Economical prospects of Communist Germany

Inspired by Wir Sind Spartakus timeline, assume there was a successful communist takeover in Germany after World War I. Assume the revolution did not spread to other countries and the only communist countries are Germany, Russia and perhaps Hungary. Assume harsher Versailles treaty, with separate Rhineland, separate East Prussia and Upper Silesia lost to Poland. (Map reference.)

1. How is Germany’s industrial potential affected by the loss of two, well more accurately one-and-half, industrial regions and additional damage caused by the civil war? How fast can it recover?
2. Aside from obvious focus on German-Russian trade how are commerce patterns of Europe changed?
3. Assuming the is a Great Depression is Germany self-sufficient enough to avoid its greatest blows? How does Communist Germany affect the Great Depression itself?
 
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Sorry, I've been thinking about this.

Unlike Russia, Germany is a highly industrialized state, and far more dependent on internaitonal trade. This is bad, because no one willw ant to trade with Communist Germany. And it's lost a few of its major territories.

(My analysis is far more favorable if Poland falls, actually).

If it still has to pay reparations, then you also have trouble. And unlike the USSR, Germany was already very advanced, at least in terms of things like education. So Germany doesnt' even get the benefits to education and human develop that the USSR saw.
 
This is bad, because no one willw ant to trade with Communist Germany.
Then again, is it feasible to cut trade connections with Germany and search for substitutes elsewhere without drasticly reducing the overall volume of international trade? For example, before the custom war of 1925 nearly 40% of Polish exports went to Weimar Republic.
(My analysis is far more favorable if Poland falls, actually).
Definitely. If Poland falls, then Communist Germany links with Soviet Union and gets more or less free hand in Eastern Europe.
If it still has to pay reparations
Unless the Entente concluded that the reparations would be unenforcable I guess Germany would still have to pay them
unlike the USSR, Germany was already very advanced, at least in terms of things like education.
Most likely Soviet Union benefits as Germany is more willing to share their expertise.
 

Old Airman

Banned
Some pretty random thought on the subject:
1. Eastern Europe had no other trading partners but Russia and Germany. With both of them going commie, the choice for Balts, Romanians, Hungarians and (to a certain extent) Poles, Finns and Yugoslavs is between trading with Commies and no trading at all. To be frank, I believe EE ruling regimes to be suicidal enough to try and block the trade as much as they could (that's exactly what Poles did IOTL inter-war, with devastating consequences for Polish industry). This would create a lot of bad blood and can, quite easily, spark WWII.
2. Economies of Communist Germany and Communist Russia are uniquely complementary. There was no item Russia needs and Germany could not produce and there's no raw material Germany need and Russia could not provide. This is true for at least quarter of century (until Russian agriculture is saturated with German equipment and Russian transportation with German locomotives and automobiles).
3. Great Depression would happen anyway.
4. Germano-Russian communist alliance would benefit from it much in the same way USSR did IOTL (by being able to buy latest American technology at deeply discounted prices).
5. "Weakness of planned economy" would not be a popular subject in this timeline until at least 1950s, "Communist economic miracle" would, even longer if WWII happens ITTL.
6. Loss of Ruhr to Germany would cause accelerated development of metallurgy in Ukraine and Southern Russia (OTL DOnbass and Krivbass), with a lot of skilled workforce provided by German economic migrants from Ruhr.
 
Some pretty random thought on the subject:
1. Eastern Europe had no other trading partners but Russia and Germany. With both of them going commie, the choice for Balts, Romanians, Hungarians and (to a certain extent) Poles, Finns and Yugoslavs is between trading with Commies and no trading at all. To be frank, I believe EE ruling regimes to be suicidal enough to try and block the trade as much as they could (that's exactly what Poles did IOTL inter-war, with devastating consequences for Polish industry). This would create a lot of bad blood and can, quite easily, spark WWII.
2. Economies of Communist Germany and Communist Russia are uniquely complementary. There was no item Russia needs and Germany could not produce and there's no raw material Germany need and Russia could not provide. This is true for at least quarter of century (until Russian agriculture is saturated with German equipment and Russian transportation with German locomotives and automobiles).
3. Great Depression would happen anyway.
4. Germano-Russian communist alliance would benefit from it much in the same way USSR did IOTL (by being able to buy latest American technology at deeply discounted prices).
5. "Weakness of planned economy" would not be a popular subject in this timeline until at least 1950s, "Communist economic miracle" would, even longer if WWII happens ITTL.
6. Loss of Ruhr to Germany would cause accelerated development of metallurgy in Ukraine and Southern Russia (OTL DOnbass and Krivbass), with a lot of skilled workforce provided by German economic migrants from Ruhr.

If you could remove Comrade Stalin from picture then Communist Miracle could run for quite some time. Poland would eventually fall communist due to being shoehorned between the two. Germany would regain Ruhr eventually, Just reverse as to what we have today. Maybe with some luck you could have communism with out the Evil Empire leaders, and maybe put some actual Democratic Socialism behind the names. Might not be a bad place to live.
 
