• When he came into power Hitler had two economic objectives, one short term, the other long term.
• Short term objective= to bring down level of unemployment in Germany which he had promised in his electoral campaigns- called campaign the 'Battle for Work.'
Long term objective= to reshape Germanys economy as a 'war economy'- what Hitler wanted ABOVE ALL was to wage total war.
How unemployment was decreased:
• 1932-33 world economic depression bottomed out, leading to a 'natural' economic recovery and consumer spending and company investment increased- so unemployment rates would have decreased without Nazi input.
• Schacht focused investment in programme of public works (eg construction of the 7,000km of autobahnen, HOWEVER number of jobs it created were actually not high, as lower profile schemes in house building, land reclamation employed a lot more workers.).
Schacht's NEW PLAN 1934: Secret rearmament programme sucked huge quantities of imported raw materials into Germany when exporters were struggling due to import taxes.
• Left Germany with a sizeable TRADE DEFECIT, meaning the values of imports exceeded value of exports.
• Schacht responded with the New Plan, which states no one could import goods into Germany without his permission- this solved the immediate problem but was tough for ordinary Germans as it meant fewer food importants and food shortages.
FOUR YEAR PLAN 1936- Hitler recognised increasing size and firepower of Germanys armed forces was only one of the challenges involved in war preparation; needed to ensure Germany was not starved of vital resources by its enemies (like WW1 naval blockade.)
• Core aim of plan was to make Germany's economy as self sufficient as possible (autarky.)
Implementing economic self-sufficiency:
• Goering aimed to reduce the need for imports of food and raw materials by:
1. Encouraging German farmers to grow more food, for example given grants to bring new land under cultivation.
2. Industries to use raw materials in Germany even if imported ones were cheaper or of better quality (low grade home iron ore vs higher quality ones.)
3. Developing artificial substitutes for natural products (ersatz goods)= motor fuel from coal, ersatz rubber.
4. Extensive programme of labour retraining to maintain workers with essential skills.
SUCCESS OF FOUR YEAR PLAN= only partly successful.
• Y: Hitler did not expect plan to make Germany self-sufficient in all respects, accepting the need for more Lebensraum 'living space' to allow Germany to feed itself.
• N: Agriculture often abandoned during war preparations; land given away, labourers made to work in factories- around 1.4 million workers left the land between 1933 and 1939 due to the Reich Entailed Farm Law (only one heir.)
Was Germany ready for war in 1939?
• Yes= had an army of nearly 4 million men, air force of 3,000 warplanes.
•NO= However army leaders still doubted whether the country was ready for war.
• Concern was equipment, due to shortages of labour and raw materials as well as mismanagement.
• Stocks of ammunition low.