/kc/ - Krautchan

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Weimar prelude and the alternative to Hitler’s strategy

The book’s introduction presents two conflicting paths interwar Germany could pursue to leave the abyss it found itself in: the one it historically followed after 1933, represented by Hitler, and an “Atlanticist” geopolitical strategy implemented to a large extent in 1924-1933, represented by Gustav Stresemann, foreign minister from 1923 to 1929. Hjalmar Schacht is the middle ground.
Firstly, what did they have in common? 
Both were keenly aware of America’s rise to superpower status and the importance it would play in European geopolitics. This game-changing American rise is one of the book’s major themes. Both Hitler and Stresemann knew that America’s population, land area and resources allowed it to outcompete any individual European state through economies of scale. Their strategies centered on how to preserve German and European relevance in light of this development.
Both understood the Great War as the result of imperial competition, with Great Britain as the Second Reich’s nemesis.
Both pursued a revision of the burdens imposed by the winners: reparations, the occupied Rhineland and the new borders.

Hitler’s vision of history was not deterministic, and he thus believed it was possible for Europe to achieve parity with America by forming a market of similar size and population, which would be created not through something along the lines of the EU but through a dominant state’s hegemony, as Prussia had done in its unification of Germany. This state would, of course, be Germany itself.
The primary purpose of this hegemony would be the acquisition of means of sustenance, the struggle for which he considered the engine of history. It is for this reason he calculated Great Britain would have no inherent geopolitical reason to oppose his policies. Wilhelmine Germany’s rising exports and market dominance brought it into direct competition with Britain, and hence, its allies, cementing its destruction in the Great War. 
He would not repeat the same mistake: Germany would not seek primacy through economics, avoiding a commercial confrontation with Britain, and would only seek to secure its means of sustenance on the continent, where the British wouldn’t lose any means of sustenance as theirs were on the empire. It would thus be possible to have a neutral or friendly London. This was one cornerstone of his vision: Britain as a counterweight to America.
The logical conclusion was that war would happen sooner or later, allowing Germany to settle scores with the French and assert its hegemony to the East. As risky as it could be, Hitler saw Germany’s confrontations with the other great powers as an existential struggle and thus accepted the risk.

Stresemann, a bourgeois optimist who had no active service in the war due to ill health, was not as apocalyptic as Hitler. He refused to accept the border with Poland and embraced dreadnought building, U-boat usage and territorial expansion, all views he never retracted, but believed a military solution was no longer possible to Germany’s issues. Instead, it could still be relevant in the sphere of economics.
His worldview encompassed not just great power competition but also the interconnectedness of the global economy, which meant Germany’s enemies still depended on it. America, in particular, could be turned into a counterweight against Britain (the opposite of Hitler’s belief) by giving it a stake in the German economy, and thus, an interest in its stability. This would pave the way for a negotiated removal of the winners’ burden and a return to the concert of nations.
It bears noting that this strategy is close to that followed by West Germany.

This was implemented in practice through a non-confrontational diplomacy with France, the sale of shares in German firms to Americans and the use of American credit to pay reparations to France and Britain.
Interwar Germany owed reparations to those two, who in turn owed war debts to America. German reparations to America didn’t matter much. Germany could pay reparations by running an export surplus (with unspent surplus staying at the Reichsbank’s foreign exchange reserves) or by borrowing. It chose the latter option, though it just meant replacing a debt towards France&Britain with a debt towards America. 

This had the side advantage of guaranteeing a higher standard of living as the balance of trade wasn’t a concern. The Weimar Republic had a brief period of stability in 1924-1929, with the NSDAP receiving little of the vote in 1928. But its primary aim was to expand this American debt so much America would have to intervene to secure more lenient terms on reparations in order to let Germany pay the new debt.
It worked. The Dawes (1924) and Young (1929) Plans alleviated reparations demands and provided credit, the former also providing for an American middleman, the Reparations Agent, who, although damaging to national prestige, could halt payments if they destabilized the Mark and insulated the German government from external pressure on this matter.

But by 1929 the situation began to veer off the rails. The Young Plan was not as generous as expected, the “neutral” Reparations Agent was gone and America’s new Smoot-Hailey tariff made it harder for European debitors to fund their payments. American lenders found this new environment unsafe and their credit dried up. With American aid weakened Germany could seek confrontation or European integration, though for the moment it mostly remained in its Atlanticist path.
Political instability brought to power a string of conservative minority governments, starting with Bruening in 1930. He veered foreign policy in a nationalist direction, ordering two cruisers for the Navy, seeking bilateral trade deals in southeast Europe and proposing a customs union with Austria. The latter was received positively in America –proof the Atlanticist strategy had tangible geopolitical effects- but all three antagonized France.

As the French were by 1931 willing to lend to Germany, this was a great blunder. Since 1930 Germany couldn’t borrow enough and Bruening had to achieve a trade surplus to pay off debt. In the economic orthodoxy of the time this could only be done by reducing imports through austerity. 
Massive budget cuts and tax increases skyrocketed unemployment and forced the government to nationalize a number of ailing industries. Fringe parties found fertile ground. But an export surplus of 2,8 billion RM (1931) was achieved, Germany was paying its debts and Atlanticism was still bearing fruits. In 1932 both reparations and inter-Allied war debts were frozen, leaving Germany only with its non-Versailles debts to deal with. 

Previously, in June 1931 Bruening had aggressively demanded an end to reparations, setting off a chain reaction through the fragile world economy. In the end the Reichsbank’s foreign exchange reserves were precariously low, the pound sterling and dollar devalued and the franc and reichsmark lost their free convertibility. The Reichsbank tightly controlled all foreign currency in Germany and rationed it among importers, reducing the import side of the trade surplus.
But now the Reichsmark was valued higher than other currencies, lowering German exports as they became uncompetitive. The trade surplus was reduced to almost nothing. One solution was to devalue it. This option was repeatedly considered in the following years, so why was it avoided?
-Devaluation was associated with inflation, which Weimar-era Germans were wary of.
-It was risky given the Reichsbank’s limited reserves.
-A strong currency reduced the value of debts in terms of Reichsmarks.
-Under Hitler and Schacht both had pledged not to devalue, so there was prestige and political capital invested in the status quo.

So with Lausanne reparations were gone. The Atlanticist strategy was now spent. It could no longer go further for a series of factors:
-Under Roosevelt’s first years in office America turned inwards and didn’t exert influence in Europe
-America’s trade balance with Europe was unfavorable to Europeans
-The international scene was unfavorable to globalization, with increasing protectionism and political radicalism

The stage was set for Hitler.

I'm gonna chew through myself of this ofc.
You can continue anytime.

All right. So this is a new way of looking this topic for me. I'm definitely interested. Especially bout the causes of Barbarossa - maybe we'll learn some moral in relation to Suvorov.
For now I don't have a question, looks straightforward. However it seems the impact of the Great Depression on international relations was left out from the equation. Or maybe just wasn't mentioned.

The dollar's devaluation was in 1933, not 1931.

 >>/27962/
> Great Depression
It's mentioned by name in the preface and introduction. The evaporation of American credit, the June 1931 crisis and the decline of globalization all happen in its context. It's emphasized that multilateral deals were harder to create, with bilateralism seeing a resurgence, and France, Britain and the United States were no longer acting coherently together.

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Unemployment
You know the story. It’s 1933 and the new Chancellor has on his hands a ruined nation with millions unemployed. Through work creation drives and other Keynesian stimuli he builds autobahns and reduces unemployment to almost zero in a handful of years without the rise of inflation. What happened?

First, it’s important to know the peak of the crisis had already been overcome. The highest level of unemployment, exceeding 6 million, was in winter 1931/32. The following winter already had a lower figure. Observers were optimistic about the future. There would have been some recovery even if policies remained exactly as they were. 
Under a number of different policies and governments, too, there would have been recovery, perhaps better than what was achieved. But that is speculative. 
GDP statistics show private investment boomed in 1933 but was offset by a decline in private consumption (wages stagnated and prices rose), so the public sector did carry the recovery.

Work creation wasn’t a central pillar of NSDAP policy. It was brought to power by the farmer’s lobby (an important force with its own chapter), the military and some leaders in the nationalist right. Its priorities were protecting the rural population, rejecting the impositions of Versailles and, most importantly, rearmament. Its Strasserist wing did care about work creation but for the mainstream that topic was on the table only around 1932-1934.

Hitler’s predecessor, General Schleicher, had already planned a work creation drive of his own and had earmarked 600 million credit-financed Reichsmarks for it. Why credit-financed?
Contemporary economists debated the feasibility of state-conducted work creation and economic stimulus. One consensus was that it couldn’t be funded by raising new taxes, as that would offset any gain in demand. So debt was the alternative for funding such programs; they were financed from unspent household savings, whereas taxes just transferred circulating money from private hands to the state. But the government couldn’t simply borrow from the banks, as that could make it harder for private investors to get loans; instead, it’d need “new credit”.
Stimulus spending in Germany was paid not directly in Reichsmarks but in IOUs, with the promise that ultimately the Reichsbank would later repay them with loans or the increased tax revenue of a recovered economy. 

To Hitler’s joy, none of this money had been spent. His government thus spent a third of it on the military, a third to local government and a third on agricultural land amelioration.
His own spending was began with the 1 billion Reichsmark Reinhardt programme of June 1933. A further 800 million Reichsmarks were designated in September. Those were substantial sums given the size of the German economy, but the funding stopped there. Programs continued with the resources still available and the state focused on its true priorities, chiefly rearmament. Even of this sum, 230 million were siphoned off to military ‘special measures’ –airfields, barracks and so on.

Initially this stimulus took the form of a work creation drive, the Battle for Work. Its first target was East Prussia, where by July nearly all unemployed had been put to work on improving rural land and infrastructure. Behind this spectacular success, intensely covered in public media, lay two facts: the province received disproportionately high funds given its population and its agrarian society made it easy to employ idle hands in simple earth-moving work. 
Once the program moved into more industrialized regions, it found clerks, secretaries, metalworkers and even bricklayers and plumbers demanded more complex work that was harder to set up.
Nonetheless, unemployment was steadily decreasing. It only lingered on within export-oriented industries, as the problem of the uncompetitively high Reichsmark had still not been solved. At their peak work creation initiatives were only directly responsible for 30% of the reduction in unemployment, so they were merely part of a wider recovery.
Though poor Germans could finally find work, their living standards were still stagnant and private consumption shrank in 1933. For this reason the government’s initiatives against unemployment gradually shifted towards indirect methods, such as financing mortgages.
The Battle for Work received disproportionate attention in propaganda given its relative importance within economic recovery and priorities in Berlin, where critical decisions on debt and rearmament were being made.  

A famous achievement of this period is the Autobahn network. It was the responsibility of Fritz Todt, a capable civil engineer deeply loyal to Hitler, who was now general inspector for German roads. The highways were conceived firstly as a military asset for rapid movement of troops (Tooze doesn’t mention it, but their actual military usefulness would prove limited during the war). Todt did a competent job with them, particularly given he didn’t receive the budget he expected –and prestige projects like Autobahns were severely constrained by the raw materials rationing enforced some years later-, but they didn’t employ a lot of workers.
A curious fact about German infrastructure was that railways were underinvested on due to the focus on highways and other projects. Few freight cars were bought and those in service were in a bad condition. By 1938 the rail system was in crisis, with bottlenecks, jams, and, funnily enough, delays.

Inflation

How was inflation kept in check as unemployment decreased by the millions? In fact, there was inflationary pressure. It picked up by 1938, not at the beginning of recovery.
Returning to the contemporary economists who debated work creation: many objected to it on the ground that government stimulus would just increase inflation, negating any benefit it could provide. Others argued that this held true in conditions of full employment, but not when there was idle capacity, and therefore, governments could spend but only as much as necessary to get rid of unemployment, with too much spending causing inflation.
From 1933 onwards the German economy grew while the unemployed found work and there was little inflation. By 1938 the military-industrial complex and related sectors were still booming while the workforce was almost fully employed. All the conditions for inflation were there. Workers wanted better pay and employers were willing to provide it to continue expanding their businesses.
It was contained by a growing bureaucratic barrier: the suppression of wage growth at 1933 levels, which was already in place for years and extensive price controls. The wage freeze was partially circumvented in industries with less central oversight (ironically favoring subcontractors and suppliers over immediate producers of armaments) through “accelerated
promotion, high-status apprenticeships, retraining schemes, hiring bonuses, improved working conditions and a variety of supplementary social benefits”.
Wage and price suppression had the side effect of nullifying market mechanisms for reassigning labor between industries, demanding more bureaucratic oversight to replace those mechanisms. Detailed information was gathered on every worker. Regional migration was restricted. Rural workers were prohibited from taking industrial jobs; this backfired when farmers found a loophole by no longer employed their sons at all. And the state gained the power to conscript labor.
So under conditions expected not to produce inflationary pressure, there was none, and under conditions expected to produce it, it existed. No surprise here.

Test

 >>/27967/
Without reading what you wrote. That chart about unemployment. Those regular spikes are associated with seasonal workers?

 >>/27971/
Yes, on warmer seasons they're hired for the harvest and construction.

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Trade
Germany had naturally high imports. Though strong in manufacturing (the basis of its export sector), on the raw materials side its only plentiful resource was coal. Cotton and wool for the textile industries, coffee and food for consumption, oil for fuel, rubber for automobiles, iron ore for the steel industry and other commodities all had to be brought from abroad. There could be no production and consumption without foreign goods.
Imports shrank due to the crisis, and by 1933 they were 50% lower than in 1928. Now they were on the rise, a sign of a recovering economy but also a pressure against the balance of trade.
Just as imports rose, exports were falling. The international environment was hostile, with widespread protectionism. But the main reason for this was that by 1933 both the pound sterling and the dollar had devalued while the Reichsmark remained in its value, making German goods comparatively more expensive. 
Compounding this problem, the Reichsbank could fund a trade deficit by running down its foreign exchange reserves but those were very limited.

And yet Germany absolutely needed an export surplus to pay debt and imports. Hence, the balance of trade was the most important limiting factor to the Nazi economy and played a central role in policy. Great pains were taken to lower imports and boost exports.

On the import side, Bruening’s government had successfully lowered purchases at the cost of mass unemployment and Hitler did not repeat his mistakes. One legacy the Weimar period did leave was the system of foreign exchange rationing: exporters handed the foreign currency they gained to the Reichsbank, which repaid them in Reichsmarks and distributed it to importers. Germany thus had a mechanism to reduce imports by handing out less currency, which it extensively did. And in 1934 the RWM (Business Ministry) set up surveillance agencies (Ueberwachungsstellen) to organize the rationing of commodity imports in some sectors, such as wool, cotton and nonferrous metals. 

Those were still ad hoc measures and importers found loopholes around them, so a bureaucracy had to be set up to institutionalize the system. From August 1934 the Reichsbank would allocate foreign currency based on export returns, keep some to pay debt and hand over the rest to 25 supervisory agencies, one for each kind of commodity. Prospective importers would file applications to their agency, which then doled out its limited funds to imports deemed of higher priority. Successful applications resulted in Exchange Certificates (Devisenbescheinigungen), without which imports were banned.
Besides lowering imports, this structure was used to direct resources to key industries at the expense of those of lesser importance to the state’s goals. Hence, through the 30s the textile industry stagnated while the military-industrial complex boomed. It also magnified the dominance of raw materials within the composition of German imports. As a side effect, industrialists no longer had to worry about competition with foreign manufactured goods within the internal market.

Germany’s commercial relations were revised to improve the balance of trade. What resulted was not “autarky” in the full sense of the word: mercantile disengagement happened just with France, Britain, and, primarily, America. A trade deficit with the USA existed and remained, but the total volume of trade shrank from a few billions to just hundreds of millions of Reichsmarks. Transatlantic diplomatic relations deteriorated at the same rate. 
With other trading partners, Germany rejected multilateralism and sought bilateral deals with each. In Western Europe, threats of moratorium broke European-American coordination and allowed agreements with the Netherlands, Switzerland, and even Britain; a trade war with the latter would have been damaging for both parties. 
To replace raw materials no longer provided by America and Britain, German trade made inroads in Latin America and Southeast Europe. Copper and saltpetre came from Chile, wheat and maize from Romania, Hungary and Yugoslavia, oil from Romania, cotton from Brazil and Peru and coffee from Brazil. This had geopolitical consequences: Southeast Europe was drawn into a German sphere of influence and Brazil found itself in a better position to handle its American debt.

Another aspect of import reduction was investment in technologies such as synthetic fuel and rubber.

Imports were thus squeezed as much as possible. Nonetheless, some (not all) industries were still expanding through the 30s and demanding more and more imported raw materials. With supply restricted and booming demand, there was a tendency towards inflation. To prevent this, rationing was implemented for commodities themselves and not just the foreign currency to buy them. Most importantly, steel was rationed from 23 January 1937. Initially rationing was balanced and rearmament didn’t receive as much steel as one would expect, but later on this, too, became a mechanism for focusing resources on the military-industrial complex.

On the export side, the simplest solution was to devalue the Reichsmark. This was debated in the Weimar era and, behind closed doors (as a politically sensitive topic), in 1934 and 1936, but ruled out for aforementioned reasons (debt, fear of inflation and prestige). This forced Germany to come up with creative methods to lower the price of German exports.
The first was, starting in 1933, a complicated system of bond buy-backs (I, for one, didn’t understand it; it’s described in page 77) which essentially subsidized exporters at the expense of Germany’s foreign creditors. 
As this wasn’t enough, in 1935 exports were subsidized by a new tax levied on industry as a whole. A progressive tax rate of 2 to 4 percent on turnover raised tens of millions of Reichsmarks every month. The largest payers of this tax were in the booming armaments industry, which ultimately propped up the export sector and the balance of trade. The tax was unpopular with businessmen, particularly since it left some industries in the red, but it was effective at least in the short term. 
On the long term it began to draw hostility from trade partners as it was essentially state-subsidized dumping, a point made in a memorandum written by Carl Goerdeler in 1936.

The objective of a positive balance of trade was contradicted by another policy, the encouragement of Jewish emigration. As emigrants left with their property and had to be provided with foreign currency by the Reichsbank, they constrained Germany’s limited supply of foreign currency. The Haavara Agreement was one workaround to this: as Jews leaving for Palestine paid German goods, they compensated their departure with an increase in exports. 
Kristallnacht was a setback, as replacements for vandalized goods had to be imported at a steep price. Goering was incensed, not about the events themselves but of their financial effect.

The whole system of import rationing and export subsidies, imperfect as it was, is called remarkable by Tooze. It allowed Germany to survive and trade with foreign exchange reserves much smaller than those of most countries today. Though even before the war it was already strained by neverending rearmament and measures such as tight controls of foreign currency and one-time acquisitions had to be taken, it was still the same framework of German trade well into the war.

 >>/27968/
Rearmament was an easy way of creating jobs and channeling production since there was basically no military - and no military spending in the budget.
The "usual" way of presenting as if Germany was creating an over proportionate war machine even tho they were just shooting for equal amount of military to their similar sized rivals had. The overestimation of the creation of the Autobahn system by other writers, this is also related to their diligence to inflate the aggressive nature of the Nazi Germany. "They prepared for war! WAAAAAAAAAAARR!" Frankly every sober nation prepares for war to some extent, even Romans said so.

I think the Nazis had only vague ideas what to do with the economy once they are in power. They were kinda whatever works. There were promises and demands in their political program but as usual with such programs there wasn't any hint on the "how" ofc. So they employed such means that were in accord with their non-economic "reforms" and general plans.

 >>/27989/
Indeed, even in the 20s the Reichswehr already took covert rearmament measures. Hitler just amplified the process. The Versailles powers would rather have their defeated enemies remain in the defeated status forever, but a return to normality implied Germany rearming to some extent. It's like what you've said of Hungary and the Trianon states.
What made Hitler's military buildup bellicose, according to Tooze, was the nature of military spending itself, civilian gains forfeited by rearmament, the willingness to risk recovery altogether for the sake of the Wehrmacht and Hitler's strategic views on war.
Germany didn't pursue a double-barred recovery with vigorous civilian and military growth not because it didn't want to, but because it couldn't have both. Imports were severely restricted, so Hitler had the choice of importing for civilian industries or the military-industrial complex, and he chose the latter. Hence the textile industry stagnated. Under the import rationing system, some industries would have to starve, and he chose to starve textiles to feed weapons.
While talking of rearmament he mentions the usual opinion of economists about the arms industry: that it's a dead end, a money sink, whose final products aren't used to further develop the economy. And yet this doesn't hold true for the 30s Wehrmacht, which improved national prestige and made Germans happier. More than that, it was an investment which would be paid back in the future.
How an investment? Hitler didn't believe that peaceful capitalist development could save German geopolitics and provide a high standard of living, as Germany lacked means of sustenance and competition in world markets would lead to another defeat by Britain and its allies. Ultimately those aims could only be successful after scores were settled with Germany's enemies in a war. Such a war would inevitably happen, though not in 1939, as rearmament plans expected full preparedness by the 1940s and the Kriegsmarine would only be ready by the very end of the 40s.
The NSDAP's agrarian constituency also believed military expansionism was necessary to secure good living conditions in the countryside, and as I'll write later they had good reasons for thinking this. 
Despite this funneling of resources to the military and the "money sink" nature of military spending, it employed many workers, created demand for the factories and carried along the recovery. The problem is that by the late 30s military expansion was going so fast it now contradicted rather than spearheaded economic recovery. The carefully built trade system and administrative controls were suffering under the strain. The regime's economists, such as Schacht, now advocated that rearmament should proceed at a slower pace to preserve the economy, but Hitler rejected them. One must conclude he was using his "economic miracle" as a means to achieve rearmament rather than the other way around.

