Hitler's economic policies - Politics Forum.org | PoFo

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Inter-war period (1919-1938), Russian civil war (1917–1921) and other non World War topics (1914-1945).
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By Erebus
#1721737
Think what you want about Hitler, his economic policies were largely a success.


Going back to this quote made in another thread, I'd like to expand on this and discuss Hitler's economic policies, its successes, failures etc.

Generaly thoughts about Hitler's policies and economic views are largely welcome.

What are your suggestions on Hitler's economic policies? Were they really a success? Why, why not?
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By Okonkwo
#1721803
First of all, Adolf Hitler was a terrible human being, a twisted, sick man and he brought irreparable shame on the German population under which it still suffers.
Nonetheless you have to admit that the Führer revitalised the devastated German economy through some of his policies. He caused a strange sort of - maybe unintentional - modernisation of German economics and overall lifestyle.
Hitler's approach to economics seemed to be a largely pragmatical. He neither endorsed the planned economy of the socialists, nor the laissez-faire economics of the right.

Success:
He helped create millions of jobs in pre-war Germany. He did this by ordering many partially publicly funded programmes, for example the building of Autobahnen, Nazi monuments and architecture and by supporting the car industry, thus creating Volkswagen.
Under Hitler's regime the propagandists of Nazism boasted about Germany's full employment. While this might not have been entirely the case, Hitler did away with the rampant unemployment of the Weimarer Republik, that was the cause of many protests, marches and clashes of workers and police. He also managed to bring the working class on his side, that originally always voted left in Germany.
How did he financiate all his prestigous programmes? He did it by cheating, with the help of the former president of the Reichsbank, Hjalmar Schacht (who actually is responsible that Iran is called Iran nowadays, and not Persia, but that is another story). Schacht created an imaginary company and initiated the so-called Mefo-Wechsel, by loaning credits with low interest rates. The fact that they were thus breaking the Treaty of Versailles didn't seem to bother anyone anymore.

Failure:
Well apart from the fact that Hitler not only created the Volkswagen car only to use it in war later, he also created the jobs purely to expand the industrial production, the military, another violation of the Treaty.
Another fact is that wages for ordinary workers actually fell under Hitler's 3rd Reich. While the standard of living rose for anyone who was active in the NSDAP, the actual wage of the working population fell by 25%, he forced workers to work at lower prices and - while giving them valuable jobs, exploited them shamelessly.

Concluding, Hitler's economic policies had a lasting effect on the German economy, his Autobahnen are still there, the Volkswagen is a very popular car and unemployment still creates displeasure.
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By pikachu
#1721814
Mefo Bonds, when presented to the Reichsbank could be converted into cash. Schacht designed the bonds to be short term so that there would be ready public acceptance of the bonds, which paid an interest rate of four percent, an acceptable figure at that time, and normal banknotes hidden under the mattress paid no interest at all! The public eagerly accepted the bonds and Adolf had his billions with which to create jobs without causing inflation. In the next four years the public subscribed to over 12 Billion marks worth of Mefo Bonds.

By the end of Adolf Hitler's first year in office unemployment had fallen from 6,000,000 to 3,374,000. An unprecedented 2,627,000 jobs had been created at a time when the rest of the world was in deep economic recession.

As the creation of jobs progressed, government income automatically increased due to several factors:
* Many unemployed and destitute no longer needed to be supported out of State Funds
* The newly employed now paid tax from their wages
* With increased confidence, private industry in turn dared to expand and employ new staff

Five years of National Socialist industrial and economic activity show that:
* Paper manufacture has increased by 50%
* The manufacture of diesel oil has increased by 66%
* The production of coal has increased by 68%
* The production of oil fuel has increased by 80%
* The production of mineral oil has increased by 90%
* The production of artificial silk has increased by 100%
* The production of Kerosene has increased by 110%
* The production of steel has increased by 167%
* The production of lubricating oil has increased by 190%

"German economic salvation has been brought about solely through the efforts of the German people and the experience they have gained. Countries abroad have contributed nothing to this." "We have made it possible, without gold and without foreign exchange, to maintain the value of the German mark. Behind the German mark stands the German capacity for work, while some foreign countries, suffocated by gold, have been compelled to devalue their currencies." — "Today in May, 1938, the world around us suffers from the anxiety which the unemployment of millions brings with it. In Germany we begin to be anxious because we have not enough workmen."
Adolf Hitler
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By Igor Antunov
#1722291
We have to look at things in context. Hitler revived the german economy, but in doing so, he had no choice but to go to war. Spend spend spend, the german economy was an expansionist entity, it could only survive by continually gobbling up other resource bases. It was probably not sustainable, what hitler built.
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By Nattering Nabob
#1722385
Hitler's economic policies consisted of government spending.

