Economic Impact on Poland

The Third Reich and its Economic Impact on Poland

 

Introduction

            The Third Reich, along with the man behind the Third Reich – Adolf Hitler – has been one of the most controversial topics of contemporary history. The interest in the history of Nazism has continued ceaselessly ever since the termination more than half a century ago of the Third Reich – a period tat neither the course of time nor the gathering of research has yet robbed of its historical importance and moral urgency. Within the historical continuum, changes in emphasis, theme and approaches are readily apparent.

It must be noted that historical research on the issue of Nazism has produced a progression of different themes and methods that have widely expanded the knowledge of people of this most challenging episode in modern history. Such Nazism issues ranges from the first tentative studies of tyranny and resistance in the decade after the war, through the enormously documented reconstructions of the growth of the Nazi Party and the policies of the German administration that had begun to appear in the late 1950s, to the revival of interest in theories of facism in the 1960s and the successive advancements of the new concern with the social history of the Third Reich and with the relationship between political structure and ideology in the decision making of the Nazis.

            This paper will be covering the topic of the Third Reich – from its history to its ideology to its prewar politics which includes the consolidation of Nazi power, economic policy and social policy. The Third Reich’s impact, specifically on Poland will be examined closely in the paper, taking into account the damages caused by the war to the country. There will also be a discussion of the economy of Poland before and after the Second World War as well as its economy under the control of the Third Reich.

 

The Third Reich

            The so-called “Third Reich” has more often than not been used as a near-synonym for Nazi Germany. Notwithstanding the exchangeable status of the two terms, the “Third Reich” has never been referred to as the “Third Empire” which is its rough English equivalent. Actually, in German, the regime is and was usually referred to as the “Drittes Reich”. This term, the “Drittes Reich” along with the term “Tausandjahriges Reich” or “Thousand-Year Empire” in English, was used by the Nazi Party to associate the new German Empire to the ones of old – the Holy Roman Empire which was considered to be the first empire lasting almost approximately a thousand years from 843 to 1806, and the German Empire of 1871, which was considered as the second empire – at the same time alluding to visualized future prosperity and the nation’s supposed destiny. However, in speeches, books as well as articles about the Third Reich after the 8th of May 1945, this thousand-year empire is often put adjacent to the twelve years of the Third Reich’s existence. The terms were only used briefly and dropped from misinformation in 1939 officially in order to prevent persiflage and also to prevent any religious implications.

            Ideologically speaking, the concept of “Grodeutschland”, meaning “Greater Germany” has been sanctioned by the Nazis. The Nazis realized the integration of the Germanic peoples into one large nation as very important in their plans for the future. As often referred to in English scholarship, the “German Problem” concentrates on the subject of the administration in Northern and Central Europe, which accordingly has been a very relevant theme throughout the German history. In addition, this nationalist, Wagnerian love affair with the Volk concept concluded in the disaster of the Third Reich. Similarly, the concern over administration of the Polish corridor and Danzig in due course led to World War II.

            Furthermore, the Nazis were also unwaveringly Anti-communist. They considered the leftist movement and international capitalism as the works of conspirational Jewry. This proposal became apparent in the displacement, internment and later, the organized annihilation of an estimated six million European Jews in the midst of the Second World War. Other included victims of the Second World War were Slavs, Gypsies, political opponents, social outcasts, religious nonconformist and uncompromising Church-affiliated leadership. As a matter of fact, although the Second World War officially began when the United Kingdom along with France declared war on Nazi Germany two days after Poland was invaded, one may argue that a war with the Soviet Union was unavoidable basing on the Third Reich’s precepts. The international conflict that followed resulted to Europe in ruins, in addition to the deaths of approximately sixty-two million peoples.

           

Pre-war Politics from 1933-1939

 In the advent of the disturbances imposed through the Treaty of Versailles, as well as the worldwide economic depression of the 1930s, the counter-traditionalism of the Weimar period and the threat of Soviet-sponsored communism in Germany, many voters had began to shift their support to Adolf Hitler’s radical Nazi Party, which accordingly had made great promises of an economic, cultural and military renewal. On January 30, 1933, Adolf Hitler was appointed chancellor of Germany by President Paul von Hindenburg consequently after the failure of General Kurt von Schleicher’s attempts to form a feasible government. It was said that Hindenburg was put to pressure by Hitler through his son, Oskar, and was intrigued from the former Chancellor Franz von Papen after his collection of participating financial interests. In addition, event though the Nazi Party had gained the biggest share of the popular vote in the two Reichstag general elections of 1932, the Nazi Party had little majority in the parliament within Papen-proposed Nationalist DNVP-NSDAP (Deutschnationale Volkspartei-Nationalsozialistische Deutsche Arbeiterpartei; which means “German National People’s Party-National Socialist German Workers Party” in English) coalition. This coalition was said to rule through continuance of un-Constitutional Presidential decree issuance under Article 48m prevalent in all Chancellorships since October 1931.

