by Tina Kong
After the First World War, the Allies imposed a Diktat (Dictated Peace) on Germany – the Treaty of Versailles. This, to the Germans, was a challenge to their national pride and dignity; for some Germans, the Diktat was unacceptable, and they were willing to do anything to overturn it. One of them was Adolf Hitler.
Ambitious and brutal, he served in the Bavarian Army during the First World War and had experienced the collective grief and suffering after Germany surrendered on the 11th of November 1918. Hitler was also part of the political instability during the Weimar era, and savoring on Germany’s misery and desire to reform, he came out on top – first as a Chancellor of a coalition government, then the Fuhrer of Germany in August 1934.
This section will discuss Hitler’s economic policies. However, one must note that although Hitler promised the people of Germany many reforms, he did not specify nor have a distinct blueprint of his plans and policies to tackle Germany’s problems. And as such, contemporary historians often viewed Hitler’s economic measures as ad hoc policies.
Nevertheless, to a large extent, Germany under Hitler in the pre-war years did recover economically. Partly to remain popular and worshipped, and partly to build a strong foundation for his expansionist policies, Hitler viewed the reconstruction of the German economy as an important step towards his ultimate goal of creating a Greater Germany and of expanding into the East. One of Hitler’s big promises to his people was “Arbeit und Brot” (work and bread), which signifies his aim to abolish unemployment. And he achieved it; unemployment had fallen from 6 million in 1932 to less than 1 million in 1938. However, some of his methods used to achieve this were undesirable to society and the economy.
For example, to create demand for labor, newly established capital such as machinery was unable to be brought into use. Although this avoided structural unemployment, it can be argued that this scheme reduced efficiency in the workplace. In addition to this, Hitler dissuaded women entering the workplace as well as dismissed them from the workforce, replacing them with men.
Nazi society mirrored a very traditionalist and men-dominated society. But is it fair to take away the freedom of German women at the time? Another significant measure Hitler took was the announcement of rearmament and consequently, conscription for all unemployed by 1935.
This reduced the unemployment figures as well as created jobs in the heavy industry as Germany prepared for war. Parallel to that, job opportunities arose from the public works that Germany had embarked on, such as the Autobahn. It was no coincidence, as the war was imminent.
As a result of Hitler’s rigorous methods, Germany was in shortage of labor by 1939. The economic policies under Hitler were greatest benefited by big businesses such as IG Farben and Volkswagen. This was because they had state support, and with the establishment of the DAF (General Labour Front), the possibility of strikes was annihilated. The DAF, organized by Robert Ley, was a compulsory organization for workers to join and in doing so, they were under the control of the state. In this trade union-free environment, wages remained low and the workers could not find better-paid jobs; therefore, they were discontent and had no incentive to work.
Looking back with the lens of economics, Hitler had many protectionist policies and was not running Germany on a free market economic system. He leaned towards socialism, and it was no surprise that the foundational Nazi policy of the time was called National Socialism. Yet, it was not completely state-controlled, as big industries and businesses could flourish if they cooperated with Hitler. Many of Hitler’s decisions were war-based, and this was one of them; Hitler had to transform a once heavily dependent economy into one that is self-sufficient and would not have to rely on its enemies’ resources. Yet to what extent was it successful is the question on the debate.
Was Hitler’s fiscal policy too lenient towards heavy government expenditure on rearmament at the costs of the food supply?
Perhaps this was what the Germans referred to as “provisions crisis” in the mid-1930s.
Despite banning food imports, which led to shortages and an upwards pressure for the price of food, Noakes and Pridham from Nazism 1919-1945 estimated that Germany was still heavily reliant on imports, composing a third of its raw materials. However, another historical viewpoint suggests that Hitler’s economy was a “miracle”, a view supported by Ben Shalom Bernanke author of "The Macroeconomics of the Great Depression: A Comparative Approach."
The German economic figures did improve since the Great Depression. But what is it like in the long run after when Hitler would have depleted all his nation’s gold reserves through his “massive deficit spending”, heavily subsidizing the auto and heavy industries?
Hidden under the mask of the Blitzkrieg war successes up until 1941, a long and drawn-out war, one that Germany knows it couldn't sustain with its current resources, was looming ahead.
References: 1) https://mises.org/library/hitlers-economics
3) One Soldier and Hitler by Johnson, David