The 14 Words

Thursday, 19 December 2013

How Hitler Tackled Unemployment and Revived Germany’s Economy

By Mark Weber

To deal with the massive unemployment and economic paralysis of the Great Depression, both the US and German governments launched innovative and ambitious programs. Although President Franklin Roosevelt’s “New Deal” measures helped only marginally, the Third Reich’s much more focused and comprehensive policies proved remarkably effective. Within three years unemployment was banished and Germany’s economy was flourishing. And while Roosevelt’s record in dealing with the Depression is pretty well known, the remarkable story of how Hitler tackled the crisis is not widely understood or appreciated.

Adolf Hitler became Chancellor of Germany on January 30, 1933. 

A few weeks later, on March 4, Franklin Roosevelt took office as President of the United States. Each man remained his country’s chief executive for the next twelve years -- until April 1945, shortly before the end of World War II in Europe. In early 1933 industrial production in each country had fallen to about half of what it had been in 1929. Each leader quickly launched bold new initiatives to tackle the terrible economic crisis, above all the scourge of mass unemployment. And although there are some striking similarities between the efforts of the two governments, the results were very different.

One of the most influential and widely read American economists of the twentieth century was John Kenneth Galbraith. He was an advisor to several presidents, and for a time served as US ambassador to India. He was the author of several dozen books, and for years taught economics at Harvard University. With regard to Germany’s record, Galbraith wrote: 
“… The elimination of unemployment in Germany during the Great Depression without inflation -- and with initial reliance on essential civilian activities -- was a signal accomplishment. It has rarely been praised and not much remarked. The notion that Hitler could do no good extends to his economics as it does, more plausibly, to all else.”
The Hitler regime’s economic policy, Galbraith goes on, involved 
  1. “large scale borrowing for public expenditures, and at first this was principally for civilian work -- railroads, canals and the Autobahnen [highway network]. The result was a far more effective attack on unemployment than in any other industrial country.” 
  2. “By late 1935,” he also wrote, “unemployment was at an end in Germany. By 1936 high income was pulling up prices or making it possible to raise them … Germany, by the late thirties, had full employment at stable prices. It was, in the industrial world, an absolutely unique achievement.” 
  3. “Hitler also anticipated modern economic policy,” the economist noted, “by recognizing that a rapid approach to full employment was only possible if it was combined with wage and price controls. That a nation oppressed by economic fears would respond to Hitler as Americans did to F.D.R. is not surprising.”
  4. Other countries, Galbraith wrote, failed to understand or to learn from the German experience: “The German example was instructive but not persuasive. British and American conservatives looked at the Nazi financial heresies -- the borrowing and spending -- and uniformly predicted a breakdown … And American liberals and British socialists looked at the repression, the destruction of the unions, the Brownshirts, the Blackshirts, the concentration camps, and screaming oratory, and ignored the economics. Nothing good [they believed], not even full employment, could come from Hitler.”
Two days after taking office as Chancellor, Hitler addressed the nation by radio. Although he and other leaders of his movement had made clear their intention to reorganize the nation’s social, political, cultural and educational life in accord with National Socialist principles, everyone knew that, with some six million jobless and the national economy in paralysis, the great priority of the moment was to restore the nation’s economic life, above all by tackling unemployment and providing productive work.
“The misery of our people is horrible to behold!,” said Hitler in this inaugural address. 
“Along with the hungry unemployed millions of industrial workers there is the impoverishment of the whole middle class and the artisans. If this collapse finally also finishes off the German farmers we will face a catastrophe of incalculable dimension. For that would be not just the collapse of a nation, but of a two-thousand-year-old inheritance of some of the greatest achievements of human culture and civilization …”
The new government, Hitler said, would 
“achieve the great task of reorganizing our nation’s economy by means of two great four-year plans. The German farmer must be rescued to maintain the nation’s food supply and, in consequence, the nation’s vital foundation. The German worker will be saved from ruin with a concerted and all-embracing attack against unemployment.”
“Within four years,” he pledged, 
“unemployment must be decisively overcome … The Marxist parties and their allies have had 14 years to show what they can do. The result is a heap of ruins. Now, people of Germany, give us four years and then pass judgment upon us!”
Rejecting the cloudy and impractical economic views of some radical activists in his Party, Hitler turned to men of proven ability and competence. Most notably, he enlisted the help of Hjalmar Schacht, a prominent banker and financier with an impressive record in both private business and public service. Even though Schacht was certainly no National Socialist, Hitler appointed him President of Germany’s central bank, the Reichsbank, and then as Minister of Economics.

