by Joe Dixon

Created on: April 27, 2008

At the end of the First World War, Germany was a defeated nation. The peace treaties that followed, in particular the Treaty of Versailles, were incredibly harsh on Germany. She was denied an air force outright and allowed only a small navy, with none of the submarines that had been so devastating in the war years, and an army of only 100,000 men with no tanks or artillery. Perhaps the most telling of the terms was the 6,600 million of reparations demanded to repair the damage caused to the defeated nations during the fighting.

The unrealistic nature of the reparations and the loss of the Rhineland, crucial to Germany's production-based economy, meant that Germany had great problems repaying her debt. One strategy the Weimar government tried was simply to print more money. This, of course, only works if the value of the country's economy was such that it could support the printing of more banknotes. This wasn't the case in Germany, as the country had no means of raising funds.

This, coupled with the 1929 Wall Street Crash, which collapsed the US economy and stopped American financial aid to Germany, was an ideal situation for a man promising to restore Germany's pride and her pre-war prowess to come to power. Although there were other factors involved in Hitler's rise to power (the Reichstag fire and his installation as Chancellor perhaps being the most important), the mere desperation instilled in the German people was enough to get Hitler into a position such that he could become dictator.

The biggest problem facing the Germany economy as the Nazis came to power was the incredibly high unemployment rates. Overall, German unemployment was running at around 30%. This was untenable and Hitler, with his financial advisor, Hjalmar Schacht, set about ways to improve the situation. One of the simplest ways to reduce unemployment figures was to reduce the number of people who can work. Hitler did this simply by saying that Jews and women were not entitled to work.

Perhaps the most obvious way in which Nazi economic policy benefited the German people was the Autobahn programme. The men involved in the building of Germany's new infrastructure accounted for 20% of the German workforce. The ever-influential Nazi propaganda used the militaristic efficiency of the project to reinvigorate German patriotism.

In addition to the autobahn construction, Hitler began to renege on the Treaty of Versailles. Part of his mass employment scheme was the creation, initially covertly with the SA and SS, of a standing army. In addition to this facet of the military, another key industry that was created by the Nazis was that of tank and aircraft construction.

As a result of Nazi economic policy, a vast road network, still in use today, was built. Germany By 1939, despite the terms of the Treaty of Versailles, Germany was strong enough to mount a war, which, for many years, she was more than capable of winning. In the long run, perhaps, with the eventual loss of the Second World War, Nazi economic policy was damaging to Germany. Of course the German economy could have recovered and not precipitated the Second World War without the Nazis, but whether it would have happened so quickly and whether the Autobahn would have been constructed are in doubt.

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