And on the Autobahn network, Tooze's argument rests on his evidence that it was thought in military terms by the leadership. He does neglect to mention that they didn't have much military use, and does kind of mention they weren't used much by civilians either as car ownership wasn't widespread. But the highways were certainly a boon for postwar German civilians.

> the Nazis had only vague ideas what to do with the economy once they are in power. They were kinda whatever works.
That's more or less correct. They had economic promises in their programme upon taking power, such as reviewing the relationship between local and national budgets and work creation, the latter a recent point, but not a full plan. Hitler did have in hand Schacht, a "dark wizard" of economics who had been by his side since the last years of the Weimar republic, and other specialists. They tackled the critical issues facing the country -within the constraints of political aims- one by one with bureaucratic means, and then had to create more and more bureaucracies to tackle the new issues arising from their solutions to the old ones. And the regime as a whole faced a number of crisis, the first one already in 1934. See imports, foreign currency was rationed to save the balance of trade but after a couple years this created the threat of inflation, so raw materials also had to be rationed. Or inflation, which arose once conditions meant recovery would cause it: price and wage controls kept it in check but eliminated market reallocation of labor, so new measures had to be taken to bureaucratically reassign workers.

 >>/27995/
Civilian industry buildup couldn't have been successful, since the result, all that goods produced, would have needed markets to sell at (inner markets can suck up only so much) which were impossible to find. Even the author says so with that level of civilian production they couldn't find buyers, also the relatively strong Reichsmark also was in the way of meaningful export. And the overproduction of goods, creating needless supply also hurts the economy.
So the reanimation of the military industry basically was the only way forward and inevitable.

 >>/27998/
That's a good way to look at it: with no buyers German industry had to produce "money sinks". Where have you read it? If it's nowhere on the literature then you have a novel insight.
But the "money sinks" didn't have to be military, they could have been civilian. Autobahnen themselves were a production of this kind. A huge investment in subsidized or free housing could have been made. Tooze repeatedly argues Hitler made decisions and had several options available.

> inner markets can suck up only so much
There was leeway for expanding inner markets. German consumers didn't have that much purchasing power because Germany itself wasn't a very wealthy country (this is a big point in the book), but a large portion of their income went to savings and taxation and could thus be funneled towards consumption. Some things were in very high demand, such as housing, which faced an acute shortage.
> the relatively strong Reichsmark also was in the way of meaningful export
A "remarkable" workaround was found, and another one (devaluation) was available.

 >>/28002/
> Where have you read it?
That's just follows what you wrote here based on Tooze's work. Tho yes I could have thought about spending the money differently since Hungary was in similar shoes. She was isolated with very few trade partners, but we spent mostly on not profit producing investments, because we mostly kept the military restrictions we were sanctioned (well at least we colored out of the lines less boldly than the Germans), only later in the 30's we started to invest in the military more heavily.
Also the situation also similar what we are in the EU. What the moneyz EU gives, we can't support local companies (we aren't allowed to produce competing goods) we can only spend it on logistics and niceties.

The military has a potentially infinite demand to be exploited and all of its funding comes from taxpayers. This rearmament is essentially forcing the people, who would otherwise not pay for consumer goods, to buy military items, though they do not contribute to living standards (Tooze notes they did, in a certain way). Since Germany's factories couldn't find buyers, taxpayers were herded into being its clients. It's forced consumption with no direct increase in living standards.
But the "money sink" interpretation makes the whole recovery seem even more ridiculous. The Reich used an irregular accounting scheme (Mefo bills) to pay money that didn't exist (but was promised to be paid back with interest) to companies producing dead-end goods that weren't productively used and then taxes those companies to artificially boost exports. It sounds like a pyramid scheme, though all stimuli of this kind sound absurd, with Keynes even claiming that burying bottles filled with cash in abandoned mines and letting the private sector dig them up would be a net benefit to the economy.
Things start to make more sense if military spending is, instead of a bottomless pit, an investment to be paid back in the future through war.

I think "we" view economy all wrong. We just assume that every economy should conform to capitalism's ruleset when other systems can exist successfully. Frankly even planned economy works just fine if you don't have to compete in arms race, nuclear race, space race, whatever race.

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 >>/28005/
> even planned economy works just fine if you don't have to compete in arms race, nuclear race, space race, whatever race.
Of course a hermit kingdom like North Korea can be stable. It can't be efficient because of the calculation problem and other inescapable reasons.

Budgets
The Reich dealt with funding of two kinds: safe, from taxation and long-term borrowing, and risky (for inflation, debt and so on) from short-term borrowing and money creation.
Taxation was, by the late 30s, the heaviest in Europe. Of note were taxes on Jews, taxes on imported oil, a part of the autarky programme, and the elimination of the car tax.
Long-term borrowing came from retained business profits and household profits in the banks. This money was also used by private investors and so measures were taken to ensure more of it went to the state, with banks being pressured to invest in government bonds and private construction constrained by a ban on new mortgage borrowing in autumn 1938.
More funds were made available to Berlin by taking resources from local governments. Hitler had promised to rationalize the relationship between central and local government and did so by centralizing public finance.
Off-budget IOUs helped fund rearmament and the Battle for Work.

Safe funding was enough at first. Then it failed to keep up with surging spending and the Reich increasingly had to rely on unsafe funding, with the threat of inflation appearing. An emergency measure was the New Finance Plan of March 1939, which forced the Reich’s suppliers to accept 40% of their payment in credits with promises of tax exemption, but the problem as a whole was not solved. Short-term credit had to be taken, which amounted to printing money, and the volume of money in circulation doubled in the two years before the war.

Now that I think about it, military spending isn't entirely "money sink". It stimulates the economy indirectly. Via the state owned companies the money flows to private contractors and workers, both utilizing it again, and now elsewhere in the economy.
Also rearmament was also a popular move, great many in Germany would wanted to see their country regain her rightful place as a world power as it was previously. And for that at the time proper army was needed, especially if they wanted to be taken seriously by other powers, particularly at the conference table over maps revisioning borders and such they oh so longed for.
And again I'm compelled to write about the volume of the rearmament. It seems a lot because it they had to build from almost zero. But it's extent worth only something if we compare it to other nations.
When Germany attacked France, they stood about on equal grounds, tho France had more tanks and Germany more airplanes.
When Germany stroke the Soviet Union... the latter had way, way more technical equipment, both in tanks and aircrafts they had overwhelming numbers... and this is after the German military industry started really booming. And the Soviet Union paid the price dearly, for all those equipment to have they sacrificed not just the standard of living but actually the lives of millions.

 >>/28015/
> Now that I think about it, military spending isn't entirely "money sink". It stimulates the economy indirectly.

It gives you a lot of negotiation power (or negotiation leverage) in any kind of deal. The US is obviously one of the best examples of a nation using its military spending in order to boost its economy or eliminate competition on the world stage. The Petrodollar, the Panama Canal. More recently the fight against Huawei or meddling in Egyptian politics. If you are in the stronger position (or alliance) you can save a lot of money.

 >>/28015/
> Via the state owned companies the money flows to private contractors and workers, both utilizing it again
State owned companies are paid with taxes from private contractors and workers in the first place. But in Germany that wasn't fully the case as nonexisting money paid for rearmament. And still, if the whole scheme had been used to produce tractors and the like the end product itself could have been utilized to further develop the economy, something that doesn't happen with the military unless it's used agressively.
> But it's extent worth only something if we compare it to other nations.
It also needs to be compared to Germany itself. It was mobilizing more of its own economy than other powers.

 >>/28016/
That's what Hitler did, Austria, the Sudetenland and Memel were all acquired through military intimidation in one way or another.

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 >>/28005/
>  Frankly even planned economy works just fine
worst part of planned economy it's cumbersome and it's mostly tried by failed states.

nowadays thanks to modern computers planning is easier but still cumbersome, it's just nowhere near 60's tier.  I think in future natural resources will be scarce and planned economy will play bigger part thanks to these reasons.

 >>/28014/
More on planned economy:
I disagree it can work efficiently in a different environment than the Soviet Union had.
What I already mentioned the burden what the race in the Cold War meant was way to heavy for it to compete successfully with another economic system which aim is basically generating endless wealth via increasing consumption and debt infinitely.
One great problem you mention is the calculation one. Since planned economy works on hypothetical numbers existing only on paper the feedback from the working economy should be constant and precise, so the plan could be altered accordingly. But in the atmosphere of the Soviet Union where you could have been gulaged on a whim prevented such thing happening. One didn't just simply stood up and said "I don't have the number", this could resulted in a one way ticket to Siberia. In a freer society, without the fear of being punished they could work with accurate numbers and course correct anytime.

 >>/28020/
> State owned companies are paid with taxes from private contractors and workers in the first place. 
No. As you mentioned previously the payment was done with Mefo bills.
I can rationalize it's "essence" as a crossover of getting a loan and issuing more money. In that situation they could have either got a loan to gain more capital to invest into stuff but this would resulted the state in debt (to some Jewish bank no doubt). Or they could have print more money but that would have caused the Reichsmark devaluate (which at that time they felt undesirable - maybe the fear from hyperinflation was still too strong).
So basically they made more money without devaluating it, but with the promise that it will be paid and can be exchanged to real money.
And why it worked? Maybe because if people believe in some things those really work. Or maybe because the money devaluates only when it is available in too much supply. Or too little demand because it rests on the balance of supply and demand, and as long as there is enough demands to met the supply the new money won't lose it's value. And military spending, rearmament is a great way to spend that money, there one can always create enough demand. If I start building houses I'll arrive to a point where noone wants to move in because everyone has a house, but I can always spend it on more tanks, airplanes, ships and bullets, research new tech and build new models and scrap the old (or sell it to others), or spend the material in wars. It's an endless demand.

 >>/28022/
> In a freer society, without the fear of being punished they could work with accurate numbers
In a planned economy there aren't any numbers to work with, that's the gist of the calculation problem. Some of the information needed for calculation can only be expressed in market prices, which don't exist in a planned economy.

 >>/28023/
Of course there are numbers. The number of people, the amount of food they will to eat, the number of tools they needed, the amount of necessary raw materials etc etc.

Hmm. another problem with the planning in the Soviet Union. They thought that the tovarishes in Moscow know better what and how much localities needed than the people at the site. Planning also can be decentralized or a mix of it to help cooperation between the communes/settlements, counties, regions etc.

 >>/28024/
Those numbers aren't the whole reality of what determines prices and values and any "calculation" based just on them would have distortions.

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Agrarianism
Interwar Germany was still in transition to an urbanized society. In the 1933 census there were 9 million agricultural workers, with 32.7% of the population in communities of less than 2,000 inhabitants and 56.8% in settlements of less than 20,000. Every party sans the KPD and SPD catered to the agrarian lobby, which was one of the players in Hitler’s rise to power and a significant faction within the NSDAP in the years to come.

Tooze stresses to his liberal readers that, though Nazi agrarians seem “atavistic”, “archaic” and “backwards-looking”, they had their feet firmly on the ground of the grave and real problems faced in the German countryside.
Long processes in the previous centuries of agricultural history are the backdrop to this story. Leaving their overcrowded continent, Europeans with an “insatiable urge to overcome scarcity” had conquered much of the Americas, Africa, Asia and Oceania, decimated several native populations, overseen a demographic transfer of 70 million slaves and settlers to the New World and created a global commodity economy supplying their continent, where peasant populations continued to skyrocket. Productivity leapt with technological advances. Large monocultural estates in the Third World and farmer homesteads in America, both geared towards maximum capitalistic efficiency, outcompeted self-sufficient peasant economies, including in Europe, once transportation costs cheapened. 
As a legacy of these conquests, several European states still had vast swathes of land in their colonial empires, but Germany had just been stripped of what little it had.
Liberalism, starting with the French Revolution, uprooted the old feudal order and made land into a commodity.
Urbanization and declining birthrates happened everywhere industrialization took hold.

German peasants were not the main winners of this. Their living conditions were poor: class photographs from rural elementary schools routinely captured images of row upon row of barefoot children, whose parents were too poor to afford shoes, at least for the summer months. Images of fieldwork show broken old people bent double over primitive ploughs pulled by worn-out cattle (p. 167). They were often overworked, some with over 12 hours of daily labour for six days a week for both men and women. Their income per hour was lower than urban workers; agrarians deemed this an injustice but it reflected lower rural productivity. Production methods were primitive and technology limited, with much labour still done by hand.
Birthrates, already declining in the cities since the 1870s, began to plunge in the fields after the Great War, reaching 20 per thousand in the 30s.
Urbanization reduced the rural workforce with every passing year and heightened the fertility reduction.
The food supply was not secure. As elsewhere in Europe, the lowest strata of society suffered chronic malnutrition even in times of affluence. The past century had seen many famines through the world as the global food economy was rearranged, but mass hunger and death weren’t far away in space and time, taking place in Eastern Europe through the 20s and 30s.
Food had to be imported and hostile powers could block its maritime trade routes, which is exactly what Britain did in the Great War, creating an epidemic of malnutrition blamed for 600,000 deaths. The distribution of food production favored Great Britain, France and the United States and they would rather see Germany remain just as a food importing economy.
Besides direct food imports, many inputs were of foreign origin, particularly animal feed, where maize, oilseeds and other items allowed some dairy and pig farmers to achieve high yields and profit. This was an issue for the balance of trade.

In spite of the Ministry’s best efforts, urbanization continued. It was a source of worry due to its effect on birthrates; in the Darwinist worldview where the nation’s death lay around the corner, infertility and food insecurity were things to fear. And birthrates were still falling in the countryside, as women were overworked due to the general high demand for labour in the mid 30s (with unemployment already very low) and the pressure to secure better harvests (from 1934 onwards the climate was unfavorable). In 1937 manpower shortages in the fields had to be supplemented by Labour Front draftees, soldiers, convicts and schoolchildren.

Properties were stratified according to size ownership in large estates (>100 ha), viable medium farms (10-100 ha) and poor marginal farms (<10 ha). Junkers employed conventional wage labour and supporting personnel. Medium farms in the 20-100 range employed servants and maids who received part of their pay in kind. 20 hectares was the minimum farm size for a guaranteed livelihood but estates of 10-20 ha were viable with good soil and close markets. Below 10 ha, some peasants could supplement their income with other activities but full-time labourers were overworked paupers.
Land was concentrated, with estates in excess of 500 ha representing 0,2% of the farms and 25% of the farmland. 88% of the farming population had less than the critical 20 ha threshold.
Marginal farmers would see their life improve if they had more land. One solution would be land reform, and for decades one plan for land reform had been proposed by many from centrists to the radical right: the breaking up of eastern Junker estates and settlement of East Prussia with small viable peasant farms, which would alleviate poverty, expand food production and provide a demographic bulwark against the Poles. The Weimar Republic accepted this and had a land reform program. It didn’t go far because of Junker resistance and high costs. But its more fundamental problem was arithmetic. Even if all cultivated land were equally divided among the rural population, every family would receive 13 hectares, less than the minimum viable size.
So “land hunger” wasn’t jingoistic Nazi rhetoric but a reality. As a topic it wasn’t an exclusivity to Germany, as it was a prime motivation for the conquest of the Americas and the still ongoing settlement of Russian Asia. Germany really had a ratio of rural population to land far higher than France, Britain and America.

In light of this, Nazi agrarianism sought not to set back the clock all the way to the 18th century but a rebirth of renaissance of the countryside. Their target audience was neither the most marginal farmers nor the Junkers, the latter calling them “agrarian bolshevists”, but the medium peasants. They occupied the Ministry of Food and Agriculture, organized assemblies and festivals, made peasant courts, defined law and policy –but not to the full desired extent, as their interests clashed with those of other constituencies- and formed a powerful organization, the Reichnaehrstand (RNS). Funded by a tax on every farm, it had over 20,000 employees and overwhelming economic powers, controlling 40% of the workforce and influencing the life of even the rural population. Its oversight reached even cooperatives, merchants and food industries and covered “every nook and cranny” of the countryside with an Orstbauernfuehrer in every one of the country’s 55,000 villages, and above, 500 Kreisbauernfuehrer and 19 Landesbauernfuehrer, with 3 divisions for ideology, farmyard and market issues.

Much effort was spent to propagate information and make the peasantry adopt modern farming methods.
Increasing yields and saving the balance of trade were contradicting aims but imported inputs in animal nutrition were successfully replaced without a drop in production.
Protectionism, gradually implemented since Bismarck’s time, and import quotas set up in the last Weimar years were continued and expanded.
Prices for agricultural produce were now determined by the RNS rather than the market. It hoped to direct production and increase the rural standard of living with them. Price increases in 1934 were met with widespread discontent (1934 was a crisis year), and from then on political pressure forced the RNS to keep them low. This backfired when demand rose as the economy recovered, leading to some shortages of meat and butter, not because of lack of production but because higher prices would have been necessary to stimulate production and lower demand. In 1938 higher prices would be paid to dairy suppliers but consumer prices weren’t raised, stimulating production but doing nothing with demand. There was also some subtle rationing.
The RNS administered the food supply and stocks.

An escape from land hunger was the addition of farmland to the Reich. An increment of 7-8 million ha to the existing 34 million would be enough. Thus, with a rational basis, agrarians were enthusiastic supporters of military expansionism and the Drang nach Osten, which would serve the same purpose as previous European colonialisms and, in their mold, reserve a secondary status for the conquered populations. Herbert Backe, future Minister, mentioned in his 1926 dissertation “The Russian grain economy as the basis for the people and economy of Russia” an uplifting of Russia’s farmland through ‘the infiltration of foreign ethnic elements of higher quality that will form themselves into an upper class and do battle with the mass of the population. The reservoir [for this infiltration] will be "The People without Space"’. (p.180) Walther Darré, who headed the Ministry for a long time, spoke to an audience of RNS officials in early 1936 directly of settlement all the way to the Urals: “The natural area for settlement by the German people is the territory to the east of the Reich's boundaries up to the Urals, bordered in the south by the Caucasus, Caspian Sea, Black Sea and the watershed which divides the Mediterranean basin from the Baltic and the North Sea. We will settle this space, according to the law that a superior people always has the right to conquer and to own the land of an inferior people”. (p.198)

The agrarians’ vision would be enshrined into law by the Reichserbhofgesetz, proposed in September 1933. In its first draft it created a new category of estate, the Erbhof, owned by physically able gentiles with a farmsize of 7.5-125 ha who applied in the Erbhofrolle. Erbhoefe were to be protected from the market: their sale and use as mortgage security were banned, providing both security and severe constraints, and the debt of their owners (6 – 9 billion Reichsmark) would be paid collectively through the Rentenbank Kreditansalt, which would tax all Erbhoefe. As this was harmful to those with little debt they’d be compensated with preferential treatment in the settlement of East Prussia. 
This faced severe opposition, with the Ministry of Economic Affairs (RWM) complaining that excessive protection would sap the peasants’ initiative and the Reichsbank refusing to accept the dismantling of conventional rural credit. A compromise was reached and the collective debt relief was abandoned. Though Schacht’s Reichsbank obstructed credit for Erbhoefe, courts followed a loose interpretation of the mortgage restriction (and even the restriction on sales) and the Ministry of Food and Agriculture provided grants and loans, allowing rural financing to continue normally.
Another point of contention were the new rules of inheritance, which intimately intruded on old regional customs and infuriated the peasants themselves. Undivided properties would pass down to a male heir (Anerbenrecht), as was the custom in northern Germany, but there peasants used to have the freedom to make other arrangements and often compensated siblings who didn’t receive the main property. In south and western Germany, partible inheritance was the norm and the law was received with “blank hostility”. The restrictions on female inheritance, too, were unprecedented. Once again courts were lenient and agrarians compromised, accepting shared ownership within the first generation.
The principle of undivided inheritance also drew fears of a decline in fertility.

Through its meticulous regulations and oversight of farm life the RNS created resentment from peasants. Its centralization of milk deliveries was met in September 1935 with a “milk strike” and an increase in the black market. But Tooze says the peasants weren’t fully in the right: after receiving for decades lavish protection from the state, it now had the right to demand something back from them.
The RNS did achieve an increase in rural living standards to above pre-Depression levels, higher food production and a more resilient rural economy. Tooze excuses some of its shortcomings on the difficulties of handling a society in transition.
Germany didn’t attempt as radical of a modernization of its agriculture as the Soviet Union because it postponed a full resolution to the matter, like several others, until after the impending war.

All right. I'm gonna need some time to catching up. I still wanna reply on the planned economy sidetrack, and still have to read Budget.

So planned economy:  >>/28026/
> reality
> distortions
That depends how we view prices and values. If we view them through the glasses of capitalism, where supply and demand will determine largely then sure, they will be distorted why not? But why assume that the normality is on the side of capitalism? In fact prices are distorted largely there, they related more to what people are willing to pay for an item (based on abstract and sometimes arbitrary values, for example why people pay X amount for an iCrap when the same chinkshit are sold for the low price of X/10?).
We could translate the "worth" of any item to how much energy was spent to produce that item. There, that's an objective value. Compared to that the prices we have to deal with in our lives are way out of touch with reality. In fact prices in our economy are the tools of speculators and people who want to get rich by exploiting and conning others.
But what is money? A tool to make the exchange of goods and/or services easier. Here and now however it is source of wealth and status (even money can be sold and bought, can be speculated with). In planned economy there is the potential to restore it's original purpose.
Now we are threading on the hypothetical, but ofc in planned economy prices can be arbitrary too (compared to a "true" value), or at least changed depending on the situation.

