How was the German economy during World War 2?

Answer

For the first couple of years of the war Germany's civilian economy did quite well. Conquered countries were forced to accept arbitrary low exchange rates on their currency, allowing Germans to buy those nations goods very cheaply. (this is much like China does for the USA today, voluntarily). The German government encouraged this situation because they did not want to stress the German civilian with a true war footed economy.

Later, around 1942, as the Allied bombing began in earnest and the Russian front started to deteriorate, the civilian economy began to suffer.

Larger cities suffered air raids, blackouts, electrical and water cut offs, low food rations, etc.

Nonetheless, Germany did not begin a true war time economy until mid 1943, much later than her rivals. For a few examples, Germany continued to manufacture useless items such as wall paper (15,000 tons) until almost the end of the war. There were also large numbers of domestic employees being used, hands that should have been involved in the war effort. Perhaps the most critical failure of the German economy was not to utilize women in industry, a practice already widely accomplished in the Allied nations.

Overall the German economy performed well during the war despite desperate shortages of some raw materials. However, it could have done much better with more planning and better utilization of resources.

Answer

Germany in 1939 had not been crippled by the debts of the Versailles treaty. Hitler in a short period of time spent more on re-arming Germany than Germany had ever paid to France & the UK.

The view that the Versailles treaty caused (or would cause) great German hardship was a view held by many economists in 1919 and by the American government. The great economist Keynes voiced grave concern over the economic effects of the treaty at the time however he later admitted to underestimating Germany's ability to pay. In fact little ever was paid. Many people to this day still blame the Versailles treaty for Germany's economic problems but I'm not sure how valid such an opinion is when scrutinized with the facts.

Much of Germanys inter war economic problems were a natural side effect of WWI itself and of German governmental mismanagement of the German economy. The Versailles treaty was a factor but one that should not be exaggerated. Reparations expenses only made up about a third of the German government spending budget deficits in the years immediately after WWI and the German government appears to have deliberately pursued the economic policy of printing more and more money to flood the money supply to pay for their deficit. Hyperinflation was the result. This was largely self inflicted.

"Germany was neither dismembered nor ruined. Reparations could, and were, scaled down and, until the great world depression of the 1930s; the Germans recovered a high degree of prosperity. In fact, the establishment of the London schedule of Payments in 1921 determined that the real amount the Germans had to pay amounted to only 6 percent of their annual national income. The Dawes plan of 1924 reduced this to 3.3%, and the Young Plan of 1929 to 2.6%. Germany never paid even these amounts in full, and the payments were cancelled entirely in 1932.

Furthermore, if Versailles is compared to the French settlement the Prussians imposed in 1871, Brest-Litovsk, and the war aims of the Kaiser (to effectively subjugate all of Europe and use it as a probable base for launching a veritable Weltpolitik), it was not at all harsh.

http://www.krapsnotes.com/Imperator/ww1_notes.htm"

First answer by ID3425419334. Last edit by Kelc14. Contributor trust: 6 [recommend contributor]. Question popularity: 106 [recommend question]