The Nazi Economy and Rearmament

When Hitler took power in January 1933, Germany was in the depths of the Great Depression. Around 6 million people were unemployed, industrial production had collapsed, and millions had lost faith in the Weimar Republic. Reducing unemployment and reviving the economy was therefore central to keeping public support.

The Nazis had a further, hidden aim: preparing Germany for war. Almost every economic policy served two purposes at once — creating jobs and building military strength.

Nazi economic goal	Why it mattered
Cut unemployment	Win public support and prove Nazi rule "worked"
Rearm the military	Reverse the Treaty of Versailles and prepare for war
Achieve self-sufficiency (autarky)	Survive a war without depending on imports
Control the workforce	Prevent strikes and opposition after banning unions

Keeping these overlapping aims in mind helps you explain why each policy existed, not just describe it.

The Nazis attacked unemployment with large public works programmes that created jobs and modernised Germany.

• Autobahns: a vast network of motorways was begun, employing hundreds of thousands of men in construction. The roads also had military value, allowing troops to move quickly.
• Public buildings: the state funded new houses, schools, hospitals and grand government buildings.
• The National Labour Service (RAD): from 1935 it became compulsory for young men aged 18–25 to serve six months doing manual work such as digging ditches and building roads. They wore uniforms, lived in camps and received only pocket money, but they were removed from the unemployment count.

The government paid for much of this through deficit spending, managed in part by the earlier work of Reichsbank president Hjalmar Schacht.

The RAD did two jobs at once: it cut unemployment figures and it trained young men in discipline and hard labour, preparing them for military service.

The biggest driver of jobs was rearmament — rebuilding Germany's armed forces in defiance of the Treaty of Versailles.

• Spending on weapons, tanks, ships and aircraft created huge demand, putting factories and workers back to work in the arms and steel industries.
• In 1935 Hitler openly announced rearmament and reintroduced conscription, expanding the army far beyond the 100,000 men allowed by Versailles.
• Conscription removed hundreds of thousands of young men from the labour market by putting them in uniform, cutting unemployment directly.

Rearmament and conscription together were arguably the single most important reason unemployment fell so far. By 1939 official unemployment was close to zero.

Cause of falling unemployment	How it worked
Public works (autobahns etc.)	Created construction jobs
RAD	Removed young men from job figures
Rearmament	Boosted arms and heavy industry
Conscription (from 1935)	Put young men into the army
"Invisible unemployment"	Jews, women and others removed from statistics

The fall in unemployment was genuine and dramatic, but the official figures were also flattered by how the Nazis counted.

Groups were removed from the unemployment statistics, creating what is sometimes called "invisible unemployment":

• Jews were pushed out of jobs and no longer counted.
• Women were encouraged or forced to leave work, and many were removed from the figures.
• Political prisoners in concentration camps did not count.
• Men in the RAD or conscripted into the army did not count as unemployed.

So while the recovery was real, the drop from 6 million to near zero looks even sharper than the underlying reality.

A strong exam answer both credits the Nazis with a real fall in unemployment and notes that the statistics were manipulated. Balancing these two points shows evaluation, which examiners reward.

By 1936 Hitler was determined to make Germany ready for war within four years. He put Hermann Göring in charge of a new Four-Year Plan, sidelining the more cautious Schacht.

The plan had two linked aims:

1. Rearmament: rapidly expand weapons and munitions production.
2. Autarky (self-sufficiency): reduce dependence on imported raw materials so that a British naval blockade (as in the First World War) could not starve Germany again.

To achieve autarky, the Nazis:

• Boosted home production of key materials like coal, iron and chemicals.
• Developed substitute (ersatz) materials, such as artificial rubber and fuel made from coal.
• Tried to increase food production to feed the population without imports.

The Four-Year Plan largely failed to reach full self-sufficiency — Germany still had to import many raw materials in 1939 — but it did shift the economy firmly towards preparing for war.

Because trade unions had been banned in May 1933, the Nazis needed a new way to manage and reward workers. They created a set of organisations to keep the workforce loyal and productive.

Organisation	What it did
German Labour Front (DAF)	Replaced unions; set wages and hours; workers could not strike or bargain freely
Strength Through Joy (KdF)	Provided cheap leisure — holidays, cruises, cinema, sport — to reward workers
Beauty of Labour (SdA)	Improved workplace conditions such as lighting, canteens and washrooms

The Volkswagen ("people's car") scheme was promoted through KdF: workers paid into a savings plan to buy a car. In practice almost none received one, as the factories switched to war production.

These schemes had real benefits, but their purpose was control: workers gained leisure and slightly better conditions in exchange for losing the right to strike, bargain or organise.

When war came in 1939, Germany's economy was not fully prepared for a long conflict. Early victories relied on rapid Blitzkrieg campaigns rather than a fully mobilised war economy.

As the war turned against Germany, the strain grew severe:

• Total war (from 1942): Albert Speer was made Armaments Minister and reorganised production, greatly increasing output of weapons even as bombing intensified. Goebbels called for "total war" in 1943.
• Rationing: food, clothing and fuel were rationed. Rations were cut as the war went on, and shortages worsened.
• Labour shortages: with millions of men conscripted, Germany faced a shortage of workers. The Nazis used forced foreign labour and prisoners from occupied countries and camps to keep factories running.
• Allied bombing: from 1942–45, Allied air raids destroyed factories, transport and cities, disrupting production and causing mass civilian hardship.
• Refugees: by 1944–45, millions were fleeing bombing and the advancing Soviet army, adding to the chaos.

By 1945 the economy had collapsed under bombing, shortages and defeat.

1. Ignoring rearmament and conscription when explaining falling unemployment

Public works get remembered, but rearmament and conscription were central to cutting unemployment. A top answer weighs both, not just the autobahns.

2. Presenting the unemployment fall as entirely genuine

The fall was real but the figures were manipulated — Jews, women and political prisoners were removed from the count. Note both sides.

3. Confusing the RAD and the DAF

The RAD was the National Labour Service (manual work for young men). The DAF was the German Labour Front (which replaced trade unions). They are different organisations.

4. Saying autarky succeeded

The Four-Year Plan and autarky largely failed to make Germany fully self-sufficient; imports of key materials continued. Credit the aim, but be accurate about the result.

5. Assuming Germany had a full war economy from 1939

Germany did not fully mobilise for total war until around 1942, under Speer. Early in the war it relied on short Blitzkrieg campaigns rather than a fully war-focused economy.