German WW II Economy - not just working more people harder

Wozza, I think the idea of the blitzkrieg economy is just an academic attempt to explain away the slap-dash way Hitler and the Nazis ran the German war effort. As if bad planning and up-down procurement were an actual plan, rather than the result of government by dickheads. With quality central direction, resource allocation, prioritisation and addressing bottlenecks and other problems the German economy c/should have produced twice of what Britain did after 1940, the industrial base was there.


Basically spot on. Carroll does go to some length to detail the extent of the Bureaucracy built up and it shows how suffocating it was . Quite common in many dicatorships since this is the real source of limited power in such regimes. Some times I think its a miracle anything got done at all...maybe that’s why people like Speer are seen as miracle workers, because unlike others he had Hitlers ear and thus the polictical clout to get something done for a change.
 
1942-44 was far too late

If the Germans had waited till 1940-42 before invading Poland, and if they had realized the vulnerability of their oil production facilities earlier, and had planned the invasion of Russia more carefully, and placed their focus on deportation of Jews to Palestine to reduce the cost of feeding them while simultaneously providing a large headache for the British they MIGHT have been able to fight Britain, the US and Russia to a standstill technologically with large gains in territory in Europe. Only a Nazi atomic bomb would have guaranteed victory, and that was not in the cards in 1940-45.

Of course by then the Japanese would have been loosing huge numbers of troops to the Chinese as the US embargo starved their empire, lessening the pressure on Russia.

Hitler may have been able to remain in power if Germany had contented itself with Poland, France and the South East of Europe while it consolidated its gains behind the mountains of Eastern Europe and by building fortifications across Poland. Also by providing weapons to the Russians fighting Stalin and by using a Russian proxy army to oppose Stalin. Simultaneously Germany could have made overtures to the British and Americans perhaps by offering a withdrawl from a demilitarized France to secure a peace with the democratic West so as to present a united front to the soviets, or at least a multifaceted threat while the new V weapons were perfected, and an atom bomb was developed.

I think that world would have looked a lot like George Orwell's 1984.
 
Wozza, I think the idea of the blitzkrieg economy is just an academic attempt to explain away the slap-dash way Hitler and the Nazis ran the German war effort. As if bad planning and up-down procurement were an actual plan, rather than the result of government by dickheads. With quality central direction, resource allocation, prioritisation and addressing bottlenecks and other problems the German economy c/should have produced twice of what Britain did after 1940, the industrial base was there.

But there is no blitzkreig economy - there is no "protection" of living standards and there is no evidence of a conscious decision to favour breadth over depth. It is more likely that Hitler was considering both short wars and long wars, in fact we know that he was from his assorted statement. The two goals are not irreconcilable.

The problem with this "bad planning" line is that it is just one more variation of "blame Hitler;" the idea that German was tactically brilliant but strategically awful - only in this case that Germany is a misdirected economic powerhouse rather than military juggenaut.

This fails on two fundamental points - in comparative terms German planning is not that bad; and it is not a powerhouse anyway, there are deept problems that better planning would be unable to solve.

That is why going back to the original question, I do not think it possible, given a realsitic POD, to deliver more than marginal improvements to German production.

Planning:
All the powers suffered from poor co-ordination, vested interests and poor arbitrary decisions. Did Germany really suffer from more? Possibly at a certain level, but having a joint services committee simply shifts as many problems as it solves, the idea that the failure to co-ordinate production earlier lost Germany the war is laughable.

The more important point is the limitations in the German economy (and here I disagree with esl fundamentally.) The German economy was simply not that advanced, certainly not compared to the US economy, and in many ways it was behind the British economy.

Yes Germany had some first rate, world-beating firms at the cutting edge of technology: behind that though, the picture is not that good.

First of all look at agriculture. During WW2 Britain had 1 million workers in agriculture, Germany 10 million. Even once you strip out differences of population and levels of food self-sufficiency you can see that German agriculture was massively inefficient. If it had been as efficient as British I imagine the Germans would have had 6 million more workers or soldiers - now that would be war-winning.

