The Nazi regime implemented ambitious economic strategies and strict social policies to stabilise Germany, secure loyalty, and realise their ideological vision of a racially unified people’s community.
Economic Strategies
Schacht’s New Plan
In 1934, Hjalmar Schacht, President of the Reichsbank and Minister of Economics, introduced the New Plan to address Germany’s pressing economic problems, particularly the shortage of foreign currency.
The plan aimed to reduce imports, prioritising raw materials vital for rearmament over consumer goods.
Bilateral trade agreements were signed with South-East European and South American countries, exchanging German industrial goods for food and raw materials, thus conserving foreign currency reserves.
Schacht used MEFO bills (credit notes) to discreetly finance rearmament and large-scale infrastructure projects without causing hyperinflation.
The New Plan stabilised the economy temporarily but was unsustainable in the long term, especially with Hitler’s increasing demands for rapid rearmament.
Goering’s Four-Year Plan
By 1936, Hitler grew dissatisfied with Schacht’s cautious policies and turned to Hermann Goering, appointing him head of the Four-Year Plan.
The plan’s principal goal was to prepare Germany for war within four years by achieving autarky (economic self-sufficiency).
Emphasis was placed on boosting production of synthetic substitutes like synthetic rubber (Buna) and fuel derived from coal.
Heavy industries, including steel and chemical production, expanded rapidly.
Agriculture was also supported to reduce reliance on food imports.
The Four-Year Plan demonstrated a clear shift from economic stability to an economy geared towards total war, resulting in significant state intervention and bureaucratic control.
Relations with Industrial Elites
The Nazis relied heavily on the cooperation of large industrial conglomerates, such as Krupp, IG Farben, and Thyssen.
Industrialists benefitted from lucrative state contracts, tax concessions, and the elimination of independent trade unions.
Although some elites feared excessive state interference, most collaborated willingly due to the profits offered by rearmament and infrastructure projects.
Prominent figures like Gustav Krupp played an integral role in aligning industrial output with Nazi goals.
Overall, relations were a mutual partnership: the regime gained resources for rearmament, while industrialists secured power and wealth.
Extent of Economic Recovery
Unemployment Statistics
Tackling unemployment was central to the Nazi promise of national revival.
In 1933, unemployment stood at around 6 million; by 1939, it had officially dropped to less than 300,000.
This reduction was partly genuine but also manipulated. Women and Jews were often removed from workforce statistics, and men were drafted into rearmament or conscription.
Rearmament and Public Works
Rearmament was the single most important factor driving economic recovery.
Military expenditure rose dramatically, absorbing surplus labour and revitalising heavy industries.
The Luftwaffe, navy, and army expansion provided jobs in manufacturing, engineering, and construction.
Public works schemes, such as the construction of the Autobahn network, showcased the regime’s commitment to modernisation and job creation.
These projects were highly visible symbols of progress and mobility.
Workers were often drawn into compulsory labour services like the RAD (Reich Labour Service) before entering the army or other industries.
Despite the outward success, the economy remained precarious, increasingly dependent on rearmament spending and foreign resource imports.
Social Policies
Youth: Hitler Youth and League of German Girls
Nazi social policy aimed to mould the younger generation into loyal citizens and future soldiers or mothers.
Hitler Youth (Hitlerjugend): Boys aged 14–18 participated in paramilitary training, hiking, and indoctrination in Nazi ideology. Membership became compulsory in 1936.
League of German Girls (Bund Deutscher Mädel, BDM): The female equivalent focused on domestic skills, physical fitness, and preparing girls for their roles as wives and mothers.
These organisations cultivated obedience, nationalism, and racial consciousness, aligning youth with Nazi aims from an early age.
Women: Kinder, Küche, Kirche
Nazi ideology envisioned women as bearers of the nation’s racial future, summed up by the slogan Kinder, Küche, Kirche (Children, Kitchen, Church).
Policies encouraged women to leave the workforce and focus on childbearing and homemaking.
The Law for the Encouragement of Marriage (1933) offered loans to newlyweds, which were reduced with each child born.
Medals such as the Mother’s Cross rewarded prolific mothers, reinforcing the value placed on large Aryan families.
