would be sure. If he failed on the economic front,
he would be likely to fail all along the line. That
is why Hitler was prepared to tolerate the con-
tinuation of Jewish businesses, to allow Jewish
salesmen to remain prominent in the export trade
until 1938, and to make use of unorthodox finan-
cial management to achieve a rapid reduction of
the unemployed; real incomes would cease to fall.
Between March 1933 and March 1934 unem-
ployment fell by over 2 million in part but not
wholly due to the ending of recession. Able men
served Hitler, including the brilliant financial
expert, Hjalmar Schacht, whom the Führer
appointed president of the Reichsbank. Plans
worked out in advance by Hitler’s economic
advisers were now put into action. With guaran-
teed prices for their produce, farmers recovered
during the first three years of the regime; small
businesses were helped with state spending; taxes
were reduced; grants were made to industry to
install new machinery; work was created in slum
clearance and housing and Autobahn construc-
tion. The economy was stimulated out of reces-
sion. Though wages did not rise in real terms,
security of employment was a greater benefit for
the wage-earners. The pursuit of autarky or self-
sufficiency helped the construction, chemical, coal
and iron and steel industries. The industrialists
welcomed the opportunities for expansion and
increased profit and applauded the destruction of
free trade unions. But industry lost its independ-
ence as its barons became dependent on state
orders and state allocation of resources. The First
and Second Four-Year Plans imposed state con-
trols severely limiting the capitalist economy.
Armament expenditure remained relatively low
from 1933 to 1935, but from then on was rapidly
increased, putting Germany on a war footing and
eliminating unemployment. Belts had to be tight-
ened, – ‘guns before butter’ – but it was too late
for any opposition to loosen the Nazi hold on
power; there was in any case no opposition that
could any longer command a mass following.
By 1934 Hitler’s regime had established a suf-
ficient base of power and secured enough willing
cooperation of ‘experts’ in the administration,
business and industry, as well as the army, for his
Nazi state to function, though often with much
confusion. The Nazi ideologues and fanatics had
formed an alliance with the educated and skilled
who served them. Without them the Nazis could
not have ruled Germany. What German history of
this period shows is that parliamentary democracy
and the rule of law, once established, will not
inevitably continue. If they are not defended, they
can be destroyed – not only by violent revolution,
but more subtly by determined and ruthless men
adopting pseudo-legal tactics.
And what of the outside world – they, too, not
only gave Hitler the concessions he demanded or
unilaterally took by breaking treaties but in 1936
handed him the spectacular triumph of holding
the Olympic Games, dedicated to freedom and
democracy, in Berlin.
1
THE FAILURE OF DEMOCRACY AND RISE OF HITLER, 1920–34 193
