German and Polish economies by the 1950s without WW2

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Deleted member 1487

Looking at the alterations of the map of Europe after WW2 there were pretty big territorial changes that gave Poland a lot of territory that was economically quite valuable in terms of the infrastructure, industry, and natural resources that today make up their economically most successful regions. Without WW2 what would the economies of Germany and Poland then look like without the border transfers, especially by the 1950s without the damage of the war?

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It is very hard to say. On one hand, Poles do not get well developed territories in the West. OTOH, Poles do not loose milions of people, especially well educated ones, who during the WW2 were specifically targeted by Nazi Germany (and to some degree USSR) as potential leaders of resistance. ITTL Poles do not loose enormous human potential, they also do not have to deal with communist economy.
AFAIK in late 1930s Polish economy was slowly, but steadily getting better. Poland would probably continue Eugeniusz Kwiatkowski' interventionist policy and develop the Central Industrial Region (Centralny Okręg Przemysłowy - COP), although IIRC, Poland lacked funds to finish or even launch all investments and build all necessary infrastructure. Kwiatkowski's 4 years plan would probably be prolonged and then... well, Poland would have 2 relatively strong industrial regions (Silesia and COP). If there is no war and some kind of detente in Europe, there might be less money spent on military - OTOH, Poles wanted and needed to modernize it.
Another problem would be Polish agriculture - generally backward (especially in the east), with relatively few machines, too many very small farms and many peasants without any land at all. The Grand Depression also hit it hard. Agricultural reform (buying out land from great landowners and giving it to lanless peasants) was getting rather slowly, and I do not think much would change.
Of course you need to consider political and economical situation in Europe and whole world without WW2 which would indirectly and directly influence Poland's economy. I'm not an expert as far as economy goes, but IMO Poland would be slowly developing. However, for quite some time it would still be mostly agricultural, somewhat backward country (especially in comparison to Germany or even Czechoslovakia), with so called Poland A (well or at least decently developed western and central Poland) and Poland B (large, but poorly developed eastern part). Kwiatkowski tried to change it (COP was supposed to help in bringing up Poland B to A level), but changes would be slow.

And Germany? Well, that depends of the reasons there is no WW2. No Hitler and Nazis? No rapid remilitarization and arms production? Who and how leads Germany out of the Grand Depression? Generally, however, I think German economical potential was simply too big; sooner or later they would be back on their feet again. And with well developed OTL western Poland (especially Silesia) their chances to become European powerhopuse were quite good.
 

Deleted member 1487

How about the issues with minorities? Poland was not exactly philo-semitic at the time and was funding Zionist extremists to fight the British in Palestine and then was hoping that would encourage more Jews to emigrate, while in the East of the country the Ukrainian, Lithuanian, and Belarussian minorities were not exactly on great terms with Warsaw. Would ethnic tensions then ease with time or get worse? Would the Soviets get more threatening?
 
How does it get out of no WW2? A continued Wiemar? There is no guarantee Germany gets out the Great Depression that made what the U.S. experienced seems tiny in comparison.

Germany needed a stronger then FDR figure, but not a Hitler. The problem is they had no one to thread the needle among its political class.

The time line you are probably looking for is sometime after Munich Hitler falls on his head. Nazi leaders start killing each other for the big chair and you end up with a benign authoritarian government coming out of it after the Nazi elite discredit themselves in the eyes of the public.
 

Deleted member 1487

How does it get out of no WW2? A continued Wiemar? There is no guarantee Germany gets out the Great Depression that made what the U.S. experienced seems tiny in comparison.

Germany needed a stronger then FDR figure, but not a Hitler. The problem is they had no one to thread the needle among its political class.

The time line you are probably looking for is sometime after Munich Hitler falls on his head. Nazi leaders start killing each other for the big chair and you end up with a benign authoritarian government coming out of it after the Nazi elite discredit themselves in the eyes of the public.

Hitler dies in a plane crash during his 1932 campaign sweep, say in July 1932. The Nazi party fractures and the traditional conservatives manage to pick off enough of it to stay in power until the cyclical economic upswing stabilizes the economy and they get credit. Say von Papen or someone that wouldn't provoke an invasion like von Schleicher.
 
Hitler dies in a plane crash during his 1932 campaign sweep, say in July 1932. The Nazi party fractures and the traditional conservatives manage to pick off enough of it to stay in power until the cyclical economic upswing stabilizes the economy and they get credit. Say von Papen or someone that wouldn't provoke an invasion like von Schleicher.

But, they also won't save the German economy which will continue to tank.

You needed someone who can rally the German people to believe they can be successful again and who will spend like a drunken sailor, but not enough to force Germany into a war or bankruptcy.
 
