Economy of a Modern Germany with post-Munich borders

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Eurofed

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Something's going to need to get settled over the Polish Corridor, but will the peculiarities of the solution actually have a substantial impact on Germany's economy?

Honestly, if a general war is avoided as assumed by the scenario, no. Even a limited G-P conflict would have scarce long-term economic impact. We have already established there is going to be a recession caused by Nazi military overspending.
 

Typo

Banned
The German recession is going to have a negative impact across Europe, it might actually trigger something pretty bad. OTL rearmament before the war was a key reason for bringing the economies of countries out of the worst of the depression. If the German economy collapses, the rearmament will no longer be needed, combined with the disruptions in trade and such, might trigger a fresh crisis. I think the recession of 1937 in the US would be a prototype for it.

Also a prolonged depression is going to make Marxist economics far more attractive, especially if Keynesianism is seen to have failed.
 
But for the sake of peace, I'm going to deploy my considerable suspension of disbelief and assume that all lingering irredentist quarrels in 1939 Europe get "magically" settled or more likely, actually frozen by butterflies after the PoD without ever involving the great powers.
Thanks.:) Myself, I'm assuming that German and Polish leaders arise post-Hitler who'll actually negotiate in good faith, and that they work out some deal which both sides can live with. I don't know what that deal is, but I'm sure one could exist.

Not really, it's not like the heart of German industry was in any of the disputed areas. The actual effects of global economic conditions regarding a depression minus WWII will be far more significant than whether Germany's borders are 150 KM this way or that.
Exactly. I know that, at least in the US, employment rates didn't really re-stabilize until we started drafting soldiers and selling arms to Europe. I wouldn't be surprised if it was the same way in several European countries - and that'd certainly have a big effect.
 
Assuming no WWII or WWIII equivalent Germany would have an increased portion of its income derived from military and aerospace exports. German optics would place Germany in a good position as a leader of semiconductor production. Germany would also be a major player in the nuclear power industry. The lack of the USA military buildup and the postwar GI bill would comparatively retard US economic growth compared to OTL.
 

Eurofed

Banned
The German recession is going to have a negative impact across Europe, it might actually trigger something pretty bad. OTL rearmament before the war was a key reason for bringing the economies of countries out of the worst of the depression. If the German economy collapses, the rearmament will no longer be needed, combined with the disruptions in trade and such, might trigger a fresh crisis.

It is doubtful that the German economy would actually "collapse". We may rather expect something akin to the German equivalent of the 1937 US recession. In other words, a painful reminder that the frailties of the Great Depression are still lingering in the background without the crutch of government spending, but not a full comeback of 1931-33.

Germany is definitely needful to slow down its rearmament significantly, and as a consequence Britain and France shall do too, but neither Germany nor the Entente are going to stop their buildup entirely. The Soviet Union is not going anywhere (nor it is Japan) and "detente" between Berlin and the West does nothing to slow down the pace of Soviet rearmament (it may have variable effects on the behavior of Japan).
 

Typo

Banned
It is doubtful that the German economy would actually "collapse". We may rather expect something akin to the German equivalent of the 1937 US recession. In other words, a painful reminder that the frailties of the Great Depression are still lingering in the background without the crutch of government spending, but not a full comeback of 1931-33.

Germany is definitely needful to slow down its rearmament significantly, and as a consequence Britain and France shall do too, but neither Germany nor the Entente are going to stop their buildup entirely. The Soviet Union is not going anywhere (nor it is Japan) and "detente" between Berlin and the West does nothing to slow down the pace of Soviet rearmament (it may have variable effects on the behavior of Japan).
Agreed, the most likely affect with every nation cutting down on government spending would be something akin to 1937 in the US.

After that though, it's inevitable that at some point there will be a western European boom simply because the business cycle exists.

What happens after that? OTL by this stage organizations like the EEC start coming into being, but in this TL, you have more Fascistic states like Italy in existence, and more suspicion between France and Germany. And without the shock of WW2 and American influence to promote European integration, the EEC less likely to exist or at least delayed.

I think something which forces the European powers to acknowledge their decreased influence in the world is needed for them to come together the same way, I think decolonization might be needed for that. I can easily see the EEC being delayed until something analogous to the Asian Tigers to show up to force the Europeans to realize that they would fall behind without a common market.
 