Period.
By Manuel
#1722438
He built the Autobahn, the most advanced highway system in the world at the time.

He was also smart enough to realize that autarky for Germany was an impossibility, and wasted no time, as Mussolini did, in attempting to accomplish it.
By Smilin' Dave
#1722490
Most of the positive aspects of the early Nazi economy can be atributed to others, rather than Hitler. Hjalmar Schacht wasn't much of a Nazi, and many of the big contruction projects etc. were already on the books prior to the Nazi rise to power. They just hadn't been actioned, allegedly because they were considered socialist in nature.

On the other hand many of the negative aspects can be atributed to Hitler. First lets remember that the Nazis were experiencing an agricultural crisis in the lead up to the war. This in turn related to another problem in the form of foreign exchange.

Having insisted on the paramount importance of rearmament the Nazis shifted the emphasis of imports to oil, rare minerals etc. rather than food stuffs. The short term loans Pikachu mentioned were a good idea, but the Nazis were unable to cover the costs of those loans, which all came back fairly quickly. In this context, a long term loan would have the advantage of letting you pay it off over a longer period. These debts and imbalances would prompt the Nazis to seize the gold reserves of every country they occupied, in order to keep the government afloat. The rapid regeneration and growth of the Nazi economy carried a price which the Nazis were unprepared for.

Industry under the Nazis was also quite inefficient. The rush to expand for rearmament resulted in a somewhat uneven growth. For example light industry tended to be neglected, which has an impact on consumer spending and real wages. It was also found by the Nazis, when they did finally gear up for total war, that many industries were using inefficient labour (which helped with the total employment the Nazis were so keen on) and production practices. Some of Albert Speer's most important reforms involved simple reorganisation of supply and logistics, or even factory layouts. Perhaps the Nazi economy had failed to impose sufficient 'market discipline', or prompt innovation?

And just while I'm rambling, the economic benefits of the autobahns are exaggerated (at least in the short term). Job creation has to be offset by the costs of construction and reduction of the labour pool for other industries. The roads themselves were not that useful. Trains remained more important, being more efficient from a logistics point of view.
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By R_G
#1722500
Putting the spending as Pre-War at home during a War was pretty stupid....
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By LAz
#1848001
Are there any good books or sources on the economic situation of Germany during the Nazi era?

Where are the statistics from that are mentioned in this topic?
#13800444
i am also agree with most of them wrote here..no doubt Adolf Hitler was a terrible human being or he was a prominent leaders in the history of the world....most of the peoples considering his best and worst sides..because to someone he was a ruler, and the same time to others he was a murderer..i am researching to write an Essay on Adolf Hitler
#13801009
Hitler DID NOT invent the concept of Autobahn. It was conceived during the Weimar Republic before 1933, but the main implementation happened during the 3rd Reich.

http://en.wikipedia.org/wiki/Autobahn#History
http://german.about.com/library/blgermyth08.htm

Apart from this, the Nazi economic program wasn't that great. Government spending (yes), a freeze of prices and wages which resulted into an invisible inflation and a shortage of goods. The economic policies are probably better explained in this article about Hjalmar Schacht, the minister of economics between '33 and '37:
http://en.wikipedia.org/wiki/Hjalmar_Sc ... Government

In '38, Walther Funk replaced Schacht and he began to expropriate Jews. Beginning in '39, Germany did the same with conquered nations and could therefore cover its serious economic deficiencies. As a result of all that, in 1945, Germans sat on tons of Reichsmark which were absolutely worthless. For years they had to use food stamps and stamps for basically everything because there was no functioning market, only shortage.

In short: The economic policies of the NSDAP didn't have the goal that economic policies have today (increasing wealth), but to prepare for war. Therefore one needs to evaluate them differently.
#13801023
As I understand it, germany didn't even engage in a war economy until 1944, which in retrospect is ridiculous. Furthermore the female workforce was completely wasted (barely used) even as the soviets were knocking on the gates of berlin.

During the heaviest allied strategic bombing phase of german industry (1944), production of tanks/aircraft/etc actually went up, because this is when hitler initiated a war footing and retooled more factories for war materiel production, but Germany never entered a total war economic footing, in the ways britain and russia did.
#13801098
German women were much more involved in the work force than in western nations. At the start of the war there were more German women involved in full time work than reached at the peak of women's involvement in labour in Britain. These were mainly in agriculture. The German economy was on a full time war footing before the war stated. The lack of labour and resources were the constraints not under utilization. The myth of lack of war economy I blame Speer for, you just cannot trust a world that man said.