 

Consolidation of Power. The new government of Germany established a dictatorship in a series of measures in fast succession. On the 27th of February 1933, the Reichstag was set on fire and this was followed almost after by the Reichstag Fire Decree, which overturned habeas corpus and liberties. A further step which turned Germany into a dictatorship virtually overnight was the Enabling Act passed in 1933 March under pressure which gave the government legislative powers and also gave them the power to diverge from the provisions of the constitution. With these powers, Adolf Hitler removed the remaining opposition and turned the Weimar Republic into the “Third Reich”. Further consolidation of power was accomplished during the 30th of March 1934 with the Act to rebuild the Reich (Gesetz uber den Neuaufbau des Reichs) which altered the highly decentralized federal Germany of the Weimar era into a centralized state. In addition, the Act disbanded state parliaments, transferring sovereign rights of the states to the Reich central government and put the state administrations under the control of the Reich administration.

It must be duly noted that only the German Army remained independent from the control of the Nazis.  The German Army had conventionally been somewhat separate from the government. The Nazi quasi-military Sturmabteilung (Storm Division) expected top positions in the new power structure. On the night of the 30th of June 1934, Hitler, wanting to sustain good relations with the army, initiated the Night of the Long Knives which was an elimination of the leadership ranks of the Sturmabteilung in addition to other political enemies which was carried by another more elitist, Nazi organization, the Schutzstaffel (Defense Quadron). After a very short time, the German Army leaders then swore their obedience to Hitler.

At the death of President Hindenburg on August 2, 1934, the Nazi-controlled Reichstag united the offices of Recihspresident and Reichskanzler and reinaugurated Hitler with the new title of Fuhrer und Reichskanzler.

The commencement of Gestapo, police acting outside of any civil authority, stressed out the intention of the Nazis to utilize powerful, coercive measures to directly control German society. Soon, an army estimated to be about a hundred thousand spies and infiltrators operated throughout Germany, reporting to Nazi officials the activities of any critic or dissenter. Many of the ordinary Germans who were happy with the improving economy and better standard of living had remained silent and obedient, however, many of the governments political opponents especially communists and some types of socialists were reported by all-pervading eavesdropping spies and were then put in prison camps where they were mistreated ruthlessly and many were even killed and tortured. It has been estimated that tens of thousands of political victims died or disappeared in the few years of the rule of the Nazis.

Social Policy. The Nazi Regime was one that is basically characterized by political control of every aspect of society in the pursuit for racial, social and cultural purity. Modern abstract art and avant-garde art was thrown out of museums and put on special display as “Degenerate Art”, where it was mocked. Amusingly, in one notable example on March 31, 1937, there were massive crowds which stood in line to view a display of “degenerate art” in Munich, while a concurrent exhibition of nine hundred works all personally approved by Hitler attracted only little unenthusiastic gathering.

The Nazi Party, in pursuit of its mission, persecuted and killed those that they consider impure. They targeted most especially against minority groups such as Jew, Gypsies, Mormons, Jehovah’s Witnesses and homosexuals.

In the years after the Nazi’s rise to power, many Jews fled the country and were persuaded to do so because of the Nazis. The time when the Nuremberg Laws passed in 1935, Jews were deprived of their German citizenship and denied government employment. Those Jews who were employed by Germans also lost their jobs during the time. Their jobs were being taken by unemployed Germans. As of November 9, 1938, the Nazi Party prompted a program against Jewish businesses, also known as, Kristallnacht or the “Night of the Broken Glass” which literally means “Crystal Night”. This euphemism was utilized as the numerous broken windows made the streets looks as if it was covered with crystal. As of September 1939, more than two hundred Jews had fled from Germany with the Nazi government seizing any property they left behind.

Furthermore, the Nazis carried out programs which targeted the “weak” or “unfit” members of their own population including the T-4 Euthanasia Program which terminated approximately tens of thousands of disabled or sick Germans in an effort to preserve the purity of the “German Master Race” (Herrenvolk in German) as illustrated by the Nazi propagandists. The techniques of mass killings advanced in these efforts were later being used in the Holocaust. Under the law that was passed in 1933, the Nazi regime undertook the necessary sterilization of over four hundred thousand individuals that were labeled as having hereditary defects which basically ranges from mental illness to alcoholism.

A recent research done by Gotz Alyhas stressed out the role of the extensive Nazi welfare programmes that supposedly facilitated maintaining the public support for the Nazi regime until late in the war. The German community was nationalized. In addition, labor and entertainment such as festivals, vacation trips and traveling cinemas were all made a part of the so-called “Strength to Joy” program. Similarly crucial to the building of the loyalty and comradeship was the implementation of the National Labor Service which was compulsory and the Hitler Youth Organization which constituted almost six million boys and girls. As well as to a number of architectural projects that were undertaken, the construction of the Autobahn prepared it to be the first National Motor Highway system in the world.

Between the years 1933 and 1936, Germany had outpaced the United States in construction, automobile production, unemployment and employment. Generally speaking, the Third Reich provided the Germans the confidence and the naturally instilled loyalty.

