Thursday, June 13, 2013

More information on the German war economy

I’ve already had a look at the German war economy and whether it was ‘mismanaged’ here. For those of you that want to read more check out these articles:

1). From Economic History Review: ’Fixed-price contracts, learning, and outsourcing: explaining the continuous growth of output and labour productivity in the German aircraft industry during the Second World War’ By Lutz Budrass, Jonas Scherner, and Jochen Streb. This is basically the same article as ‘Demystifying the German “armament miracle’’ but with additional information on outsourcing.

Summary: ‘In this article it is claimed that, at least in the aircraft industry, the development of German armament production and productivity was much more continuous than Wagenführ's armament index and both the Blitzkrieg thesis and the inefficiency thesis suggest. In order to prove this new thesis of continuity, we show on the basis of firm-level data, firstly, that investment in production capacities had already started before the war and was especially high in the early phase of the war, and secondly, that the regulatory setting of aircraft production management was rather constant and was not dramatically changed after 1941. In addition, we demonstrate that the driving forces of productivity growth were primarily learning-by-doing and outsourcing, the latter being generally neglected by economic historians.

2). ‘Industrial Investment in Nazi Germany: The Forgotten Wartime Boom’ by Jonas Scherner.

Summary: ‘To date we lack reliable data on the level of industrial investment in the Third Reich. In addition our overall knowledge of the quantitative significance of the war-related branches – autarky and armaments industries – is extremely patchy. And yet, a precise knowledge of these figures is clearly crucial if we are to arrive at a proper characterization of the political economy of the Third Reich. Investment strategies with their long-run implications for industrial output are particularly revealing as to the debate about a Blitzkrieg strategy supposedly pursued by Hitler’s Germany early in the war. Furthermore, investment data may play a crucial part in demystifying Albert Speer’s so-called armaments miracle, about which it is commonly claimed that it depended on intensive rather than extensive growth. This paper, based on largely unknown sources, attempts to fill this gap, providing figure for industrial investment for the entire period between 1936 and 1944. It will be shown that actual investment was substantially larger after 1938 than has hitherto been recognized. The paper will also present detailed estimates for investment in armaments and autarky industries for the period 1934- 1943. These show that during the period 1940-1942 Germany experienced a spectacular investment boom, primarily directed towards widening the industrial base for war. This clearly should have substantial implications for the historiography, since it calls into question both the Blitzkrieg narrative and the conventional view of the armaments miracle.

Summary: ‘Today, most scholars agree that Nazi Germany did not follow a premeditated Blitzkrieg strategy in the late 1930s and at the beginning of the Second World War. However, the question of the extent to which Germany’s economy had been prepared for a longer war is still debated because statistical information on Germany’s investment pattern is fragmentary and data on the structure of prewar German military expenditure are not available. Relying on newly discovered sources, this article closes these gaps.The Nazi regime clearly shifted its investment towards preparation for war from the mid-1930s on, and though armaments purchases stagnated during the period from 1937 to 1939, investment in munitions industries grew considerably. Consequently, during the late 1930s the Nazis pursued a ‘sustainable’ rearmament strategy necessary for fighting a longer war. Yet, despite massive capacity enlargements in the munitions industries, total German investment was not unusually high by today’s definition because contemporary figures included a significant amount of armaments purchases.

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