Key facts and dates

Nazi economic policies between 1933 and 1939 were designed to rebuild Germany's economy, reduce unemployment, and prepare for war. Under leaders like Hjalmar Schacht and Hermann Göring, these policies combined public works, rearmament, and statistical manipulation, often prioritising military goals over long-term economic stability.

Timeline of key events

• 1933 – Hjalmar Schacht appointed President of the Reichsbank, later becoming Economics Minister. Public works programmes, like autobahn construction, begin to combat unemployment.
• 1935 – Rearmament intensifies, boosting industrial production and job creation.
• 1936 – Hermann Göring introduces the Four-Year Plan to achieve autarky and prepare for war.
• 1937 – Expansion of synthetic materials (ersatz products) and heavy industry under the Four-Year Plan.
• 1939 – War economy fully prioritised, with increased reliance on forced labour.

Nazi economic goals and key figures

Nazi economic policies from 1933 to 1939 aimed to rebuild Germany after the Great Depression, reduce crippling unemployment, and gear the nation towards military expansion. These policies were shaped by two key figures, Hjalmar Schacht and Hermann Göring, each with distinct roles and approaches in steering the economy.

Roles of Hjalmar Schacht and Hermann Göring

• Hjalmar Schacht (President of the Reichsbank, later Economics Minister) - Schacht focused on economic recovery in the early Nazi years. He implemented strategies to stabilise the currency, manage national debt, and stimulate growth through state intervention, laying the groundwork for reducing unemployment.
• Hermann Göring (Four-Year Plan Leader) - Taking over economic direction in 1936, Göring shifted the focus towards militarisation. His aggressive policies prioritised war preparation over civilian needs, driving industrial expansion and resource self-sufficiency.

This dual leadership reflected a transition from recovery to war readiness, with Schacht's financial expertise giving way to Göring's militaristic vision as Germany approached the late 1930s.

Measures to reduce unemployment

One of the Nazis' most urgent priorities upon taking power in 1933 was tackling mass unemployment, which had soared during the Great Depression. Through a range of measures, they sought to create jobs and restore public confidence, though not all methods were sustainable or equitable.

Key strategies to combat unemployment

• Public works programmes - Large-scale infrastructure projects, such as the construction of the autobahn (motorway network), provided jobs for thousands of workers. These projects improved transport while showcasing Nazi achievements.
• Rearmament - From 1935, heavy investment in military production created demand for labour in industries like steel and weaponry, significantly boosting employment figures.
• National Labour Service (RAD) - The Reichsarbeitsdienst (RAD) was a compulsory labour programme for young men, involving work on public projects like road-building and land reclamation. It reduced unemployment statistics by engaging participants in state-directed tasks.
• Removal of women and Jews from employment statistics - The Nazis manipulated figures by encouraging women to leave the workforce for domestic roles and excluding Jewish workers from official counts after discriminatory laws forced them out of jobs. This artificially lowered reported unemployment rates.

These measures achieved a rapid drop in unemployment, but the reliance on statistical manipulation and militarised industries raised questions about the depth of genuine recovery.

The pursuit of autarky and the Four-Year Plan

A central goal of Nazi economic policy was achieving autarky, or economic self-sufficiency, to reduce dependence on foreign imports and prepare for war. This ambition became formalised under Hermann Göring's Four-Year Plan, launched in 1936, which reshaped the economy for military purposes.

Autarky

Autarky refers to a policy of economic independence, aiming to produce all necessary goods domestically to avoid reliance on international trade, especially crucial in wartime. For the Nazis, autarky was vital to ensure Germany could sustain itself during conflict, avoiding blockades or shortages that had crippled the nation in the First World War.

Key features of the Four-Year Plan (1936)

• Development of synthetic materials - Known as ersatz products, these substitutes (like synthetic rubber and fuel) were created to replace imported raw materials, ensuring resource availability.
• Expansion of heavy industry - Focus on steel, coal, and chemical production supported military needs, with factories reoriented towards armaments over consumer goods.
• Subordination to military goals - Economic policy was fully aligned with war preparation, prioritising army supplies and infrastructure over civilian welfare, often at the expense of living standards.

This plan marked a decisive shift, embedding war readiness into every aspect of economic planning, though it strained resources and limited consumer access to goods.

Controls on wages, prices, and consumption

To manage the economy under the intense demands of rearmament and autarky, the Nazi regime imposed strict controls on various economic aspects. These measures aimed to prevent inflation and direct resources towards military priorities, often at the cost of ordinary Germans' living conditions.

Mechanisms of economic control

• Wage controls - Salaries were capped to prevent spiralling costs in a rapidly expanding war economy, limiting workers' purchasing power despite increased employment.
• Price controls - The government fixed prices on goods to curb inflation, though this sometimes led to shortages as producers struggled with low profit margins.
• Consumption restrictions - Civilian access to consumer goods was curtailed, with resources redirected to military production. Rationing and limited availability became common as the economy prioritised guns over butter.

These controls maintained a semblance of economic stability but fostered public discontent as personal financial gains remained elusive for many.

The relationship between Nazi policies and major industrialists

Unlike socialist regimes that might nationalise industries, the Nazis opted for coordination with big business, allowing industrialists to retain ownership while aligning them with state goals. This relationship offered mutual benefits but came with ethical compromises.

Dynamics of business under Nazi rule

• Coordination over nationalisation - Major industries were not taken over by the state but were brought under tight government influence through regulations and production targets, ensuring alignment with Nazi objectives.
• Profit opportunities from rearmament - Industrialists gained lucrative contracts from the military build-up, with companies like Krupp and IG Farben profiting immensely from producing weapons and chemicals.
• Exploitation of forced labour - As the war economy intensified, businesses increasingly relied on forced labour, including prisoners and workers from occupied territories, to meet production demands under harsh conditions.

This partnership fuelled economic output but tied industrial success to militarisation and exploitation, creating a morally compromised economic structure.

The "economic miracle" and its sustainability

The Nazi regime often touted an "economic miracle" in the 1930s, pointing to dramatic reductions in unemployment and surges in production. However, the reality behind these achievements reveals a more complex and unsustainable picture.

Assessing the "economic miracle"

• Apparent success - Unemployment fell from over 6 million in 1933 to under 1 million by 1939, while industrial output, especially in military sectors, soared, creating an image of rapid recovery.
• Statistical manipulation - Much of the unemployment reduction was due to excluding certain groups (like women and Jews) from figures and mandating labour through schemes like the RAD, rather than creating sustainable jobs.
• Militarised focus - Economic growth was heavily tied to rearmament, diverting resources from civilian needs and building an economy overly dependent on war preparation.

Challenges to sustainability

• War-oriented economy - The focus on military production neglected long-term civilian infrastructure, creating imbalances that could not be maintained without conflict to justify expenditure.
• Resource strain - Pursuing autarky and synthetic production overextended natural resources and industrial capacity, risking collapse if war did not materialise or sustain demand.
• Limited genuine recovery - While production increased, living standards stagnated for many due to wage controls and consumption limits, undermining claims of a true economic revival.

The "economic miracle" thus served as powerful propaganda but masked underlying weaknesses, with policies creating short-term gains at the expense of long-term stability.