 >>/28014/
> local governments
The governments of the constituent states or governments of municipalities?

 >>/28038/
> arbitary values
> objective value
Value is, at least in part, subjective. Prices in voluntary exchanges reflect, among other things, this subjectiveness of value. A planned economy has no access to those prices and thus, insufficient information for its calculations.

 >>/28039/
Both.

subjective theory of value was debunked
source: bunkerchan

 >>/28041/
There is not just one value, there are others. There is a relative value which based on different factors, there is use value which depends on the utility of the thing which is part of it's relative value, and there is exchange value of course and others I probably didn't know about.
But every item, goods, commodity and service have something common in them (a common denominator if you will) which can be used to determine their value which independent from any perceived value - which depends on the subjective judgement of the people - they have. It's the labour behind them to produce one unit of them (well at least Marx called it labour, I would say energy since labour can be determined in joules or spent calories or whatever, basically units of energy).
Why diamond is more expensive than coal? Their rarity their utility, their percieved value will decide how much it will cost to someone. But beside that we can calculate that 1 unit of diamond is more labour intensive to produce than 1 unit of coal. Let's say I want to produce 1 cubic meter of both. I have to spend way more labour on producing this 1 cubic meter of diamond than coal (it is related to it's rarity ofc, but rarity in itself can be perceived relatively), hence their value in labour (can be also expressed in working hours, but I would still remain at spent energy) will be different. This "labour value" doesn't depend on any relative or subjective factors, hence this is an objective way of expressing value.
I think this can be understood with common sense.

Btw capitalism is a failed system. The Great Depression shows it's failure, it had to be saved everywhere by state intervention and since then it kept afloat everywhere on the world with governmental regulations. The only ongoing debate on this is how much regulations it needs.

Price correlates with labour, yes, but value is not price. The labour theory of value is disputed. It explains why more labour-intensive goods have higher prices, but not why mutually beneficial exchanges could still happen even in the absence of labour and modification of goods, culture has a major impact on demand, demand rises in the expectation of future shortages and demand for a good lowers the more someone has of that good available. The subjective theory of value explains all of these aswell as the correlation of price and labour -the cost of purchasing labour is embedded in the price, and the sale of labour itself involves subjective valuation, the worker thinks he has more to gain with the wage than with the labour time he forfeits and vice versa for his employer. Diamonds have value because their buyers think they have more to gain with the diamond (because of its beauty or whatever, not because they desire it for the labour expended on it) than with the money they have forfeited in its purchase.

 >>/28052/
I wasn't talking about prices, I was reacting what you wrote here:  >>/28041/
> Value is [...] subjective.
This, especially with the italic emphasis, implies that only one value exist. When in fact there are several, among them one which independent from human perception, resulting in an objective or "true" value.

I would write more but I really want to read today the part about Agrarianism. If you wish you can continue with the next topic or comment further on these planned economy, value sidetracks, I don't mind.

 >>/28053/
The question is wheter a planned economy can exist without over- and underproduction and stores with overstockings and shortages. It can't because of the information the planners cannot possibly obtain.

Capital
A common interpretation of the Nazi regime, long espoused by the KPD and SPD, is that it was a “dictatorship of the bosses”. This has some truth: industrialists gained more with the new order than their workers. But the NSDAP was not put in power by the industrialists, ruled in its own benefit rather than theirs and made many decisions against their will.
As mentioned, the forces behind Hitler’s rise were some nationalist politicians and agricultural and military interests, not the business class. Several industrialists funded Hitler after a meeting on February 1933, but key magnates were missing and the rest had nothing to say or discuss: Hitler just described what he was about to do, argued why it would benefit them and requested their monetary support. 
It is worth noting that IG Farben, a name now immediately associated with the regime, was a supporter of Stresemann’s diplomacy. The German industrial class endorsed internationalism and free trade and was satisfied by the Weimar Republic in this regard. The Reich would not please them with its import and raw materials restrictions, export levy and severe expansion of bureaucratic burdens.

What the regime could satisfy was their conservative internal agenda. Industrialists were anti-communist, wished to run their factories as they saw fit and despised the Weimar Republic’s welfare state and strong state unions. Hitler did not disappoint: as part of his seizure of power (Machtergreifung), communists and social democrats were wiped out of the political scene, unions were dismantled and a state of labour demobilization achieved. Bargaining power shifted towards employers and this was cemented by the national labour law of 1934. Firms were free to manage their internal affairs. The concepts of Fuehrertum and Unternehmertum (entrepreneurial leadership) blended well.
This doesn’t mean there wasn’t any programme for employees. Regional trustees of labour (Treuhaender der Arbeit) were set up to mediate workplace conflicts. The NSDAP had its own labour movement, the NSBO, but as it was too radical it got sidelined. What gained prominence was Robert Ley’s German Labour Front (DAF), a large, self-supporting organization like the RNS. It was distinct from the Labour Ministry. The DAF ran the famous Kraft durch Freude, took measures to improve working conditions and was part of the funding for programs such as what would become the VW Beetle. I’ll write of the Beetle and living standards in general later.

Wages were suppressed at their 1933 level, with any increases negotiated through the trustees. This seems like a strongly pro-business move as 1933 wages were lower than pre-Depression values, but prices, too, had lowered and the Depression wasn’t a boon for businessmen. Prices, too, were eventually suppressed, but as demand rose they grew faster than wages. Combined with the absence of foreign competition enforced by the import system, firms made healthy profits. Worker incomes also increased but not as much. 
Rather than personal consumption, the profits were mostly accumulated and reinvested. The Reich sought to direct household savings to banks and then to its own funding, while industries would fund their expansion with their own profits. Shareholders were forbidden from receiving more than 6% of the capital, leading to companies piling up massive reserves. And the Reichsbank’s oversight expanded while new legislation limited the provision of loans. Companies were thus obstructed from the banks and led to use the reserves for their investment.

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A hierarchy was set up. At the top was the Ministry of Economic Affairs (RWM), and then Reich Groups, Business Groups, Branch Groups and the firms themselves, whose participation was compulsory. The Groups were staffed by men suggested by the industry and vetted at the top. Standardized book-keeping and compulsory reports produced a lot of statistics now useful for historians. Like the RNS, guidelines and recommendations for production methods were distributed. And this bureaucracy was part of the trade system, providing staff for the import supervisory agencies and managing the export subsidy tax.
New regulations were inspired in measures taken in the Great War and ideas discussed since the 20s. But now the state was more powerful and independent than ever before. Bureaucrats no longer faced the formula “technically right but politically impossible”.
Cartelization was encouraged. It was already happening for decades, forming giants, but industries like printing were still divided among thousands of local producers. The pace of consolidation heightened and the RWM even imposed a few compulsory cartels. Cartels set prices and could pursue independent firms in court to enforce them.
Foreign investors –American, British, Dutch and Luxembourgish- could succeed if they cooperated with the state, but sending back profits was difficult.
Jewish-owned companies gradually passed to gentile hands as part of “Aryanisation”, but only in some sectors like retail, textiles and private banking Jewish presence was strong enough to mean a major change in ownership.
Synthetic production useful for autarky was expanded under state guidance. Typically funding would come from half-coerced industries, the state would block non-synthetic foreign competition, guarantee a modest rate of profit for the company involved and keep the rest of the income. Later on it’d provide funding of its own and direct more resources through the Four Year Plan. 

In banking, the “Great Banks” (Deutsche, Dresdner and Commerzbank) never fully recovered from the Depression and made profit, but not as much as other businesses.
In electricity, the market was shared (“Elektrofrieden”) between the RWE in the west and 3 state holdings. They competed with local producers, which were taken over by local NSDAP organizations. Those were in turn outmaneuvered, with the sector consolidated and the RWM given powers of oversight.
The steel sector had a number of powers. Vestag and Krupp should be familiar but five others are cited. They had different niches and political proclivities, some old guard conservatives and others fascist reformists. They fared well, Krupp reviving its military shipbuilding at the Germaniawerft (kept afloat specifically expecting a future rearmament) and Vestag landing positions in the industrial bureaucracy. Along with coal, production didn’t grow as much as one would expect for fears of overinvestment, which had previously happened in the Great War. The Reich technologically excelled at cutting-edge electrically melted steel. A curious figure is Walter Rohland, who besides an industrialist served in the 11th Panzer Regiment to have first-hand experience of what he was producing.
Textile industries were losers in the 30s, but received attention in a drive to replace American cotton with synthetic fibers. Four regional syndicates were set up and textile producers, some voluntarily and some under pressure, provided capital for IG Farben and Vereinigte Glanztofffabriken (VGF) to produce rayon.

In chemistry, IG Farben stood out. Hydrocarbons are versatile and the company was the key to sourcing more and more things out of Germany’s plentiful coal. It and its predecessors had a long-term plan in the field of coal to fuel conversion: since the 20s it used profits from explosives, fertilizer and other sectors to fund research into coal hydrogenation, betting on a future shortage of oil. The gamble failed when new fields were found in Venezuela and the USA, bringing fuel prices far below the expensive price of any advanced synthetic alternative. With all its other businesses IG Farben would have prospered under any regime, but the Nazi autarky drive gave it a way to save this specific investment in coal hydrogenation. They reached a deal: with funding from the coal industry, IG Farben would expand its Leuna plant (working since 1928) and the Reich would tax imported oil, guarantee a 5% profit and keep any further profit. 5% seemed great when the technology was a gamble, but with Germany’s oil shortage production turned out great shortages and IG Farben regretted it. Leuna only produced 350,000 tons per anuum; more plants were built and synthetic fuel came to play an important role.
In the Four Year Plan it also led the production of synthetic rubber (Buna), a more recent technology that was still experimental by the mid 30s.  

Overall Nazi rule was just a new reality German industry had to live with and it had several displeasures to quietly tolerate. But it adapted to the situation and found ways to gain handily from it.

*production turned out great profits

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anonymous delivers

 >>/28066/
In this particular post of mine here:  >>/28051/ no, my point wasn't related to planned economy, it was related to you're being full of shit when implying/saying only one value exist. I tried to say this nicer here  >>/28053/ but you didn't uderstand.

But you also mix up two things. The critique of planned economy about the "inefficient resource distribution: surplus and shortage" and the "socialist calculation debate" (quoted from Wikipee).
Whataboutism incoming:
Shortage and surplus problem also exist in market economies, the "market" just "corrects" it with changing price. But it doesn't solves the problem.
If there is less goods on the market than needed some people won't satisfy their needs because they can't no matter how high the prices will go. If there is not enough bread people will die of hunger easily. Poor people because the rich can buy it still and will buy up everything causing more shortage.
If there is more goods in the market it doesn't matter if the price goes down the goods will be wasted - not on the side of the seller, granted, but at those who buy it because they really don't need it (just buy it because it's cheap) so it won't be used efficiently. I can buy two loafs of bread but if I can eat only one in a given time the other will dry out or worse gets moldy and I have to throw it out. Or I eat double but then I just get fat.
How any of these two solves the problem of shortage and surplus? It's don't.

 >>/28074/
The shortage problem seems to be solved only by our age and place's overabundance, where no serious shortages occur at least in the part of the world where I live in and in the "West". But it is solved with wastage, we have waaayy more goods than what we need.

 >>/28074/
> If there is less goods on the market than needed some people won't satisfy their needs because they can't no matter how high the prices will go.
In the short term high prices stimulate production. In the long term our present state of abundance can be achieved, an impossibility in a planned economy.
> those who buy it because they really don't need it 
Well, with low prices production will decrease. Consumers have decreasing marginal gains and may not buy the bread at all. But if they want to buy more bread and there is bread then that's a success. That they don't consume it in a way we find proper is our judgement. 
> How any of these two solves the problem of shortage and surplus?
For one thing, they don't create the new problems of shortages and surplus introduced by price setting. Impose price controls on a normal market economy and you'll find shortages caused by a problem with that measure itself. This is well documented and understood, it happened with meat and dairy in Germany and it's happening right now in Venezuela with farmers not selling goods because legal prices are too low. It happens in market economies with price controls and planned economies are no better. They won't work just fine. In this regard playing within "capitalism's ruleset" is the wisest thing to do.

I'll be only on mobile for over a week so no more writing for now. But I'll do more rereading and take notes for what I still need to write.

 >>/28080/
Ok.

 >>/28076/
Will reply sometimes, but first...

 >>/28029/
 >>/28030/
 >>/28031/
 >>/28033/
This is straightforward too. I've two things to add.
One is about the impact of feudalism on the system of land ownership. Well it is a question basically how did it influence that?
On the Hungary back in the first half of the 19th, it became obvious that feudal land ownership is in the way of modernization, laws had to be changed so lands could be sold in order to help nobles to acquire capital in form of loans so they'll be able to modernize their farmlands, so they won't rely anymore on the low producing and ineffective robot their serfs were bound to do for them. It was also obvious that the serfdom had to be abolished and they had to be made into owners of their lands they worked. But this led to a debate, those lands were owned by the nobles and they had to be compensated. Or not, this was one point but if they were compensated how should it happen, the serfs (we might call them tenants, I think in England that was their name) should pay it in time, or the state would pay instead.
It was planned to do both but the failure of the revolution and war of independence in 1849 postponed the process. Then four year later Franz Joseph made order to abolish serfdom.
There were several problems (liek 60% of the serf were landless, or there were serfs with different legal status that allowed them to be exploited) which made the thing as a whole unsettled and left many without securing their livelihood. The situation left unresolved way after this, and when the soc-dems took over in 1918 they had to do something about it, they planned and initiated division and distribution of lands (probably the only good thing they did) but they give too few people and too little land, less than the viable size - just as you wrote about the German land division plans.

The other thing is relation of holding and childbirth rate. In the 19th it became customary on quite a few region of Hungary to have only one child to preserve the owned land intact. If there is only one kid, it won't be devided, it will be still a viable size. Ofc this had negative effect on population growth.
I think it is debated where this custom originates from one version is that protestant Germans are the ones to blame.

 >>/28067/
Read the whole thing on the weekend just forgot to reply.
Yeah, the NSDAP had some radical views which they had to drop so the industrial bigwigs could be more flexible and accept them at the helm of the country, basically both side had to compromise.

 >>/28081/
> The other thing is relation of holding and childbirth rate. In the 19th it became customary on quite a few region of Hungary to have only one child to preserve the owned land intact. 
In Türkiye it's customary to divide all the lands since rural childbirth rate is high it's quite a problem it causes more immigration to cities more than it supposed to be. Also especially in east where the kurds live, de facto feudalism is still intact but you can't touch them because you'd call fascist. There are still occasional stories about some head of kurdish clan forcibly take his adult daughter and force to marry someone back because she escaped to big cities to study in university or work.

This thread is too hard for me. I have never read anything about these. 
but it made me interested in some topics. Thanks op.

 >>/28158/
You can ask questions if you wish or point out parts where you need more clarification, or background information. I think both OP and me and basically any Bernd here would gladly give an answer.

The thing is with history that one can always go more deeper and find more details, and all those details matter, they all put a little to the events and all has a share in the result.
It's surprising how much of an oversimplification we learn in school.

 >>/28160/
> gladly give an answer.
That is if we can.

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Living standards
It’s common to think of early 20th century Germany as an affluent country with a strong economy that carried it through two world wars. In reality, it had mediocre standards of living and a weak economy, and its economic limitations were a central fact in the 30s and 40s as both an incentive and an obstruction to the decisions taken by Hitler’s regime. Ultimately this weakness was the reason it lost the war.
In common with the remainder of Europe, Germany was behind America. Though technologically both sides of the Atlantic were even, Europe lagged behind in mass manufacturing. America had a 2:1 productivity advantage on manufacturing in general and 4:1 to 5:1 in automobiles and radios. This was made possible by the scale of American markets and resources and symbolized by Ford.
Within Europe, Germany was still behind other economies, particularly Britain, which enjoyed a higher GDP per capita, a prosperous middle class and wealthier workers. German and British industries were evenly matched; what dragged down Germany was its large and outdated agricultural sector and small businesses in crafts and services. Wilhelmine Germany was catching up but that stopped in the Weimar era.

This economic inferiority translated to lower standards of living. In 1936, with full employment, blue-collar households could expect to earn 2,700 Reichsmarks a year, while Americans enjoyed living conditions that would take 5,380 to 6,055 Reichsmarks to replicate in Germany. Individual hourly earnings were measured not in Reichsmarks but in Pfennigs. Diets were monotonous (bread and jam, potatoes, cabbage and pork, washed down with water and small amounts of milk and beer) and food expensive; combined with drinks and tobacco, it could take up as much as 50% of household budgets. With another 12% on rent and 5% on utility bills, a four-person household was left with 67 Reichsmarks per month to spend on transport, education, healthcare, insurance and everything else. Common expenses like buying or resoling shoes took at least a tenth of that value, and buying a new suit could take nearly all of it.
Housing was particularly difficult. Blue-collar workers in Detroit took for granted a four and a half-room apartment with running water and separate kitchen and toilet, but in Germany that would cost 1,380 Reichsmarks a year in rent. More than one working-class family often shared the same rooms, and many lived in one room apartments, some even in attics and cellars. And this was before the crisis, which created squatter camps with tens of thousands of people outside major cities. This housing shortage was in large part the product of Weimar policy: in the immediate postwar years rent controls were imposed to prevent evictions, but they made the construction of further housing unprofitable. To remedy this a tax was levied on homeowners and used to fund public construction, but the new buildings were too expensive for working class families. This effort collapsed during the Great Depression.

In light of this, Hitler did want to bring material prosperity, to all social classes and as a central objective of his career. But he did not believe it could be achieved in peace. He rejected liberal and capitalistic notions of progress through technology and exports, as that would just lead to international competition, and instead focused on the acquisition of living space and the settling of scores with the Versailles powers. Given West Germany’s later miracle this may seem outlandish, yet in the interwar context he had plenty of reasons to be pessimistic. But prior to war, the Reich could still take small measures to improve the standard of living.

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One effort, following conventional notions of progress, rationalization and “productivism”, was an investment into workforce qualification and human capital at the same time as industries, driven by the same ideas, were also heavily investing in modernization. Apprenticeships and on-the-job training were lavishly subsidized and youths encouraged to acquire skills. This paid off well: the number of male school leavers joining the workforce as unqualified labourers dropped from 200,000 in 1934 to 30,000 in 1939. Though blue-collar workers didn’t rise to the middle class, they took on more complex tasks and a “deproletarianization” took place. This achievement outlasted the war and benefitted West Germany.
Measures were taken in the field of labour relations, which I’ve spoken of before, and the DAF had its programs, but the book doesn’t go into detail on those.
And the state sought to make some consumer goods more accessible. As industries hadn’t yet embraced Fordist economies of scale the Reich’s willpower would push for their implementation and cement the production of “Volksprodukte” at a low cost. Most Volksprodukte failed because raw materials were too expensive and German industry wasn’t advanced enough to provide them at a price compatible with the population’s low purchasing power. Examples are given in three fields: radios, housing and cars.

Radios were expensive and had limited penetration. At the Propaganda Ministry’s initiative and the cooperation of a cartel of manufacturers, new models were produced with cheaper receivers, techniques of mass production and part-payment deals, the Volksempfaenger (VE) 301 of 1933 and the Deutscher Kleinempfaenger (DKE) of 1939. Prices, previously over 100 Reichsmarks, shrank to 76 in 1933, 59 in 1937 and 35 in 1939. Half of households had a radio in 1938 as opposed to a quarter in 1933. Though internal and international inequalities remained the VE 301 and DKE were very successful. They were, however, inferior in quality to American models of the same price.
Weimar public construction projects were not resurrected, but private housing was subsidized. A settlement programme built homesteads in the hinterland, but they were of little effect due to the buildings’ poor quality. The Volksprodukte approach was taken in 1935 by the Labour Ministry in the form of Volkswohnungen, small working class apartments with central heating, proper bathrooms and hot running water. They were to be made accessible through economies of scale and government subsidy. However, only 5% of building components could be mass produced and apartments of the required size and infrastructure were still expensive to build. Production was far below targets and rents were much higher than what lower class families were willing to pay. Later in 1938, new mortgage borrowing was banned as part of budgetary efforts to keep bank credit with the state, intensifying the housing problem.

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Cars were a luxury object in interwar Germany and Hitler, a motor enthusiast, wanted to change that. By lifting the car tax and building Autobahnen he made a great contribution, but taxes on imported fuel had the opposite effect. The main effort has left a legacy on the streets of your city today: the Volkswagen Beetle. Its story began on a motor show in March 1934, when Hitler announced his desire for a people’s car priced at less than 1,000 Reichsmarks. 
Daimler-Benz and Auto Union funded a research project led by Porsche but they were skeptical that the low price tag could be achieved, as the cheapest car –Opel’s P4- was worth 1,450 Reichsmarks and 1,200 was considered the lowest possible price. A massive new factory was to be built to lower the price through economies of scale. By 1937 they gave up and the project was taken by the DAF as a not-for-profit social program. Funding was to come through a subscriptions system: prospective buyers made weekly deposits on a DAF account and received no interest, but were entitled to a VW after depositing 750 Reichsmarks. 340,000 savers signed the contract by the end of the war, of which only 5% were the desired demographic of blue-collar workers. The war disrupted the program and no private VWs were delivered. But it is likely it would have flopped without it: the production required to unleash sufficient economies of scale and achieve the desired price was far beyond what the entire German automobile industry produced, and any smaller production would force the DAF to sell the cars at a major loss.

