This document provides detailed information about the economy in Nazi Germany and the FRG, divided into three different points in aid of an essay plan with distinct paragraphs. It discusses key details and facts, including dates and statistics, to provide an idea of the extent to which the economy ...
To what extent did the nature of the economy change between the Nazi
period and the FRG?
Extent of state intervention
- Nazis created a command economy completely controlled by the state, whereas
the FRG had a social market economy
- Nazi war economy meant that the state, rather than business or agriculture
decides on how much is produced
- Goering takes over the economy in 1936 and sets out aims of how much is to be
produced
- In order to make industry more e cient, monopolies and cartels were set up so
that small businesses failed, however, before 1936 the Nazis had been
exceptionally pro-business but now prioritised rearmament and so needed a
more e cient economy
- Price controls and little competition in the command economy
- Erhard was the rst economics minister of West Germany from March 1948
- He introduced a social market economy or ‘caring capitalism’ with less state
involvement in business
- Erhard gets rid of cartels and price controls although this angered the
industrialists who had bene tted under Nazis, it created more competition and
increased investment and spending
- During the recession of 1966, growth fell and the government was forced to
intervene
- Schiller reintroduces cartels to stop prices from rising too much
- 1967 Economic Stabilisation Law allowed for government intervention in times of
economic crises to limit spending
Employment
- The way in which jobs were created changed between the Nazi era to the FRG
from government controlled schemes to stimulation of business
- Schacht introduced work schemes to increase employment after the Great
Depression
- This was very successful — by 1936, six million jobs were created and
unemployment fell to 7.4%
- New investment as a result of Erhard’s economic policies meant that businesses
were employing more and led to the economic miracle in which unemployment
dropped from 8.1% in 1950 to 0.5% in 1965
- Erhard removed cartels and so more businesses opened because there was
more competition so there was more employment available
- Both in the Nazi and FRG periods, attempts were made to increase employment
but the ways in which they did this changed from a solely government controlled
scheme to a more businesses orientated one
- Initially, the Nazi government created jobs just for Germans
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