Economy of a Modern Germany with post-Munich borders

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On the plus side, Germany retains much of its scientific personnel and infrastructure that went to the United States after World War II. Germany will remain one of the largest scientific research areas in the world.

On the minus side, Germany - along with a lot of Western Europe - was able to build its industrial infrastructure to the most modern levels after WWII because everything was destroyed and needed replacing. This was one of the reasons for the general European "miracle" economies in the 1950s. Britain, on the other hand, was stuck with its much older industrial capital stock and lagged behind.

Also, Germany is behind the United States with advanced mass industry and managerial techniques. Germany in this era simply could not mass produce things as well as the Americans did. This will likely continue to hurt German competitiveness.

The German economy will continue to be dominated by large industrial concerns with a smaller mittelstand element (because there is no Stunde Null reset in 1945 which levels the playing fields).

So it is a mixed bag. Once the German economy recovers from its large armaments spending and balance of payment issues, Germany industry will do quite well against its European competitors, but it will lose out in manufacturing (although perhaps not in other industrials like chemicals) to the US by the 1960s. Germany, though, will remain a leader in certain high tech industries where economies of scale are not so important.
 

Valdemar II

Banned
I personal think the effect of rebuilding the destroyed infrastructure are overrated, Sweden got unharmed through WWII and still took part of the post-war boom. I think ity's more a excuse by the British to why their industry got behind Germany's.
 
I don't think it's impossible to assume that Germany might be higher up in its GDP. Although a Soviet Union that hangs around will have the #2 spot regardless.
 

Anderman

Donor
I personal think the effect of rebuilding the destroyed infrastructure are overrated, Sweden got unharmed through WWII and still took part of the post-war boom. I think ity's more a excuse by the British to why their industry got behind Germany's.


Not to speak about the USA, Switzerland or.......
 
One area which might experience some changes would be agriculture. Prewar Germany had a rather undermechanised, underindustrialised agriculture. Now that you've got all these machine plants and chemical factories from the Nazi-era buildup, one could envision a route where Germany begins a crash program to equip its farmers with tractors (whether two- or four-wheeled), harvesters, chemical fertilisers, pesticides etc.
 

Valdemar II

Banned
One area which might experience some changes would be agriculture. Prewar Germany had a rather undermechanised, underindustrialised agriculture. Now that you've got all these machine plants and chemical factories from the Nazi-era buildup, one could envision a route where Germany begins a crash program to equip its farmers with tractors (whether two- or four-wheeled), harvesters, chemical fertilisers, pesticides etc.

Again you can use Germany's neighbours as examples, Denmark had more or less a similar agricultural sector, while high producing it was very undermechanised. The result was three decades of migration from land to city and a continued industrialisation in the same periode. Of course this similarity only work in the west, the east was dominated by large landowners, as such the American midwest are likely a better model for the east.
 

Valdemar II

Banned
Not to speak about the USA, Switzerland or.......

USA industry are not a good comparison, the Swedish industry are much more similar*, while Switzerland never really industrialised to the same degree as Germany or adopted the same business model.

*It follow similar business model, niches and even had similar interval in the boom-burst cycle as Germany.
 
USA industry are not a good comparison, the Swedish industry are much more similar*, while Switzerland never really industrialised to the same degree as Germany or adopted the same business model.

*It follow similar business model, niches and even had similar interval in the boom-burst cycle as Germany.

The other example is France, which also boomed postwar despite a relative lack of damage.
 
I personal think the effect of rebuilding the destroyed infrastructure are overrated, Sweden got unharmed through WWII and still took part of the post-war boom. I think ity's more a excuse by the British to why their industry got behind Germany's.

Well, it can be overstated. Britain also had lots of other problems - very poor labor relations and managerial techniques. However, the point is valid. Obsolete capital stock prevents productivity growth.

There is nothing inherently bad about not being totally destroyed. Britain could have choosen to replace its capital stock. It didn't because it pursued policies to boost as much export income as possible to keep its balance of payments high, so it choose to neglect the necessary investment. It's like choosing not to do routine maintenance on your car to save money in the short run, but it also means your car will become totally worthless a lot sooner. Sweden, on the other hand, didn't suffer any of those issues, and its tax system encourage its industry to reinvest profits into new investments rather than distribute them as dividends or income (because of the high tax rates). The reason of course, is that Sweden didn't have the burdens of running an empire, nor of trying to futilely retain its great power stature.

Germany never had to bother with that issue at all. It HAD to replace almost all of its capital stock. So while British companies made do with capital tools from the 1920s and earlier, Germany could have brand new 1950s technology. It's not going to do that in this scenario. It will keep much of its older stock and replace it much more slowly.
 
The other example is France, which also boomed postwar despite a relative lack of damage.

I think you are grossly underestimating how much damage France suffered in World War II. The Germans basically plundered the country and used up a lot of its industry and raw materials. Zero investment in basic infratsructure had been made since 1939. The Allies bombed the hell out of it to destroy certain industies supporting Germany's war machine, and especially during the fighting after Normandy. Most of France's Atlantic ports were completely ruined. Entire villages and towns were destroyed. Thousands of bridges were blown up by the retreating German army along with anything else the Germans thought would be of value. And, on top of all of this, France had to pay for the costs of occupying troops throughout the war. Its economy, infrastructure, and capital stock was in shambles.

Simply because the Germans weren't able to blow up Paris doesn't mean the rest of the country didn't suffer. France was a lot better off than Germany and Japan, but it was far worse off than Britain. Unlike Britain, France used Marshall Plan funds to replace a lot of its capital stock (Britain mainly paid off debt to improve its current finances, and not to invest in the future).
 
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