Contraception and abortion were restricted, and women in professions like law and medicine faced dismissal.
Despite this, female employment rose slightly by 1939 due to labour shortages created by rearmament and male conscription.
Workers: DAF and Strength Through Joy
Independent trade unions were banned in May 1933, replaced by the German Labour Front (Deutsche Arbeitsfront, DAF) under Robert Ley.
The DAF sought to integrate workers into the Nazi vision by supervising wages and working conditions, though strikes and collective bargaining were forbidden.
Strength Through Joy (Kraft durch Freude, KdF): This programme organised affordable leisure activities, including holidays, theatre trips, and the famed Volkswagen Beetle scheme.
The KdF aimed to improve morale, create a sense of equality, and bind workers to the regime, though promises like the Volkswagen car were largely unfulfilled before the war.
While working conditions often worsened due to longer hours and wage restrictions, these initiatives pacified labour unrest and strengthened the regime’s control.
The Churches
The relationship between the Nazi state and the Churches was complex and often uneasy.
Initially, Hitler promised to respect Christian institutions to secure support. The Concordat with the Catholic Church (1933) guaranteed Church rights but was soon undermined by state interference and persecution of clergy who criticised the regime.
The Protestant Church was reorganised under the Reich Church, dominated by Nazi-aligned pastors, while dissenting pastors formed the Confessing Church, which resisted state control.
Religious youth groups were dissolved or absorbed into the Hitler Youth.
Despite the regime’s ideological hostility towards organised religion, outright confrontation was avoided to maintain public support, resulting in a tense co-existence.
The Volksgemeinschaft Ideal
The concept of the Volksgemeinschaft (people’s community) was central to Nazi ideology.
It envisioned a racially pure, classless, harmonious society united under the Führer, transcending regional, religious, and social divisions.
Propaganda, youth organisations, public ceremonies, and welfare programmes reinforced this vision.
Social policies towards workers, women, and youth were designed to create uniformity and national solidarity.
In reality, the ideal remained only partially realised:
Deep social divisions persisted, particularly between industrial elites and workers.
Racial policies excluded Jews and other minorities, contradicting the idea of an inclusive national community.
Class privileges and economic inequalities were never fully eradicated.
Nevertheless, the Volksgemeinschaft rhetoric effectively mobilised support and fostered a sense of belonging for many “racially acceptable” Germans during the 1930s.
FAQ
Nazi propaganda was a powerful tool used to legitimise and popularise their economic and social policies. The Ministry of Propaganda, led by Joseph Goebbels, ensured that every policy appeared as a triumph for the nation and the Führer. Economic successes, like reduced unemployment and the Autobahn network, were glorified through newsreels, posters, and radio broadcasts, reinforcing the image of Hitler as Germany’s saviour. Social programmes such as Strength Through Joy were widely advertised to present the regime as caring for workers’ welfare, even though working conditions often deteriorated. Films, rallies, and speeches emphasised the idea that youth organisations and the promotion of traditional gender roles were restoring moral order and national pride. Negative aspects, such as the oppressive control over workers and suppression of dissent, were concealed. By constantly highlighting prosperity and unity, propaganda created an illusion of economic strength and social harmony, consolidating public support and marginalising criticism.
The Reich Labour Service (Reichsarbeitsdienst or RAD) was a compulsory labour organisation integral to Nazi economic recovery and social policy. Initially voluntary, it became mandatory for young men aged 18 to 25 in 1935, requiring them to serve six months before military conscription. Women also participated on a smaller scale. The RAD’s primary purpose was to instil discipline and national pride while providing cheap labour for public works. RAD members were deployed to build roads, dig drainage ditches, and work on agricultural projects, significantly contributing to the Autobahn construction and land reclamation efforts. It helped reduce visible unemployment figures by absorbing thousands into labour schemes, masking the true state of joblessness. Beyond economic benefits, the RAD was a tool for indoctrination, enforcing Nazi values like obedience, physical fitness, and camaraderie. Although its economic impact was more symbolic than transformative, the RAD played a crucial role in shaping youth attitudes and demonstrating the regime’s commitment to national regeneration.
