• Unemployment – this had risen to over 6 million by 1932
• Inflation and hyperinflation – Germany had faced devastating hyperinflation in 1923 when $1 = 4,200,000,000,000 marks
• Self-sufficiency (autarky) - Germany relied on overseas trade for vital raw materials and food supplies. Part of the reason Germany had lost the Great War was because it hadn’t been able to maintain these supplies. Hitler hoped to make Germany self-sufficient.
  
  Nazi economic policy: ‘Guns not Butter’

1. Employment
• In June 1933, the Nazis passed a Law to Reduce Unemployment.
• The RAD (National Labour Service) sent men on public works; eg the autobahns.
• Government spending rose, 1932–38 from about 5 billion to 30 billion marks.
• Unemployment fell from nearly 6 million to virtually nothing.
• Hitler built up the armed forces (e.g. conscription took 1 million unemployed).
• The soldiers needed equipment, so this set steel mills, coal mines and factories back into production. The Luftwaffe gave jobs to fitters, engineers and designers.
• The Nazi state machinery needed thousands of clerks, prison guards etc.

2. Farming
• By the 1933 Farm Law, farmers were assured of sales and given subsidies.
• The government kept food prices at the 1928 level.

• BUT farmers were organised into the Reich Food Estate and strictly controlled (e.g., one rule stated that hens must lay 65 eggs a year).

3. Industry
• The New Plan of 1934 stopped imports, and subsidised industry. This is called 'Autarky' - the belief that Germany should be self-sufficient.
• Production rose, especially of oil, steel, coal and explosives.
• In 1936, Goering was put in charge. His Four Year Plan proposed to get the army and industry ready for war in four years.
• Employers were happy when workers were well disciplined.

• BUT businesses were strictly controlled; they could be told to make something different/ were not allowed to raise wages/ workers could be sent to other factories.
• Goering said: ‘Iron makes an empire strong; butter only makes people fat’.
• Economists know now that these policies cause massive economic problems.

4. Conditions
• The Nazis tried to make people proud (e.g. the film The Beauty of Work in 1934).

• BUT trade unions were banned and all workers had to join the German Labour Front. They lost their right to strike for better pay and conditions.
• Wages actually fell.
• People who refused to work were imprisoned.
• Wages and conditions on the RAD schemes were very poor.

5. Strength through Joy (KdF) Movement
• Workers were offered cut-price holidays, theatre trips and concerts. In Berlin, 1933–38, the KdF sponsored 134,000 events for 32 million people (2 million went on cruises & weekend trips, and 11 million on theatre trips).
• The KdF designed the Volkswagen (or ‘People’s Car’) ‘Beetle’, which it was planned to be able to buy for 5 marks a week.
• The government made sure that everybody could get a cheap radio.

• Unemployment had fallen from 6 million in 1933 to 300,000 by 1939
• Industrial production in 1939 was above the figure for Weimar Germany before the 1929 Wall Street Crash.
  BUT
  
• By 1939, Germany still imported 33% of its required raw materials
• Government income had been 10 billion Reichsmarks in 1928. In 1939, it was 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939.
• From 1933 to 1939, the Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Resichsmarks.
• Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures. The only increase was in rye bread, cheese and potatoes.
• Real earnings in 1938 were all but the same as the 1928 figure. (Real earnings are wages adjusted to allow for inflation).