German Economy Under The Morgenthau Plan

So, @kernals12, how do you propose the German economy is focused on in the period between Morgenthau being implemented and the tech-based light industry you said would be the center of the modern German economy here takes off? Exporting resources like coal and iron (meaning the German economy would have many of the features of countries dependent on resource extraction like how the economy's health is dependent on the price of resources with high prices equivalent to a good economy)?
 

kernals12

Banned
Considering that they would have to import the steel in TTL it is even less likely for the refrigerators. The weak currency would actually harm that by making foreign steel more expensive. Westinghouse got its steel straight from Pittsburg, Germany would have to pay inflated prices for steel+ shipping costs.
Most of the cost of any good is labor, so on balance, German refrigerators would be cheaper with a devalued DM.
 
My point is labor cost isn't everything. Besides a low labor cost is other words for saying "Impoverished Hellhole". If you have low labor costs it means you are paying your people next to nothing by definition.
The german working and middle classes were too educated to accept too low salaries. They would emigrate en masse. There is already a big german american population that would help them to move.
 
The german working and middle classes were too educated to accept too low salaries. They would emigrate en masse. There is already a big german american population that would help them to move.

Likely, which would make Germany a giant Modern Detroit. Everyone with an education moved out and what is left is nothing but a giant slum.
 
Congratulations, you just made Kurt Schumacher the first Bundeskanzler of the Federal Republic of Germany! Since you've just fucked over manual labourers across Germany by shutting down heavy industry and slashing their wages, you've just given swathes of voters (especially in Bavaria and the Rhineland) massive reasons to vote for the SPD or KPD! Great job.
 

kernals12

Banned
My point is labor cost isn't everything. Besides a low labor cost is other words for saying "Impoverished Hellhole". If you have low labor costs it means you are paying your people next to nothing by definition.
Eventually, once the transition is complete, Germany would find itself with a large trade surplus and other countries would have corresponding trade deficits, so they'd devalue, and we'd be in an ideal equilibrium.
 
Congratulations, you just made Kurt Schumacher the first Bundeskanzler of the Federal Republic of Germany! Since you've just fucked over manual labourers across Germany by shutting down heavy industry and slashing their wages, you've just given swathes of voters (especially in Bavaria and the Rhineland) massive reasons to vote for the SPD or KPD! Great job.


Most likely KPD as the Germans have every reason to be pissed off at the West.
 

kernals12

Banned
My point is labor cost isn't everything. Besides a low labor cost is other words for saying "Impoverished Hellhole". If you have low labor costs it means you are paying your people next to nothing by definition.
No, actually, it is everything. With exception of land which is just there, the price of every single good and service is determined by the cost of labor involved in making it.
 
The Soviet Union was imposing an even more draconian reparations program at the time.

Which the West Germans will know about, how? Are they really going to trust anything coming from the NYT or the London Times after being screwed over? If the West Germans look so upset he is going to say it so much better in East Germany and shoot anyone who disagrees with him.
 
The cost of raw materials is dependent on how much labor is needed to dig or drill them out of the ground. And the ultimate source of capital is labor income that is saved and invested.

Raw material costs depend on how much of it there is and how easy it is to get to. Having 30,000,000 people try to forge steel in their back yards and you get Maoist China. Labor isn't everything.
 
Exporting resources like coal and iron (meaning the German economy would have many of the features of countries dependent on resource extraction like how the economy's health is dependent on the price of resources with high prices equivalent to a good economy)?

They wouldn't have gotten that much revenue for them, given how the last iron ore mines in Germany were closed in the early sixties and while coal production went on much longer it got subsidized to nearly ridiculous levels. And no cheap labor costs could have prevented that.
 
Also, you tout 'low labour costs' as a good thing as though German labourers were an army of servile robots who would put up with the West exploiting them for all they were worth and not, you know, a collective group of exploited workers who'd likely be a bit more supportive of Marxian economics than you give them credit for
 

kernals12

Banned
Also, you tout 'low labour costs' as a good thing as though German labourers were an army of servile robots who would put up with the West exploiting them for all they were worth and not, you know, a collective group of exploited workers who'd likely be a bit more supportive of Marxian economics than you give them credit for
low labor costs in dollar terms, not low labor costs in DM terms. I was replying to an inquiry that the devalued DM would drive up the price of imported steel and therefore not make German made refrigerators cheaper.
 
The german working and middle classes were too educated to accept too low salaries. They would emigrate en masse. There is already a big german american population that would help them to move.
Don't forget the possibility that Portugal and South Africa, in a bid to secure their colonies/minority rule, might take an interest in this pool of potential settlers as well and provide them incentives to migrate to either the Portuguese colonies or South Africa. A Morgenthau Germany could possibly mean that Portugal has its colonies to this day and Apartheid South Africa is still a thing from the Germans who migrate to Portugal's African colonies and Apartheid South Africa.
 
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