Other than the major heavy industrial concerns a lot of German industry was traditional craft firms, leaving overall manufacturing productivity way behind America, more on a level with supposedly declining Britain. On service industry German productivity was way behind Britain.

This backwardness was reflected in a number of ways - one indicator was car ownership, in the early 30s German car ownership was lower than in Ireland.

These are massive, entrenched problems, they involve millions of workers and thousands of firms/businesses. Raising the productivity of so many diverse organisations is a massive task.

First of all consider agriculture - you would need mass mechanisation, which would require huge industrial resources, in a country with a motor vehicle shortage....

The Four Year Plans were introduced to modernise industry, and they did, but they ate into resources that could be used for weapons in the early years of war. The Plans also involved developing new plant, and the expansion lowered overall industrial productivity (because it involved, for example, opening up less accessible coal seams.

Once into the war dramatic improvements in efficiency were made, but they were in the other war economies too. But ultimarely these would always be limited by the industrial base you start from - hundreds of small, dispersed workshops cannot be converted into a Taylorian assembly line without a massive investment of resources. The most efficient solution might simply cost too much in the short-term: certainly for the entire economy.

And this is an important point: effiency is needed in non-military sectors, it is all very well having tanks made in high productivity factories if the clothing factories still take up three times as many workers.

Germany starts the 30s economically backward in too many ways: there is simply too much to do, in too short a time to find a magic bullet, either in efficiency improvements or expanding capacity.
 
First of all, thank you esl for answering my question so thoroughly.

Now, perhaps we can continue the discussion.
I think that the present discussion deals with several questions at once, and perhaps it might make sense to keep these various issues apart. I' ll try to make my own list of issues adressed so far. I hope that even if you think that there should be a different list, you might think it advantageous to keep some of these issues apart.
My list of issues adressed so far:
A. My original question was whether there was a possibility of raising the output of the German wartime economy without either increasing the number of workers or working hours (that was why I called the threat "not just working more people harder"). I had already a number of ideas in mind and the one concerning fixed prices seemed the most important to me. esl has, if I understand him correctly, confirmed that adopting this policy would indeed have increased efficiency and provided very valuable information on that topic.
Now, if there was one thing I did not do, it was asking for a specific amount of increase in production. Nor did I ever claim that this increase should be so big as to win the war for the Nazis.
I'm still very much interested in this original question, for example improved production techniques introduced during the war. Two examples of these are sheet metal stamping (the most famous example is the MG 42, successor to the MG 34, which was made of machined parts. Another example is centrifugal casting. I would be grateful for more examples.
B. Wozza has claimed that the increases in efficiency could be no more than marginal. In order to discuss this question further I would like to know: How much is more than marginal? It is more than a rhetorical question.
C. 1Can this improvement in efficiency alone result in an Axis victory? My answer is: NO, never, ever, ever. American industrial output alone was many times that of all Axis powers combined.
C. 2 Can this improvement in efficiency combined with any number of other moves result in an Axis victory? My answer: still very, very, very unlikely if we have the same grouping of powers on both sides.
D. Has the fact that historically we get these improvements relatively late in the war to do with a supposed Blitzkrieg strategy? My impression - as of many others - is that no such strategy existed and that some of Hitler's remarks to the effect that any government hoarding raw materials "should be stood against a wall" are in more or less direct contrast to the aim of autarchy, pursued in the Four Year Plan.




 
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A. My original question was whether there was a possibility of raising the output of the German wartime economy without either increasing the number of workers or working hours (that was why I called the threat "not just working more people harder"). I had already a number of ideas in mind and the one concerning fixed prices seemed the most important to me. esl has, if I understand him correctly, confirmed that adopting this policy would indeed have increased efficiency and provided very valuable information on that topic.
Now, if there was one thing I did not do, it was asking for a specific amount of increase in production. Nor did I ever claim that this increase should be so big as to win the war for the Nazis.
I'm still very much interested in this original question, for example improved production techniques introduced during the war. Two examples of these are sheet metal stamping (the most famous example is the MG 42, successor to the MG 34, which was made of machined parts. Another example is centrifugal casting. I would be grateful for more examples.

