on a cold day in november the citizens of munich are going about their daily business but today is no ordinary day as thousands of armed radicals known as the brown shirts have taken to the streets even though the great war is over the german people live in a tense and uneasy atmosphere inflation has spiraled out of control and it is not uncommon to see price tags with numbers in the trillions it is only a matter of time before the situation reaches a critical point for my family to admit this is um [Applause] [Music] before we
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the description below within the next 30 days and you'll unlock the amazing new player pack which includes a month of high command and 13 000 gold hi i'm griffin johnson the armchair historian in this video we will cover how germany went from being saddled with debt and suffering the worst inflation in history to somehow conquering europe all within the span of just 20 years while the german national socialist party appeared to have brought the economy back on track we'll also examine how in many ways it didn't but first we need to establish just what crippled
the german economy and that requires going further back to the ashes of the great war when all hope seemed lost shortly after the german surrender on the 11th of november 1918 a socialist uprising forced kaiser wilhelm ii to abdicate without designating an heir in the wake of this upheaval the german monarchy was dismantled and a new government popularly referred to as the weimar republic rose to take its place this new government was forced to sign the humiliating treaty of versailles in june 1919. in addition to being forced to pay crippling war reparations the industrial heartland
of the nation was occupied and the german military was all but dismantled public perception of the new republic quickly became overwhelmingly negative with many patriotic germans blaming the revolution for their capitulation during the great war a national myth that would have devastating consequences further down the line with virtually no industry and a population hostile to taxation the weimar republic resorted to a solution dear to the hearts of economists everywhere printing money to satisfy its debtors inevitably this resulted in hyper inflation and the german mark plummeted in value at its lowest point in late 1923 a
little over 4 trillion german marks was equivalent to a single us dollar in the end a desperate germany appealed to the british and americans for assistance resulting in the enactment of the dawes plan this plan introduced a new currency based on the gold standard called the renton mark and the loaned germany a massive amount of money to restart its industrial sector under the dawes plan the weimar republic enjoyed a few years of relative stability and recovery but in 1929 the great depression struck and funding from the united states evaporated almost overnight worse still germany's creditors
began rushing for repayments plunging the country straight back into financial ruin while a series of german chancellors like franz von poppin and general kurt van slicher were busy handling the fallout a new political faction began to emerge the national socialist german workers party or simply the nazi party founded in 1920 they preyed on middle-class fears of a communist uprising for support and promoted an extremely antagonistic anti-semitic platform that demanded a racially pure germany despite surging in elections and soon becoming the most popular party the national socialists lost 2 million votes in the reichstag elections in
1932 seeking to capitalize on this weakness the conservative establishment within the republic thought the time was now ripe to pacify this violent party by welcoming some of its leaders into power surrounded by conservative ministers and only having a handful of allies in cabinet positions nazi leader adolf hitler was appointed reich chancellor by president paul von hinnenberg in january 1933 the conservative establishment thought they could control him for their own ends but they couldn't have been more wrong suffice to say hitler and his movement could not be contained the methods by which hitler went from being
essentially a lone chancellor surrounded by his opposition to having complete control of the government could warrant its own video but soon enough the weimar republic was no more and the national socialist party was in full control [Applause] using a new secret police force the nazis built a system of violent oppression and surveillance attempting to silence descent and unify the country towards one goal war with the outward display of public support the nazis first decided to tackle the unemployment problem in reality the next decade would merely see the expansion of the german military under the manipulative
guise of repairing the economy in some instances instead of creating jobs they simply distorted the numbers by encouraging young couples to get married through generous marriage loans which removed women from the workforce this reduced the pool of economically active people thus creating the illusion of a falsely esteemed workforce other shady tactics including counting part-time workers as fully employed or even classifying forced laborers and prisoners as full-time employees additionally in accordance with nazi racial policy many jews were forced out of their jobs or had their businesses confiscated and redistributed to non-jewish businessmen who displayed loyalty to
the party this falsifiable image of economic recovery opened up new opportunities for non-jewish germans but at the same time caused enormous suffering and hardship for those deemed undesirable this isn't to say that there weren't job creation programs the nazis invested hundreds of millions of marks into various games to get the germans back to work and millions of germans were now able to find full-time jobs in hitler's new arms factories but other job creation programs were far less traditional co-opting an existing labor program called the voluntary labor service the nazis forced the unemployed or people receiving
