German a/c production

[Kurfürst]

"... the artificial exchange rates and price pegging had a lot to do with it".

Tooze documents the "phony-baloney" economics of the Third Reich very clearly.

I on the other hand is not much convinced by Tooze. His thesis seems to me a bit... preconceptional.

For example: Kystallenoche (?) - thousands of expensive Jewish plate glass windows had to be replaced from Belgium with scarce HARD CURRENCY.

I doubt the state payed for these... we seem to mix up civillian sector and the state sector here and why from Belgium anyway? Not to mention such expenses are but a drop in the ocean when you look at the nation level..

The quest for self-sufficiency in oil led to the development of synthetic petroleum at high prices per barrel at a time of economic depression (worldwide) when real oil was CHEAP. CHEAP, CHEAP.

I don't get this - this was possibly the best decision made. Sure synthetic petroleum was much more expensive than natural, but it gave Germany total strategic independence from oil imports, and she could produce just about any quantity from brown coal, which Germany had in abundance. Practically the whole LW run on synthetic fuel..

 

[michaelmaltby]

"... I doubt the state payed for these... we seem to mix up civillian sector and the state sector here and why from Belgium anyway? Not to mention such expenses are but a drop in the ocean when you look at the nation level."

Actually, I think the Jews were levied to pay for the clean-up and damages. In Nazis Germany there was very little distinction between the :state" and the "civilian" economic sectors. The glass came from Belgium because they were the masters at plate glass-making.

".... I on the other hand is not much convinced by Tooze. His thesis seems to me a bit... preconceptional."

Kurstfust - I'd be pleased if you would suggest a more "objective" or more "scientific" economic look at the Third Reich .
Tooze was recommended by another poster and I personally found his views quite illuminating - myth breaking in many cases.

For example - I held the opinion that the female workforce in GB during the war was more engaged than the equivalent female workforce in Nazis Germany, (something like the Nazis dogma of women staying home and making blond babies, heh heh ) Tooze debunks this noting that at the start of war there were MORE German women in the workforce than there were British women (due to a lower standard of living in large parts of Germany). So in GB there was room for more upward movement of the percentage of employed women in the workforce. Same thing with Speer vs Milch as architects of aircraft production.

So - find Tooze "preconceptional" if you like, but lacking a better economic analysis, I think his work is valuable and insightful.

So there,

Cheers,

MM

 

[parsifal]

whether the cost of something is carried by the state directly, or by the private sector doesnt matter. its a cost, borne by the nation. and if that cost was borne by the jews, then that is just that much more costly to the nation. who cpntrols a large sector of the financial market....and what would they do if they are persecuted. thats one of the reasons why the regime found it necessary to rob them blind later on in the war....but even that finishes up costing more than it gains

there is no substitute for productivity, equity and efficiency. pre war germany lacked all three

 

[michaelmaltby]

".... there is no substitute for productivity, equity and efficiency. pre war germany lacked all three".

That is absolutely correct. Britain in 1939 was wealthier, had a larger middle class, and was more productive in overall economic terms, than the Third Reich. Germany gained nothing - in productivity terms - by its occupation. Whereas - in GB's case, the Commonwealth provided motivated manpower, efficient industries, massive food and resources production. Then you add the USA to GB's "hand" and there is just no contest.

And what advantages Germany might have had it squandered by screwing up its "currency position" and by alienating large sectors of world public opinion. The exceptions for the Nazis were Czechoslovakia and Romania - great industrial capacity for tanks and oil. If Sweden hadn't stayed "neutral" Germany would have been hard pressed for high quality iron ore as all they had in situ was "bog iron" .

It's a credit to sheer bloody-minded fanaticism and anal organization that Germany lasted as long and as effectively as it did.

MM

 

[davebender]

Unfortunately Tooze's opinions about 1930s economics don't square with the historical GDP data. Why would anyone choose an opinion over historical facts?

 

[michaelmaltby]

"Why would anyone choose an opinion over historical facts?

Examples please ...Tooze's 'opinion' vs 1939 GDP 'fact'.

MM

 

[Milosh]

It is not just Tooze but also Richard Bessel in his 'NAZISM and WAR'. ISBN 0-75381-984-8

 

[michaelmaltby]

THE WAGES OF DESTRUCTION: The Making and Breaking of the Nazi Economy
by Adam Tooze
Allen Lane £30, 832 pages

Pile up the mass of scholarship published about Nazi Germany since the second world war and you will probably end up with a stack several times the size of the Zugspitze. Is there anything at all we do not know yet about this dramatic era?

Yes, answers Adam Tooze in The Wages of Destruction, a masterful economic history of the Third Reich. Tooze, an economic historian at Cambridge, has added his name to the roll call of top-class scholars of Nazism. His painstakingly researched, astonishingly erudite study not only uncovers new explanatory strands for the events that led to and ended the war, but smashes a gallery of preconceptions on the way.

