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Mittelstand normally means a German [/Austrian /Swiss] small and medium-sized enterprise (SME). Economic and business historians have to an increasing degree been giving mittelstand companies more and more the credit for Germany's economic growth in the beginning of the 20th century.

Exactly defining mittelstand companies is difficult, because the word (directly translated) refers to "middle class". Generally speaking, though, mittelstand refers to Small and Medium Enterprises. They are typically

  1. owned and managed by a family (this is the typical definition used by the Institut für Mittelstandsforschung (Institute of Mittelstand Research)
  2. owned by family but run by an outside management team or
  3. partially owned by family but with outside shareholders.

In 2003, German mittelstand companies employed 70.2% of all employees in private business, according to the Institut für Mittelstandsforschung.

Mittelstand during Nazi Germany

As with the peasantry, the lower middle class was an important source of electoral support for the Nazis up to 1933. Hitler’s Third Reich would depend on the Mittelstand for continued support and Nazi policies aimed to have middle class approval. Hitler’s dictatorship protected them from exploitation of big business elites and from working class poverty. As with the peasantry, the fortunes of the middle class were mixed.

The German middle classes, particularly the lower middle class or Mittelstand of shopkeepers, clerks, trades people and skilled crafter workers, were Hitler’s most enthusiastic supporters during his rise to power. From the start, the regime started to fulfil some of the election pledges to the Mittelstand:

  • The establishment of new department stores was banned on May 12, 1933.
  • Half the consumer cooperatives were forced to close by 1935.
  • Competition in craft trades were curbed by the introduction of new regulations.
  • Cut-price competition between big businesses was banned.
  • State and party agencies preferential to small businesses.
  • The state made available low interest loans and a share of confiscated Jewish trade.
  • Given small grants for investment

The Mittelstand welcomed the restoration of political stability, the imposition of wage controls and the punishment of what they considered to be anti social elements such as vagrants, the work shy and homosexuals. They also won temporary protection from competition from department stores.

Though many small businesses benefited from the economic recovery, factors such as tight credit, the influence of big business and the slowness of official agencies in paying bills meant that many went bankrupt and their overall role in the economy declined. The number of independent skilled craftsmen fell from 1,645,000 to 1.5 million in the period 1936-39 (although the value of their trade doubled). Many went bankrupt due to increased costs and though finding it impossible to compete with larger firms when prices were fixed. Traders who survived tended to be old and were forced to work longer hours for diminishing returns amidst increasingly burdensome bureaucratic control. Rearmament and war also tended to undermine small business and accelerated the concentration of monopoly capitalism.

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External links


Wiktionary

Up to date as of January 15, 2010

Definition from Wiktionary, a free dictionary

Contents

German

Etymology

Germanic: mittel- 'middle, central' + Stand 'stand(ing), position, estate'; perfectly parallel to cognate Dutch middenstand

Noun

Mittelstand (genitive Mittelstands, plural Mittelstände, no diminutive)

  1. (literally) The middle class, wealthy ('bourgeois') section of the third estate
  2. The independent professionals, private initiative, notably tradesmen, entrepreneurs etc.

Synonyms

Derived terms

  • mittelständisch (adjective)
  • Mittelständler m.

Related terms

  • Arbeiterstand
  • Mittelstadt

See also

  • Adel
  • Geistlichkeit, Klerus
  • Bürgerschaft







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