Did the Third Reich Experience An Economic Miracle?

In avoiding experimentation and purely consolidating old policies, Hitler was cleverly avoiding any risks which may have worsened the situation further. Therefore although this was an intelligent strategy, it indicates that the drastic reduction of unemployment was not miraculous but merely the result of continuing and improving existing ideas and schemes.

Another method in which Hitler sought to return Germany to its former prosperity was through careful regulation and absolute control. Wages and prices were controlled to reduce the threat of inflation and Mefo Bills were introduced to help fund increased government spending. The State took over the banking system, which was on the verge of collapse and took control of the capital market. There were high levels of state supervision and intervention. Schacht's New Plan of 1934 aimed to tackle the problem of trade deficit through the regulation of imports and the control of foreign exchange. Schacht also made a series of bilateral trade agreements to supply raw materials that Germany needed and the New Plan was relatively successful in solving the immediate problem.

Therefore Hitler's economic strategy mainly consisted of expanding the Weimar Work Creation schemes, regulating imports and taking control of the countries economy; the banking system, the capital market, wages and prices. This suggests not a miracle but an economic recovery caused greatly by Hitler's enhancement of state control.

The pre-slump peak of Gross National Product had been exceeded by 1935 and the level of industrial production achieved in 1928 was surpassed by 1936. By 1937 unemployment was down to under one million and by 1939 the German economy had grown 33% above its late 1920s peak. This evidence supports the argument that the German economy made a radical recovery during the Third Reich but can this really be classed as a miracle? Certainly these are impressive statistics and Germany's economic recovery drew admiration from both home and abroad, but to call this miraculous is an over exaggeration.

The economic recovery occurred due to a variety of factors- political stabilization, the continuation of Weimar policies, the New Plan, greater state control and increased government spending. Although there were signs of the beginning of a recovery before the Nazis came to power, there is little reason to believe that Germany would have recovered any more successfully then France if not for these factors, brought about in the Third Reich. Germany's successful recovery was a result of the way Germany was governed during the Nazi rule. Although many of the Nazis economic controls had been developed under Weimar, Ferguson argues that the success would not have been possible without a radical transformation of the political system. Hitler extended and improved Weimar policies and was able to enforce them more vigorously as he had no formal constraints on his power.

Hitler's strong focus on rearmament however, had a detrimental effect on the country's economy. Hitler wanted to be ready for war within four years and the excessive pace of rearmament meant that the German economy was overheating. Mason has argued that the economy was under great strain as a result of the emphasis placed on rearmament and autarky- a strategy to make Germany as self-sufficient as possible. Therefore although Germany's economy did make a significant recovery during the Third Reich, there were also negative aspects to the Nazi regimes economic policies.

However despite this, the improvement in Germany's economy was extremely impressive. This should not be classed as a miracle but rather as an impressive recovery from a grim situation due to the consolidation of Weimar ideas enforced more vigorously with increased government funding and greater state control. The economic recovery was remarkable considering the country's economic state when Hitler first came to power but 'miracle' is too powerful a term. By 1938 the GNP had increased by about 75% which is undoubtedly spectacular but is purely evidence of successful governmental strategies- not a 'miracle'.

Rebecca Leslie 12.3