How accurate is it to say that between 1933 and 1989 the government exercised high levels of control over the economy?
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Course
Unit 1G - Germany and West Germany, 1918-89
Institution
PEARSON (PEARSON)
An A-level standard History essay arguing that the statement that ‘between 1933 and 1989 the German government exercised high levels of control over the economy’ is somewhat accurate.
How accurate is it to say that between 1933 and 1989 the government exercised
high levels of control over the economy?
When a government exercises high levels of control over a country’s economy
this usually takes the form of state planning, imposing price controls and
imposing strict monetary policy to manage inflation. Throughout the period of
1933 to 1989 both the Nazi government and the government of the FRG
employed such methods of state intervention in the economy at various points so
I would argue that it is partially accurate to say that between 1933 and 1989 the
government exercised high levels of control over the economy.
I would highlight the period of 1933 to 1989 as one in which the German
government undeniably exercised high levels of control of the economy for
prolonged periods of time. This can firstly be seen in how the establishment of
the 4 year plan in October 1936 marked the beginning of a period of considerable
state intervention in the economy of Germany, essentially creating a command
economy as the role of the market in the previously capitalist economy was now
carried out by the state. From this point onwards, the interests of individual
businesses were subordinated to the interests of the Nazi regime which were
primarily ensuring the armed forces were operational and the economy was ready
for war within 4 years. Government spending was increased significantly owing to
the drive for rearmament while, as a totalitarian state, the regime could control
prices and keep wages down in order to curb inflation and reduce consumer
demand. Price controls were introduced so that the government could remilitarise
by purchasing materials at prices below market levels, goods such as food and
clothes were rationed and Goering, who was given plenipotentiary powers as
orchestrator of the 4 year plan, practically had complete control of the economy-
including the private sector. Moreover, in November 1945 the Allied Control
Council agreed on maintaining controls imposed by the Nazis during their
occupation of Germany, meaning price controls and rationing stayed in place until
1948. It could be argued that even after the Allied occupation came to an end the
German government continued to exercise high levels of control over the
economy, as the new Social Market Economy emphasised the state’s
responsibility to improve the market condition while pursuing social equity. This
meant strong state action was taken to limit the market’s negative effects, with
monopolies being eliminated to guard against the concentration of economic
power in the hands of private people/the state and the Bundesbank being granted
enormous power to maintain tight control over the circulation of money and
ensure a steady flow of investment. Not only this, but the claim that the
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