By 1939 inflationary pressure from uncontrolled spending and the focusing of scarce imports away on the military-industrial complex led to a decline in the quality of consumer goods, though their price was kept low through administrative means. Children’s clothing now lasted months instead of years. But curiously, Tooze explains that “guns vs. butter” is a false dichotomy in this case: guns were a form of butter. Rearmament contributed to national happiness much like consumer goods would be expected to do. In any case, it would be a mistake to assume that the remilitarization of German society was something imposed from the top down, with the majority of Germans preferring butter to guns. For many millions, the reconstruction of the Wehrmacht was clearly the most successful aspect of the regime's domestic policy and the collective mass-consumption of weaponry was a more than sufficient substitute for private affluence. (p.659)

I'm writing this on Word so I can make it into a .pdf later. I've added some missing information, fixed some typos and a glaring paragraph misplacement.

 >>/28081/
The main rural obstacle to capitalist development in 19th century Brazil was slavery. Pedro II was an abolitionist but like to do things in a slow, non-confrontational way, so he planned to have the state compensate owners. But as the Paraguayan War crippled Imperial finances he stalled the issue. Then pressure from abolitionist activists got too strong and his daughter made emancipation by decree in 1888 without providing the intended compensation, leading owners to drop support for him. This was one of the reasons the monarchy fell in the following year. As a side effect of the short gap between emancipation and dethroning blacks have had sympathies for the monarchy ever since.

 >>/28367/
Ofc I'm gonna read it but first:
Wtf Denmark!!! I see Tuborg and Lego make stronk economy.

 >>/28367/
In Germany the socialist/communist movement was also very strong. It wasn't a coincidence. The situation of the workers and a wide stratum of peasantry was Eastern Europe tier, but that's true for most of the continent.
At that point "we" just left behind the "blessings" of the industrial revolution's capitalistic practices and the leading economic agents still have to give concessions so wealth could trickle down. More technological development is ahead with educational requirements, more breakthroughs on the field of energy (no nuke power yet) or medicine (they barely reached penicillin, vaccination still wore it's child shoes) or whatever. WWI was a huge strain and the great depression hit hard. Relative peace was also needed and that sharp "rivalry" what the Cold War meant so "we" arrive to this stage of wealth "we" have now. It was a transitional period.
I'll write more later but have things to do.

 >>/28408/
I don't think standard of living is a good measurement for economic competitiveness - which can support a war economy -, in that era it's for sure. Even tho large chunk of German populace lived in relative poverty they still earned several times of subsistence and it's enough for a human bean. In excessive abundance people tend to spend their surplus and time on things that are or potentially are harmful for their body, mind and moral anyway (see our day and age). What's more important is the productivity which Germany was on par with France and Britain. What sent them down the chute during the war was the fact that it was dwarfed by both the US's and the SU's productivity. I think the Germans underestimated them by large. And the SU: they could churn out waste amount of arms without any actual standard of living and that was mattered in the end and not that their citizen comrades had to eat their own kids during the 30's... People can live without comfort and make their community do great things.
That occupational changes table is kinda impressive (despite the fact that public service shows the biggest change), they really changed things whatever they did. However in this case too I would much like to see similar charts of other powers for comparison.

 >>/28408/
It was the new "Fordist" phase of capitalism with a new consensus among economists and similar policies applied through different countries, like the New Deal. Then it met its own problems in the 70s and had to reform.
 >>/28411/
> What sent them down the chute during the war was the fact that it was dwarfed by both the US's and the SU's productivity. I think the Germans underestimated them by large
The Soviet Union was underestimated and that cost Germany dearly. The USA wasn't, though, Hitler always knew of its advantages. In 1939 he fully understood Germany was outproduced not just by America but also France and Britain. Yet as he had begun his all-out military buildup earlier he had, for the moment, a parity on land and in the air. Thus he gambled on an immediate war when he still had a chance. This bet was extremely risky but he was willing to take it because in his worldview anything less than a victorious war would have apocalyptic results. Tooze devotes much of the 9th chapter to laying out the geopolitical panorama of 1939 and what fueled Hitler's decision, I'll write of it later.

> And the SU: they could churn out waste amount of arms without any actual standard of living and that was mattered in the end and not that their citizen comrades had to eat their own kids during the 30's...
He mentions that this is how the Soviet war machine absorbed the loss of the country's industrial heartland aswell as brutal losses and kept churning out huge armies on the field: in 1942-43 Soviet mobilization was so high it could only be sustained for those two years and hundreds of thousands or even millions starved. Yet it was precisely this time window that secured Stalin's victory.

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Rearmament
Military buildup was, from 1933, the founding stone of Hitler’s project, around which other topics would be organized and aims could be achieved. Domestically, it was a popular initiative and the spine of economic recovery. Internationally, at the cost of losing America’s implicit security guarantee provided by the Atlanticist strategy Germany could return to great power status, revise its borders, solve the problem of land hunger, acquire means of sustenance (which would go a long way to save the balance of payments) and settle debt and other questions.

In 1932 the German aircraft industry was tiny, with 3,200 employees and a yearly production of less than a hundred planes. Under the regime’s initiative an entire productive complex was essentially built from scratch. Industrialists were reluctant to invest as they’d have to rely on an unpredictable flow of government orders and the sector became overcrowded; Vestag even refused to buy Junkers. Thus the Reich was the ultimate source of funding and guaranteed a lion’s share of raw material inputs and foreign exchange.  Aeronautics companies catered entirely to its needs, unlike ship-, gun- and tank-makers who had some civilian production. The Reich, too, directed the whole process. 
But despite this dependence and command of the state entrepreneurial initiative and competition were fierce and harnessed to achieve technological advancement. This allowed the Reich to struggle, not with absolute success, against the huge challenges of aeronautics in the 30s and 40s: technological leaps from biplanes to jet fighters and the uncertainty about how the war in the air would be fought. 

A Ministry of Aviation (RLM) was created and served as an intermediary between businessmen in the autarchic sector and political decision-makers. It mediated funding through the Aerobank. A large, specialized new workforce was trained.
Giants of aviation arose, of which the crown jewel, Junkers, was already among the largest pre-1933 producers. Its head, Hugo Junkers, is claimed to have been a socialist and a pacifist but Tooze states he was a nationalist in favor of rearmament. In any case, Goering and Milch were determined to take over. He was detained on charges of treason and promptly signed away his firm. Such direct coercion, however, was not the norm in the regime’s relationship with industry. The companies specialized by aircraft type: Junkers, Dornier and Heinkel on bombers and Messerschmitt on fighters. Others like Arado provided parts.
As a result, by the turn of the decade this industry employed at least a quarter of a million people and was capable of turning out every year more than 10,000 of the most sophisticated combat aircraft in the world. (p.125)

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Rearmament had its costs on the balance of trade, the available raw materials and the funding. For paying armaments producers the official military budget was expanded but the main instrument were Mefo bills, off-budget IOUs like those used in the Battle for Work. Yet by spring 1938 the Reichsbank was worried about the uncontrolled growth of government spending and no more bills were issued. Instead of putting a damper on spending, the Reich simply used short-term debt, an unsafe form of funding, and the growth continued unabated while the money supply was now dangerously increasing (see Budgets). On foreign currency and material inputs, too, a ceiling was being hit by the end of the decade.
Together with those economic limitations, the expected time of war, the strength and position of other great powers and the decisions taken by the leadership in response to the previous factors determined the pace of rearmament. In general terms there was an initial buildup in 1933-35, a more intense phase with a shorter time target in 1935-36, stagnation due to economic limitations in 1937, recovery with an even shorter objective in 1938 and another crash in 1939.

The initial phase saw the definition of conscription and a remilitarized Rhineland as goals and a program of 35 billion Reichsmarks to be spent over 8 years with 4,4 billion per anuum, amounting to 5-10% of the GDP spent on defense, already a high value. The air force would grow to 2,000 aircraft by 1935, starting with production of existing designs. The army would have a peacetime strength of 21 and wartime strength of 63 by the end of 1937 and offensive striking capacity by 1941. The navy, though of lesser priority envisioned a large fleet with submarines, battleships and aircraft carriers to be ready only in 1949.

Expansion targets grew more ambitious in 1935 and by 1936 spending exceeded the initially planned value; the army alone expected to spend 9 billion Reichsmarks a year for 3 years. The air force was to have 200 squadrons by sometime around 1937 and found an adequate fighter in the Me 109. The army would be ready by 1940 and have some offensive capacity even under a defensive posture. Peacetime and wartime strengths would be 43 and 102 divisions, respectively. Of these, there’d be 3 Panzer, 4 motorized and 3 Leichte divisions, forming a substantial mobile force, but horses were still dominant and the majority of the army was not and never came to be mechanized, reflecting the fact that Germany itself was only partially modernized. The Heer was not arming itself specifically for a mobile lightning war years in advance.

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Simultaneously, the Four Year Plan would lower imports through an increase in iron ore and synthetic fuel and rubber production by 1940. Iron ore was contentious: in 1937 there were still unused low grade deposits within Germany. Industrialists, who previously preferred to import high grade Scandinavian ore, were now willing to gradually assimilate the deposits into the existing plants. Yet Goering and Paul Pleiger (of the Four Year Plan’s staff) wished to build new steel foundries, dismissing fears of excessive capacity with the expectation that demand wouldn’t stop growing. In the end Goering’s surveillance and police apparatus won him the power struggle and the Reischwerke Hermann Goering was formed. It was hoped to give the state a dominant stake in the steel industry but became just another company among several.
France and Britain began military expansion at the same period.

This accelerated rhythm brought to fore the question of what was to be done with the Wehrmacht. To produce everything by 1940 factories would have to be built or retooled. Once rearmament ended, the transition to civilian production would be slow, produce unemployment (though Tooze doesn’t mention that with the high demand for labor that wasn’t that much of a problem) and a transition back to military production in case of a war would also be slow. To avoid such troubles it now made the most sense to put the armed forces to use once they were ready.

This armaments drive demanded ever greater resources, and though the Four Year Plan would help with that in a few years, initially it was also a burden. In 1937 the scarcity of steel log jammed all of rearmament: as the Wehrmacht’s steel rations stagnated, so did armaments production.
 In response, steel mills raised production by using all available capacity, labour, scrap and more ore imports, while the Anschluss and the lull in rearmament relieved the foreign exchange situation. This allowed a new phase in early 1938. Now the time horizon was set for April 1939 and war was expected to happen soon. Stocks of ammunition were to be built. Todt was charged with building the Westwall; as he cared about results but not finance production involved a lot of overpricing and inefficiently spent money. The Luftwaffe, having found its bomber workhorse in the Ju 88, ordered 7,000 of them.
More raw materials were allocated, with over 40% of available steel going to the military. Defense spending could, if plans went through, exceed 20% of national income and relied on unsafe funding. No other capitalist economy reached this level of mobilization in peacetime and Germany’s was feeling the strain.

In late 1938-early ’39 even more ambitious plans were laid. The Luftwaffe wanted a fleet of staggering 21,750 aircraft in four years, far more than its historical peak strength of <5,000. The Kriegsmarine received first priority from January to September and wanted 797 vessels by 1948. The army would receive heavy tanks and artillery. Armaments production in general would triple.
Such aims fell flat. With a general feeling of uncertainty the government found it hard to get credit and resorted to emergency measures, even covering some of its deficit by printing banknotes. The gold standard was formally abandoned. On the balance of trade, exports were on a downwards trend. There was no choice: the Wehrmacht’s steel quotas were reduced. Once again armaments production stagnated through 1939.

Thanks for the writing, it was interesting to read it.

 >>/28414/
 >>/28415/
 >>/28416/
Those sound very ambitious plans. They were both idealistic and border megalomaniac, who - from our viewpoint - stepped aside reality. However...
> Reichsbank was worried
...this counts for a lot. I mean worrying. Just the emotional state of the leading economic figures can change how the economy react to things. If they keep calm it's easily can be smooth sail but if they start to panic it's gonna get a bumpy ride. So economy can run on thin air and be all right but if Bloomberg says crypto is a sham it crashes buttcoin.

I remember something from the fascist catechism which goes along the line of this:
"your rifle isn't for rusting in peace but for you to grip it in a war"
So ofc war machines were to build so they could make war with them, but all the thing was written in this thread makes me wonder would Germany have been better without rearmament - or was it the only way forward since war was inevitable - or was it?
Si vis pacem para bellum, the Germans also knew this and there were at least one power who pushed armament with all the power they could, and it was the Soviet Union. The Germans knew about it, well according to Suvorov at least, Guderian himself visited a Soviet train factory which produced tanks on the side in huge numbers. Also the best defence is offense anyway.
So I guess what I'm trying to say is could be the German rearmament justified (which isn't a reasoning based on our knowledge but of theirs)? Or something like this.

 >>/28501/
We know the historical regime did have bellicose intention. What's worth pondering is the extent of rearmament in a leadership with no such intentions. There are a number of reasons for why whichever government took over in 1933 could build up the military: global trade was disorganized and America was isolationistic, making it hard to export and denying the geopolitical benefits of Atlanticism. 
But in 1936 the situation had changed: trade was recovering and America was returning to the world stage and rebuilding a multilateral foreign policy. At the time Goerdeler wrote a memorandum pointing this and suggesting Germany should devaluate the Reichsmark, dismantle the cumbersome bureaucratic apparatus that would become redundant with devaluation, slow down rearmament, seek a détente with the Western powers and make concessions by liberalizing its internal policies against Jews and so on. Tooze claims the last point wouldn't even be necessary as the West was in appeasement mood and Germany in a positive international standing after the economic recovery, the Olympics and the world's eyes focusing on Italy's war against Ethiopia. Later in 1938 world trade declined again but the feasibility of Atlanticism was nonetheless recovering.
So perhaps another government could have rearmed early on  and then gradually improved relations with the West while moving to a civilian focus.

 >>/28483/
> So economy can run on thin air and be all right
Not forever.

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And now, a look at some important figures and organizations of the period.

The Strasserist economic position on two things is mentioned: they were enthusiastic proposers of work creation and defended devaluation. Initially devaluation was a radical proposal but it was later endorsed by conservatives as the less bureaucratic alternative to the export subsidy/import rationing system.

Colonel Thomas was the Wehrmacht's chief economic expert, working first as chief of staff in the army's procurement office (Heereswaffenamt) and later within OKW. He worried about conserving foreign exchange and the export industry, not for civilian purposes but to secure resources for rearmament. For this he endorsed greater bureaucratic controls including Schacht's import rationing system, but later did not support Schacht when he was falling from grace. In 1938 he opposed invading Czechoslovakia. During the war he defended the export industry's allocation of resources.

Wilhelm Keppler was Hitler's longtime aide on economic affairs, bringing to him industrialists. His nephew oversaw daily operations in Brabag, the organization which brought together the coal industry's funds to finance the coal hydrogenation program. Keppler was chairman of its supervisory board. He was also involved in the synthetic textiles program and the Four Year Plan's raw materials staff.

Schwerin von Krosigk was head of the Reichsfinanzministerium (RFM). Though not as important as the Reichsbank and RWM, it had its power. Von Krosigk, already in his position on Hitler's seizure of power favored orthodox policies and was kept despite opposing the Battle for Work. He defended fiscal conservatism, to little effect, and was one of the opponents of war in 1938.

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Hjalmar Schacht is, Hitler aside, the protagonist of the book's early chapters. In the Weimar era he was a political liberal squarely within Stresemann's camp and worked at the helm of the Reichsbank and as one of Germany's reparation negotiators until his replacement by Hans Luther in spring 1930. At about the same time he had grown disappointed with the Young Plan, disillusioned with Atlanticist diplomacy and hoped for a more agressive foreign policy and debt negotiation. He aligned with the radical right but didn't overtly criticize the Bruening government in hope of getting a cabinet position until 1931, when unemployment was massive and banks were collapsing. He appeared alongside Hitler at a nationalist rally in Bad Harzburg. He was now in Hitler's camp and took part in his February 1933 meeting with industrial magnates. With Hitler in power he naturally returned to the Reichsbank's presidency. 
From this position he wielded immense power. He embraced unorthodox economic solutions, earning him the moniker of "dark wizard", though not work creation, a point he had to concede to Hitler. He took part in debt negotiations with the Western powers and was the architect of Mefo bills and the Reichsbank's final import control system. Its establishment required him to outmaneuver Kurt Schmitt, head of the RWM, and Hans Posse, senior civil servant at that Ministry, who had an alternative "Krogmann plan" with a pseudo-market mechanism for managing import rations. With Thomas and Keppler as intermediaries, Schacht spoke to Hitler at a music festival in Bayreuth, 1934, and won his support by promising resources for rearmament. Tooze then recounts:
Encountering Secretary of State Posse for the first timein his new offices, Schacht asked him: 'Are you interested in music?' To which Posse innocently replied: 'Yes, very.' Schacht's retort was typically sarcastic: 'I'm not at all musical, but I was in Bayreuth.' (p.85)

Schmitt, a moderate, couldn't stand the Reich's 1934 crisis. Prior to the Night of the Long Knives he even feared a coup by the SA against him, as he was hated in National Socialism's left wing. He couldn't even physically bear the pressure:
By the early summer, Schmitt's health was collapsing under the strain. The end came on 28 June during a routine after-dinner speech to an audience of Berlin exporters. The Minister began by setting out the extremely serious situation facing the German economy and asked: 'What is to be done?' Before he could answer his own question, the blood drained from his face and he collapsed in mid-sentence. The water from his glass dribbled across the pages of his speech. (p.71)
From 1934 to 1937, Schacht succeeded him as Acting Minister (not permanent, as the Reichsbank was meant to be independent). With both the Reichsbank and the Reichswirschaftministerium (RWM), he accumulated immense power. The RWM was at the top of the group hierarchy of firms, encouraged (or forced) cartel formation, regulated prices, negotiated trade deals and so on. 
Together, the Reichsbank, RWM and RFM became a pro-business bloc within the regime.
Schacht's support of rearmament came back to bite him. Already in 1936 he became Keppler's enemy by opposing his plan to mine low-grade German iron ore deposits. By 1938 he opposed the intense rate of rearmament because of its overwhelming pressure on the system he had carefully built. He fell to the sidelines and lost both of his positions, which by 1939 were under Walther Funk, loyal to Hitler but not as brilliant.
Tooze characterizes Schacht as a man of action but also an opportunist. He sometimes slips his opinion on Schacht's personality, such as 
As Schacht put it with characteristic charm: 'One can sell far less to coolies .. . than one can to highly qualified . .. factory workers.' (p.89, on Germany's trading partners in South America and the Balkans).

Done read. You can continue if you have more.

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The prewar years
1933
It has been said that Hitler did not have to take critical decisions until 1936, but from his very first days in office key choices were already taken and he had a general idea of the course that was to be taken. To carry them out the immediate seizure of power and Enabling Act were followed by a gradual sidelining of other forces besides the NSDAP which still had influence within the cabinet. Conservative resistance to the Battle for Work was outmaneuvered by the appointment of Fritz Reinhardt, party member, to a position within the RFM, though von Krosigk remained at its helm. Schacht, who opposed work creation but conceded the point to Hitler, took over from Hans Luther (together with Bruening, the man responsible for late Weimar austerity) at the Reichsbank. Hugenberg of the DNVP lost his positions on the RWM and Agriculture after, while on a diplomatic delegation, he did manage to embarrass the rest of the German delegation with an unscripted outburst in which he demanded not only the return of Germany's colonies, but also a free hand for expansion towards the east. (p.53) But within the NSDAP factions more radical or more conservative than the mainstream remained.
The DAF and RNS were set up, the latter building up stocks of grain after a bountiful harvest. Large funds were allocated to work creation, which continued to be the central theme in public media through the next year despite no more funds being assigned henceforth. Rearmament began with a time horizon of at least 8 years.
Abroad, the dollar devalued, grim news for the balance of trade. Schacht took an aggressive economic diplomacy with threats of a moratorium, though some level of payments still took place.

1934-5
This biennium saw the regime face and overcome at great cost its largest prewar crisis. At its root was the problem of the balance of trade. Exports were low because of the Reichsmark’s high value and widespread protectionism. Jewish emigration made the problem worse. No decisive solutions had been found, the balance was in the red and foreign exchange reserves were burned out to almost nothing, to the point that by June 1934 importers were receiving foreign currency not on a monthly but on a day-to-day basis.

Much was attempted to correct the balance of trade. Schacht’s aggressive diplomacy continued and paid off: trade with America, with whom Germany already had a deficit anyways, began its decline, while Britain got a favorable trade deal. Dawes and Young plan loans were still being paid, though only partially.
The export subsidy scheme at foreign creditors’ expense was set up but proved insufficient after several months. Under the Haavara Agreement the foreign exchange issue with Jewish emigration was alleviated. The RWM wanted to increase demand by lowering tax rates (such as the levies paid to the DAF and others) and the RFM wanted fiscal discipline but neither were successful. The main measure of the year was the institutionalization of import rationing, as seen in Trade. Coupled with it was an even greater restriction of imports and a  funneling of available foreign exchange to the needs of rearmament. 
Creating a whole bureaucracy to manage imports was already considered a desperate measure by Schacht. Even then it wasn’t enough: at first importers, now squeezed even more, resorted to stocks of raw materials, but soon those were running out. Thus in 1935 the industry-wide tax to subsidy exports was made, also in a spirit of emergency. Coupled with a more favorable global environment, this allowed exports to recover and thus sustain a bare minimum level of imports.

