balanced with continuing the good relationship that the Nazis had with businesses. In order to build up Germany's military strength after the under-funding and downsizing that Versailles imposed, large amounts of funding were needed for the armaments industry and the armed forces. Lastly, the Nazis wanted to create autarky - making Germany self-sufficient and ready for war. The stages of the German economy - The economic recovery, the four year plan and the war economy, all reached different extents of success, to which are subjective to their strengths and failures. The 'success' can be divided between the policies aims, and the results, the results being of most importance. Germany had faced continuing economic problems since the end of the first war, those problems then worsened coinciding with the world economic depression that began in 1929. ...read more.


Schacht negotiated several trade treaties with countries in South America and southeastern Europe, under which Germany would continue to receive raw materials, but would pay in Reichsmarks; these agreements were the bilateral trade treaties. This ensured that the deficit would not get any worse, while allowing the German government to deal with the gap which had already developed. Schacht also found an innovative solution to the problem of the government deficit by using mefo bills, the main purpose of these were to disguise government spending. Through Schacht's new plan and past economic ideas, he had laid the foundations for economic recovery by mid-1936. This was therefore assumingly a very successful policy in regards to it's results. However, there were disagreements over priorities. As Schacht favored boosting exports this would resort in slower rearmaments, whilst the armed forces were already demanding more resources for rearmaments. Hitler therefore favored rapid rearmament. Also, Schacht had only questionably hidden the balance of payment by a series of financial tricks and as the demands for rearmament and consumption for goods increased, the balance of payment would actually go deeply into red. There was therefore a divide between the governments expenditure into arms production over the production of industrial goods, leading to the question: should the economy concentrate on producing "guns or butter?". The Nazi leaderships economic policy here was therefore criticized for it's over-interest in re-armament and it's priority taken over trade, peace and consumer goods. ...read more.


Despite this, Germany had the capacity to produce more and the occupied territories of the Third Reich were not exploited with real economic efficiency. Also, allies blanket bombing prevented Germany from increasing it's levels of arms production even further. Speer therefore had some major early successes, but these are shadowed by the later fundamental problems and failures evident in the later years of the war. In the end, the Nazi economy had proved incapable of rising to the demands of total war and the cost of the failure was a major factor in the ruins and economic collapse of 1945. In conclusion, the condition of Germany's economy was not static and was fairly inconsistent throughout. There were some large successes in regards to it's economic recovery at the hands of Schacht, whose success benefitted firstly sympathetic supporters of the Nazi party, followed by the major decline in unemployment and economic stiunulation brought about through his reforms and work schemes. However, his method of the balance of payments could be seen as a series of financial tricks that would not be beneficial long term. The four year plan increased arms production but through it's limitations, did not prepare or mobilize Germany for war. Speer had some notable successes in the early total war period, but the Nazi war economy could not provide for the demands of a total war economy. So therefore, after the recovery, the condition of Germany's economy got progressively worse, and even through there were some successes, the extent of failure in the later total war years shadowed these. ...read more.

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This essay is a very thorough and detailed account of Nazi economic policy and shows an excellent level of knowledge and understanding of the topic. In a timed exam question it would be better to deliberately select and focus on a few key aspects of the policies and focus more on the analysis of the impact and extent of success rather than attempting to cover so much detail on the period . ****

Marked by teacher Kate Forbes 01/03/2012

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