Based on solid statistical foundations, his central and perhaps most counter-intuitive finding is that the Germany that went to war in 1939, steeled by six years of hectic rearmament, was no mighty industrial steamroller but a weak economy, starved of resources and foreign exchange and crippled by an over-sized and utterly unproductive agricultural sector. Despite rapid industrialization in the late-19th century, standards of living in 1938 Germany were only half those in the US and two-thirds of the UK's.

Far from the juggernaut that lives on in popular imagery, Adolf Hitler's country from the mid-1930s onwards was teetering on the brink of collapse. By 1940-41 it had reached crisis, failing to commandeer the steel and fuel to reverse the unfavorable and fast-degrading balance of power between its underfunded military and that of the Allied powers. For most of the period covered, from Hitler's rise to power in 1933 to the regime's downfall in 1945, Germany's economic policy boiled down to scarcity management. It was this, Tooze contends, that dictated the Blitzkrieg nature of the 1940 offensive against the west. The state of Germany's limited stocks of oil, coal, steel, manpower, ammunition, vehicles and weapons created bottlenecks so it could not win a war of attrition against its better equipped opponents. Once forced into a defensive position after the attack on Russia ground to a halt in the winter of 1941, the war was lost.

If the economic managers of the Third Reich had any success at all, it was in ensuring that the conflict lasted four more years. This came at extraordinary human and moral costs. Occupied territories, mainly in the east, were ruthlessly looted for raw material, food and workforce - as the war effort climaxed, Germany had as many foreign workers on its soil as it does now. Civilians and prisoners of war were worked to death as Wehrmacht, Luftwaffe and Kriegsmarine descended into competition for resources.

Tooze is no economic determinist. It is to his credit that he does not dismiss politics as a factor in his narrative. The "ignorant condescension", mainly racially motivated, shown by the Germans towards Soviet Russia was, he says, among the regime's most determining miscalculations as it embarked on its eastern offensive. What it found was no primitive Slavic society, but "the first and most dramatic example of a successful developmental dictatorship".

Tooze also refreshes our understanding of the Anglo-American bombing campaign of 1942-45. The raids on the Ruhr region, he argues, dealt a mortal blow to Germany's military-industrial complex. But the RAF's futile attempts at repeating in Berlin the firestorm it had sparked in Hamburg in July 1943, instead of tightening the hold on the coal-and-steel choke-point of the Ruhr, was "a tragic operational error" that may have put off victory for a year.

One of Tooze's most fascinating conclusions is how much Hitler's economic understanding was informed by the US. Roosevelt's America was not only the ultimate enemy, dominated as the Nazis thought by Jewish capitalism, but a role model. More than France's and Britain's colonies, it was America's vast territory and internal market that informed and, in his eyes, legitimized Hitler's view that Germany could only prosper through the colonization of the east.

This Lebensraum theory, whereby local populations would be driven away or eradicated as the American Indians had been, was the Nazi answer to America's frontier mentality. In fact, many aspects of Hitler's economic thinking were nothing but a distorted interpretation of the US economic model. Even the dictator's irrational belief in the "power of the will" over adversity echoed the proverbial American optimism.

In 1945 John Kenneth Galbraith saw the defeat of the Third Reich as the "conclusive testimony to the inherent inefficiencies of dictatorship and the inherent efficiencies of freedom". In truth, the collapse had more to do with Germany's pre-war weaknesses and the Nazis' failure to reverse them. From 1933, the Nazi economy was a war economy. It had no blueprint for peacetime.

Copyright The Financial Times Limited 2010

 

[tail end charlie]

THE WAGES OF DESTRUCTION: The Making and Breaking of the Nazi Economy
by Adam Tooze
Allen Lane £30, 832 pages
Copyright The Financial Times Limited 2010

I find it surprising that people are discussing Nazi Germany as a system of government, Hitler was leader of a small group of fanatics who siezed control of a country which being newly formed didnt have the controls to stop it. This was repeated all over Africa and in many parts of Asia after the war. I cant remember seeing that Hitler was voted in on a mandate of economic competence he wasnt voted in at all. In Germany during world war two like France after the revolution, the Revolutionaries masked their incompetence by siezin g more territory, laughably and possibly poetically they both came to grief in Moscow. Waging a war overland in a place like Moscow exposed both Napoleon and Hitler to their own folly and brought about their downfall, but actually they had no choice.

In a documentary about Nazi Germany I saw there was a design bureau of 200 people working in Berlin to make a broad gauge railway system across Europe. To sugest the group would be disbanded was to say that Germany wouldnt win the war (defeatist treason) so they went into work on a fantasy project until the Russians were knocking on the door. The German Army Navy and Airforce along with their engineers and scientists were a formidible group led by complete lunatics.

 

[Glider]

It's worth remembering that before the war when Japan was planning to join the German/Italian alliance, the Japanese civilian politicians ad economist were urging their leaders not to join because of the weakness of the German economy. As you know they were overruled.

The world would be a different place had they listened.

 

[tail end charlie]

It's worth remembering that before the war when Japan was planning to join the German/Italian alliance, the Japanese civilian politicians ad economist were urging their leaders not to join because of the weakness of the German economy. As you know they were overruled.

