How did Hitler make industry so prosperous in Germany?

Answer

Much has been written about the economy of Nazi Germany, and the stereotype that Hitler made the country economically prosperous is misplaced. A good book is Adam Tooze’s The Wages of Destruction: The Making and the Breaking of the Nazi Economy New York: Viking, 2006.

The source of this stereotype lies in the origins of Nazi Germany itself: the Weimar Republic that preceded it suffered from economic malaise, heavy reparations, currency hyperinflation and high unemployment of nearly 30%. The Great Depression was not typical for Germany, but it was stronger there than elsewhere. Even a slight or apparent improvement from that condition would seem miraculous.

The economic and political crisis of 1929-1931 enabled Hitler’s NSDAP to seize power and ensure (heavy-handed) political and economic stability. Strangely enough, Hitler himself, and by extension the party leadership, was little interested in economic policy, even averse to it: they considered it too ‘materialistic’ for their ‘idealism’. Hitler therefore appointed the democratic chairman of the Reichsbank, Hjalmar Schacht, as economy minister in his pre-war government. Schacht continued with the economic policies already begun under Weimar, inspired by Keynes: major public works to reduce unemployment, low interest rates by decoupling the currency from the gold standard, creating public debt. In this way, for example, the currency was stabilized. Work on motorways had already started during the Weimar Republic.

Also know that a lot of the economic success story has been statistically ‘hidden’:

• occupational bans for Jews and the reduction of women to the hearth allowed the unemployment rates for ‘Aryan’ men to fall spectacularly;
• the expropriation of Jewish factories camouflaged the soaring national debt;
• a ban on trade unions, workbooks and strikes ensured economic stability, but not social peace (in reality, purchasing power fell sharply, by 25%);
• there was a hidden nationalization of industry: private companies were discouraged by huge taxes (up to 98% on profits!), while big companies were infiltrated by politics;
• Although the ideal of an autarkic (self-sufficient, economically independent) Germany discouraged exports, imports continued to grow. In 1936 the latter caused payment problems, after which Schacht was set aside for Göring, who then only allowed imports (oil, metals) from politically friendly countries.

British historian Timothy Mason went so far as to claim that the unsustainability of that economic system, an imminent collapse of the German economic system and, above all, the unrest among the German working class, prompted Hitler to go to war – as a kind of lightning rod. . That claim is disputed.

At the outbreak of the Second World War, economic ‘robbery’ took place on a large scale; raw materials were sold to Germany below price, two-thirds of the French trainsets were confiscated, tax increases were only implemented in conquered territory. Forced labor was an important engine for the German war economy: in 1944 even one quarter of the working population in Germany consisted of forced labour, prisoners of war, unwanted minorities… This was not only the case in heavy industry (and even in concentration camps – IG Farben, Ford, Krupp), but also in rural areas (mainly Eastern European women).

In the last years of the war it became clear that the Nazi economy was a purely planned economy, in which there was no private enterprise: everything was focused solely on military production, which, despite the heavy bombardments, doubled or tripled.

Germany did not become really prosperous under Hitler, but the economy/industry did change, albeit only around 1936.