 

Economic Policy.  It must be noted that when the Nazis came to power, the most critical issue was the unemployment rate of very close to thirty percent of the total population. The economy of the state was under the guidance of the banker named Hjalmar Schacht wherein he drafted a new economic policy which was supposedly to elevate the nation. The first measures taken under the new economic policy were destroying the trade unions and impose strict wage control.

Later on, the government increased the money supply through deficit spending. Contrastingly, the government also imposed a 4.5 percent interest rate ceiling which generated an enormous shortage in funds that were allowed to be borrowed. This shortage was resolve through the creation of a series of dummy companies that paid for goods with bonds. One of the most famous of these said companies was MEFO Company and the bonds used as currency were known as mefo bills. Despite the fact that the government promised that these bonds could eventually be exchanged for real money, the shortage was put of until after the collapse of the Third Reich. In addition, these complicated actions also facilitated the concealment of protected expenditures which violated the Treaty of Versailles.

In accordance with the economic theory, price control coalesced with an enormous increase in the supply of money should have generated a large black market, however, ruthless penalties realized that violators sent to concentration camps or even shot avoided this advancement. Suppressive actions had kept the volatility low which lessened inflationary pressures.

New economic policies also narrowed imports of consumer goods and concentrated on generating exports. International trade under the Third Reich was greatly minimized remaining at about a third of 1929 levels throughout the Nazi period. In addition, currency controls were expanded which resulted to a significant over-evaluation of the Reichsmark. The newly imposed economic policies had cut unemployment dramatically.

As for the industry during the Third Reich, it was mostly not nationalized. In addition, businesses were still encouraged by pursuing profits. On the other hand, industry was closely regulated by administrative committees that were composed of the government and business officials with quotas and requirements in order to utilize domestic resources. There was also limited competition as major companies were organized into cartels through the administrative committees. Selective nationalization was used against firms which have failed to be in agreement to these arrangements. In addition, the banks which were nationalized by Weimar were returned to their owners and each administrative committee had a bank as member to sponsor the design.

Whilst the strict intervention into the economy and the enormous rearmament policy resulted to full employment during the 1930s, real wages in Germany dropped by approximately twenty-five percent between the years 1933  and 1938. Trade unions were abolished, in addition to collective bargaining and the right to strike. Furthermore, the right of the employees to quit was also abolished. Books with regards to the new economic policies were introduced in 1935. Also, employees necessitated the consent of their previous employer in order to be hired for another job.

As of October 18, 1936, the German economy was reassigned to the leadership of Hermann Goring during the time when the German Reichstag declared the formation of a four-year plan which aimed to redesign the Nazi economy towards a war footing wherein Hitler had announced in the Hossbach Memorandum. This had reveals the intentions of Hitler to create a war in Eastern Europe in pursuit of Lebensraum (in English: “living-space). However, Hitler did not believe that the Western powers of France and Britain would interfere which will leave him free to take over the Union of Soviet Socialist Republics which Hitler regarded as natural enemy of Germany.

This four-year plan officially expired around 1940. However, by that time, Hermann Goring had already created a power base in the “Office of the Four-Year Plan” that efficiently controlled all German economic and production matters.

A massive public works project was introduced under the leadership of Fritz Todt which competed with the New Deal in both size and scope. Once the Second World War began, the massive organization that Todt established was utilized in building bunkers, underground facilities and entrenchments all over Europe. Also another part of the new German economy was the massive rearmament which had the objective of expanding the hundred-thousand-strong German Army into a force of millions.

 

The Polish Invasion

            After coming to power, it was one of Adolf Hitler’s first principal foreign policy initiatives to sign a nonaggression pact with Poland in January 1934.  This tactic was not very familiar with many Germans who altogether supported Hitler, nevertheless, resented the fact that Poland had received the former German provinces such as West Prussia, Poznan and Upper Silesia under the Treaty of Versailles after World War I. However, Hitler wanted the nonaggression pact in order to neutralize the alliance against Germany before Germany had the chance to rearm.

            As of the mid and late 1930s, France, altogether with Britain followed a foreign policy of appeasement. The main goal of this policy was to preserve peace in Europe through the creation of limited concessions to German demands. In Britain, there is a great tendency of public opinion to favor some revision of the territorial and military provision of the Versailles treaty. In addition, neither Britain nor France in 1938 was a military prepared to fight a war against Nazi Germany.

            Britain and France, relevantly, went along to Germany’s rearmament during 1935-1937, remilitarization of the Rhinaland in 1936 and the invasion of Austria in March 1938. In September 1938, consequently after the signing away of the Czech border regions, recognized as the Sudetenland, to Germany at the Munich conference, French and British leaders forced Czechoslovakia, an ally of France, to acquiesce to the demand of Germany for the incorporation of these regions. Regardless of the guarantees of Anglo-French of the integrity of rump Czechoslovakia, the Germans tore apart the Czechoslovak state in March 1939 in violation of the Munich agreement. In response to this, Britain and France guaranteed the integrity of the Polish state. In contrast, Hitler responded by making negotiations of a nonaggression pact with the Soviet Union in the summer of 1939. This German-Soviet pact in August 1939 stated that Poland was to be divided between the two powers, namely the Axis and the Allied forces. Furthermore the German-Soviet pact also enabled Germany to attack Poland without the fear of Soviet intervention.

