Nazi Economic Policy and Rearmament (1934-1939)

1. Introduction

For students beginning their exploration of Nazi Germany, it is essential to understand the significance of economic history, as it provides valuable insights into the inner workings and motivations of the regime. The period between 1934 and 1939 saw a dramatic transformation of the German economy under the Nazi Party, with a focus on rearmament and self-sufficiency. A thorough examination of Nazi economic policies and their outcomes sheds light on how the regime sought to consolidate power, address domestic issues, and prepare the nation for war. This article offers an introductory overview of the key events and developments of this crucial phase in German history.

This article follows on from The Consolidation of Nazi Power and the Establishment of the Third Reich

2. The goals of Nazi economic policy

The Nazi economic policy aimed to achieve two main objectives: reduce unemployment and prepare Germany for self-sufficiency (autarky) and war. The Nazis sought to alleviate the economic hardships faced by the German people during the Great Depression, while simultaneously strengthening the nation for their expansionist ambitions.

3. The role of Hjalmar Schacht and the New Plan

Hjalmar Schacht, appointed as Minister of Economics in 1934, played a pivotal role in shaping Nazi economic policy. Under Schacht’s direction, the New Plan was introduced to regulate foreign trade, manage currency, and ensure the efficient allocation of resources for rearmament. Schacht negotiated trade agreements with other countries, aiming to acquire essential raw materials for Germany’s industrial and military needs.

4. Public works projects and employment

The Nazis implemented large-scale public works projects, such as the construction of the autobahn network and infrastructure development, to reduce unemployment and stimulate economic growth. In addition, initiatives such as the “Strength Through Joy” (Kraft durch Freude) program aimed to improve the living standards of German workers and boost consumer demand for German-made goods.

5. The Four-Year Plan and the push for autarky

In 1936, Hitler introduced the Four-Year Plan under the direction of Hermann Göring, with the goal of achieving self-sufficiency and accelerating rearmament. The plan focused on developing synthetic substitutes for scarce resources, increasing agricultural production, and expanding key industries, such as steel, chemicals, and armaments. While the Four-Year Plan did not achieve complete autarky, it significantly bolstered Germany’s economic and military capabilities.

6. Rearmament and military expansion

During this period, Germany pursued an aggressive rearmament program, in violation of the Treaty of Versailles. The Nazi regime expanded the military, invested in advanced weaponry, and increased arms production. By 1939, Germany had become one of the world’s most powerful military forces, paving the way for the territorial expansion that would ultimately lead to World War II.

In conclusion, Nazi economic policy and rearmament from 1934 to 1939 were characterized by a dual focus on reducing unemployment and preparing Germany for war. The various economic plans and initiatives implemented during this period contributed to Germany’s rapid industrial and military expansion, setting the stage for the events of World War II. This article serves as an introductory overview, with the understanding that there is much more to discover about the intricacies of Nazi economic policy and its long-term consequences.