How about the issues with minorities? Poland was not exactly philo-semitic at the time and was funding Zionist extremists to fight the British in Palestine and then was hoping that would encourage more Jews to emigrate, while in the East of the country the Ukrainian, Lithuanian, and Belarussian minorities were not exactly on great terms with Warsaw. Would ethnic tensions then ease with time or get worse? Would the Soviets get more threatening?

One wonders if a French-style educational assimilation of linguistic minorities could work for a Poland with a better-educated and larger Polish-language intelligentsia.
 

Deleted member 1487

But, they also won't save the German economy which will continue to tank.

You needed someone who can rally the German people to believe they can be successful again and who will spend like a drunken sailor, but not enough to force Germany into a war or bankruptcy.
There is the argument that the economy was recovering anyway and Hitler just bumped things up a bit by spending Germany into bankruptcy. As it was the US and Allies had put a hold on German debts, Versailles and US loans, while the world economy was starting to tick back up. Exports were starting to rise too. The thing is you need someone to spend a bit more, tell the West to fuck themselves like Schacht did when they talked about restarting Versailles payments and US loans, and do some rearmament, which to be fair was already planned before Hitler took office. Von Papen or someone else like that would have been able and willing to do all of that. Schacht was already in change of finances, had trade deals he could arrange like IOTL, not lose Soviet trade as Hitler did, but wouldn't work to annex Austria or Sudetenland or fix relations with Poland. In fact the Polish economy might end up suffering more from the continued lack of German trade, unlike OTL when Hitler actively worked out deals with them.

https://en.wikipedia.org/wiki/Economy_of_Nazi_Germany#Pre-war_economy:_1933.E2.80.931939
The Nazis came to power in the midst of the Great Depression. The most pressing issue at that point was an unemployment rate of close to 30%.[23] Before World War II, Hitler appointed Hjalmar Schacht, a former member of the German Democratic Party, as President of the Reichsbank in 1933 and Minister of Economics in 1934.[23]


At first, Schacht continued the economic policies introduced by the government of Kurt von Schleicher in 1932 to combat the effects of the Great Depression. The inherited policies included a large public works programs supported by deficit spending – such as the construction of the Autobahn network – to stimulate the economy and reduce unemployment.[24] There was major reduction in unemployment over the following years, while price controls prevented the recurrence of inflation. However, price controls in agriculture also squeezed out small farmers.[25] Similarly, while unemployment decreased, standards of living languished: rationing of key goods like food and clothing, and long lines became common.[26]



The economic policies of the Third Reich were in the beginning the brainchildren of Schacht, who assumed office as president of the central bank under Hitler in 1933, and became finance minister in the following year. Schacht was one of the few finance ministers to take advantage of the freedom provided by the end of the gold standard to keep interest rates low and government budget deficits high, with massive public works funded by large budget deficits.[23] The consequence was an extremely rapid decline in unemployment – the most rapid decline in unemployment in any country during the Great Depression.[23] But whether this helped the average German is a matter of debate—while more Germans had jobs, a focus on rearmament meant rationing in food, clothing, metal, and wood [31] for most citizens. Rationing eventually extended to use of fuel and production of cars, leaving many Germans unable to drive. Goering nationalized the steel industry of industrialists who fell from political favor (such as Fritz Thyssen in 1939) and formed the Hermann Goering Works in 1937 with the goal of producing steel from low grade German iron at rates unprofitable to other steel companies.[32] However, production fell short of rearmament demand. When production in the nationalized iron ore industry declined, “brown shirts” seized private stores from factories, churches, and cemeteries.[33]
https://en.wikipedia.org/wiki/Hjalmar_Schacht#Involvement_with_the_Nazi_party_and_government
Schacht was going to be part of any government by the conservatives at that point.

One wonders if a French-style educational assimilation of linguistic minorities could work for a Poland with a better-educated and larger Polish-language intelligentsia.
Would Poland do that though? I doubt their minorities would appreciate the attempt to wipe out their identity as the Poles did not appreciate it in Imperial Germany.
 
There is the argument that the economy was recovering anyway and Hitler just bumped things up a bit by spending Germany into bankruptcy. As it was the US and Allies had put a hold on German debts, Versailles and US loans, while the world economy was starting to tick back up. Exports were starting to rise too. The thing is you need someone to spend a bit more, tell the West to fuck themselves like Schacht did when they talked about restarting Versailles payments and US loans, and do some rearmament, which to be fair was already planned before Hitler took office. Von Papen or someone else like that would have been able and willing to do all of that. Schacht was already in change of finances, had trade deals he could arrange like IOTL, not lose Soviet trade as Hitler did, but wouldn't work to annex Austria or Sudetenland or fix relations with Poland. In fact the Polish economy might end up suffering more from the continued lack of German trade, unlike OTL when Hitler actively worked out deals with them.