Eurofed

Banned
The German recession is going to have a negative impact across Europe, it might actually trigger something pretty bad. OTL rearmament before the war was a key reason for bringing the economies of countries out of the worst of the depression. If the German economy collapses, the rearmament will no longer be needed, combined with the disruptions in trade and such, might trigger a fresh crisis. I think the recession of 1937 in the US would be a prototype for it.

The US recession of 1937 was a painful reminder that economy was still dependent on government spending, but it was that serious nor it triggered a fresh global crisis. I do agree that a post-Nazi German recession would be much akin to it.

Also a couple issues:

1) rearmament is not the only way that public spending sustained the post-Depression economy. Public works also played a part, and the Western governments can shift money from cannons to roads, so to speak.

2) Just because a fistfight between the Entente and Germany is not going to happen, it's not like all need for weapons magically disappears. Stalin is not going anywhere, nor it is Tojo. Either is not going to behave if the other powers get underarmed.

3) Sooner or later, someone is going to guess that the long-term solution is to boost the purchasing power of the masses and redirect economic policy towards consumerism.
 

Typo

Banned
Assuming no WWII or WWIII equivalent Germany would have an increased portion of its income derived from military and aerospace exports. German optics would place Germany in a good position as a leader of semiconductor production. Germany would also be a major player in the nuclear power industry. The lack of the USA military buildup and the postwar GI bill would comparatively retard US economic growth compared to OTL.
Agreed, the GI bill was crucial to building a generation of highly trained human capital, and without the devastation caused to European economies the US economy would not have dominated every field as they did OTL.

Also the baby boom gets cancelled out as well, which is going to distort the economy world-wide starting in the 1950s.
 

Typo

Banned
So let's look a bit at the rest of the world:

Since we assume the USSR liberalizes, we model it on Maoist China, after Stalin dies a period of power struggle takes place. In this TL, without WW2 to justify it, Stalin's industrialization policies is more of a mess compare to OTL. Let's just say without WW2 he messes up the country even more as his paranoia takes over. So the impetuous for economic reform away from the command model increases. A Deng figure takes charge of the country say in the mid-60s-70s and starts to economically liberalize the country without giving up political control. Since Russia is, of course, not China and was far more developed than Maoist China was, and since Russia today is still a economic mess, there is no real model to see what it would have looked like, let's just assume the USSR is better off than today's Russia, maybe approaching the western European standard.

On the subject of the colonies, as I said before I feel decolonization ITL would be necessary for European Economical integration, otherwise political leaders will just assume they can use their empire as a substitute for a European market. Decolonization is pretty much a forgone conclusion by this point, without WW2 though, the British, French and Dutch probably fights far more decolonization conflict, and might be successful for longer. But ultimately their colonial model depended on ruling with the consent of the ruled. In a few decades it would become clear that there was little point in trying to hold onto the Empires.

Germany's own economy is going to be highly dependent on the USSR's liberalization and integration. It would be difference between its mid-Weimar era economy and its Bonn era.

I think I'm gonna talk about China later.
 
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One would assume that Germany of 1938 with its 80 million or so people being spared the 10 million or so deaths and the country wide physical destruction of WW2 would be in better shape than today. Its very safe to assume that Germany with no WW2 or the like down the line has a population of around 100 million people; figure 95 million as a low number. Now would Germany do well as West Germany after the war? Unknown but if it did, no stagnation of the Economy in East Germany, etc then Germany would be noticeable economically stronger. How much stronger is the question. 20% stronger doesn't move them up on the list of nations with biggest GDP, they are still 4th. They still would have an aging population and one in effective decline.

If anything like the EU happens it would be in a different form I think. WW2 left a strong legacy to avoid any one power from dominating Europe. Germany might be more of the center of it than is current.

Michael
 

Typo

Banned
One would assume that Germany of 1938 with its 80 million or so people being spared the 10 million or so deaths and the country wide physical destruction of WW2 would be in better shape than today. Its very safe to assume that Germany with no WW2 or the like down the line has a population of around 100 million people; figure 95 million as a low number. Now would Germany do well as West Germany after the war? Unknown but if it did, no stagnation of the Economy in East Germany, etc then Germany would be noticeable economically stronger. How much stronger is the question. 20% stronger doesn't move them up on the list of nations with biggest GDP, they are still 4th. They still would have an aging population and one in effective decline.

If anything like the EU happens it would be in a different form I think. WW2 left a strong legacy to avoid any one power from dominating Europe. Germany might be more of the center of it than is current.