Nazi economic policy had complex effects on small businesses and craftsmen. While large industrial concerns thrived under lucrative rearmament contracts and state support, small businesses and tradesmen often struggled. The regime pledged to protect the Mittelstand (middle-class small business owners and artisans) as part of its Volksgemeinschaft ideal, portraying them as the backbone of the German economy. Protective measures included limiting large department stores’ expansion and favouring local businesses for government orders. However, in practice, big business and state priorities often overshadowed these promises. Many craftsmen faced increased competition from industrial mass production, while strict price controls and government regulations constrained profits. Additionally, joining the German Labour Front and paying party contributions imposed financial burdens. Despite Nazi rhetoric championing their importance, small businesses often felt neglected compared to the industrial giants feeding the rearmament drive. Thus, while the Nazis publicly courted the Mittelstand, their policies primarily benefited large-scale industrial partners vital for military expansion.
Beyond direct rearmament, Nazi economic policy laid extensive groundwork for sustaining a prolonged conflict. The Four-Year Plan focused on achieving autarky, reducing Germany’s dependency on foreign imports which could be disrupted during war. This involved massive investment in synthetic fuel, rubber, and substitute materials like ersatz goods, ensuring the military and domestic economy could function despite potential blockades. Agricultural policy aimed to increase self-sufficiency in food production through land reclamation and modernisation, though this had limited success. Strategic stockpiling of raw materials and the expansion of key industries like chemicals and armaments further strengthened war readiness. The restructuring of the workforce through the RAD and youth indoctrination programmes prepared a disciplined, ideologically committed population ready for mobilisation. Economic alliances and bilateral trade deals with Eastern and South-Eastern European states secured vital resources such as oil and grain. Collectively, these measures meant that by 1939, Germany was economically primed not just to launch war but to endure its demands.
Nazi social policy deeply reshaped education to align with ideological goals and produce loyal citizens devoted to the regime. The curriculum was overhauled to emphasise subjects that reinforced Nazi ideals: history was rewritten to glorify German nationalism and the Führer; biology centred on racial theory and eugenics, indoctrinating students with notions of Aryan superiority and anti-Semitism. Physical education gained prominence to prepare boys for military service and girls for healthy motherhood. Teachers were brought under strict control through the National Socialist Teachers League; membership became virtually mandatory. Those who resisted faced dismissal or worse. Textbooks were censored or replaced to include Nazi propaganda, heroic images of Hitler, and anti-Jewish material. Pupils were encouraged to report teachers or classmates expressing dissenting views, fostering a climate of fear and conformity. Education, alongside Hitler Youth activities, ensured that children were ideologically shaped both inside and outside the classroom, making schools a crucial pillar of the Nazi Volksgemeinschaft vision.
Practice Questions
Examine the impact of Nazi economic policies on unemployment and industrial growth between 1933 and 1939.
Nazi economic policies had a profound impact on unemployment and industrial growth. Through Schacht’s New Plan and Goering’s Four-Year Plan, the regime prioritised rearmament and infrastructure, dramatically reducing unemployment from six million to under 300,000 by 1939. Public works like the Autobahn showcased progress, while rearmament stimulated heavy industries such as steel and chemicals. However, this recovery was partly artificial, masking women’s and Jews’ exclusion from statistics. Industrial elites cooperated for profit, enabling rapid industrial expansion. Overall, economic policies achieved significant growth but created an economy dangerously dependent on war preparations and state intervention.
Assess how successful Nazi social policies were in creating a Volksgemeinschaft in Germany by 1939.
Nazi social policies had mixed success in creating a Volksgemeinschaft. Youth indoctrination through the Hitler Youth and League of German Girls fostered loyalty, and workers were pacified via the DAF and Strength Through Joy. Policies promoting traditional roles for women encouraged population growth. However, deep social divisions remained; industrialists still wielded power, and minorities like Jews were brutally excluded, contradicting unity. Resistance from Churches and some youth also persisted. Propaganda effectively promoted an image of a cohesive national community, but in practice, the ideal of a harmonious, classless, racially pure Volksgemeinschaft was never fully realised by 1939.
