Financial cost of human losses in WW1

[Deleted member 1487]

Looking through Adam Tooze's "Wages of Destruction" the first chapter has a chart about the economic growth of Germany from the 1870s through 1930s and it is clear that the war was a huge blow to their economy during it. The recovery started immediately after it ended and then collapsed again due to the reparations payments and inflation of the early 1920s. Then again there was the late 1920s recovery that got them back to their 1913 peak before the Great Depression wiped things out yet again. Clearly without the war and aftermath there would have been steady growth that left them far richer than they were at their peak inter-war economic position, but how much of that was due to the loss of so many young men that would have been the next generation of workers and inventors? How much of that was due to the breakdown in finance and trade? What about for the rest of Europe? Even Britain, which was proportionally and relatively the least damaged of the major powers of Europe was still badly impacted by WW1, the only nation that gained was the US, a fact I think not really appreciated as it was the Great War and profits from that that set America and American industry (financial and manufacturing) up for superpower status. So what did the human losses alone cost Europe from WW1?

 

[tenthring]

Looking through Adam Tooze's "Wages of Destruction" the first chapter has a chart about the economic growth of Germany from the 1870s through 1930s and it is clear that the war was a huge blow to their economy during it. The recovery started immediately after it ended and then collapsed again due to the reparations payments and inflation of the early 1920s. Then again there was the late 1920s recovery that got them back to their 1913 peak before the Great Depression wiped things out yet again. Clearly without the war and aftermath there would have been steady growth that left them far richer than they were at their peak inter-war economic position, but how much of that was due to the loss of so many young men that would have been the next generation of workers and inventors? How much of that was due to the breakdown in finance and trade? What about for the rest of Europe? Even Britain, which was proportionally and relatively the least damaged of the major powers of Europe was still badly impacted by WW1, the only nation that gained was the US, a fact I think not really appreciated as it was the Great War and profits from that that set America and American industry (financial and manufacturing) up for superpower status. So what did the human losses alone cost Europe from WW1?

Losses came disproportionately from the best of society. The sick and the weak stayed back home. Also, many were maimed, which is worse then death in a cost/benefit sense since they become and ongoing burden.

 

[Deleted member 1487]

Losses came disproportionately from the best of society. The sick and the weak stayed back home. Also, many were maimed, which is worse then death in a cost/benefit sense since they become and ongoing burden.

Exactly. They also came from the young men of society, who at the time were the primary economic drivers. So that is the crux of my question.

 

[Catspoke]

I don't know. It may not be as bad as one might think.

So I can imagine a scenario where 25% of all males 18-30 are zapped by aliens and vaporized. For us survivors it is great, less competition for females, and immediate advancement opportunities open up, or job prospects improve, maybe changed supply/demand increases wages so perhaps the survivors are better motivated or may have opportunities to shine where they would have never had the chance before.

For the business there would be immediate shock as they have to retrain people and hire replacements or maybe raise wages due to supply/demand, there may be also less customers for their product. Of course better organized businesses might be able to survive this better than others, so there may be winners and losers and not necessarily all losers.

The real losers would be where those 18-30 year old already had children and now widows are forced to raise these children without the fathers income. Of course those children that have surviving fathers might be better off as their competition is less capable.

Maybe some business without the alien zapping would have been faced with brutal competition, now his competitor has been eliminated and now has freed to spend more on R+D.

Maybe without these wars society becomes complacent, oligarchical and sinful (I mean the USA hasn't bee in too many real wars lately and some say we are in decline). Without the fear of Robespierres guillotine and all the wars of ideology for the next 150 years, maybe the people who ran things in Europe would have never modernized their society.

 

[Deleted member 1487]

I don't know. It may not be as bad as one might think.

So I can imagine a scenario where 25% of all males 18-30 are zapped by aliens and vaporized. For us survivors it is great, less competition for females, and immediate advancement opportunities open up, or job prospects improve, maybe changed supply/demand increases wages so perhaps the survivors are better motivated or may have opportunities to shine where they would have never had the chance before.

For the business there would be immediate shock as they have to retrain people and hire replacements or maybe raise wages due to supply/demand, there may be also less customers for their product. Of course better organized businesses might be able to survive this better than others, so there may be winners and losers and not necessarily all losers.