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But it took time to solve the crisis. In the meantime, 1934 was a difficult year. Millions were still unemployed. The supply of consumer goods was uncertain. The harvest was awful, but stocks from the previous year covered that; nonetheless, the RNS fixed higher food prices. The Gestapo registered a gloomy and apathetic mood in the public with minor expressions of dissent appearing. Goebbels ran a campaign against “rubbishers and critics” but it proved counterproductive.
This reflected on the power struggle within the regime. Conservatives were dissatisfied while leftist elements demanded a more populist direction and criticized the RWM. Internal tensions burst out in the Night of the Long Knives, through which the main wing of the party cemented its power.

1936-37
Hitler now had an orderly house: unemployment was low, the economy was booming and there was little dissent. Compared to the Soviet purges and Japanese and Italian warmongering, Germany had a positive international image and this was boosted by the Olympics. International trade recovered and Western powers tried to restore international cooperation. 
A memorandum by Carl Goerdeler expounded on an alternative path Germany could now take, and a Reichsbank paper shed more light on some of its proposals. It would now be possible to devaluate the Reichsmark. On the short term this would produce unemployment, but the byzantine trade bureaucracy would become unnecessary and ill will over the subsidies would end. Upon recovery German goods could compete on equal terms on the world market. A devaluation, however, would require fiscal discipline, ruling out an acceleration of the pace of rearmament. Now in line with other powers, Germany could, at the cost of concessions on matters such as Jews, the Church and the rule of law, reap the fruits of closer relations with the West and even usher a new age of international cooperation. 
Tooze argues even the concessions would be unnecessary because of appeasement. A related course was followed by France, which devalued.

Instead, Hitler chose to double down on his present course, for the same reasons he had chosen to take it in the first place. Compromise was impossible and Germany must be ready for a war around 1940. The Rhineland was remilitarized. The Wehrmacht drafted more ambitious expansion plans and resources would be secured through the Four Year Plan. With its own bureaucracy and funding, it’d increase the production of iron, synthetic fuel and the new technology of synthetic rubber. Goering was placed in charge, and this is when he gets relevant in the book. Interestingly enough, until then he had a reputation as a conservative, pro-business figure and was resented by populists.
The first faults appeared between militarists and pro-business elements who feared the economic effects of rearming too fast. Schacht began to lose favor. 
Though the Four Year Plan would replace imports that would still take time and the Wehrmacht demanded more and more foreign exchange in the meantime. In the metallurgic industry, a crisis in steel supply was imminent, so production for the domestic market was reduced in November. This would produce inflation, so prices were suppressed and a steel rationing system created in the following months. The industry clashed and lost to Goering on expanding processing capacity for iron ore. 
Imports were still very hard to come by  and the Wehrmacht received a smaller ration than it wanted. Lacking resources, armaments output stagnated. The military buildup had hit a wall.
In November a more immediate solution to steel scarcity was found in the decision to maximize the use of existing capacity. Goering began to conscript private holdings of foreign assets as a non-renewable source of foreign exchange.

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1938
Senior military leaders met with Hitler in November 1937 and he set the tone for the following year. Germany had to act prior to 1943-45, when it’d lose its advantage in the arms race. More concretely, it had to make a move on Czechoslovakia immediately.
At home, a “second seizure of power” took place. The Defense Minister and CiC of the Army were evicted after scandals and OKW created to further subordinate the military. Von Ribbentrop assumed the Foreign Ministry. Schacht lost the RWM, which was then staffed by politically reliable men close to Goering; senior civil servants called them a “council of workers and soldiers” in reference to the revolutions of 1918-19.

Prior to taking on the Czechs, the Anschluss took place. Austria suffered from the same balance of trade problems as Germany and did not provide long-term relief to its economic woes, but its 401,000 unemployed joined the workforce and its national bank provided 345 million Reichsmarks in gold and foreign currency. This allowed Germany to import a lot more and run a deficit, but only temporarily as that was a one-off source. Geopolitically, the Anschluss encircled Czechoslovakia and projected German influence into the Balkans.
With more imports the Wehrmacht’s steel hunger was satisfied and once again rearmament accelerated.

Already after the Anschluss there was mobilization fear of war in Prague, though there was no intention to make a move that early; Germany’s inaction then created the false impression that it had backed down. Britain and France stood by the Czechoslovaks, leading Hitler to conclude a war in the west would be necessary before attacking the Soviet Union. Disappointingly, despite his vision of achieving a neutral Britain, its hostility was now a given. America had its eyes on Europe and FDR was determined to overcome internal isolationist pressure to provide weapons to the French and British. 
And those two had now set their military buildup in full gear. They had overwhelming naval superiority that only increased, not decreased through the 30s, parity the ground and inferiority in the air (having started its aerial buildup late, Germany was technologically ahead and could boast of a sizeable air fleet), but even that wouldn’t last long. The Soviet Union, too, could not be left out.

One reason for appeasement is this dynamic of the arms race: the allies were buying time and stalling Hitler so their superiority in the economic field could be materialized into the military.

After the May crisis the time horizon was shortened to a war already in early 1939 and, if needed, force would be used against Czechoslovakia even earlier. 
Ever higher military buildup was putting a strain on the economy.
At this year unemployment was nearing zero. As mentioned in Inflation, the continuation of the economic boom meant there was a repressed threat of inflation. It was controlled by suppressing prices, but that in turn prevented the reallocation of workers to the most important sectors, which had to be addressed by bureaucratically assigning workers and that did not proceed smoothly.
Mefo bills ended in this year, and uncontrolled spending now relied on unsafe funding. This, too, was an inflationary threat.
Railways were falling apart.

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After a few months passed Hitler pressed the Sudetenland issue and was willing to solve it with an invasion. France and Britain would not have backed down in this case, and the world was on the brink of war. Around Hitler a broad array of forces formed a coalition opposed to war on military, geopolitical and economic grounds. It included even Goering and Mussolini. Officers gathered around Franz Halder and planned a coup.
Ludwig Beck wrote a memorandum with a correct strategic assessment –the Western coalition had overwhelming economic superiority and would stall and drag the war to make use of it- and an incorrect operational one –France would invade the Westwall while the bulk of the Wehrmacht was in Bohemia; this, of course, was refuted by his previous point. Von Krosigk of the RFM noted that public finances were already overburdened and under “war and inflation psychosis”. 
At the Foreign Office, Secretary of State Weiszaecker had, even before the crisis, prophetically determined that
in the event of a war with Britain and France, Germany would find itself facing a 'world coalition' (Weltkoalition) including both the United States and the Soviet Union. Even if it could count on the assistance of Italy and Japan, the outcome of such a conflict could not be in doubt. Germany would suffer 'exhaustion and defeat' (Erschoepfung und Niederlage). (p.271)

At the fateful hour Hitler was presented with the choice of stopping at the Sudetenland or going to war. He chose the former. Pent-up ideological tension was unleashed in greater anti-Semitism including Kristallnacht. Abroad, America became more anti-German.  

Those in circles of power in Berlin were relieved and drafted new strategies for a pending war in the west. 
Schacht, believing the Sudetenland would be Hitler’s last demanded, wanted a transition back to a peacetime economy, but instead a new wave of armaments expansion took place. Rationalization would free up manpower and capital for the military-industrial complex. 
The rump Czechoslovakia would be neutralized. Alliance building would draw Japan, Italy and minor European states including even Poland to military cooperation.

1939
As in 1937, new armaments targets fell flat. The Reich’s finances were in dire straits and a further ramping up of spending would produce inflation. Schacht lost his position, the gold standard was fully abandoned, paving the way for uncontrolled spending if need be, and the New Finance Plan promised a minor relief to the threat of inflation. 
Exports were in decline, and even Goering accepted a shifting of focus away from rearmament. Steel rations were cut for the Wehrmacht, and its pacing stagnated once again.

It bears noting that, though the military-industrial complex was jammed in 1937 and 1939 and now there was economic strain such as the threat of inflation, both of these years were not crises as 1934 was. Internally there was no unrest and the party had a firm grip in power.

One last burst of military acceleration would be possible if Germany waited and accumulated foreign currency for a while, but the fact was that it was outsped by its enemies in the arms race. It was a similar situation as the last year: Germany had superiority in the air and a dubious parity on land but would lose both in the long run to the much faster Franco-British war machines. In the sea, it was completely powerless.
Western powers were free of balance of payments constraints and controlled the seas, giving them a strong raw materials base. Their economies were stronger in general and about to churn out weapons faster than Germany. The British introduced conscription, were heavily investing in the RAF and would soon dominate the skies. And FDR was determined to direct America’s gargantuan industry into French and British armories. 
All this was achieved with a lower degree of mobilization: Germany had stagnant militarization and economic woes while spending 23% of national income in defense, while that figure was 17% for France, 12% for Britain and 2% for America.

Diplomacy bore little fruit at first. Japan was cold and Mussolini unwilling to commit to a war just yet, preventing a “triple threat” against the Royal Navy. To the southeast, Germany had to secure Iranian and Romanian oil supplies and Turkey as the gateway to the east. But its actual influence was limited. Hungary was friendly. Romania sold oil for Messerschmitts but counterbalanced that with a French security guarantee. Yugoslavia, Bulgaria, Greece and Turkey were pro-Allied.
What was left of Czechoslovakia was neutralized in March, intensifying Roosevelt’s antagonism. Germany seemed encircled by France, Britain, America and the Soviet Union. However, in the wake of this move Roosevelt tried and failed to pass “cash and carry” legislation. Held back by the Neutrality Act of 1937, it was clear that isolationist resistance would delay America’s entry into a war in Europe. And, once Japan rejected German proposals, diplomacy with the Soviet Union –which had tense relations at the border in Manchuria- was opened up. 
Already in the spring the Soviets were emphasizing the concept of inter-capitalist warfare, signaling their openness to an understanding with Germany. Negotiations expanded from the middle of the year and on the 24th of August von Ribbentrop achieved a major breakthrough in his non-aggression pact. Now the possibility of two-front war was gone and Soviet raw materials could be acquired.

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The reasons for war
Just a few days later, Europe was at war again. What explains it? For that the scenario facing Germany’s leadership should be understood.
First, it’s important to establish that they, including Hitler, were well-informed of the geopolitical chessboard, the state of the arms race and the economic and military strengths of the great powers. 
Hitler derided whoever tried to sway him to a less hawkish path and banned subordinates from trying to convince him with pessimistic statistics, but he was no fool and miscalculation or lack of information are not what explain his actions in this moment. 
Though he didn’t delve into technical details, he knew the strength of his enemies and kept himself in track of how many armaments Germany could realistically produce. He had the final say in the steel quota reductions that crippled rearmament in 1937 and 39. He adjusted his time horizon according to these realistic capabilities and played with international tension to put pressure on the arms race.

The following situation was presented to him in August 1939: the USA and USSR, though long-term enemies, were, for a time window, off the board on any war with France and Britain. 
If such a war were started immediately, at least limited offensive victories could be achieved, though the final outcome was very dubious. If it began in 1940, the speed of the powers’ armament economies meant Germany’s relative strength and overall chances would decrease. In 1941 even more and so on. Time was an enemy.
This meant that, if a war was to begin, Germany had the highest chance of victory if it began immediately. Any further wait would increase its chance of defeat. Thus, based on the conditions of diplomacy and the arms race there was a case for starting a war immediately. Hitler himself would later explain this to Albert Speer.

But this alone is not enough of an explanation. Though Germany’s best shot at a war would be an immediate war, it would still be an extremely risky shot. It only had parity, not superiority in strength. Unless it could achieve immediate victory, and that was unlikely, its enemies would still be able to bring their economic superiority to bear. Even such a war was likely to end in defeat, and it did. So why did Hitler commit to such a tremendous gambit? Ideology must be taken into account.
Britain was hostile despite Hitler’s geopolitical calculation that his continental aims would not threaten it, and likewise, friendly to America despite his belief that they were inherently antagonistic. For him, this contradiction was explained by the actions of world Jewry. Those, too, extended to all the “flanking powers” –France, Britain, America and Russia- and this ties in to his understanding of history as a battle for survival between peoples. 
The coalition facing him was a sinister one and the war that could happen would be a struggle of annihilation over which Germany would perish or secure its existence. Waiting would not help as the present peacetime position was precarious enough. A victorious war was the only guarantee of survival.

 >>/28714/
> pic 1
> 1940-41
> negative entry implies German borrowing from abroad
From who?

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Partially relevant. Freshly stolen from fellow Hungarobernd on Kohl. Original probably on youtube.

 >>/28830/
 >>/28830/
Russia really wants to kys the world. Also if your country is never show up in this video, you're pretty much a non country.

t.knower

 >>/28830/
now 1977, that was the year

 >>/28714/
I guess that's in the "other unrequited acquisitions of foreign exchange or gold" category. Capital advanced into the occupied states, though only modestly, Germany ran a large trade deficit with them -though it was just left as unpaid debt owned by the Reich- and demanded large occupation payments.
 >>/28830/
Surprising to see Brazil so early on. After an arms race among the ABC powers (see Argentina) the navy had two modern dreadnoughts but the army was pathetic and could barely defeat peasants.

 >>/28833/
I always knew the Netherlands were an evil warmongering country.

 >>/28834/
So yeah I see that the "Balance of trade in services, interests, dividends and reparations" column is what give that whopping minus. So basically Tooze just considers the German income (plus) from plundering occupied countries as a debt that should be payed as reparations, hence it's a minus in the balance? But what if Germany would have won? Then it would be plus?
Or maybe I'm misunderstand something. I not yet finished what you wrote.

 >>/28831/
> Also if your country is never show up in this video, you're pretty much a non country.
However I see Belgium up there so the reverse of what you said doesn't necessarily ensures a "not a non-country" status.

 >>/28836/
Maybe the occupation costs are counted as foreign capital making claims and hence negative. Or the unpaid debts related to trade are counted in that category. I'm also confused.

 >>/28837/
belgium is never a country. but you are a coontreeh because austria-hungary shows up.

Early war strategy
Germany’s leadership now had to answer three questions: how much space the internal civilian market would have, how the remainder of production would be distributed and how an increase in armaments output would be carried out.

Gauleiters and Walther Funk of the RWM wanted to balance civilian and military needs. They immediately lost the argument. Contrary to claims that few demands were made on the population early on or that the short war strategy sought to spare civilians, the consensus reached in Berlin was to sacrifice the availability of consumer goods in order to win the war. 
The already high level of mobilization was pushed even further; throughout the war Germany had a greater mobilization than Britain and was second only to the Soviet Union. 
The share of national income going to the military rose from a fifth to a third. More raw materials were allocated to the Wehrmacht. Private consumption and investment were curtailed and the funds redirected to the war effort.
The real choice was between a long and a short war. The military-economic staffs of OKW (with Thomas as an important figure), the RWM and the RNS did not want a repeat of 1914, when Germany hedged all of its bets on an immediate victory that never came and was defeated in the lengthy struggle that followed. Thus they wanted to safeguard the long-term viability of the war effort. Arms production would have to share priority with exports and food. The Wehrmacht would assume a defensive posture to spare resources. 
The conclusions of this line of thought, however, were defeatist: with no offensives for a long time there was no prospect of victory and the Allies could bring their economic superiority to bear.
On the other side, Hitler with Keitel, Goering and Todt as his mouthpieces had an all or nothing approach. Since Allied strength would grow faster than the Reich’s, the only way to achieve victory was to spend all resources in one big push. The war effort’s long-term survival would be put in question: exports would lose priority, productive capacity would be exploited to the maximum at the cost of running down stocks of raw materials, more of the workforce would be drafted and an offensive would be launched soon.

Soon, for Hitler, meant the 12th of November. Against the wishes of his generals he demanded an attack on France right after Poland was done. Bad weather prevented it from taking place, which was a saving grace. The cancelled attack would not have been the brilliant campaign of May 1940 but at most a draw .The plan was not an elegant encirclement maneuver but a brute force slog to the Channel followed by an aerial bombardment of Britain, with no prospect of how this could translate to immediate victory. Public opinion was reluctant and officers disloyal. The army needed time to refit. Third-rate units had proven unreliable and needed more training. The brief fighting in Poland overburdened the war industry’s provision of supplies.

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With the attack postponed military production was the central theme in the first months. The navy was relegated to last priority and its surface ships scrapped in favor of submarines. The Luftwaffe successfully lobbied to guarantee a large share of resources and focused on bombers. Though a tank production drive took place, the bulk of land production would go to a massive expansion of ammunition stocks, particularly for the artillery; this decision was taken by Hitler against the army’s complaints that it would squeeze production of other items.
Though priorities were clear the figures for armaments output in the first months of the war are disappointing. This has been construed as complacency, but the Reich was fighting to maximize the numbers. What explains it, then?
-Mobilization caused temporary disorganization and permanent shrinkage of the workforce.
-Already depreciated railways were overburdened by the movement of dozens of divisions, triggering a logistical crisis.
-It took months for increased raw materials assignments to cross the industrial metabolism and translate into higher production numbers. This is an important point in the book: there’s always a delay between reforms/increased resources and their effects, and this repeatedly gave false impressions of merit to administrators who assumed in the interim.
-Blockaded by the Royal Navy, imports plunged to a level comparable to the late war. Soviet raw materials would make up for the end of overseas trade but this took time to establish.

Goering’s and the RLM’s political clout shielded the Luftwaffe from the war economy’s disappointing results. The Heer was not as lucky. Managing the acquisition of its weapons was its procurement office, part of the army’s own bureaucracy headed by General Becker. Placed under pressure, it did try as hard as it could to raise production, stockpiling empty shells so the chemical industry could provide explosives later and ruthlessly mobilizing resources. By February this had the desired effect and a steep increase in output followed until the summer.
But it was too late: by then the procurement office had already become the scapegoat for stagnant production and the target of Nazi ideologues. In March a Ministry of Ammunition was created and Todt, the “miracle man” of the autobahnen and Westwall, appointed to it. Uncompromising civilian National Socialist leadership, it was now thought, would do what the army’s bureaucrats couldn’t. 
Todt created new hierarchies and, most importantly, gave a greater role to industrialists in the arms economy, which greatly benefitted their class. They were a third party to this and are commonly described as having led the confrontation against the army’s bureaucrats, but there were industrialists on both sides and most didn’t bother. However even prior to Todt the army was already experimenting with a closer relationship with industry.
Now armaments output was rapidly increasing. Todt gained all the merit and was praised for this “miracle” when in fact most of the work had already been done to him by his reviled predecessors.

Back to these posts:  >>/28714/ -  >>/28719/ , I've finished just now.
I would oppose Tooze's optimistic view on the "what if they would stop the strained rearmament and change economical direction". Apparently he believes that would have been a viable path to take. However it is a legitimate view that the war was inevitable, it was so that the second WW wasn't even second just a continuation of the first one, and the interwar period was only a phase for gathering strength. If Germany had tuned down the rearmament, she would have been squashed in an months. There were people who saw the second round coming right at the time the peace was signed, so it's not just backward rationalization or something.
While I read this summary Suvorov came to mind. He wrote that if the SU wanted to keep safe from Germany, then they would have kept the buffer zone what an intact Poland and the Baltic states meant. Now this is true the other way around: the Germans were safe from the SU as long as that buffer was intact. So they didn't faced the SU like you (Tooze) wrote, but France, GB and Poland.

 >>/28940/
> it is a legitimate view that the war was inevitable
It was very likely to happen. In states that were defeated (Germany) or didn't feel they got what they deserved (Italy) there was too much emnity and thirst for vengeance. Unlike in 1945 onwards there was no feeling that such aims had been decisively crushed, and no means to suppress revanchists from getting to power and trying to revise the situation. The true victors, on their part, were happy with the status quo of weakened rivals and superior access to land and resources, but they were also steeped in pacifism. On revisionist states the population did not want war, either -at least that was the case in Germany, when the initial mobilization against Poland was met with apathy- but the regimes could go ahead with a hawkish attitude. 
But I don't think the Western powers would have attacked a doveish Germany. They were in a reactive position. The status quo was good enough for them. There was too much internal opposition to war, particularly in America where isolationist influence would surge in the event of an offensive war against a peaceful Germany; such an attack would be even more politically complicated at the height of German prestige in 1936. And the entire Western strategy was "turtling", waiting and waiting to convert economic into military superiority, rather than an immediate invasion. France didn't even attack during the reoccupation of the Rhineland.

If a war was truly inevitable, though, then Germany's prospects were indeed bleak. An inevitable war would be followed by an inevitable defeat, as was predicted.

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Historiography of the campaign in the West
The first plan for the strike against France, a rehash of the Schlieffen Plan, had, by the last week of February, been replaced with von Manstein’s conception of squeezing the Allies between the sea and a main thrust from the Ardennes to the sea.
Once applied in May, its results are well known. Against an opponent with slight superiority in men and equipment, the Heer won with amazing speed and small casualties. Finesse and movement defined the moment, not the grinding attrition of the trenches. This was baffling to all witnesses. This miraculous event demanded an explanation, and several were made in succession. They were marked by the clash of two ways to interpret history, materialism and voluntarism. In this context they mean whether the campaign should be understood as the result of the war economy, equipment, force disposition, etc. or military willpower.

