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
ffi fi fi ffi
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
ffi fi fi ffi
