Assess the work of Hjalmar Schacht in restoring Germanys economic :: Economics

Assess the work of Hjalmar Schacht in restoring Germany's economic situation. Germany at the beginning of 1933 had a high unemployment rate, which meant poverty was widespread. Those in work found that their wages declining which had consequences for those who produced consumer goods. International trade, industrial production and national income had all dropped. Schacht had been chosen by Hitler to solve Germany's economic problems due to a couple of reasons. The most important one was the fact he was the man who had solved hyperinflation in 1923 and had brought Germany's economy back on track then; the other reason was because Schacht was strongly right wing. Schacht became the Economic Minister in 1934 and used the financial facilities of the Reichsbank to help Germany rearm. He was then given dictatorial powers over the economy. The new plan of September 1934 provided control of all aspects of trade and currency exchange. Schacht had many ideas on how to get Germany's economy back up to full strength. One of his ideas was influenced by Keynes, a British economist. He adopted the policy of deficit financing; this idea was that money would be spent of public works to create jobs. The government would pay people to build motorways, which would then reduce unemployment. They then had money to spend, which would mean more products would be needed and companies would have to take on more workers, lowering unemployment further. The German government hoped that the secondary jobs, which were being created, would reemploy the majority of the population, instead of having to feed more money into the system. But this didn't just solve unemployment; it was useful to the public, it meant there were now modern roads, which eased travel over the country. This idea had one more advantage although this wasn't for the people; it was for the Nazi party. Building roads and updating the country was good propaganda; people liked what they were doing and had even more reason to want to keep them in power. Building wasn't the only scheme launched; afforestation was also used to create jobs. This idea paid off as unemployment was down to 2.5 million by mid 1934, and then by the middle of 1935 it had decreased further to 1.7 million. Hitler wanted 'autarky', which in principal was that Germany would become economically self-sufficient. This would then mean that Germany no longer would have to be dependent on other countries to import foodstuffs and raw materials. Another advantage was that Reichsmarks weren't wasted on import taxes. It also gave Germany the opportunity to strive towards a target and it would give them pride when it was