The malnutrition of foreign labour was a major inefficiency of the Nazi war time economy. They systemically half straved their heavy labour force, thus getting much less effective labour.

A lot of the subsequent higher production later in the war was due to a number of factors. (1) It took 6000 hours to make a fighter in 1939, 2000 in 1944 thus was a well known and expected learning curve in industrial production predicted before the start of the war by experts both in the US and Germany (the decrease was much the same in all countries. (2) the Germans devoted a lot of resources to building planet, more production capacity as this came on line, production increased. (3) In aircraft, single engine fighters were 30% of production in 1939 but 70% in 1944, they were building more numbers of simpler aircraft, production going up was producing more fighter than bombers.
#13801171
It was slightly less socialistic than Stalin's Russia but overall still incredibly centrally planned, the Nazi's determined prices, production amounts and what was to be produced, that makes them very socialistic.

The popular myth that Nazi economics had anything to do with capitalism is just one huge dirty lie invented by socialists in order to distance themselves from their ideological association with the german national socialists.
#13801190
Kman wrote:It was slightly less socialistic than Stalin's Russia but overall still incredibly centrally planned, the Nazi's determined prices, production amounts and what was to be produced, that makes them very socialistic.

The popular myth that Nazi economics had anything to do with capitalism is just one huge dirty lie invented by socialists in order to distance themselves from their ideological association with the german national socialists.
Well, of course Hitler railed against corrupt capitalism because it was harmful to the economy, just as it is in the US today. When Hitler socialized more of the economy unemployment went way down. Considering the unemployment problem in the USA it would be wise to follow this example and that is exactly what Obama is trying to do, however he is being roadblocked every step of the way, mostly by Republicans. Therefore we will continue to see horrific unemployment rates until the American people kick the Republicans out of office and put rational, reasonable adults in charge of tackling the unemployment problem.

The longer the Republicans have control of the House and/or filibuster power in the Senate the longer the USA will remain in economic crisis. And sometimes I think economic crisis is exactly what the Republicans want because they think it will help them defeat Obama.
#13801201
Getting out of a deflationary/ low inflation depression is not brain science, although it seems beyond the wit or the will of most political leaders.

Firstly print money and pay off government debt to increase demand. That in itself will probably be sufficient. But secondly smash union power to avoid a wage / price spiral. The Nazis increased demand in the economy and they smashed union power, that's why they were so successful in reducing unemployment and getting the economy growing. Remember in the mid to late thirties the Soviet economy was growing even more dramatically. Essentially using these two methods of increasing demand and holding down real wages. with the addition of very squeezing the workers and peasants to finance high levels of investment. One of Germany's big difficulties was that they held the exchange rate artificially high largely for totemic reasons which introduced huge distortions. However a move towards autarky was necessary if the Nazis were going to go to war and be cut off from the world market for any length of time,
#13801236
The Nazi's didnt create some sort of economic miracle, they replaced a horrendous regime that was destroying the currency with an equilly bad economic policy, germans were not rich or prosperous during the Nazi pre-war years, they were dirt poor working slave like working weeks in order to build up an army for the lunatic Hitler.

Unemployment levels are not the be all end all indicator of economic health, the Soviet Union had 0% unemployment but the economy was still atrociously bad and living standards were incredibly low.
#13801661
Igor Antunov wrote:As I understand it, germany didn't even engage in a war economy until 1944, which in retrospect is ridiculous. Furthermore the female workforce was completely wasted (barely used) even as the soviets were knocking on the gates of berlin.

During the heaviest allied strategic bombing phase of german industry (1944), production of tanks/aircraft/etc actually went up, because this is when hitler initiated a war footing and retooled more factories for war materiel production, but Germany never entered a total war economic footing, in the ways britain and russia did.


That is true. For example, aircraft production was at maximum during 1944. During the Battle of Britain in 1940, the UK produced around four times as many fighters as Germany.

However, that is totally OK within the parameters of Nazi-thinking. They always planned for short campaigns, never for long wars. They always thought that a compain would be over within weeks or months. That was true until 1940, after that it failed. However, it took a while for Germany to be put on an economic war footing. It started when Albert Speer became Minister of War production (or whatever "Reichsminister für Rüstung" translates into English) in 1942 or so.
#13859142
Actually the Nazis were privatising stuff in the 1930s, at a time when most other countries were nationalising companies to try to survive the Depression.

American companies increased their investment in Germany by 50% during the period 1933-41 approx.

Hitler had no interest in economics by the way, he saw that as a strength, and for him it probably was as he was a populist.
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