            As of September 1, 1939, Germany then attacked Poland. Within weeks of the invasion, the Polish army was defeated by the Germans. With approximately more than 2,000 tanks and over 1,000 planes, German units from East Prussia in the north and Silesia and Slovakia in the south broke through Polish defenses along the border and pressed forward on Warsaw in a considerable encirclement attack. After intense shelling and bombing, Warsaw then surrendered to the Germans by the 28th of September 1939.

            In September 3, 1939, Britain and France, standing by their guarantee of Poland’s border, had declared war against Germany. In September 17, 1939, the Soviet Union also invaded Poland, targeting on Poland’s eastern part. In October 1939, Germany directly took control of those former Polish territories along eastern border of Germany including territories such as West Prussia, Poznan, Upper Silesia and the former Free City of Danzig. The remainder of the German-occupied Poland, including cities such as Warsaw, Krakow, Radom and Lublin was organized as the so-called Generalgouvernment (General Government) under a civilian governor general, the Nazi Party lawyer Hans Frank.

            The Third Reich occupied the remainder of Poland when it invaded the Soviet Union in June 1941. Poland had remained under German occupation until January 1945.

 

Poland under the Control of the Third Reich

            The German occupation of Poland was exceptionally brutal as the Nazis considered the Poles to be racially inferior. Consequently after the military defeat of Poland by Germany in September 1939, the Germans then launched a campaign of terror. German police units killed thousands of Polish civilians and necessitated all Polish males to perform forced labor. The Nazis sought to demolish Polish culture by terminating the Polish political, religious and intellectual leadership partly due to German disdain for Polish culture and to prevent resistance against the German occupation of Poland. 

            In May 1940, the German occupation authorities commenced AB-Aktion which was basically a plan to terminate all of the Polish intelligentsia and leadership class. The main mission of AB-Aktion was to kill Polish leaders with great speed, hence, encouraging fear in the general population of Poland and discouraging resistance. Also, the Germans killed thousands of teachers, priests and other intellectuals in mass killings in and around Warsaw, most especially in the city’s Pawiak prison. The Nazis sent thousands more of Poles to the newly built Auschwitz concentration camp, to Stutthof and to other concentration camps in Germany wherein non-Jewish Poles comprised majority of the inmates until March 1942.

            The Nazis conducted indiscriminate retaliatory measures against those populations in places that resistance was revealed. These measures included mass expulsions. In November of 1942, the Germans expelled over a hundred thousand peoples from the Zamosc region as many were reportedly deported to the Auschwitz and Majdanek camps. An estimated of fifty thousand Polish children were taken from their families, transferred to the Reich and subjected to “Germanization” policies.

            Consequently after the occupation of western Poland to Germany, Adolf Hitler declared “Germanization” of the Polish territory. Nazi governors such as Arthur Greiser in the Warthegau and Albert Forster in Dazig, West Prussia expelled hundreds of thousands of Polish people from their homes in the Generalgouvernment. Approximately more than five hundred thousand ethic Germans were settled in these areas.

            Furthermore, a Polish government-in-exile which was led by Wladyslaw Sikorski was established in London. It was basically represented on Polish soil by the underground “Delegatura” whose primary function was to collaborate the activities of the Polish Home Army (Armia Krajowa). The resistance of the Poles staged a violent mass revolution against the Germans in Warsaw in August 1944 which lasted for two months, after eventually being crushed by the Germans. Approximately more than two hundred thousand Poles were killed in the revolution.

Between 1939 and 1945, 1.5 million Polish citizens at minimum were deported to German territory for forced labor. In addition, hundreds of thousands were also imprisoned in Nazi concentration camps. It has been estimated that the Germans killed at least 1.9 million non-Jewish Polish civilians during World War II and the Germans, reportedly, murdered at a minimum of three million Jewish citizens of Poland. 

 

Poland before 1939

            As of the eve of World War II, Poland was said to have gone forward towards attaining economic unity, assuring monetary stability and providing for economic growth. However, the progress towards these objectives was hindered by: (1) an inexperienced public administration and incompetently chosen economic policies; (2) the disconcerted international political situation which has greatly discouraged private investment; and (3) the occurrence of the world depression. In an attempt to solve its economic problems, the Polish government expanded its role in the management of the economy. This was done both directly in the form of ownership and operation of the enterprises and indirectly through regulation of the private economic activity.

            The agricultural problem of Poland remained severe, in spite of extensive redistribution of land under the agrarian reform. However, toward the end of the interwar period, the solution for the agricultural problem was being addressed to in the framework of planned industrialization. At the same time that the government expanded the state’s direct role in industry, it also encouraged private enterprise to unite in the planned industrialization of the country. However, the emerging experiment of the partnership between the state and the private enterprise was cut short by the outbreak of the Second World War.

