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Hitler’s Economic Miracle

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  • Pages: 5
  • Word count: 1004
  • Category: Economics

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When Hitler was elected chancellor in 1933, Germany was an economic mess. Before he came to power, Germany’s economy had already endured a lot. By 1914 Germany had become Europe’s most powerful economic and military power. That was second only after the United States in the world. After that, 4 terrible years of warfare leaded Germany, by 1918, to economic ruin. Warfare was the fact that they couldn’t export or import industrial goods and were limited in trade. As a result of World War 1, Germany wasn’t any longer the second most advanced nation in the world by 1919. Also the terms of the Treaty of Versailles obliged Germany to pay a huge sum in reparations to the others. In 1921, Germany couldn’t pay that sum and French troops invaded and occupied the Ruhr.

They took away goods and raw materials that were strongly needed by the Germans. Those reacted by printing more money and by 1923 they had reached hyperinflation. After some rough years came a better time for Germany. The years 1924 to 1929 are now known as “The Golden Years”. It became peaceful and USA lent Germany a lot of money. The economy was then rebuilt and unemployment was reduced. People began to feel more secure. But that time didn’t last long. The collapse of the American economy after the Wall Street Crash during 1929 had huge consequences on a lot of countries in Europe. Unemployment and poverty was growing more and more between 1929 and 1933.

Hitler realised that he was going to work hard to get support from the Germans to solve the massive problems his country had. The main problems were unemployment, Autarky and hyperinflation. By the time Hitler became chancellor, the unemployment rate was at 6 million people. This meant 1 men out of 3 was without work. He also saw that Germany had to become self sufficient if it wanted to survive a war. Being independent and not needing help from anyone was very important for him. That is why international trading was one of the things that were massively cut down. Finally, a major problem for the economy was the hyperinflation under the power or the Weimar Republic. After World War 1, Germany had to do a lot of reparations. To pay everything, they had to borrow money from France, because the Mark had nearly no value, because of the Treaty of Versailles. Germany couldn’t pay everything back when the French asked for it and so they invaded the Ruhr. To avoid more complications, Germany printed a huge amount of money. The Mark was practically worthless and so this lead to hyperinflation.

Hitler introduced Nazi economic policies to solve those major problems. The SA arrested the trade union leaders and replaced it with the DAF, the Labour Front, which was the only allowed union. The employees got high wages, security, leisure programmes, canteens, pauses and regular working times. The German workers were satisfied by what the DAF gave them. In return all they had to do was having absolute loyalty towards the Nazis. Hitler also created the organisation, Strength trough Joy. It encouraged people to work as hard as possible for Germany. They would then get cheaper holidays and cars.

To create more jobs, Hitler banned some machinery that would take places of human jobs. Another clever “job creator” was the autobahn project. Just a few days after the Nazi takeover, Hitler was very enthusiastic about making this autobahn construction project work properly. He appointed Fritz Todt to lead the project. By 1936, more than 130’000 workers were employed directly on the construction site and other 270’000 in factories, supplying chains, constructions equipment, steel, concrete etc.… Full employment was almost reached by 1936. The autobahn weren’t primarily intended as an infrastructure improvement, but it was well used. Cars had therefore to be built what gave even more jobs. This project turned into a massive propaganda event with the use of media. Everyone was interested by it and Hitler became even more popular.

Factories for weapons were opened and helped rearming at the same time. This was also very important to Hitler. He wanted to be powerful and not only with the economy, but also military. When he did something that helped the economy he always made sure that it could help him in other ways to. For example here: a lot of jobs were created in factories and at the same time Germany became military more powerful. This could only help Germany. Air force was built as well as the navy and a lot of weapons. So that no money was wasted, some of the weapons were bought cheaply from other countries. To be social and popular with the people, more radios were produced, so that not only more people could work, but also people could then listen to his speeches and other important propaganda. Hitler also created the organisation, Strength trough Joy. It encouraged people to work as hard as possible for Germany. They would then get cheaper holidays and cars. With this method, nearly everybody was happy working under the command of the Nazis. To make sure that inflation won’t happen again, the government introduced a price control. This means that there are restrictions on the prices charged on goods and services.

To summarize, the plan was to reduce unemployment, reduce imports, increase productivity and make trade agreements with other nations after Germany had to endure a horrible time during and after WW1. The economy was at its lowest and people were sceptical. They then made unemployment fall from 6 million in 1933 to barely anything by 1939. This led to a great industrial production, which was way above the Weimar Republic before. The economic policies, which were supported by deficit spending, such as the construction of the Autobahn, stimulated the economy and then reduced unemployment. At the same time price controls prevented the coming back of inflation. This propelled Germany out of a deep depression .

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