welfare benefits to volunteer for hard labor like farming or clearing earth for the state's massive construction projects hundreds of thousands of germans were forced to toil in abysmal conditions for lower pay than they were even receiving under the welfare program and any who expressed complaints were sent to early forms of the concentration camps and yet to the nazis these suffering workers represented an encouraging statistic by 1935 unemployment rates had plummeted to only 2 million people but if you include the unemployment rate the forced laborers prisoners and women taken out of the workforce by marriage loans
the actual unemployment rate stood at about double this figure however rotten its foundation may have been the german economy was growing but it was not nearly enough to cover the amount the government was spending rather than temper their ambitions the nazis engaged in massive deficit spending to finance the programs they had in mind german economists instituted a complicated new credit system called mifo bills that allowed them to create and spend enormous amounts of cash while avoiding a new round of hyperinflation these mipho bills essentially acted like government bonds and allowed the nazis to spend money
that didn't really exist this initially proved successful but gradually collapsed over time the german government was spending exorbitant amounts of money on rearmament and public works projects with the mindset that it would all be repaid by the plunder and land seizure of future conquests they instituted no long-term economic plan and made no attempts to boost foreign trade or look beyond the coming war as the national debt skyrocketed the nazis didn't stop to consider what would happen if they lost the war they had been banking on instead they invested everything they had into ensuring they would
win every subsidy and every investment made went into manufacturing and engineering at the almost complete abandonment of consumer goods all of the nazis programs and initiatives from job creation to public works to even their racial policies were ultimately meant to serve the cause of rearmament perhaps one of the most famous public works launched during this time the audubon highway system was no different financed in part by laws that granted a billion marks for infrastructure projects the autobahn was marketed as a massive modern highway system for the new german citizen to proudly tour his country behind
the wheel of a shiny new car unsurprisingly it also had another purpose hitler envisioned the highways of the audubon as the main arteries of a new military mobilization system he pictured columns upon columns of panzers rolling down the roads protected by a thick concrete shell that towered over the highways and blocked air attacks contrary to his lofty vision no concrete tunnels were ever built and the roads proved too unstable for heavy tanks to roll along even the system under which the highways were laid out prevented them from having any use in military mobilization since the
roads were too far away from any front line despite creating over 100 000 jobs and improving infrastructure the audubon's true success was propagandistic hitler personally planned some routes to weave through the most picturesque views in germany and insisted on the most modern bridge and road designs to project the image of a unified and idealistic state but the government encountered a bump in the autobahn the average citizen couldn't afford a car so who is going to use the new highway system in the first place as a solution hitler imagined an affordable and cheaply produced vehicle known
as the people's car or volkswagen that everyday citizens could purchase and drive through the new scenic highways through the beautiful german countryside a mass advertising campaign and workers payment program were launched to promote the car and hundreds of thousands of laborers enthusiastically signed on but as with so much during this period everything ended up being used in service of the ultimate goal instead re-armament despite 340 000 workers investing 110 million reichsmarks into the car payment program not one would actually receive a car all of the funds collected by the people's car campaign went straight towards
war spending car ownership in germany did noticeably increase during this period but the autobahn was not merely the success portrayed by nazi propaganda even by 1939 railways remained the most common form of transport in the country these years of spending on military rearmaments did not go unnoticed as germany was not yet ready for war hitler had to fabricate a variety of excuses to justify the expansion of the armed forces to foreign powers to the surprise of many germany was suddenly very interested in producing thousands upon thousands of innocent passenger planes and agricultural tractors these vehicles
only existed on paper however there was nothing innocent nor agricultural about the messerschmitts and panzers rolling off the assembly lines or the rifles and howitzers emerging under the table from civilian manufacturers across the country this disguised military buildup culminated in 1935 when mandatory conscription was passed and by the end of the year the army had grown to nearly eight hundred thousand men over eight times the maximum set by the treaty of versailles with this act the last of germany's non-jewish unemployed men were swept into military service and unemployment was on paper at least fully eradicated
the result of all of this was that germany entered the second world war far better off than it had been at the end of the last great war the gross national product had surged to well over 100 billion reichsmarks in 1939 from a low of 60 billion in 1932 and to all it seemed that germany had fully regained its strength but while unemployment was down and manufacturing and capital were up many of those so-called employed germans were slaving away in a labor camp and that capital was contingent on the complete success of the war further
the benefits from all of this economic success were skewed heavily towards those considered true germans and came at the expense of everyone else like the autobahn unable to carry hitler's tanks the nazi economy was shiny on the surface but hollow at its core [Music] [Music] you
