Schacht's 'New Plan' (1934) was Nazi Germany's economic program under Hjalmar Schacht that used strict state control of trade, currency, and imports to cut unemployment, move toward self-sufficiency (autarky), and quietly finance rearmament during the interwar period.
Schacht's 'New Plan' was the economic strategy Hjalmar Schacht rolled out as Hitler's Economics Minister in 1934. Germany was still crawling out of the Great Depression with massive unemployment and almost no foreign currency reserves. Schacht's answer was heavy state intervention. The government decided which imports Germany could afford (raw materials for industry and rearmament got priority, consumer goods did not), signed bilateral trade deals with countries that would accept German goods instead of cash, and tightly controlled foreign exchange so money didn't leak out of the country.
The bigger picture is what makes it an AP Euro term. The New Plan paired public works and rearmament spending with a managed, state-directed economy aimed at autarky, meaning Germany could feed its war machine without depending on foreign suppliers. It wasn't full socialism and it wasn't free-market capitalism. Private businesses still existed, but the state told them what to produce and where to trade. That hybrid is the classic fascist economic model, and it's exactly the kind of economic foundation that made Hitler's later remilitarization and expansion possible.
This term lives in Unit 8 (20th-Century Global Conflicts), specifically Topic 8.7, Europe During the Interwar Period. It supports learning objective 8.7.A, which asks you to explain how political and ideological factors led to World War II. The CED's essential knowledge (KC-4.1.III.A) points out that Western fears of another war and American isolationism 'allowed fascist states to rearm and expand.' Schacht's New Plan is the mechanism behind that rearmament. It's the economic engine that turned Nazi ideology into tanks and planes while Britain and France looked the other way. It also fits the AP Euro theme of states experimenting with new economic models after the Depression discredited laissez-faire capitalism.
Keep studying AP Euro Unit 8
Autarky (Unit 8)
Autarky, or economic self-sufficiency, was the New Plan's end goal. Schacht's import controls and bilateral trade deals were all designed so Germany could wage war without being strangled by a blockade like it was in WWI.
Rearmament (Unit 8)
The New Plan funneled scarce foreign currency toward raw materials for weapons production. When you explain how fascist states rearmed despite the Depression (KC-4.1.III.A), Schacht's financing tricks are your evidence.
Five Year Plans (Unit 8)
Stalin's Five Year Plans and Schacht's New Plan are the two big interwar examples of state-directed economies, which makes them a perfect comparison pair. The key difference is that the USSR abolished private ownership entirely, while Nazi Germany kept private business and just steered it.
Economic Instability and the Great Depression (Unit 8)
The New Plan only makes sense as a response to the Depression. Mass unemployment and a collapsed export market discredited liberal capitalism in Germany and opened the door for state-controlled solutions, both economic and political.
You're most likely to meet this in multiple-choice questions built around an interwar economic chart, a Nazi propaganda source, or a passage about Depression-era recovery, where the right answer involves state intervention, autarky, or rearmament. No released FRQ has used this term verbatim, but it's strong evidence for LEQ and DBQ prompts about responses to the Great Depression, the rise of fascism, or the causes of World War II. The move that earns points is connecting the economics to the politics. Don't just say Germany recovered; explain that the New Plan's recovery was built on rearmament, which the Western democracies failed to stop, which led to war.
These are two phases of Nazi economic policy, and they're easy to blur together. Schacht's New Plan (1934) was about managing a fragile economy: control trade, conserve foreign currency, rebuild gradually while funding rearmament on the side. Göring's Four Year Plan (1936) dropped the caution and demanded an economy ready for war within four years, full autarky at any cost. Schacht thought that pace was reckless and was pushed out of power. Think of it as the careful banker's plan replaced by the warmonger's plan.
Schacht's New Plan (1934) used state control of trade, imports, and foreign currency to pull Nazi Germany out of the Depression and fund rearmament.
Its core goal was autarky, meaning Germany would be economically self-sufficient and blockade-proof in a future war.
It blended capitalism with state direction, keeping private businesses but telling them what to produce and where to trade, which is the signature fascist economic model.
It directly supports CED essential knowledge KC-4.1.III.A, because the rearmament it financed went unchecked by Britain, France, and an isolationist United States.
It makes a strong comparison with Stalin's Five Year Plans as another interwar state-directed economy, with the key difference that the USSR eliminated private ownership while Nazi Germany did not.
It was Nazi Germany's 1934 economic program under Economics Minister Hjalmar Schacht. It used state-controlled trade, import restrictions, and bilateral deals to reduce unemployment, push toward autarky, and finance rearmament during the interwar period.
No. Private property and private businesses stayed in place, which separates it from Soviet-style socialism. The state directed the economy through trade controls and spending priorities rather than owning the means of production, which is the fascist hybrid model.
Both were state-directed responses to economic crisis, but Stalin's Five Year Plans abolished private ownership and forced rapid industrialization through central planning. Schacht's New Plan kept capitalism intact and steered it through import controls, currency rules, and trade agreements.
It quietly bankrolled German rearmament in the mid-1930s. The CED's KC-4.1.III.A points out that Western fears of war and American isolationism let fascist states rearm unchecked, and the New Plan is the economic machinery that made that rearmament possible.
By 1936 Hitler wanted war-readiness faster than Schacht thought the economy could handle, so Göring's Four Year Plan took over with a push for total autarky and military buildup. Schacht lost influence and resigned as Economics Minister in 1937.