The voluntarist thesis was laid out in the post-battle propaganda. It emphasized Allied material strength, showing their impressive fortifications and tanks. This was counterposed on the German side with the superior valor of soldiers and brilliance of commanders, which surmounted material gridlock to achieve a “triumph of the will”. Overwhelming success in the West was seen as a confirmation of National Socialism’s strongly voluntarist outlook.
The materialist antithesis came with the first generation of historians. They claimed that, despite equal numbers, Germany had the right weapons. Having predicted it couldn’t win superior numbers nor a lengthy war, its leadership sought years in advance a “strategic synthesis” between the armaments economy -producing tanks, trucks, etc.- and a new military doctrine of using those new weapons for encirclement maneuvers, speed and immediate victory.
Critical historians, however, realized this was wrong. German rearmament did not fit into the concept of Blitzkrieg, neither before the war nor up to July ’40 when the main priority was ammunition, particularly for the artillery. This, and the first plans for a full frontal attack, shows Berlin’s expectations were close to the mass battles of the Great War. Von Manstein merely came up with a last minute “military fix”. Early German depictions are more accurate than those of the following historians.

Tooze, however, notes some caveats. At the heart of von Manstein’s plan were not revolutionary new ideas of mechanized warfare but an ancient principle: victory by superior concentration at a decisive point. Whereas the Allies distributed their forces equally along the front, Germany had a skeleton garrison in the Westwall, a modest offensive force in the Netherlands and the best units and bulk of its strength on the Ardennes. There, a superiority of almost 3:1 was achieved. Germany had more numbers, not on the whole front but exactly where they mattered. This was made possible by mobility and fooling the enemy, which disregarded the Ardennes and moved to counter the lesser Dutch offensive.
Allied foolishness, too, played a large part. The plan was a risky gamble. Overwhelming success would not have been achieved if the main thrust had been counterattacked and/or less forces moved to the Netherlands. The massive force concentration on the Ardennes was highly vulnerable to air attack and this was only prevented by overcommitting the Luftwaffe, leading to a high rate of casualties that made itself felt later over Britain.
Simple geography was in Germany’s favor. The sea itself played the role of a pincer in the encirclement maneuver. And it was close to the German border on good roads. The vast, poorly developed Russian plains would prove far harder to tame.
So willpower only succeeded because it was given good material conditions.

One footnote: French tanks being dispersed across divisions, compared to Germans having them in only a few, are not very relevant. France had more tanks and could afford to do that. It still had powerful dedicated armored divisions of its own.

Though the concept of a fast-moving short war was not what guided German decisions in previous years, it was now proven possible and taken as a central pillar of future plans. “Blitzkrieg” is thus more of a result than the cause of the Western campaign. 
Besides this conceptual shift, it had two other effects. It vindicated Hitler, whose war strategy was, for the moment, proven right, giving him popular support and nullifying any resistance within the army and bureaucracy. And, to some level, it created overconfidence of what the Heer could achieve.

 >>/28966/
It's not just that. The Soviet wasn't a peaceful gathering of hippies, they built their war machine to take over the world.
We are also forgetting (and apparently Tooze too) at least one important event, the Spanish Civil War. It wasn't about the coalition of harmless democratic forces' struggle against the evil fascists. Without Italy's and Germany's help to counter the "republicans", the Soviet could easily push the events through a permanent revolution and set up a bolshevik puppet regime. And from there who knows what could have happened, maybe France?

 >>/28977/
Also it looks like as if Tooze doesn't calculate with the effect of the Spanish Civil War to the calculations of the German leadership.

 >>/28977/
The Soviets wanted, just like Germany and Italy, to aggressively revise the status quo, so with a peaceful Germany they'd still bully neighboring states. There are several possible outcomes to this. In the best case scenario Stalin is too aggressive and the Western powers are drawn into an alliance with Germany. In the worst case scenario they're aggressive enough to make Germany return to rearmament without the Western powers feeling threatened, and Germany is placed in something similar to its historical situation.
In any such scenario Stalin's time horizon for attacking other great powers 
Tooze does mention Hitler felt himself encircled by the election of leftist governments in France and Spain.

Stalin's time horizon for war with the other great powers is an important factor. He gladly used force against small states but how early would he be willing to invade another great power? There are reasons to believe he followed a "turtling" strategy like the Western powers, stalling his rivals to gradually build up his strength. But if Suvorov was right then he was willing to attack early, and a peaceful Germany would be at a serious risk.
On the other hand an early attack against a peaceful Germany could trigger immediate action from the West.

 >>/28855/
Yeah Luftwaffe was the little favourite...

 >>/28972/
> French tanks being dispersed across divisions, compared to Germans having them in only a few, are not very relevant.
It was very relevant. It's added a lot to the effect of concentration of power. Tanks dispersed meant they couldn't send them in the way of the enemy armor effectively, they weren't a mobile force to throw punches with, but bound to slow moving infantry as an addition of mediocre amount of firepower.
> German rearmament did not fit into the concept of Blitzkrieg, neither before the war nor up to July ’40 when the main priority was ammunition, particularly for the artillery. This, and the first plans for a full frontal attack, shows Berlin’s expectations were close to the mass battles of the Great War.
Interesting reading these lines worded like this. Kinda new consideration for me but I'd agree with Tooze, the Germans relied on concentration of power, and the plan of Manstein played out so brilliantly because the Frenchies and Brits outsmarted themselves. They moved into Belgium instead of staying put and they had nothing to counter the Germans, when they forced they way through their troops. Even Germans did not expect that, and their panzers lost contact soon with the main force behind, because they saw the opportunity to move on.
And here a larger mobile tank unit could have come in handy for the Allies. If there would have been such with their armies in the lowlands. That could have been directed toward the lone German panzers.

 >>/29063/
The French didn't disperse all of their tanks among infantry. They had more tanks so in addition to the dispersed fleet they had their own armored divisions, in addition to a higher level of motorization as a whole.
On the 10th of May the Allies had:
5 Divisions Légères de Cavalerie (half-motorized)
At least 7 (1st,3rd,5th,9th,12th,15th,25th) infantry divisions designated as motorized
3 Divisions Légères Mécaniques (armored)
3 Divisions Cuirassées de Reserve (armored)
Plus a few cavalry units, the army-sized BEF that had a very high level of motorization and the mobile components of the Dutch and Belgian armies.
Germany had 10 Panzer, 1 cavalry and 6 motorized (including SS-Totenkopf and SS-Verfügungs) divisions.
The Allied mobile component was there, but like the rest of the army it was in the wrong place in the wrong time.

I'm gonna drop my comment here. Despite Schlieffen Plan was brilliant, it was a completely disastrous diplomatical mistake. The western powers were war weary and had strong disputes in internal affairs. France is one of them. They had a big commie support, if they manage to take power hitler's crusade against communism (which I strongly assume that was the reason why western powers let hitler run amok until molotov-ribbentrop pact) would be legitimate in the eyes of west. With western border is already secure also supported in a degree he would have better chance against SU. 

But he COMPLETELY misread the situation. Though I think after signign molotov-ribbentrop he completely lost the western support, he could not repent after that.

 >>/29077/
But without signing the Pact he couldn't have occupy Poland and reach a common border with the SU so he can attack it later. Maybe from Finland and Romania but that sounds very inconvenient.
Anti-communist groups were everywhere (just liek communist, these guys attract their antithesis very easily as if it was a reaction to them... it is). Some might have supported Hitler, others surely didn't. Those anti-communists with real political (and economical) weight wouldn't support Hitler. They were sure enough of themselves and their countries not turning into a communist state. They saw bigger threat in Hitler, so they tried to appease him for a while and hoped for the best.

 >>/29076/
Just because such higher units (I'm referring to the tanks only) exist it doesn't mean they were kept together (I will look it up ofc), their subunits could been dispersed, they could been detached to other units. It's not like every infantry platoon had a couple of tanks.
From the top of my head I remember reading about a concentrated group of armour, a few hundred (up to maybe 500) in fact. They were at Paris and fallen victim of Stukas. I'm not sure when tho and the circumstances. Were they before Dunkerque or after? Were they concentrated there or kept as a reserve (I think the latter tho).
I also wonder if French higher commands was aware what's going on. Liek when they got the news of the breakthrough and if they knew about the movement of the German units, especially their panzers. I only remember reading vague lines of historians like "when they saw what's happening it was too late" and such bullshit.

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 >>/29077/
You (and other Bernds) should drop more comments me thinks. It's not liek Brazilbernd writes this only to me... Also I had the impression that WWII is topic which people on chans generally interested in.
Ofc I cannot order around anyone to post, so...

 >>/29077/
In 1940 the time factor was still against Hitler. The Allies didn't plan to sit at the Maginot Line forever, with their economic superiority they'd build up a military advantage over Germany and attack it at some point in the future. The more the war stalled, the more comfortable their situation became. It was Germany that had to find a solution to the stalemate quickly. So the Allies didn't need to reach a negotiated settlement anytime soon.

 >>/29079/
> But without signing the Pact he couldn't have occupy Poland and reach a common border with the SU so he can attack it later.
Another big issue is that without the pact Germany's economy would be crippled, Soviet raw materials were the primary factor keeping it alive in 1940-1. The secondary factor was resources seized from occupied countries aswell as their very limited production, and those were only conquered because the eastern border was safe.
> Just because such higher units (I'm referring to the tanks only) exist it doesn't mean they were kept together (I will look it up ofc), their subunits could been dispersed, they could been detached to other units.
Well, divisions were kept as a monolithic units of maneuver by default, detachments were the exception. Hearts of Iron isn't too far from reality in depicting them as the basic unit in the field.

 >>/29084/
Subunits can be moved around freely (and passed on as detachments) without disbanding the unit itself and keeping the HQ "alive". And the HQ can have units "de jure" but the unit "de facto" belonging to other units.
Ifc HoI getting inspiration and many facts from reality, but the developers had to standardize since reality is very complex. A size and organization of a division was different in one country and another, and this discrepancy could go as deep as squad level. Or the the lowest independent unit was the brigade in some countries (liek in Hungary), and so on. Ofc in this question the French organizational practices would be the deciding factors.

 >>/29081/
 >>/29084/
> In 1940 the time factor was still against Hitler.
molotov-ribbentrop has been signed earlier. so he had to what he had to do after that. He could easily be buttbuddies with chamberlain before the pact. He could get economical boost with western support. Also the military investment was super high, as he planned to attack pretty much anyone who oppose him. With a good manouver on diplomacy, he wouldnt cripple his economy so much.

 >>/29081/
I was in summer school studying and passing exams. Now it's over I can post more.

 >>/29079/
> But without signing the Pact he couldn't have occupy Poland and reach a common border with the SU
He could bid his time to invade poland later and prepeare for SU invasion just after it. He didn't need to sign the pact for invading poland, the west guaranteed poland because hitler literally torn apart the munich agreement despite they tried their best to appease him. he left them no choice, the west was war weary they had no intention to make a war, just to crusade against communism mainly with german soldiers. They realized there can't be peace with this guy. If only germany had a sensible leader..

 >>/29086/
Also even tank platoons can be attached to lower level units, not just divisions can have detachments.

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 >>/29086/
You are right. But also wrong.

For the following I relied on the these books:
Alistair Horne - To Lose a Battle: France 1940; 2008, Penguin
Philip Warner - The Battle for France: Six Weeks That Changed the World; 2010, Pen & Sword Military
Robert Allan Doughty - The Seeds of Disaster: The Develompent of French Army Doctrine, 1919-1939; 1985, Archon Books
For the Allied/French order of battle I consulted with Wikipee and an Osprey book from the Men-at_Arms Series (no. 315) by Ian Sumner, Francois Vaucillier and Mike Chappel; it's The French Army 1939-45, Vol. 1, The Army of 1939-40 & Vichy France.
All available at Library Genesis: http://gen.lib.rus.ec 

The French doctrine was a methodical maneuver based, they never calculated with mobile warfare, they believed the main tool to achieve breakthrough is the infantry and expected the tanks to add firepower to them, but not mobility. When they created armored divisions the usage they imagined for them was similar to what tank battalions were for regiments and divisions, only for higher level units (corps and army). 
Beside the three armored divisions they organized (by the spring of 1940) three light mechanized divisions and five cavalry divisions which included tanks in their ranks. These divisions were divided between the armies of the First Army Group which was designated to move into Belgium as soon as the German invasion started. The amored ones however were kept in reserves, the 1st might have been the reserve of the 1st Army, the other two were surely of the GQG's (French high command) and they were stationed south west of Sedan in the Champagne area.
The French army all in all had 'bout 3100-3500 tanks (most likely closer to 3100) more than half of which was dispersed through the whole northeastern battlefield, another 800 were were divided between the armies with the cavalry and mechanized divisions, and all in all those three armoured divisions were summed up around 600 tanks.
On May 15th a new armored division "joined" the others tho. That's liek 200 more tanks.

So how the French amored divisions were used?
Separately.
They stationed in a quite good area to make a concentrated effort with them. But instead they were sent to different parts of the front, the 1st against Rommel (north), the 2nd was scattered in the chaos at first then ripped in two by Reinhardt's Corps (middle), the 3rd took part in the counter-attack at Sedan against Guderian (south). The result is known.
Maybe the three grouped together could stop one Corps of the germans preventing the German plan fully bearing fruit, and slowing down their advance in meaningful way.
Maybe if all the divisions that had tanks in their composition were held together, they could have been used as an effective force to parry the german panzer's thrust over the Meuse. But with all the tanks collected, their chance would have been better, almost good. Ofc the German success was in the concentrated use of tanks, arty and air force. So the panzers were only one component to counter.

So as a conclusion: you are right, there were monolithic bodies of armor in the French army but you are wrong, because it would have mattered a lot if they would have kept together.
As you say it here:  >>/29076/
> it was in the wrong place in the wrong time.
Which I can translate to: they were dispersed, placed all the wrong places, and not concentrated in one right.

Btw, you wrote those posts about the Amazonas fires on sportschan? Will read it sometimes.

 >>/29130/
Nice of you to look it up.
> Btw, you wrote those posts about the Amazonas fires on sportschan? Will read it sometimes.
I made the original post, the recent replies are someone else. He makes some interesting points, I'll reply sometime.

 >>/29136/
I was intrigued by the what if.
There are many components of the French defeat ofc because it was more like that than German success, but the wrong usage of tanks is surely one of them. And I believe a major one.

I saw that there's two Br posters. I wasn't sure who is who.

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To Barbarossa
Between the Polish and Western campaigns the Reich had already taken steps to secure its northern and southern flanks. Operations in Denmark and Norway secured Swedish iron ore deliveries and Romania agreed to sell more of its oil. But now even before France signed its armistice all of Europe realized a new, German-centered geopolitical reality was at hand and adapted to it. Italy joined the war and Romania gave Germany a monopoly on its oil. Even Spain and Portugal became slightly friendlier. Switzerland offered more generous terms on trade.
Berlin was now the heart of a power bloc backed by the economies of occupied, neutral and allied states, and beyond them, the resources of the Soviet Union. Facing it was the British Empire backed by America, and the question remained on how to deal with this troublesome archipelago.

Hitler still hoped for a settlement with Britain, leaving it to its empire while becoming the hegemon on the continent, but his overtures were rejected due to British confidence in American aid. To reach such a deal he’d need to deal a strong enough blow to the British and do so before a full American entrance in the war. There was thus a time window at hand.
A cross-Channel invasion was out of the question. The Kriegsmarine’s surface ships were hopelessly outmatched and their inferiority only widened after heavy losses in Norway. Planned battleships would take years. All that could be done was harass British supply lines through battlecruisers and U-boats. It was too late to invest in the former. The latter were few in number due to the priority given to bombers and ammunition since the start of the war, and only gained a higher priority for a brief period. U-boat numbers declined to a bottom of 22 in February 1941. Though plenty of convoy tonnage was sunk it was far from enough and American aid aswell as decryption and new convoy tactics tilted the balance at sea against the Axis. Worse of all, Doenitz estimated that even with an ideal number of U-boats, it’d take until autumn 1941 to isolate Britain and more months to starve it out, and this was beyond the time window.
The Luftwaffe was the other arm that could be used. However, it had just lost nearly 30% of its strength in the French campaign. The Ju 88 had neither the numbers nor the specifications to win the campaign. Its dedicated escort, the Me 110, proved a failure. Heavy bombers would’ve been valuable but of the existing project, the He 177, only 500 were in order and they’d come in 1941-2. (When they did, the aircraft was a disappointment). Damage was dealt but the air war could not bring victory.
In short, there was never any chance of bringing Britain to its knees. The British, on their part, had no way to invade the European mainland, either. As many predicted years in advance, the war reached a stalemate; the unexpected fact was just that it was at the Channel rather than on France. The only ones who could benefit from this were America and Russia. The latter, it is noted, tallied up the total number of aircraft lost over England without breaking them down by side: all that mattered was that the two exhausted themselves.

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The former are also the reason Churchill kept on fighting in the first place. Roosevelt was determined to act against Hitler and reacted against his every move. As soon as the war began he won the upper hand against isolationists in Congress and passed “cash and carry” legislation allowing the export of weapons to France and Britain. After summer 1940 France’s orders for American equipment were assumed by Britain. Through transatlantic aid it supplemented its lower level of mobilization relative to Germany and gradually overcame Axis production of aircraft and other war material. At the same time America began a humongous naval and aerial expansion. In September it transferred destroyers to the Royal Navy. In the following year it passed the Lend-Lease Act and began to engage U-boats at sea.
For this Britain paid a heavy price. “Cash and carry” meant it still had to pay for American weapons. Only after reaching financial exhaustion Lend-Lease began. Assets were mortgaged and bases and technology made available to America. Firm transatlantic backing gave Britain a safe position to continue the war, but at the cost of dependence.
The Anglo-American alliance was building up and would first hit through a fleet of strategic bombers. Germany was aware that the Luftwaffe would be the first arm to face the brunt of this strength. However it also correctly calculated it would take until 1942 for American shipments to become truly decisive.

While Britain had America, Germany had a number of smaller economies at its disposal. An economic bloc comprising continental Europe sans Russia would, if operating at a prewar level, have a GDP greater than either America or Britain. If colonial empires were factored in, this bloc would extend over a fifth of the world’s population and land area. Planners in Berlin soon discussed how to consolidate their sphere of influence into the long-envisioned dream of an economic “Grossraum” spanning the continent, something even Stresemann desired. The topic of either devaluating or making other currencies rise to the Reichsmark was brought up but it was not the time to decide on that. The initial effort was to form customs and currency unions, but the first country approached –Denmark- rejected the proposal. In any case, occupied economies plunged from their prewar outputs and Europe couldn’t offer much to Germany.
Their most immediate contribution was in war booty. Thousands of tanks, artillery pieces and other items were taken and were still in use by the end of the war. To alleviate the overburdened German railways, French and Benelux rolling stock was taken over. And stores of raw materials –tin, nickel, copper, and, most importantly, oil- were seized.
Surprisingly few companies in occupied territory fell under German control: only those in Alsace-Lorraine, French interests in the Balkans and those under state, Jewish or foreign ownership changed hands significantly. The limiting factor was the balance of trade: buying firms abroad involved an export of capital, like imports, and thus had to be compensated with exports. German capital could only make inroads abroad if exports were raised –thus, after the war was over.

Concerns over the balance of trade did not apply to imports. A system was created to allow Germany to run a trade deficit with occupied countries: foreign exporters dispatched their goods to German importers, their own national banks paid them and the Reichsbank assumed a debt to those national banks. The debt went unpaid and the whole system would have to be reviewed once the war was over.
Nonetheless, a large part of the economy was still devoted to producing goods for export, even though this happened at the expense of producing armaments. While a deficit was held with France and the Benelux, a trade surplus was achieved over particularly fragile economies (Norway and Poland) and balanced trade occurred with neutrals and allies in central and eastern Europe. In the case of the Balkans, this is a reversal of the 30s, when Germany ran deficits. Exports were needed to keep their economies running –even France’s- and to gain political favor.
Trade deficits were compensated by the exaction of occupation costs over conquered states. Such costs greatly exceeded actual expenses on garrisoning those states.

The Wehrmacht could now order armaments from factories on occupied territory. However, the once large French war industry was, like the rest of its economy, suffering under severe logistical and resource limitations, and the same was true for Belgium and the Netherlands.
-Railways were crippled by German requisitioning of rolling stock, harming even the transit of raw materials.
-France and the Benelux were heavy oil consumers and their access to overseas oil was irreplaceably cut off, leaving the limited production of Romania and German synthetic plants to cover the whole continent. Severe rationing was imposed with France getting 8% of its prewar oil. This expanded the logistical crisis.
-Mobilization and blockade removed fertilizer (which competed with explosives over certain raw materials), horses, manpower and imported animal feed from the “delicate ecology of European peasant farming”, triggering an Europe-wide food crisis. Food is a critical subject and will be covered in detail on a section of its own.
-Western Europe relied on coal imports that were cut off. On paper there was enough coal in Axis Europe to make up for this, but that would require a comprehensive logistical reorganization that never took place in wartime conditions. Expanding production in local fields wasn’t any easier because of the food crisis, which hit labor-intensive work such as coal mining hard.
As a result, occupied industry could not contribute to Germany a fraction of what America gave Britain. In 1942 7,775 aircraft were shipped across the Atlantic compared to mere 743 produced in France and the Benelux. Productivity was chronically low; it took four times as many workers to produce a German plane in France than in Germany. Foreign labor was more useful within Germany itself and many such workers were conscripted; that will also have a section of its own.

Even Germany’s economy was just barely trudging along. Coal, not iron, was now the limiting factor to steel production as mobilization prevented the mines from hiring the best labor, though they did not lose workers. 
For other raw materials, particularly oil, the situation was worse. Whereas Britain was worried whenever its oil stocks fell below 7 million tons, German stocks peaked at only 2 million tons in January 1941. With captured Western stocks and low military activity resources were available for the moment, but with scarce sources (for oil, Romania and coal hydrogenation) that could not last and problems were expected to emerge after the middle of 1941. Fuel scarcity was already harming the Italian navy and the training of truck drivers in the Heer.