The world would be a different place had they listened.

If Germany had overrun the Uk and therefore taken control of most of Europe/Africa the incompetence of those concerned wouldnt matter, look at Zimbawe, the question would only have been would Germany and Russia fight to the death or just co exist.

 

[parsifal]

My opinion is that Germany possessed greater economic potential than Britain. The industrial indexes applicable to 1938, as I recall, were greater for Germany than they were for Britain. However, for a number of reasons actual outputs tended to be very disappointing.

These reasons included inherent corruption and latent inefficiency of the political system that existed in Germany at that time….the country tended to be run as a series of disconnected fiefdoms in which the greater national goals were lost to individual and personal interests, decisions tended to be made without consultation and on the basis of incomplete information or even the immediate whims of the leadership at the time.

There was also a very shallow and short range degree of forward planning in the preparations for war. Because of the atrocious balance of credits that existed in Germany, the country was limited really to preparing for a war of short duration. Consequently their pre-war investment dollars went into producing the actual hardware, rather than developing the support arrangements that would be needed for a rapid and massive expansion once the war actually broke out. ,

Just looking at aircraft outputs, for example, a nation such as Japan, a far smaller economic complex, with supply problems at least as acute as those experienced by Germany, produced a competitively similar number of aircraft to that of Germany.

 

[davebender]

1930s Germany was a republic. Not the world's best example of a republic but then neither were France and Poland.

In any case I agree there is no such thing as a "Nazi" system of government. Nor was there such a thing as a "Fascist" system of government. 1930s Italy was a constitutional monarchy.

 

[michaelmaltby]

".... re discussing Nazi Germany as a system of government,"

I wasn't aware that we were, Charlie. I thought we were discussing aircraft production in Nazi Germany and the economy behind that production.

MM

 

[parsifal]

Incorrect, at least in any reasonable sense. The very first thing Hitler did after the Death of Hindenburg, was to merge the roles of Chancellor and President to create the new unconstitutional position of "Fuhrer", which effectively cut across all the checks and balances inherent in the republican model. It fundamentally flouted the separation of powers but then it gets worse, on gaining power Hitler immediately declared a state of emergency, and for the next 12 years ruled by emergency decree. This effectively removed the power of the Reichstag to act as a real house of review.

Hitlers actions in all of this were blatantly unconstitutional and illegal. They had the effect of destroying the republic and its democratic credential. To even try and call it a republic is a bad joke at best, and a total travesty of democratic traditions at worst.

Germany was not a republic during the nazi era, and it is really silly IMO to even try to say as a cameo it was a republic.

 

[Gixxerman]

One of the things that has always struck me as odd regarding the German approach to war production was that they had Ford Opel (and others) engaged in the then most modern mass production techniques and yet as far as aero production (amongst others areas) they persisted in the 'hand crafted' method of production for so long.

I agree that the US experience of using automotive mass production techniques did not progress without hiccups, initially at least, but given their desperate need to compete with the USSR's enormous productive capacity (nevermind the USA's) it seems very odd that aircraft - and tank - production did not rapidly move to a proper mass-production basis until it was way past too late for Germany.

(although I am of the view that once Russia was invaded the war was probably unwinnable - and certainly guaranteed lost after Japan Hitler's declaration of war brought the total involvement of the USA on the allied side)

IIRC the UK's aircraft production usually exceeded Germany's during the war, 1944 the production dash - using up most if not all of their material stocks - excepted, which seems extremely surprising, considering.

 

[Glider]

IIRC the UK's aircraft production usually exceeded Germany's during the war, 1944 the production dash - using up most if not all of their material stocks - excepted, which seems extremely surprising, considering.

In production terms when comparing Germany and the UK the fact that from 1942 the UK produced many thousands of four engined bombers which involved three to five (Depending on which figures you take) times the production effort of a single engined aircraft.

With that in mind the UK out produced Germany at every stage of the war.

 

[davebender]

One of the things that has always struck me as odd regarding the German approach to war production was that they had Ford Opel (and others) engaged in the then most modern mass production techniques and yet as far as aero production (amongst others areas) they persisted in the 'hand crafted' method of production for so long.

We've discussed this myth before. The paper at the below link provides historical details as to how the most important WWII German aircraft program actually worked.

http://www.econ.yale.edu/growth_pdf/cdp905.pdf

 

[The Basket]

German insurers paid for the damage to the Jewish shops.

There was a big thing between Goering and the agent for german insurers who said that the Insurnace companies had to pay the claims...else german insurnace will be considered worthless abroad.

If memory serves...hard currency was strictly controlled by the Nazi Government so replacement glass was a state thing as it was paid in hard currency....hence Goring as head of the German Economy stick his face in it.

He blamed Heydrich for this...saying he wished he killed more Jews than break windows....

Anyway...one is forgetting that unitl June 1941...the USSR pact meant that Germany got what it wanted in raw materials from them...including oil.