This is the amount of steel allocated to the armaments programme

800,000 tons per month in 1938;”USSBS –Ordnance Industry report” [1947 report]
~900,000 tons per month in 1939; Milward ;“The German Economy at War” pp 30
930,000 tons per month in 1940; Milward ;“The German Economy at War” pp 30
850,000 tons per month in 1944;”USSBS -Tank Report “Exhibit D” [1947 report]



And yet look at the difference in out put between those periods orders of magnitude more out put by 1944 for general armament.War material out put percentage of 1943 level [The Historical Encyclopedia of World War” pp196]
1938 20%
1939 25%
1940 44%
1942 64%
1943 100%
1944 125%

Overy also points out that between 1941 and 1944 the German aircraft industry increase out put four fold even though the labor shrunk by 5% and the aluminum allocated increased by 20%.

So with a 20-30% increase in resources allocated [Steel & aluminum] production skyrocketed 3-5 fold, due to a centralized authority [Speer] overseeing control of production and allocations of ALL military services.

Richard Overy remarks that at the start of the war for every 100,000 tons of steel allocated they were getting only 10,000 tons product. By 1944 this had shifted to getting 40,000 tons product for every 100,000 tons allocated. The companies found these efficencies when they were pushed to do so with fixed pricing etc. I heard that in the USA wareconomy this efficency had reached 60% by weight , suggesting there was further room for improvement even at the end of the war.

The link I gave to the German paper in the last post ,shows how fixed pricing forced the company to hunt down economies and thus reduced the cost manhours to build and resoures expended by 1/3 within 2 years of initial production. Now think in terms of how often the Germans shifted production from one model to another. In small runs the special variants are twice as expensive as the main production type while in large production runs is about 1/3 more expensive. It seems that alot of the payback doesnt occur until the 3-4 year of production. It also shows how similaneously producting many different types of tanks or planes [for example] with smaller production runs each is much less effient than running only a small number of different types with hugh production runs through licence production.


1939 1940 steel allocation
Construction 2.4 m tons to 2.9m tons
Army 3.7 m tons to 4.0 M tons
Navy 1.5 m tons to 1.67 M tons
Air force 2.7 M tons to 2.56 M tons

In 1939-1940 Construction devoured roughly ¼ of the steel allocated to the military. Think Atlantic Wall and West Wall, neither were worth the hugh investment in labor resources or money.
 
This is the amount of steel allocated to the armaments programme

800,000 tons per month in 1938;”USSBS –Ordnance Industry report” [1947 report]
~900,000 tons per month in 1939; Milward ;“The German Economy at War” pp 30
930,000 tons per month in 1940; Milward ;“The German Economy at War” pp 30
850,000 tons per month in 1944;”USSBS -Tank Report “Exhibit D” [1947 report]

And yet look at the difference in out put between those periods orders of magnitude more out put by 1944 for general armament.War material out put percentage of 1943 level [The Historical Encyclopedia of World War” pp196]
1938 20%
1939 25%
1940 44%
1942 64%
1943 100%
1944 125%

Overy also points out that between 1941 and 1944 the German aircraft industry increase out put four fold even though the labor shrunk by 5% and the aluminum allocated increased by 20%.

So with a 20-30% increase in resources allocated [Steel & aluminum] production skyrocketed 3-5 fold, due to a centralized authority [Speer] overseeing control of production and allocations of ALL military services.

Richard Overy remarks that at the start of the war for every 100,000 tons of steel allocated they were getting only 10,000 tons product. By 1944 this had shifted to getting 40,000 tons product for every 100,000 tons allocated. The companies found these efficencies when they were pushed to do so with fixed pricing etc.