After taking power, writes Prof. John Garraty, a prominent American historian, Hitler and his new government 
“immediately launched an all-out assault on unemployment … They stimulated private industry through subsidies and tax rebates, encouraged consumer spending by such means as marriage loans, and plunged into the massive public-works program that produced the autobahn [highway system], and housing, railroad and navigation projects.”
The regime’s new leaders also succeeded in persuading formerly skeptical and even hostile Germans of their sincerity, resolve and ability. This fostered trust and confidence, which in turn encouraged businessmen to hire and invest, and consumers to spend with an eye to the future.

As he had promised, Hitler and his National Socialist government banished unemployment within four years. The number of jobless was cut from six million at the beginning of 1933, when he took power, to one million by 1936. So rapidly was the jobless rate reduced that by 1937-38 there was a national labor shortage.

For the great mass of Germans, wages and working conditions improved steadily. From 1932 to 1938 gross real weekly earnings increased by 21 percent. After taking into account tax and insurance deductions and adjustments to the cost of living, the increase in real weekly earnings during this period was 14 percent. At the same time, rents remained stable, and there was a relative decline in the costs of heating and light. Prices actually declined for some consumer goods, such as electrical appliances, clocks and watches, as well as for some foods.
"Consumer prices rose at an average annual rate of just 1.2 percent between 1933 and 1939," notes British historian Niall Ferguson. 
"This meant that Germans workers were better off in real as well as nominal terms: between 1933 and 1938, weekly net earnings (after tax) rose by 22 percent, while the cost of living rose by just seven percent." 
Even after the outbreak of war in September 1939, workers’ income continued to rise. By 1943 average hourly earnings of German workers had risen by 25 percent, and weekly earnings by 41 percent.

The “normal” work day for most Germans was eight hours, and pay for overtime work was generous. In addition to higher wages, benefits included markedly improved working conditions, such as better health and safety conditions, canteens with subsidized hot meals, athletic fields, parks, subsidized theater performances and concerts, exhibitions, sports and hiking groups, dances, adult education courses, and subsidized tourism. An already extensive network of social welfare programs, including old age insurance and a national health care program, was expanded.

Hitler wanted Germans to have “the highest possible standard of living,” he said in an interview with an American journalist in early 1934. 
“In my opinion, the Americans are right in not wanting to make everyone the same but rather in upholding the principle of the ladder. However, every single person must be granted the opportunity to climb up the ladder.” 
In keeping with this outlook, Hitler’s government promoted social mobility, with wide opportunities to improve and advance. As Prof. Garraty notes: 
“It is beyond argument that the Nazis encouraged working-class social and economic mobility.”
To encourage acquisition of new skills, the government greatly expanded vocational training programs, and offered generous incentives for further advancement of efficient workers.


2 comments:

  1. BUT . . . There's one thing that really scares the kike.
    Always has and always will.
    See picture:

    http://2.bp.blogspot.com/-oH63tMqHl1E/UqrXngZz2II/AAAAAAAAIcE/JwKAr8pPmDk/s640/JEW-SWASTIKA-NIGHTMARES.jpg

    ReplyDelete
    Replies
    1. Yes that picture sums it all up very well. 88

      Delete