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What kept the Axis alive was trade with the Soviet Union and its importance cannot be understated. Amongst the raw materials purchased in the USSR there were alloy metals, Grain was imported at such a large volume that some of it was drawn from the Soviet national grain reserve. Germany reciprocated with manufactured goods, particularly machine tools. Production for deliveries towards the Soviet Union had the same priority as for the Wehrmacht itself.
Just as Britain had to become dependent as a precondition/result of receiving American aid, so did Germany have the prospect of dependency towards the USSR. Any consolidation of its existing European empire would require a greater level of Soviet trade. The export of machine tools aided the Red Army’s expansion. The Soviets were even in a position to request German synthetic fuel and rubber technology, though that was denied. Soviet-Japanese rapprochement in April 1941 –the Japanese were now focused on a strike against the Western powers- opened up the possibility of a move that could truly turn the tables on the Anglo-American power bloc: an Eurasian coalition of Germany, Italy, Russia and Japan. Yet this would cause even more dependency, as the central power in such a coalition would be the one that would gain the most.

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Why and how
Hitler was now locked in a protracted war of attrition against an economically much stronger enemy and was set to lose. This wouldn’t happen immediately, and so once again he had a time window to work in. He very well could stay put and work to strengthen his holdings, but that would require losing protagonism to the USSR, with whom an even higher level of cooperation could be sought at a dangerous geopolitical cost.
An exciting alternative existed. The Reich lacked the resources to win this war of attrition. But the amazing victory achieved over France made it seem possible to defeat any army on the continent and do so quickly. The only thing standing in the way of the continent’s largest reservoir of resources was one such army. And so in 31 July 1940 Hitler ordered preparations to invade the Soviet Union, and by early 1941 the decision was final.

The logic of Barbarossa can be summed up as: winning a short war in the East to acquire the means to fight a long war against Britain and America. 

If the Red Army were defeated and European Russia taken over, Swedish ore shipments through the Baltic would be safe and Ukrainian grain and iron aswell as Caucasian oil would flow west. Germany’s economic inferiority versus the Anglo-American alliance would be alleviated, improving the chances of victory in the long war. And if Stalin was defeated prior to American entry, Hitler hoped that would corner Britain into an impossible position and force it to negotiate. And a knocked out USSR would also give Japan a safer position from which to attack Western possessions in Asia and the Pacific.
For this a true strategic synthesis was devised, with operational planning and armaments production united under one coordinated vision.

Economic priorities were rearranged so as to prepare for both the short Eastern and long Western campaigns, and redirect all resources to the West as soon as the East was settled. Needed in the long term, exports received a higher steel quota at the expense of the army. Yet it made up for this by cutting ammunition production; the 1939-40 burst had left comfortable stocks. Its targets, Ruestungsprogramm B, were largely met. For the fast and intense campaign divisional strength rose –he gives 143 on May ’40 to 180 on June ’41, though on another source I can find 165 to 209-, with a core of ~33 mobile divisions equipped by doubling the number of medium tanks. Tank construction was spread over several plants, booting up production quickly and reducing inter-company friction and vulnerability to aerial bombardment at the expense of economies of scale.
This required sapping men from the workforce: Germany was to invade with its manpower already overstretched and fully committed while the Soviets still had millions to mobilize. Yet this was compensated by releasing veterans for an “armaments holiday” of months in the factories, followed by a “war holiday” in the front and then, once the fighting was over, the army would lose manpower and resources for naval and aerial industries.
The Luftwaffe’s production did not grow as much despite increases in manpower. This is because it was the most subject to delays in production increase but also because it focused on the development of new craft rather than economies of scale. 
Rather than focusing on immediate output, the entire war economy invested heavily in future capacity, building or expanding aircraft, tank, aluminum and particularly chemical plants. One case was a white elephant: Koppenberg, manager of Junkers, tried to build a thousand-aeroengine plant on the principle of Fordist mass production, but all it could achieve was 198 engines in 1944. Other projects were very successful but only showed their full potential after the war: IG Farben’s chemical plant in Auschwitz is today one of the largest synthetic rubber producers in Europe.

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The military aspect centered on the 500 km strip of land between the border and the Dnieper-Dvina river line. This was the maximum logistical range achieved with the innovation of intermediate supply dumps. Any further advance would require a delay to refit. All strength would be concentrated at the border to rapidly annihilate the Red Army before the river line in a series of encirclement maneuvers. It was then expected that the Bolshevik regime would begin to crumble and offer little resistance in operations on the Baltic and Ukraine followed by a march on Moscow.
With the information available there were reasons to doubt both the economic value that could be extracted from the territory aswell as the possibility of its conquest itself.
Von Bock, commander of Army Group Center, was seriously worried about the possibility of the Red Army escaping beyond the Dnieper-Dvina line. The Soviet Union’s size, population, poor infrastructure and ongoing industrialization were well known; on the other hand, there was still a large developmental gap which made it not unreasonable to assume the Red Army was weak. And if the regime faced political disintegration, it would suffer from poor infrastructure as much as the invaders. 
One of the earliest war games and Generalmajor Marcks, who drafted the first plan, predicted that, if the destruction of the Red Army and capture of Moscow didn’t happen quickly, Germany would be locked in a long and grim two-front war. Marcks saw a relief in that control of the Baltic and the Ukraine would facilitate survival in this long war.
And yet the Wehrmacht’s military-economic office and the Four Year Plan’s staff showed the Ukraine’s grain surplus was modest. Hauling it west would require fuel for a large fleet of trucks, and yet an early military-geographic study ruled out an immediate takeover of Caucasian oil fields. Franz Halder of the OKH’s General Staff believed an invasion wouldn’t significantly improve Germany’s resource base. 

Despite all of this the generals could not oppose Barbarossa. There was rejection from the Foreign Ministry, but after the success of summer 1940 Hitler was in too strong of a position to be veered off course. Although flawed, the decision to invade the USSR had a rational basis. It was not just a way to survive a war of attrition in the West but also seemed to be a strike on the “weakest link in the chain”. Only on land Germany had supremacy; it seemed easier to employ the battle-proven Heer against an apparently weak enemy than bash the Kriegsmarine and Luftwaffe against strong defenses.
Besides this pragmatic/economic logic, there were the ideological reasons, such as defeating Bolshevism and securing living space. Those motivations complemented each other: if, on one hand, Germany had to conquer the East quickly so it could survive the Anglo-American coalition, on the other hand it also had to fulfill its ideological objectives quickly before the strength of the West fell over it.

 >>/29201/
> America
Soon we need analysis on America's economy and politics.

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 >>/29203/
> The export of machine tools aided the Red Army’s expansion

Different discussions in Russian military history circles ended with opinion that Germany's pre-war export was pretty inefficient for Soviet economy. Amount of machines was not so large to do any proper effect, and other things (including cruiser Lützow/Petropavlovsk) didn't do anything good in war times.

That agreement was much more beneficial to Germany than USSR, although it is ok for pre-war USSR, who did so much wrong political moves anyway.

 >>/29227/
I also have thoughts on this.
First as a reply to you:
I think Russian historians (even of our day and age) has reasons to downplay the importance of this mutual assistance, maybe there's even an expectations from the circles of authority and even some pressure from the people who feels nostalgic to the Soviet state and regime. This expectation and pressure might not be said out loud, but researchers themselves might feel they better correct their opinions on this.
Nazi Germany was inflated into this great monster, a boogeyman, an untouchable and everyone who has something to lose tries to distance himself from it. And especially in a country which fought the Great Patriotic War against it, it might be an uncomfortable truth, that before that happened there was an agreement which benefited both sides. The Molotov-Ribbentrop pact has this darkening shadow too.

And my other thoughts:
What is more important that due to this assistance Stalin and his marry band of pranksters and trolls could exactly know what situation Germany is in. This might support Suvorov's theory, that Hitler was played by Stalin big time.
I haven't read all Brasilbernd's posts so maybe this will come up, but the German leadership/Hitler was right to attack the Soviet Union even tho they weren't prepared for the task. They had one chance, they made their bet, they might calculated the odds wrong but even if they saw it clear, there were no other choice.

 >>/29205/
Ok. So.
The Anglo-American threat and the western war of attrition is overly dramatized. The best they could have done (in case of a Soviet defeat) was to overtake Italy's overseas possessions, control the Atlantic, Indian oceans and western seas, make difficult to keep relations with Japan, and carpet bomb Europe. The last one posed some threat, but with the buildup of Luftwaffe that could have been countered - meanwhile German ballistic rockets could continue to drop on the Small Island. And even what really happened, the bombing campaigns weren't that much of a hindrance to the German economy.
With the conquest of the SU Germany could have gained a very secure position. But an impasse nonetheless she wouldn't manage to force the US on her knees, maybe flatten Britain tops, ending locked in another Cold War.

 >>/29231/
> I think Russian historians (even of our day and age) has reasons to downplay the importance of this mutual assistance, maybe there's even an expectations from the circles of authority and even some pressure from the people who feels nostalgic to the Soviet state and regime. 

Of course they are, especially about Molotov-Ribbentrop pact. But there are "opposition", i.e. pro-Russian-Empire historians who don't like commies and like to blame them for everything.

But authorities and pressure isn't really a reason. Russian historians are pretty opinionated (and Russian historiography in general, and Russians in general too), so this happens mostly by own will of historian.

But considering economical ties, looks like USSR really got less than Germany. USA in early 30s did much more for USSR.

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 >>/29233/
> And even what really happened, the bombing campaigns weren't that much of a hindrance to the German economy.
They were. Allied strategic bombing became serious in 1943. The RAF's assault on the Ruhr and Hamburg in March-August 1943 stopped the "Speer miracle" (not fully Speer's and not fully a miracle, as will later be shown) dead in its tracks. The Ruhr's heavy industry was heavily damaged and factories across the whole country experienced a Zulieferungskrise (subcomponents crisis). Civilian morale began its collapse in 1943. Fighters and anti-aircraft weapons had to be diverted from other fronts. When the Zentrale Planung (the organization Speer founded to bring together the key figures in the war economy) met in 29 July 1943, Speer told them Only if the enemy air attacks can be stopped will it be possible to think of an increase in production. If, however, the air attacks continue on the same scale as hitherto, they [the Zentrale Planung] would, within twelve weeks, be automatically relieved of a lot of questions that they were now discussing ... A greater output of fighter aircraft is the only means of preventing everything being smashed up, otherwise they might as well put a bullet through their heads. (p.604) Output did not plunge, but it stagnated for nearly a year. There is no other explanation for this, bombardment in early 1943 had a major impact. What saved Germany was Bomber Command's mistake to shift priority to Berlin and new fighter tactics. In the first half of 1944 output had one last period of increase, but at the same time new American fighters gave the Allies air superiority. Armaments production peaked around mid-1944 and declined over the rest of the war. This was before Silesia and the Rhineland fell, so bombing is one of the main factors, though there's another important reason in the internal disorganization of the war economy due to inflation.

Expanding on this: in the first half of 1944 the Allied air forces were distracted by the need to lay the ground for the Normandy landing. Once it was done they renewed their strategic air offensive. Besides scorchig city after city they suffocated German infrastructure to great effect, and the Ruhr in particular was cut off from the rest of the country with a collapse in the coal supply.

Germany's situation wouldn't be all that better with a conquered East. The reason it'd lose the war of attrition in the West was the gargantuan Allied and particularly American armaments output which dwarfed anything it could ever hope to offer. The East offered more raw material inputs but not more industry. Hitler's long-term strategy was to use its living space to catch up to American economies of scale and output, but that was something for decades. In the meantime he's left with the same industrial inferiority, with the difference that his prospects of running out of raw materials are delayed and he can modestly boost his industry with more conscripted Eastern workers.
Even the raw materials situation wouldn't be vastly improved. When Imperial Germany took over the Ukraine in the last acts of the Great War it was disappointed. And now even less grain was available due to urbanization. Caucasian oil wouldn't come in easily, it'd take time to restart production after Soviet scorched earth -the Maykop fields provided nothing because of this. And the Caucausus is within range of Allied strategic bombing from the Middle East. A campaign could be launched there but it'd have very unfavourable logistics.
A substantial portion of the Heer would be unavailable, garrisoning the East. More production would be allocated to the Luftwaffe and it'd concentrate more fighters in the West but it still stood to be outproduced and defeated, with strategic bombing then taking its toll on the whole war economy. And then from 1945 onwards America would be willing to drop nukes on Germany in accordance with its "Europe first" policy.

 >>/29240/
Well the numbers show continuous increase. With the exception of vehicles and ships/submarines. So bombings weren't that much of problem, and other factors sure had to play a role in the fluctuation (like logistical: transporting units from one front to another could enjoy priorities over moving raw materials or parts).
> Civilian morale began its collapse in 1943
I don't think it's ever collapsed until Red Army soldiers showed up and started to liberate goods and women. Bombing is actually a counterproductive way of practicing psychological warfare since such hardships tend to strengthen determination (and it did) and not the cause of psychological breakdown as military theorist believed just after WWI. And this brings us back to the psychology of killing: not the danger of death brings the soldier to the brink but the need that he has to kill.

 >>/29353/
> Germany's situation wouldn't be all that better with a conquered East
With the exception that the East distracted almost the whole Wehrmacht from the West. The only reason why the Western Allies could land in Africa, Sicily, Italy, Normandy and south France. The only reason why they couldn't mow Brits down in Egypt and further in the Middle East.
> The East offered more raw material inputs but not more industry.
Except that the SU was an industrial giant. It would have depended on the surviving factories and industrial equipment. Also not having to replace destroyed equipment in the east, just concentrating on fighter aircrafts would have meant much.
The Germs could have concentrate also on their new tech most notably ballistic missiles (maybe they could reach the US too, who knows), and jet fighters. Those nukes: they should had been to be taken over Germany somehow. They can't if their bombers get shot down.
> "Europe first" policy.
It was only first because there was men fighting Germany there: the Red Army. With noone on the continent what would have been the incentive?

 >>/29450/
1943 was the year morale began to plunge, though not just from bombing but also from humiliating defeats in the East and the Mediterranean.
But the impact on contemporaries of the events of July 1943 cannot be exaggerated. Even the most rabid adherents of the Third Reich could hardly deny that the 'end was nigh'. Hans Kehrl faced this reality, on the first night of Hamburg's devastation, when he was woken by a telephone call from his close associate Gauleiter Karl Kaufmann, who begged him to accelerate the delivery of several trainloads of quicklime, which would be needed for the rapid disposal of tens of thousands of corpses. After Kehrl rushed to the Ministry and was informed of the dimensions of the disaster, he suffered a temporary collapse. For the first time in years, this obsessive workaholic was forced to return home where he spent hours roaming around his garden in a daze. Not surprisingly, as the news from Hamburg leaked, the Gestapo picked up reports of shock and dismay from across the country. Mussolini's sudden removal added to the panic. The SD noted that party members were no longer wearing their party badges in public and people were avoiding the Hitler salute wherever possible. Speer found that even party audiences no longer responded to his boasts about the triumphs of the armaments miracle. Amongst senior industrial leaders, the SD reported, there was no longer anyone who believed in the possibility of a German victory. To admit as much in public, however, was extremely dangerous.

The Nazi leadership reacted to the crisis of morale with a determined escalation of violence. On 24 August 1943 Heinrich Himmler, Reichsfuehrer of the SS, took over the Interior Ministry. By the end of the year the regional bosses of the Nazi party, the Gauleiter, had been formally instituted as the overseeing authority of local government. The party and the state were increasingly fused and it was the party that set the tone. The politicization of the judiciary, which had taken on ever more aggressive forms since the beginning of the war, was intensified. By 1943 the courts were issuing death penalties against Germans for defeatism and sabotage at the rate of a hundred a week. Even prominent businessmen were no longer immune. Indeed, Heinrich Himmler and the Gestapo made a point of singling out bourgeois defeatists for especially aggressive reprisals. In the autumn of 1943 two senior branch managers of the Deutsche Bank were arrested and executed for making defeatist remarks.
(pages 602-603) Then there's more about how the black market began to grown from this year onwards.

> Well the numbers show continuous increase. With the exception of vehicles and ships/submarines. So bombings weren't that much of problem, and other factors sure had to play a role in the fluctuation (like logistical: transporting units from one front to another could enjoy priorities over moving raw materials or parts).
The armaments index grew from 1943 to 1944 but only modestly. Compared to its previous 1942-3 growth it stagnated. It could have expanded more and it didn't, this means a large number of weapons that weren't produced. 
The beginning of stagnation exactly matches the time major strategic bombing began and the causality was explained in Speer's own words. Of course as the book shows Speer presented reality in a biased manner and he could be trying to shift blame but he was right in this case. Troop movements weren't dramatically different from 1942 to 1943, they don't seem an important enough factor. And this bombing could have been even more effective if not for new defensive tactics and the Allied mistake of going for Berlin. 
Then came the late 1944 strategic bombardment and it was extremely effective.

> With the exception that the East distracted almost the whole Wehrmacht from the West.
In the aftermath of an Eastern victory only some divisions committed would come back. A large garrison would have to be left to shield the very long (one Eastern front of length, to be exact) new border aswell as vast territories in the rear. A further number of fighting men would be dismissed to work in the factories as originally planned. A few divisions would perhaps attack towards the Indian Ocean. And any forces deployed to North Africa were guaranteed to be taken as POWS.
> he only reason why the Western Allies could land in Africa, Sicily, Italy, Normandy and south France. The only reason why they couldn't mow Brits down in Egypt and further in the Middle East.
In Normandy and southern France, maybe. But with Allied hegemony in the sea and crippling logistical deficiencies -the Axis had enough trouble supplying what it did have in Libya- defeat in North Africa and, consequently, the loss of a modest number of divisions is guaranteed.
> Except that the SU was an industrial giant. It would have depended on the surviving factories and industrial equipment.
France was an industrial giant. Its actual productive contribution to the German war economy was all but worthless. German-occupied Western Europe, although heavily industrialized, functioned at a fraction of its prewar productino. The East was poorer, more agrarian, had more intense fighting and a chunk of its prewar industry was evacuated upon the war's beginning. Tooze doesn't even bother to mention any arms production there.
> Also not having to replace destroyed equipment in the east, just concentrating on fighter aircrafts would have meant much.
It would only delay the inevitable. American production was gargantuan and dwarfed anything Germany could ever hope to produce. Even a full duplication of output would still leave the Luftwaffe outnumbered. The only way to match America would be having an American-sized economy. This was Hitler's long-term strategic vision but not something that could be done within the war years.
> The Germs could have concentrate also on their new tech most notably ballistic missiles (maybe they could reach the US too, who knows), and jet fighters.
Missiles weren't all that relevant in the grand scheme of things. Their development is to some part owed to political moves by Speer as the project was under his rather than the Luftwaffe's authority.
Jet fighters were pursued with all possible effort but it would still take time to get them into mass production.

 >>/29452/
I think that was more of getting back to the WWI routine by the German society. Those who didn't have it (because they were too young back then to experience it) were all in the fronts. Their nerves (even the party cadres) were on edge, previously they saw they were on a roll, which filled them enthusiasm but the first real problems filled them with dread and deep doubts. They were punished severely for the previous war, and that was a negative feedback they learnt to fear. They didn't see they lost the war they just envisioned doom because that's people do who already burned themselves once. Giving the credit of forethought is false.

 >>/29453/
> The armaments index grew from 1943 to 1944 but only modestly. 
Wep: 106 > 137 > 234 > 348(!100+)
Tnk:  81 > 130 > 330 > 536(!200+)
Air:  97 > 133 > 216 > 277
Amm: 102 > 166 > 247 > 306
Pwd:  96 > 129 > 200 > 212
Exp: 103 > 132 > 191 > 226
The real stagnation was in vehicles and ships.

The SU falling is all hypothetical so much can be imagined, let's say they manage to capture their targets in '41 and Japan gets involved in the east, and no Pearl happens. Or yeah only in '42 they punch out the SU, but then African front still can get reinforcement, the Germs could double their troops there, which amount is nothing compared to what was in the SU. And no other front, most soldiers could have remain and pacify Russia, still could have spare a couple of divisions to redirect. Also barely any air cover should have needed there and quite a few units could be regrouped to west and Africa.
And the enthusiasm which they would have gained, and Brits could crap their pants and envision doom at that moment.

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Tooze has some notes on data, with the tables here:
https://adamtooze.com/app/uploads/2016/03/Arming-the-Reich-Tables.xls
The third is the armaments index.
 >>/29512/
> I think that was more of getting back to the WWI routine by the German society. Those who didn't have it (because they were too young back then to experience it) were all in the fronts. Their nerves (even the party cadres) were on edge, previously they saw they were on a roll, which filled them enthusiasm but the first real problems filled them with dread and deep doubts. They were punished severely for the previous war, and that was a negative feedback they learnt to fear. They didn't see they lost the war they just envisioned doom because that's people do who already burned themselves once. Giving the credit of forethought is false.
That's a loss of morale nonetheless, and the regime had to fuse the Party and bureaucracy and intensify repression because it saw it as a serious problem. And the decay in morale had economic consequences as it vivified the black market which previously was only modest in scope.
> The real stagnation was in vehicles and ships.
The yearly figures include the last boom in the first half of 1944 aswell as the normal months prior to bombing in 1943. When the critical nine-month period from June 1943 to February 1943 is compared to the previous nine-month period and the final five-month burst from March to July 1944 (afterwards it goes down and down), all sectors except ammunition experienced only modest growth, much slower than in the previous period. And even with the pre-bombing rate of growth the Allies still had greater output: a slowdown in this moment was the last thing Germany needed.
And all of this was with the 1943 bombing. In the following year from August onwards the whole war economy slid into oblivion.