1939 1940 steel allocation
Construction 2.4 m tons to 2.9m tons
Army 3.7 m tons to 4.0 M tons
Navy 1.5 m tons to 1.67 M tons
Air force 2.7 M tons to 2.56 M tons

In 1939-1940 Construction devoured roughly ¼ of the steel allocated to the military. Think Atlantic Wall and West Wall, neither were worth the hugh investment in labor resources or money.

Dear esl,
again I am very grateful for the information you provide. Please do not consider it nitpicking when I repeat some thoughts I have found elsewhere why these figures might (just might!) not be quite as impressive as they look, although they probably are also partly caused by an improvement in efficiency:

1. One possible reason for the apparent dramatic improvement in the ratio between tons of steel allocated and tons of armaments produced might be the following: The figures for steel allocated in the earlier years include those for building new factories and machines for producing tanks, guns and so on and a relatively small number of tanks and guns from already existing factories. In the later years, the construction of these new factories has been completed, and almost all the steel goes directly into new tanks and guns, not into still more factory buildings and machines.
Or have these processes already been factored out, and the figures do strictly compare like with like, that is material allocated to direct production (not capital investment like machines and buildings) in, say, 1940, compared to material allocated to direct production in, say, 1944? This would make a world of a difference. I have been unable to find this out by looking into Overy or Kroener, perhaps my fault.

2. The improved ratio between aluminum allocated and output of aircraft is partly due to improved efficiency, but probably also due to the fact that only the number of aircraft are counted. In 1941 there is a relatively high proportion of twin engined bombers, while in 1944 production consists largely of single engined fighters which are much easier to produce.


A question concerning the 1939-1940 allocation of steel. Do the 2.4 to 2.9 million metric tons of steel include construction of armament factories?
 
Has anyone else noticed that when it comes to the Nazis doing better in almost any area the discussion gets bogged down arguing about different stats provided by different sources with no defintive answers. Here's a WI "WI we can get a definitive answer to ANY of the major questions concerning Nazi Germany." For my mind, the academic reading I've done over the last decade has convinced me that there was a large potential production shortfall in Germany in the first half of the war. All the counter-arguments will fall on deaf ears here because I think I've trawled through enough quality info to convince myself that my conclusion has merit, just as those with different conclusions have done their research.
 
Dear esl,
again I am very grateful for the information you provide. Please do not consider it nitpicking when I repeat some thoughts I have found elsewhere why these figures might (just might!) not be quite as impressive as they look, although they probably are also partly caused by an improvement in efficiency:

1. One possible reason for the apparent dramatic improvement in the ratio between tons of steel allocated and tons of armaments produced might be the following: The figures for steel allocated in the earlier years include those for building new factories and machines for producing tanks, guns and so on and a relatively small number of tanks and guns from already existing factories. In the later years, the construction of these new factories has been completed, and almost all the steel goes directly into new tanks and guns, not into still more factory buildings and machines.
Or have these processes already been factored out, and the figures do strictly compare like with like, that is material allocated to direct production (not capital investment like machines and buildings) in, say, 1940, compared to material allocated to direct production in, say, 1944? This would make a world of a difference. I have been unable to find this out by looking into Overy or Kroener, perhaps my fault.

2. The improved ratio between aluminum allocated and output of aircraft is partly due to improved efficiency, but probably also due to the fact that only the number of aircraft are counted. In 1941 there is a relatively high proportion of twin engined bombers, while in 1944 production consists largely of single engined fighters which are much easier to produce.


A question concerning the 1939-1940 allocation of steel. Do the 2.4 to 2.9 million metric tons of steel include construction of armament factories?

resources to construction was seperated from Armaments sectors so it would not show up in factories construction. The reason aluminum improved so dramatically was that up until Speer intervened and changed the situation, all manufactures were issued 16,000 lb of aluminum per aircraft regardless of if the plane was fighter or bomber. The companies horded the excess aluminum and turned it into products for the civilian market which they sold at a profit. After this aluminum allocation was tied to aircraft size , companies had to find more inovative methods of construction to keep profits up.