The real losers would be where those 18-30 year old already had children and now widows are forced to raise these children without the fathers income. Of course those children that have surviving fathers might be better off as their competition is less capable.

Maybe some business without the alien zapping would have been faced with brutal competition, now his competitor has been eliminated and now has freed to spend more on R+D.

Maybe without these wars society becomes complacent, oligarchical and sinful (I mean the USA hasn't bee in too many real wars lately and some say we are in decline). Without the fear of Robespierres guillotine and all the wars of ideology for the next 150 years, maybe the people who ran things in Europe would have never modernized their society.

The problem is for society as a whole, especially as in war it is usually the top 25-50% of men 18-40 that are killed in world wars.
And much of what you describe is Broken Window Fallacy:
https://en.wikipedia.org/wiki/Parable_of_the_broken_window

 

[BootOnFace]

Maybe without these wars society becomes complacent, oligarchical and sinful (I mean the USA hasn't bee in too many real wars lately and some say we are in decline). Without the fear of Robespierres guillotine and all the wars of ideology for the next 150 years, maybe the people who ran things in Europe would have never modernized their society.

The US isn't in decline, it's just that Asia is finally becoming a developed continent in the manner Europe is. Historically, like half of the GDP of the world was in India and China and now China is resuming its historical role as a top-tier great power. America has pretty robust population and economic growth, with good indicators all around except for income inequality. If anyone is in decline, it's Russia, Japan, and Great Britain. France and Germany are at least on the rise thanks to diplomatic maneuvering in the EU, but Britain is becoming isolationist and without immigration, will end up like Japan.

But on to stay topic, you really have to think about how economic activity is generated. By people. Even though domestic work usually doesn't have an economic value assigned to it, it is valuable and some pay very well for it, so it's a mistake to assume that young men are the only ones contributing to the economy. That said, losing entire percentage points of your population would hinder economic growth considerably. This is also the age demographic that produces children, too, who are necessary to provide for the preceding generations once they're out of the workforce. Honestly, I'd say that the decline in birth rates and the increase in death rates of the working demographic cut growth rates for the next decade by entire percentage points. This isn't even taking into consideration all of the economic activity that went towards breaking and fixing windows, to borrow a phrase. Total war is an economic disaster the likes of which capital crises like the Great Depression have no hope of reaching the impact of.

My views on how (moderate) population growth is instrumental to economic growth is supported by the Demographic Transition Model, even though education is a far more important indicator according to the paper Economic Development in OECD countries during the 20th century. Europe, especially Germany, was on the tail end of that transition, with real nice population pyramids due to expanded access to modern medicine and nutrition. These "population pyramids" of plenty of young supporting the old allow for huge workforces relative to the total population producing unprecedented economic growth and prosperity. Of course, France is the famous exception to the model, with no boom, but a steady growth rate all the way up until today. This made France particularly vulnerable to the huge casualties in WW1, since while countries like Austria-Hungary, Germany, and Bulgaria had similar amounts of their total population die, France had fewer young people as a percentage of their population. This means that a greater share of their workforce and child-bearing population had died relative to their retired and disabled population.

All of this means that belligerent powers of WW1 had not only less total economic growth and activity post-war, but less economic growth and activity per capita, compared to a counterfactual "no-war" scenario, especially in France. However, quantifying the actual amounts would be worthy of a PhD.

 

[Catspoke]

Agree that war, even if nobody died, is a total waste, you have to drag everybody away for their jobs, arm them up, feed them in the field for years, during which time they are probably not learning anything that really applies to peace time jobs.

But focusing on just the human costs, it would be more like a great plague, humanity just recovers from that quickly. Often times we have surpluses of males anyway and people have to think of things for them to do or they are causing havoc.

Is that really just the top men though, I mean Stephen Hawking ain't fighting anybody.

 

[BootOnFace]

Y'all are too focus on the micro stuff like the quality of the men being killed. The main thing is that instead of being killed, they would be generating economic activity even as mere consumers. And with as educated as the average German and Frenchman was, the value of the economic activity generated would be relatively considerable. And decreased competition between workers while, increasing wages, wouldn't drive economic growth in and of itself. The economy of France was growing very fast in the 1920s, but it was largely just recovery from the war. France didn't reach pre-war production levels until 1924. There is every indication that France, and other European economies, took considerable economic damage from the deaths due to the war.