Michael
Actually I doubt the population would be that high 90-95 million might be reasonable, the post-war baby boom would be cancelled out as well. And the declining birthrate would still kick in.
 
I agree with the general theme that Germany was heading for either war or a sharp economic correction by Munich however I think you are underestimating the scale of the problem. First of all there were two elements to Hitlers economic recovery, one was government spending on re-armament and public works, this was dependent on government borrowing which has pretty much reached its limit by 1938, Germany couldn't get money on the international market and the home market was saturated.
The other element was exports, however 90% of the growth in exports post-1933 was to eastern and southern Europe, this was because eastern and southern Europe was also experiencing a boom, but it was an "artificial" boom based not on productivity growth or consumer spending but German demand for raw materials (Romanian oil, Yugoslavian iron etc.). This meant that the entire region was dependent on continued German re-armament spending.
If you cut off that tap, and in the absence of war it had to be cut off by 1940 or you would have a German bankruptcy the entire region is going to be hammered, increased demand from the rest of the world isn't going to help, the US and France are behind their tariff walls and the UK is heading that way. This entire region was dependent on German demand and that is going to fall and with it their economies which is going to feed back into German exports exacerbating the crunch.
I think the correction will be worse than 1937 US Recession though not as bad as 1933, maybe 15% off GDP.
 

Typo

Banned
I guess Germany could try to alleviate the crisis by selling its weapon stocks, though of course the crisis would still be pretty severe. Chiang's regime in China would buy them for one.
 
Actually I doubt the population would be that high 90-95 million might be reasonable, the post-war baby boom would be cancelled out as well. And the declining birthrate would still kick in.

Actually that would be a very good thing. Instead of a very jagged pattern with busts (1933-36, 39-45) and booms (47-55) you would have the birth rate gradually rise as economic conditions improved and then gradually decline as society moved on (the pill, feminism, greater female workforce participation). You would still have an ageing population as the TFR drop below replacement but you wouldn't have such an un-naturally large baby boomer generation.

For example my grandparents married in Jan 1939 and always intended to have 3 kids spaced several years apart. However Grandad got sent to Burma and didn't get back till '46 and then had four kids in 5 years (the last pregnancy was twins one of whom is my father) this was because Grandma was going to turn 35 in 1950 and the medical advice was that having kids after 35 was a bad idea. If instead they had been able to follow their plan you would have had the same number of kids but spaced over a decade, multiply that by 200,000 and you have a much more even population pyramid, making actuarial planning and pension provision 65 years later (i.e. 2016) much easier.

I guess Germany could try to alleviate the crisis by selling its weapon stocks, though of course the crisis would still be pretty severe. Chiang's regime in China would buy them for one.

A lot of the money was spent on factories and infrastructure that can't be sold overseas or personnel who have to be sacked. Actual saleable weapon stocks (tank, guns etc.) were only a small percentage of total spending.
 

Typo

Banned
Actually that would be a very good thing. Instead of a very jagged pattern with busts (1933-36, 39-45) and booms (47-55) you would have the birth rate gradually rise as economic conditions improved and then gradually decline as society moved on (the pill, feminism, greater female workforce participation). You would still have an ageing population as the TFR drop below replacement but you wouldn't have such an un-naturally large baby boomer generation.

For example my grandparents married in Jan 1939 and always intended to have 3 kids spaced several years apart. However Grandad got sent to Burma and didn't get back till '46 and then had four kids in 5 years (the last pregnancy was twins one of whom is my father) this was because Grandma was going to turn 35 in 1950 and the medical advice was that having kids after 35 was a bad idea. If instead they had been able to follow their plan you would have had the same number of kids but spaced over a decade, multiply that by 200,000 and you have a much more even population pyramid, making actuarial planning and pension provision 65 years later (i.e. 2016) much easier.
Agreed, this is of course going to have long-term impact distorting both economics (i.e the fact that the 50s consumerism was unusually focused on kids) and social movements.
A lot of the money was spent on factories and infrastructure that can't be sold overseas or personnel who have to be sacked. Actual saleable weapon stocks (tank, guns etc.) were only a small percentage of total spending.
True, though the weapons themselves are going to have an impact wherever they end up.
 
Agreed, this is of course going to have long-term impact distorting both economics (i.e the fact that the 50s consumerism was unusually focused on kids) and social movements.

Of course but there will be so many other butterflies that I think that'll be lost in the cloud.
 