 

 

Impacts of the Third Reich to Poland

            It must be noted that Poland had indeed suffered from economic losses during the Second World War in 1939. In fact, the immense task of reconstructing the country was accompanied by the struggle to create a stable, centralized power base which was further complicated by the mistrust from a considerable part of the society apprehended for the new regime and by differences of opinion over Poland’s postwar borders, which were not firmly established as of the mid-1945.

            Aside from being the first country to be overrun in the Second World War, Poland was also the last country to emerge from the theater of hostilities. The Second World War brought about widespread destruction to the national wealth, although very likely not as great as the Polish officials estimates would specify. Apparently, these estimates had the intention to serve as a foundation for compensations and economic assistance or to enlarge the consequent performance of the economy of the country. Hence, a statement in the context of the law for the Six-Year Plan emphasized that the losses from the war and requisitions resulted to a thirty-three percent reduction in the national wealth. Actually, another Polish estimate placed a capital losses in the industry for the period 1939 to 1945, which was about the time of German occupation in Poland at a roughly 11.5 billion U.S. dollars or actually equivalent to 11.5 percent if the entire national property.

            Also another statement of the Polish government placed the material losses in the old territories of Poland within present boundaries at 18.2 billion U.S. dollars of which approximately 5.7 billion was distributed to the industry and 3.5 billion to the transport and communications. Also the same source equated these losses to some fifty percent of the prewar capital value. In addition, over twenty percent of the prewar industrial facilities in the new western territories were removed or destroyed.

            There was also a considerable amount of war destruction and damage to the communications system. In fact, it was estimated that main railway lines were damaged to the extent of forty percent. Thirty percent of the small railway bridges and a roughly seventy percent of the large ones were reportedly ruined and the lines were practically shed of rolling stock.

            In terms of agricultural losses brought about the Second World War, livestock was mainly the most damaged. It has been reported by the Ofiice of War Reparations of the polish government that these losses on livestock were approximately as follow: (1) horses – 2,776,000 – this is seventy-five percent of prewar numbers; (2) cattle – 8,541,000 – sixty percent of prewar; and (3) pigs – 6,434,000 – eighty percent of prewar. A roughly 467,000 farm buildings were also destroyed within the new boundaries which basically amounts to over fifteen percent of their value or a loss of about 2.5 billion zlotys at 1939 prices.

            Furthermore, the Polish Ministry of Reconstruction had estimated that the losses in urban buildings which were over ten percent ruined at about 527 million cubic meters valued at over 9.5 billion zlotys in 1939, which is approximately equivalent to 1.8 billion dollars of that date. A little more than half of this value of loss was distributed to the new western territories. In addition, approximately four million were estimated to be damaged from a total of nine million rooms in urban housing which had existed in the present territory of Poland before 1939; the damage is more than ten percent of their value.

            These statements of loss are presented to give a more complete description of Poland’s economic potential at the onset of planning in the postwar period. The losses are probably overstated; however, they afford some suggestions of the magnitude of losses incurred. On balance, it seems apparent that Poland in her postwar boundaries possessed a much more favorable opportunity for economic development compared to prewar times in practically all the major sectors of production.

 

Discussion

            There are actually two factors which stood out in a comparison of the prewar and postwar economic development of Poland. First is the physical environment within which the economic activity of the country takes place which has significantly changed as a result of the Second World War as well as the successive boundary revisions and population changes. The second factor is the prevailing conditions of social organization, policy and control which drastically changed by the Communist-dominated postwar governments.

            The population of Poland in the postwar period had greatly reduced by approximately one-third. In addition, even though the total area of the country was also reduced by about one-fifth of the original area before the war, the collection of natural resources and installed productive capacity was such that by recovering prewar production inside the present boundaries of Poland could equal the prewar agricultural output in prewar boundaries and maximize industrial production by more than half. The lessened total population of Poland basically implies that there are excellent prospects for full employment, substantial maximization of production per capita and good cause to expect a much higher scale of living.

            It must be noted that the economy of Poland had moved a long way toward centralization of control before 1939. Its legacy from the years of partition, the First World War and the Russo-Polish War incorporated a wide array of government controls and direct participation in production and distribution. Consequently, in pursuit of establishing economic unity, provision for national defense and insurance of full employment, the government of Poland had expanded its intervention in the economy and as of 1937; it had gone on board on economic planning on a broad basis. Quite the reverse to the postwar development, however, this effort was only a partial approach to the economic planning. Furthermore, the government did not endeavor at complete socialization of production. As a matter of fact, it rather pursued to create a framework within which private and state enterprise could cooperate, meaning the state could take over in areas wherein there was lacking private domestic venture.

After the Second World War, the legal reforms recast into a pattern which had allowed centralized control and planning. Simultaneously, a dictatorial government dedicated to a policy of rapid industrialization proceeded to execute its plans with ruthless fervor. The catalogue of laws, decrees and administrative actions which regulate the economic activity system from a central conviction which planned economic development must follow the pattern pioneered in the USSR both with regards to the nature of development and the institutional approaches by which resources were directed to this goal. 

