Schacht's 'New Plan'

Definition

Schacht's 'New Plan' was an economic policy introduced by Hjalmar Schacht in Nazi Germany during the 1930s aimed at reducing unemployment and stabilizing the economy. This plan focused on state intervention, emphasizing public works projects, rearmament, and creating a controlled economy to achieve self-sufficiency while managing trade balances. It represented a crucial shift in Germany's economic strategy during the interwar period, highlighting the blend of capitalist and state-directed approaches.

5 Must Know Facts For Your Next Test

1. Schacht's 'New Plan' was implemented in 1934 as a response to the Great Depression and aimed to lower Germany's unemployment rate dramatically.
2. The plan facilitated extensive public works projects, such as the construction of the Autobahn, which helped to stimulate job creation.
3. Through this plan, Schacht focused on achieving a favorable balance of trade by regulating imports and promoting exports.
4. The New Plan included elements of rearmament, aligning with Hitler's broader military objectives while providing jobs and boosting the economy.
5. Schacht eventually fell out of favor with Hitler due to his opposition to full autarky and more aggressive military spending, leading to his resignation in 1937.

Review Questions

• How did Schacht's 'New Plan' reflect the economic challenges faced by Germany during the interwar period?
  • Schacht's 'New Plan' emerged as a strategic response to the severe economic difficulties stemming from the Great Depression, which had devastated Germany's economy. The plan focused on reducing unemployment through public works and rearmament while ensuring that the economy could sustain itself without heavy reliance on imports. This approach highlighted the desperate need for economic recovery in a nation still grappling with hyperinflation and social unrest.
• Analyze the effectiveness of Schacht's 'New Plan' in addressing Germany's economic problems compared to traditional capitalist approaches.
  • Schacht's 'New Plan' was effective in significantly reducing unemployment and revitalizing the economy through state intervention and public works projects, contrasting sharply with traditional capitalist approaches that emphasized free-market principles. By prioritizing government control over certain sectors and implementing policies that aligned with national interests, Schacht managed to stabilize Germany economically. However, this came at a cost, as it set the stage for increased militarization and conflict due to the focus on rearmament and self-sufficiency.
• Evaluate how Schacht's 'New Plan' influenced Nazi Germany's long-term economic strategy and its implications for Europe leading into World War II.
  • Schacht's 'New Plan' significantly influenced Nazi Germany's long-term economic strategy by laying the groundwork for an autarkic economy focused on self-sufficiency and militarization. The policies enacted through this plan enabled Germany to recover from the Great Depression while also preparing for future military aggression. This shift had profound implications for Europe as it contributed to escalating tensions, leading up to World War II, as nations recognized Germany's growing economic power coupled with aggressive expansionist policies.

Related terms

Autarky: A policy of economic independence that seeks to reduce reliance on foreign imports by promoting domestic production.

Nazi Economic Policy: The overall strategy implemented by the Nazi regime to boost the economy through state intervention, focusing on militarization, infrastructure development, and social welfare.

Rearmament: The process of rebuilding and expanding a nation's military capabilities, particularly significant for Germany in the 1930s as it violated the Treaty of Versailles.