I don't buy that argument in the least to be frank. The problem is that alone would not have saved the German economy by that point. It might have made a real difference it if it happened before the Great Depression, but by the point the German economy flatlined nothing sort of radical spending would get it out of its hole.

FDR's radical spending alone with the New Deal and making Americans feel better about things wasn't enough to get America out of its hole and it was much much less deep then the German hole. It wasn't until that spending ontop of rearmament and selling weapons to Europe that the U.S. got out of the hole.

Modern economies once they totally flatline along with the public losing all faith in itself need a lot of juice to restart them.
 

Deleted member 1487

I don't buy that argument in the least to be frank. The problem is that alone would not have saved the German economy by that point. It might have made a real difference it if it happened before the Great Depression, but by the point the German economy flatlined nothing sort of radical spending would get it out of its hole.

FDR's radical spending alone with the New Deal and making Americans feel better about things wasn't enough to get America out of its hole and it was much much less deep then the German hole. It wasn't until that spending ontop of rearmament and selling weapons to Europe that the U.S. got out of the hole.

Modern economies once they totally flatline along with the public losing all faith in itself need a lot of juice to restart them.
What are you basing this opinion on? The US and German economies were different; Germany was more export based and they were starting to get export orders again. I'm not saying everything would have been fixed, but it was a massive boon to the German economy to stop the bleeding of loan and Versailles payments while having very little military expenses in 1932-33. Clearly its not going to be as big a boom as it was IOTL 1933 with the huge deficit spending, but its also not going to be flat lined. US and German economics even today a very different so trying to use what works for one or the other as a heuristic isn't necessarily helpful in understanding what will work for them. Even a limited uptick in the German economy because of the end of reparations and loan payments is a huge improvement; add in the increased international business and mild rearmament plans and things pick up, which in turn restores some faith in the system; without foreign debt servicing the German government can also reverse Brunig's deflationary policies now that they don't have to cut government spending to keep up that debt servicing and they can stabilize the banking system; welfare payments can resume.
 
What are you basing this opinion on? The US and German economies were different; Germany was more export based and they were starting to get export orders again. I'm not saying everything would have been fixed, but it was a massive boon to the German economy to stop the bleeding of loan and Versailles payments while having very little military expenses in 1932-33. Clearly its not going to be as big a boom as it was IOTL 1933 with the huge deficit spending, but its also not going to be flat lined. US and German economics even today a very different so trying to use what works for one or the other as a heuristic isn't necessarily helpful in understanding what will work for them. Even a limited uptick in the German economy because of the end of reparations and loan payments is a huge improvement; add in the increased international business and mild rearmament plans and things pick up, which in turn restores some faith in the system.

We are going to have to agree to disagree, because I believe this to be true for all modern economies that flatline. That they can pick up and get slightly better, but long term they are going to stay very sick for quite some time without the government giving the economy a shot in the arm.

I won't even argue that the German economy wouldn't have on it's own gotten back to upper to mid 20% levels of unemployment, but I view that as pretty much the ceiling after the bottom dropped out without several decades of time passing or massive government expenditures. They didn't have to be on thr level Hitler enacted certainly to be that shot in the arm.
 
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You needed someone who can rally the German people to believe they can be successful again and who will spend like a drunken sailor, but not enough to force Germany into a war or bankruptcy.

FDR's radical spending alone with the New Deal and making Americans feel better about things wasn't enough to get America out of its hole and it was much much less deep then the German hole. It wasn't until that spending ontop of rearmament and selling weapons to Europe that the U.S. got out of the hole.

In a word, no.

The biggest factor in economic recovery from the Great Depression across countries was when they abandoned the gold standard and began expanding the monetary base. Whether they intended that monetary expansion for the purpose of correcting a trade imbalance or preventing debt-deflation was ultimately irrelevant.

Expansionary fiscal policy didn't (or wouldn't) hurt, but the Great Depression involved a contraction in credit and collapse of demand first and foremost, and monetary policy (when not handcuffed by the gold standard) is ideal for a rapid and strong response to that sort of disaster.

If a non-Nazi Germany attempts to engage in a massively expansionary fiscal policy without breaking from the gold standard, they will be forced to tightly restrict trade and capital flows in a similar manner to OTL, with considerably less effectiveness in improving demand growth or the expansion of credit. Any monetary or currency policy that is attempting to maintain the gold-value of the Reichsmark will be highly contractionary. That would offset to a considerable degree fiscal expansion, and ultimately something has to give. If the government decouples Germany from international trade and finance, which is an 'easy' choice, they add a negative supply shock to the domestic economy given the dependence on trade for a number of sectors.
 