Perceived against the background of physical potentials, the coverage of public control and the prioritized established by the government, the remarkable development in industrial production accomplished in the post-war period is not astonishing. Basically the entire industrial sector has passed into state ownership, and the same is true for forestry, transportation, communications, trade and the services of finance.

By the end of 1953, Poland’s agriculture was about one-fifth socialized and the remainder operated within a tight structure of regulations prevailing compulsory deliveries of products to the state and of dependence upon the socialized sector for the supply equipment, fertilizers, constructions materials and other production necessities. Through the government’s wide-ranging controls, the country was able to change labor from agriculture and services to socialized industry. In this attempt, the government increased its policy of differential wages in accordance to planned priorities with an array of direct controls over labor and the professions.

In addition, the government prepared the nation’s educational system to the necessities of the planned economy. In terms of its policies, the government significantly changed private saving by public saving. Furthermore, it distributed the resources freed by enforced abstinence from consumption primarily to industrial expansion. Through the government’s direct control over production and trade, they were able to implement its distributions.

Under the government’s priorities, agriculture failed to meet its
aims. However, under the expanded state controls it was nevertheless
obliged to provide the necessary supplies for the urban population
and the raw material needs of industry. Agriculture rated a low
priority for investment with its labor force already trimmed down by war
which was further weakened by recruitment for industry.

In addition, the individual private farmer was subjected to time-consuming schedules of compulsory deliveries, restricted opportunities for free sale of his surplus above these deliveries, discriminatory taxation and compulsory deliveries favoring the socialized farms, and other pressures for collectivization of production. After a period of fairly speedy recovery up to 1950, agricultural production leveled off and declined under this regimen.

The failure of the population to become conscious of a considerable increase in the scale of living is inherent in the stagnation of agriculture and the comparatively low priorities assigned to the production of consumer goods and services. This failure is recognized in Polish official statements which emphasized that at the end of 1953 real wages in non-agricultural employment had changed only imperceptibly as compared with 1949, but that increased employment made promising an increase of about fifteen to twenty percent in urban and rural per capita real income. Even if this declaration be granted, when quantified against the Six-Year Plan goal of sixty percent increase in the scale of living by 1955, it is a noteworthy admission of disappointment. If the revised goals for 1955 are recognized, only about one half of the original planned increase in consumption would be accomplished.

Poland’s postwar rate of growth of industrial production was predominantly fast because of a mixture of unusual factors. This growth started from very low postwar levels and continued rapidly during the period of reconstruction when somewhat small capital investments could activate moderately large increments of productive capacity. Expansion in this early period was facilitated by assistance from the United Nations Relief and Rehabilitation Administration to the extent of about 481 million dollars and by foreign loans. In reestablishing and expanding production, Poland was able to profit from the amassed technological developments recognized in other countries. As this backlog is used up, Poland’s rate of expansion will tend to weaken.

Moreover, expanding industry was able to draw labor from agriculture and services and introduce a higher percentage of women into the labor force. However, consecutive additions from these sources became increasingly more difficult to apprehend. The commencement of reserves of labor was paralleled by mobilization of industrial capital, natural resources, urban housing, and other material means for the achievement of planned industrialization. The working out of these unusual factors is replicated in the waning rate of growth of industrial production. Future gains will rely more on enhancements in output per worker made possible by new skills and new investment in production facilities and less upon new additions to the labor force and a higher rate of exploitation of existing capital.

Acknowledgment of the depressive consequences its policies had generated in agriculture and upon worker morale in the socialized sector at first directed the government to maximize the rigidity of its controls over the economy. Laws were passed endeavoring to achieve increased labor discipline, lessened labor turnover, and increased compulsory deliveries from agriculture. However, in 1953 after the lead of the USSR and several of its satellites in Eastern Europe, Poland modified her economic policies.

Under the new plans for 1954-55, absolute investment is to be kept constant at the 1953 level, hence allowing consumption and other uses of the national product to boost with the anticipated gains in total output. Investment priorities and labor policies would be changed to increase the production of manufactured consumer goods and agricultural products. If the new plans are realized, the Six-Year Plan will be over fulfilled in industry, but agricultural production and levels of consumption will still be far below the original goals.

Notwithstanding the changes introduced by the new policies, the Polish economy remains fundamentally oriented toward further improvement of heavy industry. Socialization of agriculture similarly remains an ongoing goal to be trailed after in 1954-55 as dynamically as in 1953.

At the same time, in the interest of intensifying production, the government guaranteed the peasants that compulsory deliveries would not be further augmented and that they could organize of their increased production without restraint. The modified policies generally should authorize the government to eliminate some of the discrepancies its earlier priorities had introduced among the sectors of the economy and to regulate to a lower rate of growth implicit in the playing out of the unusual growth factors operating in the earlier postwar years.