1. Eastern Europe had no other trading partners but Russia and Germany.
Not entirely true. As per the Polish-German customs war it is possible to diversify the trade relations, for example by building trade relations with Scandinavia. Of course OTL the custom war happened after Polish economy had 5 years to stabilize. Without that time the consequences would be disastrous.
(by being able to buy latest American technology at deeply discounted prices)
Please, elaborate. It seems there is some important aspect of OTL that I am not aware of.
Loss of Ruhr to Germany would cause accelerated development of metallurgy in Ukraine and Southern Russia (OTL DOnbass and Krivbass), with a lot of skilled workforce provided by German economic migrants from Ruhr.
On the other hand it is possible that Germans would rather emigrate from Communist Germany to the ’Rhenish Republic’, rather than from Ruhr to Soviet Union.

How much time do Germany and Russia need to reassert themselves in Eastern Europe?
 

Old Airman

Banned
If you could remove Comrade Stalin from picture then Communist Miracle could run for quite some time.
IOTL even with Comrade Stalin communist system did provide ever-increasing quality of life for an average Soviet citizen up to late-1970s, with exception of 1929-1933 (forced industrialization and Holodomor caused by it) and 1941-1947 (WWII and immediate aftermath), not as effectively as 1st world, but more effectively than 3rd world or European colonial possessions. It is hard to predict how would leadership game among Commies play out, and we're trying to discuss economy here anyway.
Poland would eventually fall communist due to being shoehorned between the two.
The threat would be there, but I'm unsure of how events would play out. Remember, IOTL Baltic countrilets existed for more than a year in a world gone FUBAR (a.k.a. WWII) before being swallowed by Stalin. I could see Poland being THE sore point of Europe for decades.

Germany would regain Ruhr eventually
I don't see it pre-WWII. Just like nobody gives a damn today about will of Crimean or Eastern Ukrainian population, nobody would care about wishes of Ruhr people to rejoin Mother Germany, as soon as the Germany is communist.

Maybe with some luck you could have communism with out the Evil Empire leaders
I don't believe in planned economy long-term, so eventually the system should bomb. However, it might took a lot longer than in OTL.

Might not be a bad place to live.
Comparing to? OTL Soviet Union? Almost certainly (Stalin did rob the country pretty severely to pay for industrialization). OTL pre-WWII Germany? I would say, better for poorest 10% of OTL German population, somewhat close to OTL for middle class, much worse for top 10%.

Not entirely true. As per the Polish-German customs war it is possible to diversify the trade relations, for example by building trade relations with Scandinavia.
This is exactly the mindset I was talking about. Voluntary cancellation of trade with two by far biggest economies of the region, driven by political considerations and augmented by heavy self-hypnosis campaign that puny Scandinavian market is as good as mammoth-sized Russian and German ones.

Please, elaborate. It seems there is some important aspect of OTL that I am not aware of.
IOTL Soviets bought all their tank and tractor producing capacity from American companies. Americans were nice enough to oversee plant construction, equipment installation and training of the Soviet workers. Same for main Soviet car plants (Americans built GAZ from the ground up and supplied equipment to modernize WWI-era Moscow ZIS, equipped Moskvitch car assembly plant and initially supplied car kits for assembly here). Out of 4 main lines of aircraft piston engines, one (of I-16, La-5, Tu-2, Pe-2 fame) goes back to license-built Wright Cyclone, another (powerplant used by Shturmovik and MIG-3) is a BMW VI derivative, third and fourth are based on French designs (Gnome and Hispano-Suiza). Only Beemer engine is not related to Depression-induced fire sale. Most Soviet tanks were of either British (T-26, a.k.a. Vickers 6 ton) or American (BT) design, with original designs being either barely adequate (T-28) or outright failures (T-35). On the top of that, American equipment and cansulting was essential in building of many steel mills, powerplants, aluminium plants etc. Now, this might not happen IATL to the same extent, as a lot of OTL sales had been influenced by barely disguised racist thinking "Russians are too stupid to put the new toys they buy to a good use, so we're earning money without actually helping the Red Devil", and nobody ever questioned abilities of German workers. But, in a Depression-crippled world temptation to trade with Reds who're paying cash would be great.

On the other hand it is possible that Germans would rather emigrate from Communist Germany to the ’Rhenish Republic’, rather than from Ruhr to Soviet Union.
As far as I know, Soviet Union, despite having pretty porous borders in 1920-1935, enjoyed a positive migration balance. Red Germany, not destroyed by civil war, would be pretty attractive to half-starving unemployed workers of Rhur, who would be on receiving end of French occupational regime.
 
There is still a darker side to this TL, and this is the attitude of "democracies" towards the Germany-USSR tandem. The West will not allow Germany to violate Versailles. I can't see a possibility to win WWII for the communists. That is why they probably would try to rock the boat during the Depression.

Mind that years and years of collaboration could produce quite a lot of butterflies. The very hope of world revolution wouldn't seem that idealistic, that is why we could end up with Trotsky in power. ITTL Depression will be considered a "revolutionary situation", and the all-powerful Comintern would surely take any chances.
 
Well a quick first analysis (this is all I have time for), I conclude that inflation is going to be a huge problem very soon. Inflation is largely a monatary phenomenom and the massive increase in the ammount in circulation will see hyper-inflation even earlier.
 
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