 

[Deleted member 1487]

But on to stay topic, you really have to think about how economic activity is generated. By people. Even though domestic work usually doesn't have an economic value assigned to it, it is valuable and some pay very well for it, so it's a mistake to assume that young men are the only ones contributing to the economy.

No one said that, but the majority of economic growth in economies of the 20th century was via manufacturing and technology. Domestic work can be classified as a service job and really no different from what was going on in pre-industrial societies and we can honestly say that was not causing economic expansion, manufacturing and technology innovation was.

That said, losing entire percentage points of your population would hinder economic growth considerably. This is also the age demographic that produces children, too, who are necessary to provide for the preceding generations once they're out of the workforce. Honestly, I'd say that the decline in birth rates and the increase in death rates of the working demographic cut growth rates for the next decade by entire percentage points. This isn't even taking into consideration all of the economic activity that went towards breaking and fixing windows, to borrow a phrase. Total war is an economic disaster the likes of which capital crises like the Great Depression have no hope of reaching the impact of.

This I agree with, the question is how much growth the population lost actually cost, which is hard to divorce from capital destruction during the war and the impact of the peace afterwards, plus the massive economic distortions caused by disrupted trade and US economic expansion to feed the European war effort, plus their transition from net debtor to creditor. I know both in Germany and in France the collapse in birth rates left a demographic wedge that even WW2 didn't. This is a demographic graph from 1950:

I couldn't find a similar for France, but this shows the collapse of French population due to the wars:

 

[Deleted member 1487]

Agree that war, even if nobody died, is a total waste, you have to drag everybody away for their jobs, arm them up, feed them in the field for years, during which time they are probably not learning anything that really applies to peace time jobs.

But focusing on just the human costs, it would be more like a great plague, humanity just recovers from that quickly. Often times we have surpluses of males anyway and people have to think of things for them to do or they are causing havoc.

Is that really just the top men though, I mean Stephen Hawking ain't fighting anybody.

Actually the investments in training men really did pay off for the US post-WW2. My grandfather learned a trade, as did many of the men from his generation, that boosted them into the middle class post-1950. That isn't even counting the GI Bill benefits.
As to 'top men' or not in general it is the young, physically fit men that were the vital industrial workforce of the majority of the 20th century that were being wiped out. Plus of course university students in WW1 who joined up en masse and died en masse.

Y'all are too focus on the micro stuff like the quality of the men being killed.

Skilled, fit men were a vital workforce in the trades and industry, as well as more likely to have lots of healthy children in the first half of the 20th century. Post-WW1 Germany never recovered her pre-WW1 birthrate even during the Nazi period when having children was emphasized by the state and rewarded, nor the post-war baby boom. France was a massive exception post-WW2 with it's baby boom, as it was been stagnating pre-WW1 in terms of fertility and stayed low post-WW1, then had another dip as men were gone in the millions from France during most of WW2.

The main thing is that instead of being killed, they would be generating economic activity even as mere consumers.

Sure, but consumers generate less activity than producers in the manufacturing sector, which was labor heavy in most of the 20th century. Pre-industrial societies have a bunch of consumers, but they aren't generating major economic growth other than with major population expansion. Of course many European economies relied on export markets to keep up their economic growth and activity because they lacked the internal population and economic development that the US or Russia had.

And with as educated as the average German and Frenchman was, the value of the economic activity generated would be relatively considerable. And decreased competition between workers while, increasing wages, wouldn't drive economic growth in and of itself. The economy of France was growing very fast in the 1920s, but it was largely just recovery from the war. France didn't reach pre-war production levels until 1924. There is every indication that France, and other European economies, took considerable economic damage from the deaths due to the war.

Without a doubt. Everything in the above quote is very true.

 

[Deleted member 1487]

As an aside Tooze also hints at the point that due to the Nazi state investing in skilling it's male workers before and during WW2 mean that most men had valuable peacetime economic skills at precentages unknown in any other period of German history, sort of like the post-WW2 GI Bill in the US. I made the connection with that being a major reason for the post-WW2 'Wirtschaftswunder' of West Germany, as the surviving men mostly had skills that could be applied to rebuilding and working in industry in post-war Germany. It was the education of it's workforce as a goal of the state that helped ensure that it was economically successful as they lacked natural resources to exploit as many other countries did (with the exception of coal). Without the Great War the population of Europe and the US would lack that government investment in their populations/workforce, so would continue on with the Libertarian model of workforce training (everyone responsible for themselves).