Progress in Polish postwar economic organization and policy closely paralleled the Soviet experience. Resemblances between institutional arrangements of the two economies are becoming ever closer as the legal enactments to transform Polish society take effect. From 1946 to 1949 Poland passed through a state of evolution broadly corresponding to the period of the New Economic Policy in Russia. Following a brief period of recuperation, the state continued to eradicate the remaining elements of private enterprise in the nonagricultural sector of the economy, excepting handicrafts. Beginning in 1948, polish planning progressed more and more by orientation to current Soviet practice. In 1949 the Central Board of Planning was reinstated by the State Commission of Economic Planning, which is the Polish equivalent of Go plan in more than name alone. Before long thereafter, both the government and the economic administration in Poland were restructured to match up more closely to the Soviet model.

The Soviet model was in the same way applied in the reform of the banking and financial system, the development of the supply of labor to industry and professions, and in the revision of the methodology and procedures of planning and control both on the aggregative levels and within enterprises. In reality, there are very few areas of economic activity that have not been subjected to controls currently in effect in the USSR. Agriculture is the noteworthy exception, but socialization of production has already overwhelmed about one fifth of this sector and further collectivization remains a firm goal for the future. Advancement in socializing agriculture has been comparatively slow, probably in keeping with the slowly increasing supply of farm machinery or probably in the light of the unsuccessful effect of forced all-out collectivization in the Soviet Union. The encouragements which the Polish government is offering to uphold the formation of collective farms favor the type which most closely resembles the Soviet kolkhoz.

Many of the Polish approximations to the Soviet model are not as close as the formal procedures commencing them would propose. It takes time to educate the system of government and to prevail over the resistance of the population. A study of Polish economic literature shows that even two or more years after particular procedures have been introduced; they have not completely pervaded the economic organization. Most of the formal disagreements from the Soviet pattern belonging to the earlier postwar years were more and more removed up to the end of 1953. Unquestionably, on the operational level there are deviations from the official regulations in Poland just as there are in the USSR, either to complete more directly some of the production goals of the enterprise or to gain some personal advantage.

The close communication between the establishments, systems, and goals of planning in Poland and the Soviet Union is not accidental. As an alternative it springs from Soviet domination over Poland implemented through the submissive (Communist) Polish United Workers’ Party. One does not need to impute this subordination to the Polish Communist leaders. They publicly recognize the leading role of the Communist Party of the Soviet Union in the determination of basic lines of foreign and domestic policy for the countries of “people’s democracy.” The social science of Lenin and Stalin is summoned in practically every public discussion of economic policy. Without a doubt, the procedures of social control and economic management gained from Russia may well be considered Poland’s chief import from that country. One may question whether the application of the Soviet model for economic development was suitable for the Polish environment, but at the same time one must take into account the fact that the decision was not Polish, but Russian. Therefore, the appropriate question would be whether the Soviet Union acted wisely in commanding the norms of its experience on the Polish economy, or, alternatively, whether the result was for the good of Poland.

Whether the result is for the good of the Poles must rely on the valuations to be taken as a standard. Clearly, Poland has experienced a speedy industrial expansion since the Second World War. Even though much of this development is attributable to the territorial gains from Germany, the techniques of social control introduced from the Soviet Union have made possible centralized planning of economic activity and have imposed abstinence from current consumption to make promising broad investment in new industrial capacity. Additionally, these methods of control have supplied the labor compulsory to man the industrial capacity taken over by the state. Perceptibly the volume of industrial production is not the only criterion of national welfare.

In a country with such low levels of consumption as Poland, the output of agriculture could be the most in need of attention source of a higher level of living. Performance in this slighted sector of production was very unsatisfactory, and for that reason the consumption goals of the Six-Year Plan had to be discarded. Although the forfeit of a currently higher scale of living was not the only cost of Poland’s industrialization. Undoubtedly the host of laws, decrees, administrative orders, and regulations designed to control the country’s efforts toward the government’s aspirations and the burden of an expanded bureaucracy to enforce them represent a loss of personal freedom as well as a consumption of resources that could be used for directly productive purposes.

The employment of force to force the Communist program for Poland, on the other hand, makes it apparent that the wishes of the population differ from those of the planners. The latter not only decide the aggregate rate of investment but also in large measure designate the specific forms this investment shall take. Within the share of the national product presented for consumption, the planners’ choice of the collection of consumer goods has challenged to take account of consumers’ preferences, but performance on this score left much to be desired even by the standards set by the planners. Given a desire by the Poles to govern their economic destiny by democratic means, then the Soviet model clearly is inappropriate for Poland.

Attempts intended at a large measure of decentralized decision making within the broad framework of the state’s economic policy were effectively blocked by the consolidation of political power in Communist hands. The Communists ruled out any negotiation between the Soviet model and the mixed economies of the West.

The Communists’ insistence upon the Soviet model of a highly centralized planned economy perhaps can best be understood in terms of the obligation of effective control. In the Russian view this model had established its efficiency in promising political control and in gathering together productive resources for the development of industry and for military strength. Its expansion into Eastern Europe serves the same purpose. For the Polish Communists the rapid transition to the Soviet pattern surely must have outweighed the finer contemplations of economic effectiveness. It seems that their performance was evaluated not only in terms of the enormity of production and the related costs but also in terms of the institutional adaptations to the Soviet model.