Deleted member 1487

In a word, no.

The biggest factor in economic recovery from the Great Depression across countries was when they abandoned the gold standard and began expanding the monetary base. Whether they intended that monetary expansion for the purpose of correcting a trade imbalance or preventing debt-deflation was ultimately irrelevant.

Expansionary fiscal policy didn't (or wouldn't) hurt, but the Great Depression involved a contraction in credit and collapse of demand first and foremost, and monetary policy (when not handcuffed by the gold standard) is ideal for a rapid and strong response to that sort of disaster.

If a non-Nazi Germany attempts to engage in a massively expansionary fiscal policy without breaking from the gold standard, they will be forced to tightly restrict trade and capital flows in a similar manner to OTL, with considerably less effectiveness in improving demand growth or the expansion of credit. Any monetary or currency policy that is attempting to maintain the gold-value of the Reichsmark will be highly contractionary. That would offset to a considerable degree fiscal expansion, and ultimately something has to give. If the government decouples Germany from international trade and finance, which is an 'easy' choice, they add a negative supply shock to the domestic economy given the dependence on trade for a number of sectors.


If they go with Schacht he won't use that all that much, he was highly influenced by the hyperinflation of the 1920s and was more concerned about runaway inflation than deflation. IIRC he even supported the gold standard. If they can get over their fear of having a free floating currency (IOTL the Nazis wanted to maintain a stranglehold over the value of the currency), that can only come after the Allies have lost their power over the German economy and Versailles can be truly called dead, because they forbade Germany under the treaty from free floating. They had that option IOTL under Hitler by the mid-1930s with the return of the Saarland because by then the Allies had lost their leverage, but such a move would have to wait until then and potentially face very serious efforts by Germany's enemies to devalue her currency on the open market as a means of control over German policy.
 
How about the issues with minorities? Poland was not exactly philo-semitic at the time and was funding Zionist extremists to fight the British in Palestine and then was hoping that would encourage more Jews to emigrate, while in the East of the country the Ukrainian, Lithuanian, and Belarussian minorities were not exactly on great terms with Warsaw. Would ethnic tensions then ease with time or get worse? Would the Soviets get more threatening?

It really makes you wonder if the Germans and Poles did not share a common border, whether they would have been allies. They had a similar enemies list and all.
 

Deleted member 1487

It really makes you wonder if the Germans and Poles did not share a common border, whether they would have been allies. They had a similar enemies list and all.
Well, Hitler did expect them to be allies, but to him allies were little more than puppets to be ordered about; the Poles clearly and understandably did not want to be Warsaw Pact like puppets. But there was a reason that they were able to work together from 1934-39 reasonably well.
 
If they go with Schacht he won't use that all that much, he was highly influenced by the hyperinflation of the 1920s and was more concerned about runaway inflation than deflation. IIRC he even supported the gold standard.If they can get over their fear of having a free floating currency (IOTL the Nazis wanted to maintain a stranglehold over the value of the currency), that can only come after the Allies have lost their power over the German economy and Versailles can be truly called dead, because they forbade Germany under the treaty from free floating.

France and Britain don't have a leg to stand on if they're in technical default on debts to the US, and are unlikely to have the will to engage in another occupation of the Rhur. And when the UK itself is leaving the gold standard, it can't easily support military action against Germany for doing the same. When the US eventually follows the UK in leaving the gold standard, the jig is up; even if France and a few others accept a few more years of stagnation.

The Nazi regime had an even greater need to keep a lid on domestic inflation given the immense and unsustainable fiscal expansion it engaged in for its efforts at employment and rearmament (hence tight wage, labor, and price controls). A non-Nazi Germany might still have a public works campaign, and limited re-armament, but it's likely to be on a much more modest scale.

Realistically, I think Germany will follow the French model of a very late withdrawal from the gold standard, and a much slower recovery than the UK or even the US. On the other hand, the latter half of the 1930s should be much more conductive to economic growth in general if Germany is still openly trading with the rest of the world, and not conserving foreign exchange with barter agreements. The recovery of German trade partners will help quite a bit.
 

Deleted member 1487

By 1936 FDR was offering reciprocal tariff reduction agreements to get free trade going, so if the Germans had been open to that, they could have gotten access to US markets for trade. Of course they'd have to be pretty aggressive with certain efforts to make it beneficial, like reforming their agriculture so as not to having their farm industry wiped out by cheap US imports.
 
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