How Successful Were Economic Policies 1933-1939?

Youth unemployment was dealt with by the forming of the Voluntary Labour Service (VLS) and the Voluntary Youth Service (VYS), these planted forests, repaired river banks and helped reclaim wasteland, women in certain professions such as doctors and civil servants dismissed, while other married women were paid a lump sum of 1000 marks to stay at home.  In the summer of 1935 Adolf Hitler announced the introduction of Labour Service (RAD). Under this measure all men aged between the ages of nineteen and twenty-five had work for the government for six months. Later women were also included in the scheme and they did work such as teaching and domestic service.  Jewish businesses were confiscated and given to non Jews, whilst all Jews were forced to leave work, source one states that, ‘It was further necessary to remove the conditions giving rise to interference.’  Schacht also decided to introduce what came to be known as Mefo Bills, Mefo Bills were an alternative form of payment where the employee would take the bill to the bank and get it cashed in.  The government also introduced plans of freezing all taxes and wages.  They also took over shares and lowered interest rates to save people money.  This is referred to in source one, ‘Put a stop to the everlasting fluctuations of wages and prices.’    

However whilst the figures may have looked good the reality was quite different.  All Jews and women were not included on the unemployment list.  So in reality there were still many people unemployed but they were not thought as of important so were not included.  Also the whole issue of guns vs. butter debate comes into play; Germany’s main priority was to be war ready at any cost.  Therefore Schacht introduced restrictions on foreign imports, with the idea that all money should be being pumped into Germany and therefore benefiting rearmament.  Source two discusses this, ‘Rearmament dominated Germany’s economy.’

However after 1936, Schacht and Hitler had a falling out and Schacht stood down from his role.  Hitler decided to bring in the chief of the Luftwaffe, Herman Goering as his replacement, a man who has little to no experience on how economics work.  However the aims were still the same as before.  Hitler wanted Goering to enable Germany to be ready for war, however he wanted this to happen in 1942/43.  Goering aimed to create many new factories and this is referred in source one, ‘Create a number of technical and psychological conditions.’  Certain industries within Germany had an enormous amount of output increased such as the steel and iron industries.  Goering pumped a large amount of funding into these industries and in return output was dramatically increased.  This is stated in source one, ‘Planned provision of labour.’  However Goering brought many downfalls with him.  First of all, rearmament was hugely unsuccessful, the army only had enough ammunition and shells to last them six weeks, therefore the Wehrmacht was forced to use blitzkrieg tactics, which proved to be very effective in towns and cities.  Also Goering had no co-ordination between the departments in industry.  Therefore there was major wastage, shortages, the women had no role until the war began were they used in the factories and the railways were being used to transport Jews to the work camps instead of using the railways to transport ammunition, medical supplies and reinforcements.  This is stated in source three, ‘Rearmament dominated Germany’s economy.’ ‘Relatively modest level of weapons output.’  Goering also reinforced the guns and butter debate, therefore there was an enormous shortage of raw materials, an increasing state intervention and a more lasting recovery was prevented due to the fact that imports were lowered and exports were also lowered.  Therefore less money was coming into Germany.  This is referred to in source two, ‘Shortages of goods restrict their turnover.’  

• In conclusion, I feel that that both plans ended up being a huge failure.  We just have to look at the facts to find out why.  By 1939, Germany was importing 33% of its required raw materials,
• Government income had been 10 billion Reichsmarks in 1928. In 1939, it was 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939.
• 1933 to 1939, the Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Reichsmarks.
• Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures. The only increase was in rye bread, cheese and potatoes.
• Real earnings in 1938 were all but the same as the 1928 figure. (Real earnings are wages adjusted to allow for inflation).