Even within the socialized sector the potential gain in effectiveness that could take place from decentralization of decision making must have been weighed against the loss in centralized control that it would necessitate. Notwithstanding its noticeable ineffectiveness as compared to schemes of automatic distribution of resources to production and of distribution of the product under prices acting as parameters in various adaptations of a perfectly competitive economy, the Soviet model possesses the benefit of speedy accommodation to the planners’ objectives. Within their framework of centralized planning and control, the Polish planners have given some attention to stimulating efficiency.

Adjustments of the price system and of the method of distribution of profits have been directed toward this end. The tardiness shown in selecting prices sufficiently reflecting costs of production, however, must have hindered realistic planning. The entire postwar period was illustrated by both open and disguised inflation, rationing, price control, monetary reforms, and revisions of prices and wages which bear witness to defective financial planning.

These materializations were primarily the result of the government’s policy of a high rate of investment in producer goods industry and of other high public expenditures together with insufficient lessening of the population’s purchasing power through taxation or other fiscal devices. Perhaps in such circumstances highly centralized planning featuring direct controls over economic activities is rational from the viewpoint of the planners. It allows at least a rough approximation to their principal objectives.

The development of centralized planning demonstrates the tendency of direct economic controls to broaden to ever wider areas of activity. Given the conflict between the preferences of the population and the independent producers expressed through the market and the desires of the planning authority apparent in a given direct control, it could be anticipated that the market would seek to circumvent the control and that the planning authority would try to prevent such action by the introduction of new direct controls. In the case of Poland such tendencies were powerfully amplified by the Soviet example. Without a doubt the series of piecemeal extensions of state control can be regarded as the progressive application of a well-established ideology and its fully developed pattern of action.

It might appear that the autarkic improvement being followed by Poland would not be in keeping with Russian aims for incorporation of the country into an expanded Soviet economy. Such a development, on the other hand, does not differ from the policy prescribed by the USSR for development of its own regions. In both cases, the prescription calls for as much self-sufficiency as achievable for a given region, and at the same time it demands a specialized role for the region based on its assortment of productive resources. Polish official statements stressing economic collaboration within the Soviet bloc were restated with added prominence in connection with the revision of economic plans for 1954-55. Such augmented collaboration was expected to result in cost economies through specialization and division of labor.

The growth of Polish trade with Soviet orbit countries designate that it is possible for economic planning to create complementarities among economies which are fundamentally similar in structure. Improved trade on a much wider geographic basis would yield even greater economic advantages, but such a practice would not be compatible with the aim of self-sufficiency within the Soviet bloc.

From the Russian point of view the rapid adoption of the Soviet model of economic organization and planning in Poland must be regarded as highly desirable because it paves the way for possible assimilation of the country into the USSR. Even if Soviet policy did not aim at formal annexation, an industrially developed Poland under a Communist government responsive to Soviet control would represent an important increment to Russia’s military potential. In any case, Communist control would prevent Poland from joining possible adversaries.

Conclusion

            The Third Reich is such a broad topic to be covered. Much of this paper has given a detailed overview of the history during the Third Reich. The Third Reich, also known as Nazi Germany, commonly refers to Germany in the years from 1933 to 1945when it was under the firm control of the totalitarian ideology of the Nazi Party with Adolf Hitler as dictator. The Third Reich is actually an Anglicization of the German expression “Drittes Reich” which refers to the German government and its agencies instead of its land and its people.

The term “Third Reich” was first used in the year 1922, as the title of the book by conservative writer Arthur Moeller van den Bruck which was then adopted by the Nazi propaganda that counted the Holy Roman Empire as the first Reich, the German Empire from 1871 to 1918 as the second and its own regime as the third Reich. Accordingly, this was done in order to suggest a return to assumed former German glory after the apparent failure of the 1919 Weimar Republic. In addition, the disorder and poverty that was caused by the Great Depression and fear of Communism has allowed the Nazis to gain power.

The Third Reich has also been referred to as “Thousand Year Reich”. In fact, the Third Reich controlled a greater part of Europe including Poland. However, because of their defeat by the Allied Powers in the Second World War, the so-called thousand-year-empire lasted only for twelve years, basically from 1933 to 1945.

The paper also covered a brief overview of the invasion of Poland by the German Nazis. The paper has also illustrated Poland under the control of the Third Reich which was basically characterized by exceptional brutality as the Nazis considered Polish people as racially inferior. Millions of Polish people were reported to have been murdered by the German Nazis. They were stripped off their rights as humans as well as of their jobs and their properties including land, homes, cars, etc.

In addition, the economic impact of the Third Reich on Poland was critically discussed with regards to the country’s economy before and after the Second World War. The nature of the economic exploitation was assessed basing on the damages brought about by the Second World War. This paper has concluded that Poland had suffered great economic losses brought about by the Second World War as there were significant losses in terms of its population, boundaries, communication system and agriculture.

However, the researcher has assessed that it may seem apparent that Poland in her postwar boundaries actually possessed a much more encouraging and favorable opportunity for economic development compared to its prewar times in practically all major areas of production.  

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