Did the Nazis improve the economy for Germany?

by Ben Alford

Did the Nazis produce an economic miracle for Germany?

Hitler needed a strong economy to retain popular support and to underpin his rearmament plans. The problem was that the German economy was not strong enough to increase consumer production and weapons production. After 1936 there was a shift in production away from consumer goods (butter) towards rearmament (guns). But, by the mid-1930s, Germany was still importing large amounts of food and raw materials like copper, lead and oil, that it could not really afford. From 1936, the Nazis embarked on a policy of self-sufficiency or autarky. The idea was to synthetically reproduce products such as oil in order to cut costs and to make Germany economically independent. Goring became increasingly involved in this policy as Commissioner of Raw materials. Hjalmar Schacht became very concerned by the rise of Goring’s influence and the bias towards rearmament.. In 1936 a Second Four Year Plan was introduced to drive forward autarky. This was Goring’s pet policy and Schacht resigned in disgust in 1937. Schacht was officially replaced by Walter Funk, but Goring effectively took over the economy.


How successful were the Nazis in tackling unemployment, inflation and creating self-sufficiency?

  • 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.


  • Standards of living fell for many workers. Despite full employment, there was increased regimentation of workers’ lives and longer hours were experienced.
  • 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 Reichsmarks.
  • 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 (cheaper substitutes).
  • Real earnings in 1938 were all but the same as the 1928 figure. (Real earnings are wages adjusted to allow for inflation).


Leave a Reply

You must be logged in to post a comment.