BTW the bomber production in 1940 reached 4000 models ,while in 1943 and 1944 they reached 6936 total. What is not commonly pointed out is that the number of bombers destroyed included another 3800 . So had the allies not destroyed the bombers in the factories they would have included 10,777 or over 5000 per year. More than the 1940 and 1941 production of bombers.

Good general source with numerous production figures.
http://orbat.com/site/sturmvogel/WarEcon.html

Lot of more information here including break downs in steel production. construction is no were listed in armaments allocations .
USSBS
http://orbat.com/site/sturmvogel/ussbsindex.html

Ordnance report as an example
http://orbat.com/site/sturmvogel/ussbsord.html

Heres an example of production increases
http://orbat.com/site/sturmvogel/images/ussbs/ordexb1.gif
Artillery production goes up 8 fold between 1941 and 1944

Shell production goes up ~ 10 fold in the same period.
http://orbat.com/site/sturmvogel/images/ussbs/ordexb16.gif

 
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From me, too, a belated "thank you" to esl for his many sources.

The following ideas for a more efficient German economy in the early war period are from the book by Bernhard R. Kroener, Rolf-Dieter Muller and Hans Umbreit Das Deutsche Reich und der Zweite Weltkrieg, Band 5, Organisation und Mobilisierung des Deutschen Machtbereichs. Erster Halbband, Kriegsverwaltung, Wirtschaft und personelle Ressourcen.
The English Translation has the title Germany and the Second World War. Volume 5, Organization and Mobilization of the German Sphere of Power. Part 1, Wartime administration, economy and manpower resources.
The page numbers refer to the German edition.

1 Armament production could have been increased if fewer resources had been used for building new Wehrmacht-owned factories and more had been used for converting existing civilian factories to military use and to introduce a multi-shift system in existing factories. Page 370.

2 There were obvious flaws in the system of allocating raw materials to factories. Some factories had been allocated raw materials, but no contracts to produce, others had been given contracts, but no raw materials. Page 385. The system also greatly encouraged hoarding. Page 431.

3 Under the influence of the Minister for the Economy, Walther Funk, production contracts for the armed forces followed the so-called Streuungsprinzip (the literal translation is "principle of dispersion"). This meant that military production contracts had to be given to a large number of small firms to keep these firms alive and to avoid unemployment. It was conceded, even at the time, that this would result in increased costs for armaments, but "social and political reasons" were considered more important. Page 385.

4 In early wartime in OTL, communication between an armament supplier and its sub-contractors was to take place only through the mediation of the Rüstungsinspektionen ("armament inspectorates"). Page 449. I think that it is not difficult to imagine that this was a time-consuming and personnel-intensive process that could have been abolished.

5 In OTL German foreign trade during the war was conducted by the state and consisted largely of bartering. There were representatives of private enterprise who insisted that the entrepreneur, not the state was best suited for foreign trade, but they went unheard. Page 394. It is difficult to imagine a totalitarian government giving up power and control to such an extent, but given the proven superiority of market economies over command economies, I think that more market based trade relations, within the Axis sphere of influence (which also comprised a few neutrals), would indeed have improved the economic situation of all countries within that sphere. It may sound counter-intuitive but I am looking forward to criticism.
 
Germany WWII

Ulitmately the miltary offensives defeated the Germany war machine. Production of planes, tanks & 88mm anti tank weapons etc. increased right up to January 1945. Albert Speer was an excellent administrator as well as a 'Good Nazi'. Steel and Oil which drove the German war economy became short in supply with the Swedes cutting down steel exports to Germany in early 1945 and the loss of oil from Bulgaria after the Russians occupied that country.

Slave labour was a problem but not a major problem in the German war effort. Other factors decided their downfall.

Counter factual. The German war machine finds endless labour for their war efforts but find raw materials, allied miltary advances and disintergration of the German miltary and civilian organizations overcomes them. Probable result. The 2nd World War still ends in early May 1945
 
Done some more readings on the armaments programs

In 1938 General Thomas Request for clear prioities on armaments production and party building projects civilian construction etc, to be established by the Summer of 1939. Each service branches were issuing demands for steel that were 3-4 times the monthly steel production and something had to change.