Valdemar II

Banned
Germany with post-Munich borders, it's going to be different, in OTL capitalistic Germany major industrial areas was reduced to the Ruhr, here they have Silesia, Saxony and Sudetenland all three major industrial areas. population-wise we see three increases the 8 million Germans not killed, 2 million Germans, Czechs and Poles extra inside Germany plus 7-8 Austrians. While people may argue we won't see the post-war babyboom, I disagree, first there are more Germans (especially young men), second more or less all Germans neighbour with the exception of France, Austria and Belgian Wallonia saw a major population boom after the war. So at very least I'm going to guess on a population of 105-120 million by modern day.

Economic Saxony, Thuringia, Saxe-Anhalt , Silesia and Sudentland are going to follow the development of Nordrhine-Westphalen, Rhineland-Pfalz and Hesse. Austria are going to be a Bavaria and Baden-Württemberg extra, while Mecklenburg, Pommern, Neumark and East Prussia are going to end up much like Niedersachsen and Holstein.
Brandenburg are going to end up as greater Berlin. Without OTL split Berlin will continue its growth for decades. Most European capital have around 10% of their country's population, this will transform Berlin into a metropol the size of London.

Economic we are not going to see EU or EEC, but still Germany need food, raw materials and markets. It will likely not look to France or UK which have their own industry and empires to serve as markets. So instead it will be cventre for a internal Central European market, Benelux, Italy, Czechslovakia, Hungary, Denmark, Sweden, Finland, Balticum and the Balkans will be the main trading partners of Germany. Poland will likely join the German trade network too. This may enable these countries to repeat the economic growth and integration of EEC, through it will never get as close as EU (at least not by 2010).

The guestworker pattern will change too, where Germany in OTL saw Turks, Yugoslavs and Italians, Poles and Hungarians will likely be highest on the list here of guest workers here.
 

Typo

Banned
While people may argue we won't see the post-war babyboom, I disagree, first there are more Germans (especially young men), second more or less all Germans neighbour with the exception of France, Austria and Belgian Wallonia saw a major population boom after the war. So at very least I'm going to guess on a population of 105-120 million by modern day.
Yes, France, Austria and such saw a post-war boom, I don't see why your conclusion from this is that there will be a population boom in the 50s with or without the war, since the entire post-war economical/population boom had everything to do with the war.
Economic Saxony, Thuringia, Saxe-Anhalt , Silesia and Sudentland are going to follow the development of Nordrhine-Westphalen, Rhineland-Pfalz and Hesse. Austria are going to be a Bavaria and Baden-Württemberg extra, while Mecklenburg, Pommern, Neumark and East Prussia are going to end up much like Niedersachsen and Holstein.
Brandenburg are going to end up as greater Berlin. Without OTL split Berlin will continue its growth for decades. Most European capital have around 10% of their country's population, this will transform Berlin into a metropol the size of London.

Economic we are not going to see EU or EEC, but still Germany need food, raw materials and markets. It will likely not look to France or UK which have their own industry and empires to serve as markets. So instead it will be cventre for a internal Central European market, Benelux, Italy, Czechslovakia, Hungary, Denmark, Sweden, Finland, Balticum and the Balkans will be the main trading partners of Germany. Poland will likely join the German trade network too. This may enable these countries to repeat the economic growth and integration of EEC, through it will never get as close as EU (at least not by 2010).
Probably, though no European integration at all is going to make modern day economics of a lot of countries look really different and hard to to imagine
 
On the decolonisation point - while de facto decolonisation is more or less inevitable, although probably a few decades later than IOTL, these ex-colonies may well stay within the economic and political spheres of their former masters. France still exerts an awful lot of influence in its former North African colonies anyway, while a UK which has not been utterly exhausted and bankrupted by the strain of fighting for its survival may have the energy, resources and willpower to exert itself a bit more diplomatically and militarily.
 

Valdemar II

Banned
Yes, France, Austria and such saw a post-war boom, I don't see why your conclusion from this is that there will be a population boom in the 50s with or without the war, since the entire post-war economical/population boom had everything to do with the war.

Austria didn't see a post-war boom because they had lost a generation of young men too. France didn't see it, because their demography was fundamental different from Germany. The pre-war demography was quite similar to Netherlands, Flandern and Denmark, of cource they can't repeat the explosive Dutch post war growth, which to large degree was caused by factors Germany can't duplicate, but a similar growth rate as Flandern or Denmark aren't unlikely.
 
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