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Definition of AUTARKY 1 : self-sufficiency, independence; specifically : national economic self-sufficiency and independence 2 : a policy of establishing a self-sufficient and independent national economy
World War I and the subsequent Treaty of Versailles with its severe reparations imposed on Germany led to a decade of economic woes, including hyperinflation in the mid 1920s. Following the Wall Street Crash of 1929, the German economy, like many other western nations, suffered the effects of the Great Depression with unemployment soaring. When Hitler became Chancellor in 1933, he introduced new efforts to improve Germany's economy, including autarky - discouraging most trade with other nations and emphasizing economic self-sufficiency - and a radical extension of the Autobahn system founded in the late years of the Weimar republic
Initially, the outbreak of World War II did not bring about any large changes in the German economy. Germany had spent six years preparing for war, and a large portion of the economy was already devoted to military production. Unlike most other governments, the Nazis did not increase direct taxes by any significant amount in order to fund the war. The top income tax rate in 1941 was 13.7% in Germany as opposed to 23.7% in Great Britain
Mercantilism was a policy followed by empires, especially in the 17th and 18th centuries, forbidding or limiting trade outside the empire. In the 1930s, autarky as a policy goal was sought by Nazi Germany, which maximized trade within its economic bloc and minimized external trade, particularly with the then world powers such as Great Britain, the Soviet Union, and France, with which it expected to go to war and consequently could not rely upon. The economic bloc wherein trade was maximized comprised countries that were economically weak—namely, those in South America, the Balkans and eastern Europe (Yugoslavia, Romania and Hungary)—and had raw materials vital to Germany's growth.