Discussion: Comparing British and German industries 1900-1940

Thomas1195

Banned
The British Treasury for one. Reducing imports saves foreign currency. It also puts more money into your own economy.

If the British steel industry before world war one had been able to make and more importantly sell more in the process increasing steel exports and reducing steel imports that had two beneficial effects. The first is that the British go into World War One with bigger foreign currency reserves. Second the British steel firms would be making bigger profits which they paid British taxes on so that the British Government could pay more of the cost of the war from revenue and less by borrowing, which in turn meant a smaller national debt at the end of the war reducing the crippling debt burden the UK was under between the world wars.
Also you would not have to import American steel = saving foreign currencies
 
This was what I mean. Note that not only output, but German productivity in heavy industries was also higher.

But German farming productivity sucked, and since Germany gave up due in very large part to starving (Hunger Winter, Kiel mutineers having eaten too much "barbed wire stew"), Germany's handicaps far outweighed any supposed superiority. I mean, look at the scoreboard.
 

Thomas1195

Banned
But German farming productivity sucked, and since Germany gave up due in very large part to starving (Hunger Winter, Kiel mutineers having eaten too much "barbed wire stew"), Germany's handicaps far outweighed any supposed superiority. I mean, look at the scoreboard.
Was Britain self-suffcient in farming???? NO. Britain was luckier to possess more colonies (many of them well before the unification of Germany) that supplied them food.
 
E.g.
Steel production in 1913:
UK: 8 million tons
Germany: 16 million tons.
If the UK had been fighting Germany alone in World War One your arguments and statistics would have more weight. However, the British were not and I think these statistics from Kennedy's Rise and Fall of the Great Powers paint an entirely different picture:

Percentage of World Manufacturing Production (1913)

Germany & Austria-Hungary = 19.2%

France & Russia 14.3% PLUS Britain 13.6% = 27.9% - that is nearly 50% more than the Central Powers

Energy Consumption (1913), metric million tons of coal equivalent

Germany & Austria-Hungary = 236.4

France & Russia 116.8 PLUS Britain 195.0 = 311.8

Steel Production (1913), in millions of tons

Germany & Austria-Hungary = 20.2

France & Russia 9.4 PLUS Britain 7.7 = 17.1

Total Industrial Potential (UK in 1900 = 100)

Germany & Austria Hungary = 178.4

France & Russia 178.4 PLUS Britain 133.9 = 261.1

The Entente had substantial leads over the Central Powers in 3 out of 4 of the above categories and was about 15% inferior in steel production.
 
Was Britain self-suffcient in farming???? NO. Britain was luckier to possess more colonies (many of them well before the unification of Germany) that supplied them food.

Yet Germany was not self sufficient either, as widespread starvation in both wars showed, despite looting from conquered nations. Do you disagree with this point? Britain was buying American wheat and Argentinian beef- neither were colonies. Had Germany not built a fleet in the 1910's, and modernized its farming, it might have won WW1.
 
Also you would not have to import American steel = saving foreign currencies
Once again you don't interpret what I write properly because the above statement repeats what I wrote.
The British Treasury for one. Reducing imports saves foreign currency. It also puts more money into your own economy.

If the British steel industry before world war one had been able to make and more importantly sell more in the process increasing steel exports and reducing steel imports that had two beneficial effects. The first is that the British go into World War One with bigger foreign currency reserves. Second the British steel firms would be making bigger profits which they paid British taxes on so that the British Government could pay more of the cost of the war from revenue and less by borrowing, which in turn meant a smaller national debt at the end of the war reducing the crippling debt burden the UK was under between the world wars.
 

Thomas1195

Banned
If the UK had been fighting Germany alone in World War One your arguments and statistics would have more weight. However, the British were not and I think these statistics from Kennedy's Rise and Fall of the Great Powers paint an entirely different picture:

Percentage of World Manufacturing Production (1913)

Germany & Austria-Hungary = 19.2%

France & Russia 14.3% PLUS Britain 13.6% = 27.9% - that is nearly 50% more than the Central Powers

Energy Consumption (1913), metric million tons of coal equivalent

Germany & Austria-Hungary = 236.4

France & Russia 116.8 PLUS Britain 195.0 = 311.8

Steel Production (1913), in millions of tons

Germany & Austria-Hungary = 20.2

France & Russia 9.4 PLUS Britain 7.7 = 17.1

Total Industrial Potential (UK in 1900 = 100)

Germany & Austria Hungary = 178.4

France & Russia 178.4 PLUS Britain 133.9 = 261.1

The Entente had substantial leads over the Central Powers in 3 out of 4 of the above categories and was about 15% inferior in steel production.
Well, this was thanks to German bad handling in diplomacy after Bismarck. They could have pulled Russia into their side with a POD before 1900. A Russo-German alliance would be unbeatable.
 
Was Britain self-suffcient in farming???? NO. Britain was luckier to possess more colonies (many of them well before the unification of Germany) that supplied them food.
They could produce the food more cheaply. Unemployed British farm labourers went to work in factories, which exported manufactured goods to the colonies that paid for the imported food. Or put another way the colonies paid for the manufactured goods they bought from the British by selling them cheap food.

IIRC its called absolute advantage. Each country concentrates on producing what they can produce the most efficiently so that both can have more of everything.
 
Well, this was thanks to German bad handling in diplomacy after Bismarck. They could have pulled Russia into their side with a POD before 1900. A Russo-German alliance would be unbeatable.
Your like the Irishman giving directions. You are advising us to start our journey from a location different from your actual one.

