How successful were Hitler's economic policies 1933-1939? Prior to the Nazis coming to power the German economy was suffering a severe depression. The German economy in the 1920s relied heavily on American investment that stopped after the Wall Street Crash in 1929. By 1932 unemployment had reached six million and Hitler was promising to end unemployment and solve the financial crisis. These promises helped Hitler to power in 1933.
Germany was very reliant on overseas trade for vital raw materials and food supplies. Hitler adopted a policy of making Germany self-sufficient and to end the reliance on overseas trade. This complemented the policy of lebensraum and the expansion of Germany to the east to take control of the natural resources and agricultural land of Eastern Europe. Hitler imposed tariffs on agricultural imports in an effort to promote the development of German agriculture. Hitler was fortunate that the German economy was just beginning to recover when he got into power.
One of the first measures Hitler introduced was to ban trade union and arrest the trade union leaders. The Nazis wanted all aspect of German society under their control and could not allow trade unions to disrupt their economic plans by organising strikes and opposing the Nazis. The Nazis introduced a pay freeze in 1933 in order to increase profits to fund future investment and wage rates were then dictated by the Nazi Labour Front rather than between employers and workers. These measures allowed employers to increase profits and it contributed to the economic recovery.
The Nazis needed to dramatically reduce unemployment in order to maintain their support in German society. Investment was made in labour intensive infrastructural programmes like building the autobahns. Work contracts were given to companies that employed manual labour rather than machines and many labour-saving machines were banned by the Nazis. The measures reduced unemployment and contributed to economic growth.
The Nazis pursued a policy of re-armament. Workers were employed in factories producing weapons and military equipment. The Nazis introduced conscription into the armed forces and 500,000 Germans were conscripted into the army. These measures further reduced unemployment and were a successful measure from the perspective of the Nazi regime.
A further measure implemented to reduce unemployment was to encourage women to work in the home rather than in industry or services. Women working in certain professions and the civil service were dismissed. Hitler’s policy of providing loans to couples to have children also encouraged women not to seek employment outside the home. Unemployment was reduced as men replaced women in the workforce and the loans to couples stimulated economic activity as the loans were spent in the economy.
As a result of these measures unemployment dropped from 6 million in 1932 to 300,000 by 1939. Industrial production in 1939 had recovered to levels reached before the Wall Street Crash in 1929. However, the Nazi policy of autarky had failed. Instead of being self-sufficient, Germany was still importing 33% of its raw materials in 1939. Real incomes for workers in 1938 were at the same level as in 1928 and food consumption had actually dropped during the same period. While on the surface the Germany economy improved significantly after the Nazis came to power, they failed to implement some of their policies and the lives of ordinary people did not improve under their rule.
The Nazis implemented a major investment programme and this was paid for by borrowing money. German government income increased from ten billion Reichmarks in 1929 to fifteen billion Reichsmarks in 1939. However, during the same period government spending increased from twelve billion Reichsmarks to thirty billion Reichmarks. The policies of the Nazis resulted in a massive increase in government debt which reached forty billion Reichsmarks in 1939. As a result the German economy was on the verge of collapse at the beginning of World War Two.
Hitler’s economic policies dramatically reduced unemployment and led to economic growth and as such could be claimed as a success. However, the policies the Nazis introduced resulted in a massive increase in German government debt. As a result it could be argued that the economic policies of the Nazis were a failure. In effect World War Two came just in time to stop the German economy collapsing and the war economy allowed the German economy to continue to grow. By the end of World War Two Germany had been devastated and it was only because of the Marshall Plan that it recovered and avoided the crisis that followed World War One.