The Wall Street Crash in 1929 prompted the Great Depression, leading the US to recall multiple short and long term loans they’d given to Germany, and causing a significant impact on Germany. The significance of the political, social and economic impact can be assessed from the time scale of the impact, the number of people affected, to what degree they were affected and the nature in which they were affected. The impact of the Great Depression on Germany was very significant because the extent of its impact led to an authoritarian regime which changed the nature of Germany, affecting all Germans greatly.
The economic impact of the Great Depression was the most significant impact on Germany and the German people as it was extensive and caused the political and social impact. The German economy was heavily dependent on foreign investment, up to 5bn RM a year generated from it in 1928. Thus when loans were recalled, international trade slowed and industry, employment and banks were affected. As a result, export prices decreased 55% from 1929 by 1934, having a significant impact of Germany’s economy. Furthermore, the trade balance was negative from 1932 to 1938, and was at -3,455 in 1938, showing a slow recovery and a greatly impacted trade and economy. This led to agricultural prices decreasing 61% from 1927 in 1932, however the prices were already decreasing before the Great Depression, so the significance of this impact is limited. Industry was similarly affected; it decreased 42% from 1928 in 1932, but had made a swift recovery to original production by 1936. Production rates dropped 60% from 1929 to 1933, and the total agriculture and industry price was not up to the 1929 figure of 13,511.9bn RM by 1938, still at 11,973.3. These statistics show directly how Germany was impacted economically by the Great Depression, and the varying durations of the effects. In addition, the decrease in industry and agriculture led to acute unemployment. From 1.8m unemployed in 1929, in January up to 6.1m were unemployed, although there was a quick recovery to 1.6m in 1936. During this period of economic depression, 5 major banks had collapsed by 1931. The economic impact of the Great Depression caused much of the political and social impact; unemployment leads to social and political extremism, so it’s very significant. However most of the impact was quick to recover despite lasting longer than hyperinflation; the German economy had recovered by the Berlin Olympics in 1936. This was due to Nazi policies, making the economic impact less significant to the extent that its duration was lessened by the political impact. Hjalmar Schacht, the Minister of Economics in 1934, used dictatorial powers facilitated by the authoritarian regime over the economy. Yet this was a false economy, the government spending money they didn’t have on funding jobs for ‘arbeitsdienst’, or increasing industry for rearmament; by 1939 the government was still 40bn RM in debt. The social impact was lessened by the Nazis, but the economic impact remained due to underlying problems. In conclusion, all elements of the economy were affected greatly, impacting many people. Although its significance could be decreased by its quick recovery, the economic impact remained beneath the false economy, so it is significant. The nature of the impact meant that it would have further social and political effects, making the economic impact of the Great Depression very significant.
Another way the impact of the Great Depression was significant, was the large social effect on the majority of the working and agricultural class of Germany. This group was most affected by the economic problems, thus were impacted greatly socially. Unemployment caused a plethora of social consequences, although these were less significant than the economic impact because they were caused by it. In January 1932, nearly ⅓ of workers were unemployed, including 40% of factory workers. Since 15% got no form of support, there was a profound social impact on the unemployed, causing political extremism and lack of faith in Weimar. Homelessness increased by 350,000 from 1929 to 1939. Furthermore, despite food prices falling, the working class couldn’t afford to buy food. In these poor social conditions, compared to Britain, which was less reliant on US loans, there was a 17.1% greater increase in infectious and malnutrition-related diseases. Respiratory diseases also had an increase of 20%. Writer Heinrich Hauser stated that “there was something else that had never been seen before”, indicating that such a social impact had never been felt before, including in the hyperinflation of 1923, making the impact very significant. The social extremes led to Germany having an 11.1% greater increase than Britain in deaths by violence. This eventually led to political extremism; a female textile worker wondered “why everything is so unequal”, a question which leads towards extreme solutions, found in extremist politics. For example, in 1932 when tenants of Berlin tenement buildings went on strike over poor conditions, Nazi and Communist flags were pictured hanging from the buildings. For farmers, their income had declined 50% by 1932 and by 1944 agricultural prices still hadn’t reached those of 1929. However agricultural incomes had been falling since 1927, so this impact is less significant because it was a continuation of a process that was already underway. All of the social impact on the working class and farmers was due to the economic impact of the Great Depression, so the social impact wasn’t as significant as the economic. However the social conditions influenced the political impact of the Great Depression; people in extreme situations are led to extreme politics. Therefore the social impact was more significant than the political impact. Moreover, it was significant because, although most social conditions recovered quickly, the consequences of consequential political decisions were long lasting, most of the working and agricultural class were impacted in a severe way due to being unemployed without benefits, and the extreme nature of the impact of led them to make significant political decisions.
