At the same time economic recovery would mean more sources would be available and this would allow Hitler to rebuild German military power, allowing him to pursue his other priority of territorial expansion. In order to achieve this, Hitler believed that it was important for Germany to be self sufficient and geared for war; this was seen as essential following the disasters of the blockade during World War One. Hitler was very successful in achieving his aim of reducing unemployment. When the Nazis came to power there were close to six million unemployed, yet by 1 934 this had dropped to 2.
Lion and was down to 0. 2 million by 1938. Through public works schemes such as housing, land improvement schemes, the building of canals, rail and motorways, large numbers of jobs were created and the number of people in employment also rose. For many Germans this was Hitter’s greatest achievement and won him widespread support, one German commented: ‘l would have made a pact with the devil if it meant work’, so desperate was the situation when Hitler came to power. At the same time as this reduction in unemployment, industrial production rose y a staggering and GNP rose by 40%.
However, although jobs were created, some of them paid very little and were very mundane in nature and the introduction of compulsory labor service in 1935 introduced further control over the workers. At the same time, although the recovery cannot be denied there are certainly question marks over how far it was due to Nazi economic policies. Many of the public work schemes were already underway under Whimper and the Nazis simply expanded these. The trade cycle and the world economy had reached their lowest points before the Nazis came to rower and afterwards it began to improve, helping the Nazi position.
Despite these advantages it was the public investment, led by the State, which did most to aid the recovery. The Increased public spending stimulated demand and increased national income, but just as importantly Stomach was able to achieve this without inflation through his control of prices and wages. Therefore, through careful management, there is little doubt that the Nazis did much to bring about recovery and take advantage of a favorable tuition to bring about full unemployment, even if 25% of those employed were in the armaments industry.It is almost impossible to separate economic issues from foreign policy as Hitter’s main concern was to rearm Germany for war.
Although Germany went to war in 1 939, suggesting that economic preparations in this area had been successful, this is far from the case. There is little doubt that the initial stages of rearmament created serious problems for the economy and revealed structural weaknesses that had been hidden in the early years. Until 936 the balance of payment problem had been hidden by Stomach, but as the demand for rearmament increased, balance of payments went further into the red.This was reflected in the crisis of 1935-6, when German farmers’ failure to produce enough food meant that imports were needed. The government had to allow the imports as they feared the reaction to the introduction of food rationing. This raised the ‘Guns or Butter debate and clearly showed that in 1 936 the German economy was unable to meet both demands. The attempt to solve these problems through the introduction of the Four Year Plan in 1936 was of limited success.
The aim was to ensure that the German economy was ready for war within four years. However, the response was very mixed. Although there was increased production in the aluminum and explosives industries, production levels fell short in the key commodities of rubber and oil and certainly never reached the levels demanded by the armed forces. However, the plan did stop any further increased reliance on imports, but even at the start of the war Germany still needed a third of its raw materials from abroad.