Had the Germans still been in an alliance with Russia it's unlikely that World War One as we know it would have happened in the first place.
 

Thomas1195

Banned
They could produce the food more cheaply. Unemployed British farm labourers went to work in factories, which exported manufactured goods to the colonies that paid for the imported food. Or put another way the colonies paid for the manufactured goods they bought from the British by selling them cheap food.

IIRC its called absolute advantage. Each country concentrates on producing what they can produce the most efficiently so that both can have more of everything.

The problem is that Germany had no colonies to do so. Their position force them to protect their agriculture. Of course they should have mechanized farming.
 

Thomas1195

Banned
Your like the Irishman giving directions. You are advising us to start our journey from a location different from your actual one.

Had the Germans still been in an alliance with Russia it's unlikely that World War One as we know it would have happened in the first place.
I only mean that Germany's problem was caused by its bad handling of diplomacy.

A wiser approach would be engaging in a Chinese-style trade war, or if they really want a war, make sure that the war would be just Anglo-German (like in 1870 with France).
 
This was what I mean. Note that not only output, but German productivity in heavy industries was also higher.
I don't know enough about that. However, my suspicion is that in 1910 British heavy industrial productivity was not significantly inferior to Germany and the USA. I don't know what the situation with steel was, but with shipbuilding I'm confident that the British were still just as good if not better than the rest.

It was between 1910 and 1940 that British heavy industry fell far behind in productivity.
 

Thomas1195

Banned
I don't know enough about that. However, my suspicion is that in 1910 British heavy industrial productivity was sufficiently inferior to Germany and the USA. I don't know what the situation with steel was, but with shipbuilding I'm confident that the British were still just as good if not better than the rest.

It was between 1940 and 1940 that British heavy industry fell far behind in productivity.
All studies found that US overall manufacturing and overall productivity always outdistanced the rest during that period (the distance might reach 200% or more).

British overall industry productivity was more or less the same as Germany overall. But while Germany led in heavy industries, Britain had advantages in light industries.
 
The British Treasury for one. Reducing imports saves foreign currency. It also puts more money into your own economy.

If the British steel industry before world war one had been able to make and more importantly sell more in the process increasing steel exports and reducing steel imports that had two beneficial effects. The first is that the British go into World War One with bigger foreign currency reserves. Second the British steel firms would be making bigger profits which they paid British taxes on so that the British Government could pay more of the cost of the war from revenue and less by borrowing, which in turn meant a smaller national debt at the end of the war reducing the crippling debt burden the UK was under between the world wars.

Which would be a stupid thing to do. You're basically saying that UK should throw away its comparative advantage in manufactured goods in order to make and sell less competitive intermediate goods, thus leading to a general fall in output and consumption. Your short-sighted blindness has missed the simple fact that the UK would have to give up something for increased steel production, and that would be total productivity.


People really need to learn economics. The blatant disregard is why I never like talking about these kind of topics to those who don't have any idea of what exchanges are required in macroeconomics.
 
The problem is that Germany had no colonies to do so. Their position force them to protect their agriculture. Of course they should have mechanized farming.
Again. I think the point wasn't that they were colonies. AFAIK the UK was importing large quantities of food from Argentina and the USA, which weren't colonies and both were also exporting large quantities of food to Continental Europe which weren't colonies. I think the significance of the colonies being sources of food is that they were part of the Sterling Area which helped with the Balance of Payments.
 

Thomas1195

Banned
Which would be a stupid thing to do. You're basically saying that UK should throw away its comparative advantage in manufactured goods in order to make and sell less competitive intermediate goods, thus leading to a general fall in output and consumption. Your short-sighted blindness has missed the simple fact that the UK would have to give up something for increased steel production, and that would be total productivity.


People really need to learn economics. The blatant disregard is why I never like talking about these kind of topics to those who don't have any idea of what exchanges are required in macroeconomics.
In manufacturing, comparative advantage can be built up via technological changes or experience, as they would bring down the cost of production.
 
http://personal.lse.ac.uk/ritschl/pdf_files/KETCHUP.pdf
Look at figure 2. Then look at the straight lines, they predicted that German productivity would finally surpass Britain in mid 1930s without ww1.
That is not a prediction, it's just an extension of the regression analysis for 1901-1913 trends.

In manufacturing, comparative advantage can be built up via technological changes or experience, as they would bring down the cost of production.
Only if there is the benefit for doing so. With the trade network UK enjoyed, it would have been more costly to spend time and resources deliberately building up steel capacity than to focus on investing in the final products.
 
Which would be a stupid thing to do. You're basically saying that UK should throw away its comparative advantage in manufactured goods in order to make and sell less competitive intermediate goods, thus leading to a general fall in output and consumption.
No. I'm basically saying that if it had been possible to increase steel production, provided they could make it cheaply enough to sell said extra production, with the same amount of labour and WITHOUT reducing production of something else THEN it would have been a good thing. If what Thomas1195 says about the UK importing steel before World War One is correct then it suggests that the demand was there provided the British steel industry could make it cheaply enough. However, I repeat that if making more and cheaper steel means that something else has to be sacrificed then it should not be done.
Your short-sighted blindness has missed the simple fact that the UK would have to give up something for increased steel production, and that would be total productivity.

People really need to learn economics. The blatant disregard is why I never like talking about these kind of topics to those who don't have any idea of what exchanges are required in macroeconomics.
I'm not going to get into a slanging match over that. All I'll say is that when it comes to the British economy in the 1910s I'm closer to your interpretation than I am to that of Thomas1195.
 
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