Once he had secured power in 1933, Hitler sought to harness the German economy for war preparation. He well understood that his desire for new lands in the east (lebensraum) had to be realized through a series of swift and decisive military victories. The German economy could not sustain a long drawn-out war. Thus the blitzkrieg (lightning war) was born of economic necessity.
In 1936, Hitler instituted a Four-Year Plan for the economy under Reichsmarschall (Reich Marshal) Herman Göring. The idea was designed to centralize the economy. However, as with everything else in the Third Reich, the rivalry of higher-ranking officials, encouraged by Hitler, meant that the economy remained a battlefield for various competing interests, even within the armed forces themselves. Despite these inefficiencies, Germany rebuilt its military. Spending on the armed forces, however, was consuming 50 percent of the budget, or approximately 60 billion reichsmarks, per year. Hjalmar Schacht, head of the Reichsbank, pointed out that this level of expenditure could not be sustained.
Besides military growth, another goal of the Four-Year Plan was German economic autarky in such key areas as the petrochemical industry and reduction of imports of other raw materials necessary for war production, including rubber and minerals. From 1936 to 1938, the Four-Year Plan concentrated on production of raw materials; after 1938, attention was focused on production of finished goods such as tanks, aircraft, and artillery pieces for immediate war use. Between 1936 and 1942, the Four-Year Plan represented 50 percent (13.25 billion reichsmarks) of total German industrial investment.
Memories of World War I, when the British naval blockade starved Germany of raw materials and foodstuffs, underpinned German planning. The August 1939 German-Soviet Non-aggression Pact, however, removed much of the impact of the blockade during World War II, as did the addition of Romania—with its important oil fields of Ploesti—to the Axis alliance after the war began.
Despite emphasis on military production, the Nazi hierarchy feared the impact on home-front morale of shortages of consumer goods. Production of consumer goods from 1936 to 1939, when Germany was straining to increase its armaments, actually went up by 25 percent. This continued during the war; Germans enjoyed both "guns and butter" and a relatively high standard of living until 1944. After the successful military campaigns of 1939 and 1940, Hitler recommended a reduction in arms production in order not to affect civilian morale. The government pacified the population with incentives such as bonuses for night shifts and overtime pay on holidays. Despite an official decree to freeze salaries, average wages from September 1939 to March 1941 rose by 10.4 percent.
Even in 1942, consumer expenditures were maintained at about the 1937 level, and few new economic restrictions were imposed. Raw materials were in short supply, but these were deliberately depleted in the expectation of a quick victory over the Soviet Union. This optimistic outlook changed with the German reverses in the winter of 1941–1942. In February 1942, when Fritz Todt, minister of armaments and production, died in a plane crash, Hitler named Albert Speer as Todt's replacement.
An organizing genius with a keen interest in efficiency rather than ideology, Speer created a centralized machinery of control in the Central Planning Board. By 1943, Speer had nearly complete control of the national economy and was able substantially to boost production. He also enacted industrial policies to standardize production by limiting the number of different types of armaments produced and promoting factory assembly-line methods. In fact, German war production was at its height in 1944, despite Allied bombing, and production of consumer goods dropped only slightly. In March 1944, German aircraft plants went on double shifts and a seven-day workweek. Thus Germany attained its highest levels of aircraft, tanks, and munitions production in late 1944 while bearing the full brunt of Allied bombing. But by then it was too late. When the Allies shifted their bombing emphasis to lines of communication and petroleum production, the transportation system collapsed and there was no fuel to operate the tanks and new jet aircraft.
Speer might have accomplished more had he not been handicapped by jealous rivals, such as the multi-hatted Hermann Göring and Reichsführer-Schutzstaffel (leader for the Reich, RFSS) Heinrich Himmler. Himmler was a major hindrance. Constantly scheming to enhance the power of the SS within the Reich, he actually undermined the economy. The SS grew to be a state within a state, and Hitler even approved Himmler's proposal to build an SS-owned industrial concern to make it independent of the state budget.
Major factors in Speer's success, of course, were the substantial territory and resources Germany had acquired by 1942. Germany could exploit the resources of this new empire—skilled labor, industry, and metallurgical resources from France and Belgium; foodstuffs and other resources from Denmark, Norway, and the Balkans. There were also substantial resources in the vast stretches of the Soviet Union occupied by the German army from June 1941 onward, although many of these resources were simply those Germany had depended on in the past.
Spain was a friendly neutral country, and Sweden, Portugal, and Switzerland continued to trade with the Reich and conduct its business. In addition, ruthless German economic exactions helped finance the war. German-occupied Western Europe provided substantial raw materials and money to fuel the German war machine. Of the total German war expenditure of 657 billion reichsmarks, the German people paid only 184.7 billion. France alone paid "administrative costs" to Germany at the absurdly high sum of 20 million reichsmarks a day, calculated at the greatly inflated rate of exchange of 20 francs per reichsmark and amounting to some 60 percent of French national income.
The National Socialist regime failed to use two readily available sources of labor, however. The Nazis had done all in their power to reverse the emancipation of women during the Weimar Republic. Restricting women to the "three Ks" of Kinder, Kirche, and Küche (children, church, and kitchen) meant that during the Great Depression jobs were secured only for men. This system carried forward into the war with serious implications for the war economy. Speer claimed that mobilizing the 5 million women capable of war service would have released 3 million German males for military service. Such a step might have altered the results of battles and campaigns, although it probably would not have affected the overall outcome of the war.
As early as 1942, Speer recommended that women be recruited for industry, but Hitler rejected this advice. Not until 1943 were women between 17 and 45 years of age required to register for compulsory work. Later, the upper age limit for women was raised to 50, and the age span for men was set at 16 to 65. By 1944, German women actually outnumbered men in the civilian labor force at 51.6 percent.
Another available source of skilled labor that had served the Fatherland well during World War I was the Jews. Numbering about 600,000 when Hitler came to power, many German Jews soon escaped abroad. Virtually all who remained and were identified perished in the "final solution." The systematic extermination of European Jewry also took its toll on the war effort, as considerable manpower was absorbed simply in rounding up and transporting European Jews to the death camps.
The Third Reich sought to compensate for labor shortages by using foreign workers. In March 1942, Fritz Sauckel became general Reich director for labor, or minister of labor. In 1942, there were 3.8 million fewer people employed in the German economy than in 1939. The Germans tried to attract foreign skilled workers with financial incentives. When this approach failed, the occupiers simply rounded up those they thought necessary and shipped them to Germany to work in appalling conditions. By the end of 1942, the total number of people working in the German arms industry had risen by 1.3 million. By September 1944, there were 7.5 million foreign and 28.4 million German workers, and at the end of the war there were upward of 10 million foreign workers in the Reich. Such labor was hardly efficient. Speer noted that in October 1943, some 30,000 prisoners working in armaments production produced over a seven-month period only 40,000 carbines, whereas 14,000 U.S. workers turned out 1,050,000 carbines in the same amount of time. Until 1944, most German factories only ran a single shift per day, and only 10 percent of employees were working a second or third shift.
Only at the very end of the war, when it was clear even to the German leadership that the war was lost, did the regime risk disrupting the German home front. By then, of course, German cities were being devastated by Allied strategic bombing. The suffering of his people did not seem to disturb Hitler. He held that Germans had proven "unworthy" of him and thus deserved to perish with him. Neville Panthaki and Spencer C. Tucker
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Neville Panthaki and Spencer C. Tucker