 

[BootOnFace]

No one said that, but the majority of economic growth in economies of the 20th century was via manufacturing and technology.

Good point, I should have focused more on how women were entering the workforce more and more with the mechanization of household tasks and factories and offices employing young women.

Your graph really shows how the wars damaged France's demographics and thus, economic potential. It was 41 million in 1911 and 41 million in 1951. That's an insane amount of missed growth. To compare, 1951 was 41 million and 1991 was 56 million. If you just take a 1% growth a year, France could have had a population of 61 million in '51. And with a .5% population growth(which is historical) after 1951, it would have a population of 82 million today.

 

[Deleted member 1487]

Good point, I should have focused more on how women were entering the workforce more and more with the mechanization of household tasks and factories and offices employing young women.

Sure, but that is a late 20th century phenomenon and not really applicable to the situation until the 1970s. Especially without the loss of men in wars, women would have seriously delayed entry into the workforce en masse.

Your graph really shows how the wars damaged France's demographics and thus, economic potential. It was 41 million in 1911 and 41 million in 1951. That's an insane amount of missed growth. To compare, 1951 was 41 million and 1991 was 56 million. If you just take a 1% growth a year, France could have had a population of 61 million in '51. And with a .5% population growth(which is historical) after 1951, it would have a population of 82 million today.

Well be careful with France as a model, they also liberalized their immigration laws from the colonies, so their growth post-WW2 was fueled by immigration as much as the birthrate. If the population continues to stagnate as it did pre-WW1 perhaps they'd have earlier immigration changes to get one up on Germany. Of course without a major European war then Russian might well have a lot of people leaving the East to settle in France. As the economies of Europe liberalized their tariff policies one could also see the mobility of populations similar to how it is now with the EU.

 

[BootOnFace]

Sure, but that is a late 20th century phenomenon and not really applicable to the situation until the 1970s. Especially without the loss of men in wars, women would have seriously delayed entry into the workforce en masse.

Good point, but it was applicable in the 1910s-1920s with unmarried women. Without the wars, women would still be in textile mills, coed colleges would still be the vast majority, and washing machines and vacuum cleaners would be increasingly common. Young women working menial jobs was very common, though once they were married they left the workforce permanently.

The important thing is we agree on the main point of the demographics being damaged considerably by the wars and causing a great amount of missed growth. French population growth is special in that it doesn't follow normal trends and is thus incredibly hard to predict. There's no consensus on what's caused its great growth since WW2 or what caused its lack of growth before WW1.

 

[Deleted member 1487]

Good point, but it was applicable in the 1910s-1920s with unmarried women.

Got numbers from the previous decade? During and after WW1 clearly women were joining the workforce due to lack of men to do the jobs and marriagable men around.

Without the wars, women would still be in textile mills, coed colleges would still be the vast majority, and washing machines and vacuum cleaners would be increasingly common. Young women working menial jobs was very common, though once they were married they left the workforce permanently.

Right.

The important thing is we agree on the main point of the demographics being damaged considerably by the wars and causing a great amount of missed growth. French population growth is special in that it doesn't follow normal trends and is thus incredibly hard to predict. There's no consensus on what's caused its great growth since WW2 or what caused its lack of growth before WW1.

I think in France it was the culture and prosperity and post-war there was a conservative cultural shift in France, plus liberalizing immigration laws. But yeah population loss causes a lot of economic problems.

 

[Starkad]

I couldn't find a similar for France, but this shows the collapse of French population due to the wars:

Hmm, I suspect the graph is a bit deceptive for WW2, most of the 1940-41 dip of ~3 million is likely war workers sent to Germany plus those who fled to/stayed outside France. French war casualties were "only" ~600.000 including the colonies (French Indochina may not be included here).
Also note population is stable for app. a decade before the war.

 

[ben0628]

Idk if this is relevant, but could a comparison be made to the socioeconomic benefits that came from the black death during the middle ages?

 

[BootOnFace]

Some of the biggest differences between feudalism and capitalism are in how the labor market operates. Yes supply and demand are still relevant, but elasticity of demand is extremely constrained and without industry, you kind of top out on how productive urban centers can be, resulting in a more Malthusian labor market.