Thomas submitted his requested in writing to Keitel on January 1938. Goering thus order priorities in fall 1938 putting four year plan at top followed by Fortifications Highway construction etc. Admiral Raeder got Hitler to change this to put the Zplan at the top of priorities in 1939. Heer and Luftwaffe demanded this changed back but Hitler rebuked them saying ‘that if the army and airforce were suffering it was the economic bottlenecks which were at fault’ pp 193.

Subsequent to this Hitler demanded acceleration on West Wall fortifications in 1939. With the approaching war Thomas demanded armaments programmes that were needed for the invasion of Poland. He demanded all ship construction halted. Initial Hitler resisted but when the war started he reversed his position again . According to Berenice Carrol. “Design For Total War” pp194 “On 1 September the navy was ordered to drop its peace time construction program and restrict itself to repairs, conversions, shipbuilding to be completed within one year and new ships only within the limits of the .Production Program Wehrmacht’. ” PPW was the Wehrmacht prewar mobilization plan.

Hitler’s new priorities issued on 7 September , put ammo production at the top along with armaments replacement [loss replacement production]. Naval program disappeared from the priorities and Westwall reduced. [pp195] Then the whole plan changed again on October 4 –10 when the whole program was shelved for motorization of the Heer to be completed in 4-6 weeks as maximum priority !!! By Mid November 1939 Hitler had changed his mind again putting ammunition production at the top of the list. pp196. The poor factory bosses pleaded for some sanity since they had no sooner retooled/planned for one direction only to retool/plan for another.

With the defeat of Poland France became the main concern and Hitler demanded an acceleration of the Westwall fortification and they got 100,000 tons steel in Oct 1939 but Todt organization group took increasing center stage demanding additional 100,000 tons steel to complete autobahn and misc party buildings! [pp200] Some like Thomas argued that the entire Autobahn program was not a military programm but building up the railnetwork was . I gather that in the first year of the war they anticipated 200,000 freight cars but could only muster 130,000. Reportedly that short fall could be addressed by diverting 15,000 tons steel per month.

Goering tried to change things in Oct 1939 by listing priority a case by case basis. Ju-88 , Uboat and V-1/V-2 development were all put at the top , followed by munitions production and then all other armaments projects. Next on the priorities was his own Herman Goering Works followed by civilian building projects. Apparently this included a massive building program for Berlin and other top cities. Hitler appointed Reich minister Todt in charge of all construction and this sparked Todt to demand control of all steel allocation planned for Wehrmacht construction projects [barracks docks etc].I recall Overy suggests construction was gobbling up ~20 Billion RM from 1939-1941. While some of this was for new barracks ports fuel storage , airfields factory expansion, alot was infact for party building projects...so reorganisation for war was needed.


At ever turn the Nazi party resisted any attempt to cut into civilian projects as a matter of policy. “for reasons of public opinion, they are trying to maintain the highest possible level of civilian production. Even the Fuhrer at first often said in expectation of a short war, that conversion to a war economy would not be necessary” [pp205] Berenice was quoting Thomas.

That’s 8 changes in armaments production priority/direction in a about a year. Small wonder armaments production spluttered along making no progress to increase out put.

Sounds like the nazi party hacks were all ADHD!
 
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The Nazis actually had a higher rate of female participation than any other power, indeed it has higher before the war than most other countries reached within it. This was a different profile of participation than most other countries
Not from what I've read, which suggests Hitler opposed women working, actively discouraged it, & Germany ended up with the lowest rate of participation in the industrial workforce of the major combatants.
 
Not from what I've read, which suggests Hitler opposed women working, actively discouraged it, & Germany ended up with the lowest rate of participation in the industrial workforce of the major combatants.

Then what you read was at worst wrong and at best incomplete. German female participation as a whole has higher, although the process was different, with an emphasis on involvement in small family firms rather than major factories. This partly reflect the dichotonous nature of the German economy with its long and inefficient tail of small family firms.
 
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