A less significant way in which Germany was impacted was the impact on the middle and upper class. They were not greatly affected socially; despite public funding decreasing to ⅓ in 1932, it recovered to a higher amount than 1929 by 1936. 50,000 businesses collapsed, which would affect the business-owning middle class, and 60% of new graduates couldn’t get a job. However with Nazi economic plans, the social impact was not long lasting, and it was the political impact of the working class which impacted the middle class. The middle class were worried by growing communist popularity among the working class; they turned towards fascism and the Nazis to combat this threat. They were not directly impacted socially. Compared to hyperinflation in 1923, the middle class were not as severely affected because they didn’t lose their savings, making the social impact of the Great Depression less significant compared to other events. The social impact on the middle and upper class was not significant because the effects weren’t long lasting, they weren’t affected to the extent of other classes in relation to severity and number, the nature in which they were affected wasn’t direct, instead due to a universal decline in the economy, and the impact was caused by other factors which were more significant – the social and political impact on working class and the general economic impact. Overall the social impact didn’t affect the upper and middle class, they were impacted by politics, and the working class were impacted mainly economically, however both groups had a political impact. The social impact of the Great Depression was significant to the extent that it had a political impact, but it was caused by the economic impact, which remains more significant.
Another significant way in which the impact of the Great Depression was significant was the lasting impact on German politics, causing the Weimar Republic to fall and the development of a Nazi regime, changing the nature of Germany. Due to the economic impact of increased unemployment, Müller’s coalition was divided about how to manage the deficit in unemployment insurance. After the coalition collapsed in 1930, none of the following coalitions were stable enough to rule by parliamentary democracy, so use of the dictatorial Presidential Article 48 was adopted, and used increasingly frequently. This showed change in the nature of German politics, and subsequent increasingly authoritarian governments were hostile to the democratic basis of the Weimar Republic. However the autocracy was also due to weaknesses in the Weimar Constitution which created Article 48, thus it was the existing Constitution which enabled an undemocratic government. Similarly, the proportional representation of the Weimar Republic meant that coalition governments were commonly formed, introducing the need for the use of Article 48. Due to pre-existing weaknesses in the Weimar Constitution, the significance of the political impact of the Great Depression was limited. In addition, despite the Nazis being the largest group in the Reichstag, they weren’t able to form their own government. Similarly shown by Hitler’s loss to Hindenburg in the 1932 Presidential election, Nazi popularity was increased by the Great Depression, but not impacted enough to enable them to have complete power. Despite increasing authoritarianism enabling an extremist regime to rise, it didn’t have to be the Nazis. The Nazi vote increased from 2.6% in 1928 to 37.3% in August 1932, however the KDP also became more popular, their vote rising from 10.6% to 14.3%. Social alarm within the middle class led to the Nazis, instead of another extremist party, like the KDP, being elected. Therefore the social impact of the Great Depression was more significant than the political impact of the end of democracy; it led to the rise of extremism and of totalitarian Nazism rather than another regime. The significance of the impact is further limited by the interference of von Papen and von Schleicher; the Nazi rise to power was due to external factors rather than the initial political impact. Although the Great Depression changed the nature of German politics, it didn’t significantly impact extremist political popularity, rather creating an opportunity for Nazi tactics and political meddling. Even before the Great Depression, Nazi membership grew to 130,000 by 1929; the political and social impact of the Great Depression is less significant as it didn’t specifically cause the rise of the Nazis, but merely contributed to it and provided a juncture for it. Furthermore, the political impact was caused by the social and economic impact, making it less significant. The economic increase in unemployment led to the fall of Müller and end of democracy, creating the authoritarianism for extremism. Additionally, economic deterioration led to social extremism, contributing to an increase in political extremism and acceptance of totalitarian Nazi economic policies, such as the New Plan in 1934. The political impact of the Great Depression was significant because it affected all of Germany due to a change in the whole political system, it affected them greatly due to the authoritarian nature of the politics, it was a long lasting change; the Nazis ended democratic elections, thus preventing any change in the government, and the whole nature of Germany was changed because of totalitarianism. It is significant, however because the political impact was caused by the economic and social impact, it is not the most significant impact.
To conclude, the impact of the Great Depression was very significant due to the extent of its political, social and economic impact, and the duration of its eventual consequences. However its significance was limited because its impact was partly as a result of pre-existing weaknesses from before 1929. Despite this, the impact of the Great Depression was significant because it triggered these weaknesses, and it had a long lasting impact. Although some elements were quickly rectified by Nazis, the more significant and severe effects of the impact, like an authoritarian government, lasted a long time. Everyone was affected, even those not affected immediately; the initial impact caused further effects which impacted everybody in Germany. They way in which they were all impacted was significant; all the political, social and economic aspects of Germany, were changed. The significant nature of the impact of the Great Depression was consequential in that it changed the nature of German democracy itself. The impact of the Great Depression was very significant.