to pressure from the party ranks for more radical action and a ‘second revolution’.
It is clear that Hitler’s overriding interest lay in the preparation for the conquest of additional ‘living space’ (Lebensraum) and not primarily in the transformation of the economy. In his view, everything must be directed towards the ultimate goal of rearmament. As Hitler put it in a speech to his cabinet only a week after becoming Chancellor, on 8 February 1933: ‘The next five years in Germany had to be devoted to rendering the German people again capable of bearing arms. Every publicly sponsored measure to create employment had to be considered from the point of view of whether it was necessary with respect to rendering the German people again capable of bearing arms for military service. This had to be the dominant thought, always and everywhere’.12 Insofar as there was a coherent, specifically Nazi economic programme, it had two main features: the notion of self-sufficiency, or ‘autarky’; and the notion of expanded living space in central Europe, encompassing particularly lands to the southeast and east of Germany. These notions were, of course, integrally related to the development of a self-sufficient war economy sustained by territorial expansion and exploitation of the raw materials and labour of conquered territories. At the same time as giving priority to rearmament, however, the Nazis were concerned to retain popular support, which meant paying attention to consumer pressures and not imposing severe levels of austerity on the people. These different objectives were not entirely compatible, and periodic strains and crises resulted from attempts to pursue mutually contradictory strands of policy. Such crises also had effects on, for example, the timing of certain foreign policy moves, such as the remilitarization of the Left bank of the Rhine in 1936.
Initially, the economic policies of Nazi Germany were controlled by the relatively orthodox former President of the Reichsbank, Hjalmar Schacht, as Minister of Economics. Deficit financing began in 1933 with the issue of so-called Mefo Bills, which served to disguise spending on rearmament under the cover of the spurious ‘Metallurgical Research Society’ (Metallurgische Forschungsgesellschaft m.b.H.). On 1 June 1933 the first ‘Reinhardt Programme’ was announced with the ‘Law to Reduce Unemployment’, followed by a second plan on 21 September 1933; and on 27 June 1933 there was a law initiating the construction of autobahns. While the economy had already begun to turn around in 1932, prior to the Nazis’ participation in government, economic recovery up to 1936 was certainly aided – perhaps speeded up – by Nazi work-creation schemes, motorization and construction works, and their willingness to engage in deficit financing. Many of these early schemes were of an infrastructural nature, facilitating later mobilization for war without being directly war-related themselves. While autobahns would later be highly useful for the rapid movement of troops, they could also serve more immediate ideological ends, symbolizing the rebuilding of the community and the integration of its different parts into one future-oriented national whole.13 Schacht’s New Plan of 1934 marked the first stage in the planned development of autarky (although Schacht himself was an opponent of out-and-out autarky), with bilateral trade agreements between pairs of countries not relying on certain international foreign currency exchanges.
By 1935, however, it was becoming clear that, despite the return towards full employment, Germany’s economic problems were by no means resolved. With a shortage of foreign exchange reserves, a choice had to be made between the import of raw materials for the rearmament programme or of foodstuffs for consumers. Moreover, there were splits within industry: while some industries, most notably the great chemical combine I. G. Farben, supported the manufacture of synthetic materials and an economy of autarky, others, more export-oriented, were opposed to such policies. In August 1936 Hitler issued a key memorandum stating that Germany must be ready for war within four years and that economic activity must be geared towards this primary end. On 18 October 1936 the Four Year Plan was announced, with Goering in charge. Yet despite the precarious economic condition of Germany, and the overriding priority given to rearmament, there was to be no drop in the standard of living of consumers. From then on, in attempting to pursue both these objectives, economic policy became less and less orthodox and increasingly unbalanced.
The Four Year Plan involved close collaboration between members of certain industries – again, particularly I. G. Farben – and Nazis in high positions. It represented to some extent a clear illustration of the proliferation of spheres of competence and institutional rivalries in the Nazi state, as the powers of Goering conflicted with those of the ministers of labour (Seldte), agriculture (Darré) and economics (Schacht). Schacht in fact resigned his post as Minister of Economics in November 1937, partly because of these conflicts (and was dismissed as President of the Reichsbank a little over a year later, in January 1939). There were both party–state conflicts and conflicts between different sections of the party. There were, for example, conflicts between party agencies concerned with rearmament, and those more concerned with aspects of consumer satisfaction or popular opinion, such as the DAF.
These developments have been variously interpreted. While rearmament has often been held up as one of the prime factors in German economic recovery in the 1930s, Richard Overy suggests that it was only increasingly important after 1936 and that in fact attempts to orientate the economy towards war actually slowed down the rate of recovery and growth, partly because of the resistance of some cartelized industries to Nazi policies. Yet Overy plays down Volker Berghahn’s emphasis on what the latter calls a deliberate ‘unhinging’ of the economy from 1936, when traditional economic considerations were discarded and ultimate economic salvation was predicated on a successful war of conquest.14 The relationships between industry, party and state are also more complex than sometimes assumed. Older debates between a clearly untenable Marxist interpretation of fascism as the last-ditch stand of a capitalist state in crisis and an alternative view emphasizing the ‘primacy of politics’ have been displaced by more open analyses of the complex combination of factors at play and the contingency of historical developments. Some industries benefited from close collaboration with the state; others attempted to resist interference. Also, while the Nazis attempted to control the direction of economic policy, they were by no means always successful, nor could they be, given their own partly mutually contradictory aims. Moreover, the successes of economic recovery and a return to full employment by 1936 had by 1939 generated a shortage of skilled labour, necessitating the conscription of workers into compulsory labour service on certain projects. There were also conflicts between aspects of Nazi ideology and the demands of reality: women, for example, despite Nazi views of their proper place being in the home, in fact participated in increasing numbers in paid employment outside the home, even before the more acute shortages of (literally) manpower in wartime years.
What is quite clear is that, far from achieving a social revolution, the effects of Nazi economic policies on society represented in large measure a continuation and perhaps exacerbation of previous socioeconomic trends. Realities under Nazi rule by no means corresponded with pre-1933 election promises. While the return to full employment did mean jobs and a steady income for many, the associated withdrawal of trade union rights and collective bargaining, as well as the very variable rates of pay and conditions, rendered the experience at best an ambiguous one. Despite attempts by the All-German Federation of Trade Unions (ADGB) to reach a compromise with the new regime in April 1933, autonomous trade unions had been unequivocally smashed; and although many workers were prepared somewhat cynically to enjoy any holidays or outings offered to them by organizations such as Strength through Joy, few really swallowed much of the propaganda about the ‘harmonious factory community’ and the like. While concessions were made to small businesses, insofar as they did not conflict with major political aims, other demands of small retailers were not met; in particular, big department stores continued to flourish – albeit increasingly in ‘Aryan’ hands, as Jewish owners were ousted or forced to sell up at ludicrously low prices. While peasants were praised in Nazi ideology, the measures taken under Darré (who had replaced Hugenberg as Minister of Agriculture in June 1933) were by no means universally popular. The control of the production, distribution and pricing of foodstuffs by the Reich Food Estate and the control of the inheritance of farms under the Entailed Farm Law met with the hostility of considerable numbers of peasants in different areas, varying with local conditions.
It is clear
