German Economy After A 1940 Victory

Nestor

Banned
If Britain decided to make peace with Germany following the fall of France in 1940 and a general peace was established in Europe for at least the next few decades (Hitler either decides not to invade the Soviet Union or dies before he gets the chance), would Germany's economy be able to stay afloat with the indemnity from France and the economic exploitation of the rest of Europe they conquered, or would it collapse within a few years as a result of the instability caused by the rearmament program?
 

tenthring

Banned
I want to address this in two parts.

Without making peace with Britain:

1) On paper the Germans captured a lot of resources when they conquered France. However, France like everywhere else in Europe was dependent on international trade to acquire key resources. Without those resources the captured resources can't perform at their theoretical capacity.

The "Wages of Destruction" did a good job of covering this in more detail, but you can't just add up GDP/population/etc to figure out what Germany's 1940 economic capacity was. Even if their economy was run better, the blockade would have been as effective as it was in WWI.

2) I believe that if the blockade remained Germany would have collapsed. The key would have come when the USSR cut them off. Stalin wasn't as much of a fool as we make him out to be. He knew Hitler would turn on him. He just thought he wouldn't turn on him in 1941. If Stalin gets a couple more years he would be able to reform his army from the late 30s purge. Properly trained, properly armed, the Red Army could wipe the floor with the Germans if they invaded. Especially since without Russian oil Germany wasn't going anywhere.

Expect this to come in the form of increasing Russian trade demands in exchange for their raw materials. Demands the Germans won't be able to meet.

3) If the USA enters the war, which it eventually would over what is happening with U-boats in the Atlantic, the production capacity of America was truly astounding. Even with no Eastern front I believe America could have vastly outproduced Nazi Europe and slowly bombed them back into the stone age.

I think this realization was actually a part of Hitlers decision to implement Barbarossa. Rather then have the Soviets cut off the Luftwaffe's fuel in 1944 when the USA is pounding them into submission, go and get the oil yourself in 1941. There are a ton of problems with that line of thinking, but it was there.

If Britain leave the war:

I think Germany will stabilize for some time. The USSR is probably a good model here. Centrally planned economies, and Nazi Germany sure was one, tend to be OK at mass producing existing goods but bad at consumer products and innovation. When the economy started to move in that direction in the 70s you saw stagnation and decline in the Soviet system. I would expect the same with the Nazi's, perhaps even earlier if Hitler is unstable.

Note: This matches what happened with Franco in Spain.
 
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