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It's said that the unemployment was virtually non-existent in Nazi Germany. What factors led to such a drastic reduction of unemployment?

Are there comparable examples of other industrial nations achieving similar rates or is this an anomaly?

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    Look at US unemployment rates prior to WWII and during the war. Putting a large part of your potential work force in the army would seem an obvious way to reduce unemployment, as would creating an armaments industry. – jamesqf Apr 29 '16 at 18:09
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    Mark I don't think that would be significant because the rate decreased most drastically between 1933-36 and reached the low point around 1939. The internment camps weren't active during those times. Also if it was simply a numbers gain there wouldn't have been an accompanied increase in standard of living between 1933-39 which there clearly was. Accepting that Germany had a successful economic recovery doesn't mean you're promoting neo-nazism. No need to make this an emotional or patriotic issue. – Philip Kirkbride Apr 29 '16 at 19:53
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    One reason was the will to reduce unemployment. Interesting detail for this topic: en.wikipedia.org/wiki/Reichsautobahn#Employment – knut Apr 29 '16 at 20:03
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    @PhilipKirkbride The internment camps weren't active during those times Wrong. For example, Dachau opened in 1933. It is true that during the war many others were created, but there were concentration camps from the beginning of Nazi Germany. – SJuan76 Apr 29 '16 at 20:16
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    Another causes for reduced unemployment: forced labour (en.wikipedia.org/wiki/Reichsarbeitsdienst) and rearmament finance by an irregular system of loans called MEFO (en.wikipedia.org/wiki/MEFO) and that was on the verge of collapse in 1939 – SJuan76 Apr 29 '16 at 20:43
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I would recommend e.g. this page for a fair review of the dropping unemployment figures. Before Hitler took over, the Weimar Republic's body of unemployed citizens peaked at 6 million people. The figure was dramatically decreasing down to the figure of only 300,000 people (a decrease by a factor of 20) in 1939.

However, that doesn't mean that this decrease was a universally good thing. It seems fair to say that it was "mostly bad".

  • First, let me start with the only aspect I consider "mostly good": lots of new big-government projects were started, new highways, irrigation projects etc. that needed lots of workers (well, many people were proud about it but at the end, I and others just don't think that such a big part of the economy should be driven by the government, even when it comes to building the infrastructure)
  • A related point is that the funding of many of these things was from huge budget deficits and the public debt skyrocketed. Various "new forms of the government debt" were spreading. The deficit in 1939 was 38 billion marks – clearly an unsustainable dynamics in normal circumstances. The detachment of these figures from the economic reality made "something big" as the war pretty much necessary by itself. See Economy of Nazi Germany on Wikipedia for some detailed data.
  • Second, much of the legitimate reduction of unemployment among the workers was started when the weapons began to be mass-produced for Germany to become a military power, and that increase of the military strength of Germany was a major force that made the war unavoidable later (which is why I count this point as a negative)
  • Third, women were completely eliminated from the statistics, so basically a factor-of-two decrease may be considered a bureaucratic trick for this reason (also something showing that the Third Reich was sick; here, where we had the Protectorate of Bohemia and Moravia, all men were obliged to be members of the "National Conviviality" while women were totally eliminated from that, too – I don't think that this perfect segregation of the sexes belongs to a civilized society)
  • Jews lost their citizenship in 1935 and were eliminated from the statistics – even though the Jewish unemployment probably grew during Hitler's reign (while their later fate was much worse than just unemployment; a catastrophic point for the picture of the Third Reich)
  • Even non-Jewish unemployed citizens were likely to be labeled "work-shy" and moved to the concentration camp so everyone was "encouraged" to work in this brutal way (sorry but that just doesn't happen in civilized countries)
  • Conscription took lots of young men off the unemployment tables (5 million German troops paid their life for this move to "reduce the unemployment", a little bit too high a price – the military casualties almost match all the unemployed people during the Weimar peak)
  • Much like the USSR and the communist countries later, the Nazi regime was ideologically obsessed with this "virtue" of almost non-existent unemployment. That also answers your other question: Obviously, all the communist bloc countries should be considered analogous – and, as the points above make clear, no decent free democratic country may be considered analogous in those respects. As a kid, I grew up in late communist Czechoslovakia and we were constantly impressed by the idea that there was no unemployment in the Soviet bloc. The reasons were pretty similar. The sane among us never thought that this "non-existent unemployment" was a good enough excuse for virtually all aspects of our nation and its economy to be so brutally damaged.

With one exception, almost all the reasons for the dramatically dropping figures were bad. And economists would generally agree that the super-low unemployment in Germany was a bad outcome, anyway. Companies need some nontrivial pool from which they can hire when someone leaves or dies or a pool that allows them to expand or reshuffle etc. 300,000 people was unquestionably a pathologically low number for a country of Germany's size.

Too bad, there still exist people who are so obsessed with the reduction of the unemployment rate that they could be ready to do similar things that were taking place in Germany of the 1930s. I personally find it totally fine to appreciate things that worked even when we're talking about an unpopular and inhuman country such as the Third Reich (and I think that even on our occupied territory, there were things that just "worked"). But I am convinced that the people who think that the whole "package" leading to the low unemployment in the Third Reich – the reasons, methods, and the results – was a "good thing" are much closer in their reasoning to the Nazi (or otherwise totalitarian) reasoning than they are probably willing to admit.

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    I think point 3 is incorrect as not counting woman in the work force was a global norm in the period before world war 2. – Philip Kirkbride Apr 30 '16 at 15:12
  • What period are comparing unemployment rates in eastern Czechoslovakia to nazi-Germany? It is my understanding that Germany had strong underlying economy but this is not the case with Czechoslovakia. The strength of the German economy (even after 1945) is well documented in the early history of the EU. – Philip Kirkbride Apr 30 '16 at 15:18
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    Dear @PhilipKirkbride, do you have some evidence for your extraordinary claim? Do you claim, for example, that our democratic Czechoslovakia in the 1930s didn't count the "unemployed mothers" among the unemployed people? I can't imagine that. Since 1861, women could actually vote and run for offices and they were treated as equal in almost all respects. Many of them wrote their job as household wives when husbands were OK with that but if they didn't have that, they were unemployed just like any other man. I don't believe it was different in other democratic countries. – Luboš Motl Apr 30 '16 at 15:20
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    OK, the 1938 number is clearly a bogus number - it may remove the Sudetenland from Czechoslovakia. We had the same GDP per capita e.g. in the mid 1930s and probably higher GDP per capita than Germany in 1930 or early 1930s. This was contributed by the incredible boom, e.g. 10% and 12% GDP growth of Czechoslovakia in 1927, 1929, respectively dejinyasoucasnost.cz/archiv/2008/3/nase-zlata-leta - the timing is different, but the point you are trying to make that this Nazi big-government system beats democracy is just totally and fatally wrong. It's undeniably economically inferior. – Luboš Motl Apr 30 '16 at 15:35
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    cool story bro. I'm simply interested in the economic organization of the country. I can admit the Chinese government is efficient at certain things without advocating that type of government. The same can be said of Nazi Germany. The aspects I'm interested in hearing about include restructuring of labour unions, banking system, and unique interaction between corporations and government for example Volkswagen. – Philip Kirkbride Apr 30 '16 at 15:50

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