Official exchange rates are very misleading in the case of the the Soviets, since it was illegal to take currency out of the country without government approval, and the Soviet currency was not on the gold standard until after Stalin (if I recall correctly. The sviets grossly inflated the value of their own currency for reasons known only to them. The real exchange rate (if you could call it that), was about $0.05 per Rouble during the war, which explains why the Soviet citizens were always happy to deal in USD over their own domestic currency. This is a situation that continues to this day....local p[eople do not believe in the value of the currency even today.
I agree that none of these standards are accurate in themselves. However they are valid surrogate measures, and whilst it might be valid to dismiss one or two of them as aberrations and not representative, it becomes a bit implausible to mount that argument when all the surrogate indicators point in the opposite direction. Economics is a science, but it becomes imprecise, and somewhat based on guesswork when incomplete information is all there is to go on.
We can argue all day long about the accuracy of these figures, but this wont get us any closer to understaning why Germany, with an Industrial index much greater than the Soviets prewar, on the basis of nearly all the accepted indicators, was far more powerful that the USSR, but in terms of actual outputs delivered was far less efficient.
Some have argued that the Germans were engaging some of their industrial potential in other fields, such as electronics and naval construction. Radar I think is a valid point, but then it is not widely known that the Soviets constructed and maintained over 2000 ground station radars of their own, based on Allied technologies. Also, the Soviets outproduced the Germans in tems of surface ships during the war, and were only slightly behind in submarine production. They also built huge river flotillas in the thousands, which the germans did not. My opinion is that all these swirling reasons for the dissipation of GTerman industrial potential can be met by equally strange dispersal of effort in the Soviet camp....why would the Soviets need nearly 500 submarines for example
Geran oncosts are in my opinion high because of the low production runs, the high costs of the technology that was put into them, and because the German auto industry from pre-war days had always concentrated on quality, and were inexperienced in mas production techniques. Throughout the interwar period, German car ownership rates remained very low for a developed western nation. I think it very significant that huge proportions of the soft skinned vehicle parks were from foreign manufacture, and that the German output of soft skinned vehicles....about 300000, was so badly dwarfed by the USA (over 2000000).
Another area of weakness for the German Industrial complex was the very regime itself. Whereas in the US the competitive tender process was just that, so that the contract price arrived at between the General Board and Chrysler of $33500 per unit, was transferrable to most of the other contracts such as GMs arrangements, the same cannot be said in the case of German industry. (Chryslers contract, incidentally was responsible for something like 30% of the Sherm,an deliveries during the war, at what is today known as the TACAM plant.....its a huge complex). In the case the competitive tender process was often corrupted by the regime, and there were often compensatory contracts issued to competing designs which, inreality served only to make the process even less efficient.
Panther tanks were not RM130K, the stated cost does not include armement, which means, I now believe, they were delivered without turrets. The cost of a turret was not RM 12.5K. That is the cost of the gun. The turret assembly and its fitting shot the cost of the Panther all the way up RM180K per unit.
Lastly there is some debate about the exchange rate of the RM. From 1934 until the end of 1941, it hovered at about 2.489 or 2.5, and then from 1942 to the end of the war was totally off the western exchange rates. Exchange rates between Germany and the occupied territories were peged artificailly low in favour of Germany, so that trade terms were heavily weighted in favour of Germany in that period. This seems to have affected the exchange rate adopted of the new currency in 1946, since the new DM emerged with an exchange rate of about 3.3. Properly manage currency is a measure of the nations welath and potential, so while we cant be sure about the exchange rates in the 42-5 period, it seems to me reasonable to assert its was hovering somewhere in the area of 2-5 to 3-0.
None of this is controversial or seriously disputed in academic circles. You have to keep getting back to the fundamental issues driving this....German AFV production was low, its industrial potential was high, but it had significant problems. This all suggest s very clearly that in those sectors where the Germans lacked a great deal of expertise, they were going to do badly in those areas. Given the absolute necessity of AFVs to the war, and the relative inexperience of German industry in vehicle mass production techniques (this is not questioning the technical espertise of the designs), alomng with thos other handicaps I mentioned, I am at a loss as to why people still dont think that German production costs for these items were high....
Germany did excel in production terchniques during the war, particulalry for small arms, but they were never strong on the full implementation of vehicle manufacture mass pro duction techniques, including armoured vehicles, and this drove the unit costs for such items through the roof. This was not helped by the decreasing skills base in the workforce (I mentioned the influx of forced labour, 8 millio of them, which was refuted....I dont accept that, but what is undenaible was the drain of highly skilled tradesman, like toolm,akers, from the workforce to the army particulalry after 1942. Up to that point certain trades were exempt in Germany from military service, but after 1942, this became less and less the case. My own stepfather was a toolmaker, and was called to the colours in 1942, along with a large number of other tradesmen working at the plant he was employed in. He says they were all replaced by foreign tradesman, and the plant prompltly suffered a near 30% loss in productivity as a result