> Japan gets involved in the east, and no Pearl happens.
Japan wasn't going to attack the Soviet Union. Hitler wanted Pearl Harbor to happen and made his plans around a future Japanese attack on the Western powers, this is something talked about in the book.

 >>/29513/
Yes, I got that numbers from there. You posted a screenshot from his book here:  >>/29240/ That's a clear growth from 43 to 44 in all fields I listed. Weapons and Tanks grew with same proportion as before, the others seem to slow down somewhat. Ofc, probably they balanced out so they could keep the pace in W. and T.
To be honest ofc, the numbers in normal circumstances should show larger rise in production but this is where the bombings came in. They were effective to some extent to thwart an exponential growth but not that much.
Western writers Americans are doing it yeah, but Brits are notorious in this thing tend to exaggerate their role in WWII. Every saint favors himself.

> That's a loss of morale nonetheless,
Yeah, but not due to the bombing. It was an all round war thing.
> And the decay in morale had economic consequences as it vivified the black market which previously was only modest in scope.
This is true to the Allies as well. All of them. They were corrupt as fuck in and out. Catch 22 is a fiction but it relies on Heller's experience in war, and reflects his criticism toward the USAian war machine.
It's a war thing.

 >>/29515/
> Weapons and Tanks grew with same proportion as before
From September 42 to May 43 weapons grew by 58% with an average of 7% per month. Tanks grew by 255% with an average of 17%.
From June 43 to February 44 weapons grew by 19% with an average of 2% per month. Tanks grew by 35% with an average of 2% per month.
The only sector that didn't slow down was ammunition, which even managed a larger growth in the later period (32% versus 21%). But it's correct that most sectors experienced clear but slowed down expansion. So strategic bombing had a concrete economic impact. Its effectiveness was limited by three things, Allied geographical focus, the attainability of air superiority and a learning process in which targets moved to infrastructure and caused more damage. There was a succesful initial campaign over the Ruhr and Hamburg, which didn't even last the whole stagnation period, a lull and then everything converged again by late 1944 and it became highly effective. Cutting off the Ruhr's coal mines is no insignificant feat.
> Western writers tend to exaggerate their role in WWII.
They do, but it's not dramatic in this case. In popular views of the war strategic bombing -except for the nukes- doesn't get a lot of attention, causing massive civilian deaths is not glamorous. The Wikipedia page shows controversy, not a scholarly consensus in favor of its impact. Another case, the blockade, is obscure for laymen, and the scholarly reference described in the footnotes is Medlicott's official history of the blockade, which begins on a famously downbeat note - 'too much . . . was expected of the blockade' - in fact cites little or no evidence from the German side and shows no appreciation of the severity of the Reich's import problem.
And as the book shows Germany's leadership was constantly worried about American economic capacity as an existential threat and America as a very difficult enemy. The Germans themselves assigned a large role to the Western powers.
> Yeah, but not due to the bombing. It was an all round war thing.
There was a continuous exhaustion but anxiety was suddenly heightened from the shock of bombing and defeats.
> This is true to the Allies as well. All of them. They were corrupt as fuck in and out. Catch 22 is a fiction but it relies on Heller's experience in war, and reflects his criticism toward the USAian war machine.
America's war economy was still running well at the end while Germany's was imploding with inflation getting out of control. The Western Allies didn't have it as bad.

 >>/29525/
Will read and reply sometimes.

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1941
Five facts stood out as the year passed:
- Britain gained the upper hand on the fringes of Germany’s sphere of influence, taking over Italian East Africa, suppressing pro-Axis governments in Persia and Iraq and nearly defeating Italian positions in Libya. This was partially compensated by Germany’s takeover of Greece and Rommel’s deployment. As a result the possibilities of integrating the colonial empires of Germany’s vassals and of connecting with Japan through South Asia were blocked.
- America’s imminent entry into the war became obvious.
- Japan’s leadership increasingly favored an attack against the Western powers.
- Germany and Japan were drawn closer into an offensive alliance against both Britain and America. For Hitler this was directed against the West, not the Soviet Union; he still thought the Wehrmacht could defeat the latter alone. But against the West, for years a German-Italian-Japanese alliance was seen in both Germany and Britain as the only thing that could pose any threat to the Royal Navy. It was the possibility of Japanese-American rapprochement that worried Hitler.  Hitler pledged to reciprocate a Japanese declaration of war and kept true to this in December.

-The assumptions over which Barbarossa was launched were proven wrong. The Red Army was not vanquished west of the Dniepr-Dvina line: despite massive, triumphant encirclements there was still an ever-growing number of divisions on the other side of the frontline. Those defeats did not unseat Stalin from power. Key figures like Fromm, director of the army’s armaments effort, Thomas and Todt now pondered on a political solution to the war and Todt even discussed this possibility with Hitler in November.
And finally, the Heer was defeated at the gates of Moscow. The Red Army went on a theater-wide counteroffensive over the winter. For a moment it even threatened to encircle Army Group Center, but that could not be done due to an insufficient concentration of force. (Tooze blames this on Stalin’s mistake, but given the Red Army’s lack of armor at the moment he had a reason for doing wider attacks). The frontline panic was contained and by spring 1942 the Wehrmacht was still lodged deep inside the Soviet Union.
Yet this shock reverberated into a system-wide crisis starting on late 1941. Over the course of 1942 the Reich had to defeat crises in finance, food, manpower, coal and steel, and it is in this context that Alber Speer becomes Minister. Finance, food and manpower will be reviewed separately, and then Speer’s tenure and the strategic situation in 1942.

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Wartime finance and inflation
The Reich could spend as much as it wanted. Since June 1939 the Reichsbank’s statutes allowed it to set the money supply at will. Its real constraint was the threat of inflation. That was a problem even for the Soviet Union, which recognized a stable monetary standard as a basic necessity for accounting and statistics. Inflation acted as a hidden tax across the population, dampened incentives for worker and entrepreneurial initiative, made coercion the only way to command production, encouraged consumers to work outside the system (through barter and the black market) and threatened to send the entire war economy into disarray with popular unrest and collapsing productivity.
Military spending grew voraciously with every year. To compensate this the government had to lower costs on the military side. On the civilian side it had to suppress economic activity and the money supply and base at least some of its spending on actual revenue, of the prewar “safe funding” kind, from taxes and long-term debt/savings banks, and from occupation costs paid by other countries.
Upon the outbreak of war Germany was already one of the most highly taxed states in Europe. Nonetheless the RFM proposed a tax hike. This was rejected in favor of a “silent system” of war financing (geraeuschlose Kriegsfinanzierung): consumer goods were rationed, leaving a volume of unspent private income which flowed into savings banks, from which the Reich could siphon funding. Investors were blocked from borrowing from the banks. Those who had capital of their own had nothing to spend it on besides government debt. This achieved exactly the same as a tax increase. However it was politically more palatable, preserving an appearance of normality in which there were even some wage increases on the expectation of postwar prosperity.
Yet private income could also be hoarded or leak into the black market. The former was too rare to matter. The latter depended in large part on morale. On the first years of the war, the populace was calm and there was little black market activity. 
Consumer goods rationing also depended on labor and raw materials controls to regulate production and supply. Though the operation of such controls was haphazard it was “more surprising... that it functioned at all” and they succeeded in reallocating resources to the military sector.

Another question in the monetary field was that of prices paid to arms producers. The Reich had to simultaneously lower costs and give industrialists a profit incentive to increase efficiency. Since the Sudeten crisis the pricing of public contracts was determined by the LSOe system.  Prices were set by estimated costs plus a profit margin (normally 5%) calculated not over costs but over capital employed. Once agreed, prices were fixed. 
In 1940 Todt modified this to “stimulate the appetites” of businessmen: in the case of ammunition, the lowest-cost producers were given standard prices.
But as a whole prices were not standardized through the whole board. This was appropriate for the early war, when new producers were entering the arms market and authorities needed flexibility to reach all of them.
The system did succeed in encouraging industrialists to lower production costs. The point of contention was that they were making too much profit, which the Reich had to “claw back”. The topic came up in 1940 and was brought to fore in November 1941, when Reich price commissioner Josef Wagner proposed to raise 2 billion Reichsmarks by cutting profit rates and in the future defining standard prices. He was opposed by industrialists, who were represented by Wilhelm Zangen, head of the Reich Group for Industry. Wagner resigned due to unrelated intrigue with the SS.
Discussion continued and pricing reform was portrayed as one of the central pillars of Speer’s miracle, though it began months before his appointment. Producers were now paid in standard prices and could keep profits they made by reducing costs were theirs to keep. It is commonly said, and a talking point in Speer’s propaganda, that the LSOe system was inefficient and did not encourage producers to cut costs. This is incorrect. The innovation was standardization and a lesser need for bureaucratic oversight, but even then there was a reason not to standardize in the early war.
The “claw back” was made in an tax over profits 50% higher than those earned in 1938, favoring older armaments producers. It was applied mildly and overall the compromise achieved did not greatly cream off business profits. Speer couldn’t care less about inflation and gave workers and producers generous monetary rewards.

By 1941-42, while the matter of pricing was settled, authorities detected an expansion of barter and black market trade and an inflationary threat. Barter was under a code restricting it to between households. Goebbels launched a successful propaganda attack on the black market over the winter. Fiscal authorities encouraged savings and raised revenue by increasing corporation tax (from 40% in mid 1941 to 55% in January 1945) and a one-off prepayment of 10 years of the Hauszinssteuer, the Weimar tax on property (see Living standards). Meanwhile occupation revenue also increased. Tax revenue covered 54% of expenditure in 1942 and 44% in 1943. The Reich’s economic stability was secure for the moment. This achievement of the Reichsbank, RFM and RWM has little appreciation, but Speer’s “miracle” could not have happened without it.
This did not last. The state’s capacity to raise revenue and impose rationing and controls was overwhelmed by the burden of its expenditure, which hit 99,4 billion Reichsmarks in the fifth year of the war. Inflation began to creep in, starting from the periphery of Germany’s empire. In 1942 prices rose sharply through the Balkans. In 1943 the economies of Western Europe disintegrated under the weight of occupation costs. In Germany tax revenue stagnated, ever less consumer goods were on the market, financial institutions could not absorb all of the government’s debt and the black market steadily grew as morale withered away from 1943 onwards.

By 1944 Germany proper was also facing uncontrolled inflation, which Hans Kehrl, leading figure in the RWM (though Goering was at the helm), described in a memorandum in July. Banks no longer invested into government bonds, leaving that task for the Reichsbank. The volume of cash in circulation exploded. Kehrl noted that the bureaucratic suppression of inflation that was already being attempted could only be effective if combined with tax increases and the replacement of some cash payment with payment in bonds (comparable to the New Finance Plan of 1939). Yet Hitler, which had previously overseen a high level of peacetime taxation, a measure identical to a tax increase in 1939 and further efforts in 1942, now refused to raise taxes, ruling out such a possibility in 22 September 1944. In February 1945 he agreed to the RFM’s request for a tax increase… on the condition that it would happen after the war. 
Refusal to raise taxes did not mean civilians were spared. Living standards plunged and a tax increase would have been the lesser evil. There was a “drive towards substance” (Drang zur Substanz): once it was clear that funds would evaporate in postwar inflation,  capital that could have contributed to the war effort flowing towards shares, machine tools, new buildings and neutral states. In the industries, partial answers to the meaninglessness of monetary incentives were found in material rewards such as extra rations and greater coercive violence. But inflation was still one of the factors behind the war economy’s collapse in late 1944.

 >>/30401/
> taking over Italian East Africa, [...] and nearly defeating Italian positions in Libya. [...] As a result the possibilities of integrating the colonial empires of Germany’s vassals [...] were blocked.
But by Tooze's measurement, overseas lands were worthless anyway. Even Europeans couldn't add much to the war machines of the Axis. However these:
> suppressing pro-Axis governments in Persia and Iraq
> connecting with Japan through South Asia were blocked
were more important in this question.
Even if the Germans could acquired the Sovier Caucasus, they would have to defend it against the Brits from the south (whom could approach from the Levant and India).

 >>/30527/
> But by Tooze's measurement, overseas lands were worthless anyway.
Colonies are mentioned because earlier on they're factored into the hypothetical peacetime economic potential of Germany's sphere of influence. On the short term they're meaningless for the Axis, and militarily unreachable even with fantastic success in North Africa. 
> Even if the Germans could acquired the Sovier Caucasus, they would have to defend it against the Brits from the south (whom could approach from the Levant and India).
With logistical and terrain limitations I doubt either side would be able to make any deep advance. However Baku would be within range of Allied bombers.

 >>/30403/
I don't get it how it was a problem that those companies made much profit. This should have meant they accumulated capital to invest in stuff, so it would have went back to the economy. It's not that they siphoned it to offshore bank accounts and sat on it.

 >>/30404/
I wonder if fiat money would have been better, they could have dealt with inflation better. In the beginning for sure, maybe by 44 could have proved bigger fiasco.

 >>/30527/
> Even if the Germans could acquired the Sovier Caucasus, they would have to defend it against the Brits from the south (whom could approach from the Levant and India).

But USSR would be crushed in process, because Caucasus and Baku region produced near ~80% of oil.

In that case Germans wouldn't need even to properly restart oil production in occupied zone. Brits wouldn't matter when USSR is out, at least at land in that region.

 >>/30767/
> I don't get it how it was a problem that those companies made much profit. This should have meant they accumulated capital to invest in stuff, so it would have went back to the economy.
The problem was inflation. The Reich didn't want the money going back into circulation as it already had relentlessly growing military spending. Same thing with consumer goods consumption, which is normally a good thing but whose suppression was desirable in those conditions.
> I wonder if fiat money would have been better
They pretty much already had fiat money.
In June 1939, the statutes of the Reichsbank were revised to abolish any formal limitation on the expansion of the money supply. Though the external value of the Reichsmark remained officially at gold parity, the abandonment of the gold standard demanded by Nazi monetary theorists since the 1920s was now finally acknowledged as a reality. Hitler as Fuehrer of the German people was given the power to determine the money supply at will. The path was cleared for unfettered military spending. (p. 239)

 >>/30776/
Maybe, but who knows how much oil the SU had in reserves? Also grabbing the land might not helped the Germans, that oil had to be extracted and refined to solve their shortage. So maybe the front would have turned to slow moving (or not at all), resembling to WWI fronts.

 >>/30778/
But the only thing they could have inflation is the disproportionate amount of money compared to the gold reserve. Otherwise inflation is only caused if there's no demand for the oversupply of money. But in a war there's infinite opportunities to spend the money. And they had a friggin World War to spend it on. That's a barrel with no bottom, that's infinite demand.

 >>/30784/
The potentially limitless demand wasn't for money itself. Reichsmarks were not a scarce resource, unlike gold and foreign exchange reserves; the regime had as many of them as it wanted to have. The regime didn't care about having the money itself. Its unending demand was for weapons, which were scarce, and that is already an upwards pressure for their price. Then the Reich could, if it wanted to, essentially make money out of thin air to buy them. This money passed on to arms producers which pledged it to purchase capital and consumer goods. Thus, there was also an upwards pressure for the price level of those goods, which restrictions such as rationing and price controls repressed but not with 100% effectiveness. And so with everything rising in price there is inflation.

 >>/30784/
> Maybe, but who knows how much oil the SU had in reserves?

Fighting on reserves without supply is pretty good way to be defeated. Considering that Germany was somewhat close to winning in 41-42, it would be crucial.

> Also grabbing the land might not helped the Germans, that oil had to be extracted and refined to solve their shortage.

But Germans fought pretty well even with shortage. USSR, on other side, fought not so good in first years even with abundance of supply. So, even sitting there and doing nothing is a good way to remove USSR, and without USSR there is no one on continent who could stop Germans, especially if they wouldn't go into another radical blitzkrieg.

Although all these alternative history theories are hard to prove and could, of course, be countered by other theories.

 >>/30813/
 >>/30813/
>  USSR, on other side, fought not so good in first years even with abundance of supply.
Afaik that's mainly due to interference of political commisars and Stalin.

 >>/30818/
> Afaik that's mainly due to interference of political commisars and Stalin.

That is complex question. Of course Stalin's purges had pretty bad influence on army's abilities, but even without them USSR was weaker than Germany in multiple fields.

 >>/30818/
In the Suvorov thread we gathered a bunch of things which could cause the failure, since his theory also explains that, Russian Bernd complemented counterarguments. I think you were here already, so you might remember.

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Manpower and foreign labor
Essentially the entire German workforce was employed in September 1939, either on the civilian sector or in activities necessary for the war effort – agriculture, mining and the military-industrial complex. For a peacetime economy the latter was already a large segment of the population. Mobilization transferred millions to a third sector, the Wehrmacht. The Reich’s leadership now had to carefully reallocate workers between the three sectors.
Emptying civilian industry in favor of the other two was a no-brainer and began already in 1939. The Wehrmacht received workers through conscription. Useful industries were bolstered in a number of ways. With higher wages they had a magnetism and many workers moved on their own, particularly new entrees to the workforce. Civilian firms received contracts from the Wehrmacht or transferred employees to military contracts they already had. And the regime had many tools to force reallocation, from its rationing systems to assigning compulsory service (Dienstverpflichtung) to workers. On the first year it also tried to close down small businesses to release their resources, but this was ditched as it was unpopular and ineffective. 
In the likely inflated Reich Group for industry’s figures, the share of the industrial workforce under Wehrmacht contracts rose from 22% in 1939 to 50,2% a year later. 750,000 men were on civilian contracts in summer 1940, compared to 1,3 million in May 1939. 
Consumer goods industries managed to resist with their powers of bribery, their products being scarce and desired, and from 1943 onward a renewed effort was made to “comb” them out through coercion by Speer and the SS. However the extent of undermobilization in the first years of the war was greatly overstated by Speer and early historians; as soon as the war began the Reich was already working hard towards economic mobilization.

The real dilemma was not civilian vs. military but between the frontlines and the war economy. Mobilization drew extensively on teenage cohorts entering majority, which only had an indirect  impact, but employers soon found themselves in competition with conscription authorities for prime manpower, both young and old. The Wehrmacht needed not just cannon fodder, which could be drawn from unqualified workers, but also skilled mechanics, fitters and electricians for the engineering corps, in army repair shops, as Luftwaffe ground crew and in naval engine rooms; they were thus also in competition for experienced workers. Employees in firms directly under Wehrmacht supervision were exempted from the draft, but further down the production chain sub-contractors and raw materials providers were caught up in mobilization. Even where no net loss of workers took place, the best young men were unavailable for hire. This was one of the reasons for struggling coal output in 1941.
The contradiction became grave once the Eastern Front was opened, with a substantial number of fatalities which had to be replenished on top of the need to expand the military. By the first half of 1942 teenage cohorts could barely cover losses and conscription advanced over 200,000 armaments workers.
There was less leeway to increase the workforce by mobilizing women than is commonly assumed. In 1939 German women already had a high rate of employment, higher even than in Britain and America at the end of the war. This was particularly the case in agriculture, but major centers such as Berlin and Hamburg had a large proportion of women at work. 
One thing that could be done was increasing the work load of existing employees. This was done in two high-priority cases: in the coal fields of the Ruhr from spring 1941, with the usage of Sunday shifts, and in tank factories after the Adolf Hitler Panzer programme of late 1942, with 72-hour work weeks. Workers and their families were generously rewarded. Henschel’s Tiger tank plant in Kassel worked 24/7 in two daily shifts.

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Manpower could also be juggled back and forth. This was part of the pre-Barbarossa plans: demobilize workers, call them up for a short Eastern campaign and then dismiss them again.

But the only definitive solution was to increase the number of workers. They could be brought from the several countries under occupation to make up for conscription losses and go beyond that. Besides this simple logic of addition, importing workers also made sense as Germany had the highest productivity in Axis Europe. A French worker in Germany was more productive than a French worker in France. A concentration of the continent’s manpower within the German economy was what any “rational economic dictator” would do.
The usage of foreign labor began with Poles in agriculture. There was already a tradition of temporary work across the border and in 1938, with the harvest looking difficult, Backe had proposed to negotiate with the Polish government a transfer of laborers to German fields. In 1940, with the food supply in danger and the pre-France strategy of total short-term mobilization dictating a greater exploitation of occupied territory, Goering, Backe and Hans Frank (occupation administrator) agreed to use the General Government as a reservoir of labor, employing a large proportion of its population and tapping into areas without traditions of temporary cross-border work. 
This clashed with Himmler’s intentions: Germany had just annexed several Polish territories and he was working to have the Poles leave, not enter the country. The arrival of large numbers of Poles and their participation in society were not desired. A compromise was reached in subjecting the arrivals to apartheid, severely restricting their social contact with Germans, aswell as a cap to their wage level and harsh punishments for shirking at work -but never deportation back to the General Government.  
POWs were put to work and volunteers arrived, but that was not enough. Manpower targets had to be met by forceful transfer. As this provoked a reaction by the subject population and occupation authorities had little military strength they preemptively targeted the nucleus of a nascent Polish resistance movement, with purges beginning in the summer. 

The usage of foreign labor widened, assimilating Western POWs and delving into other sectors such as coal mining. But it truly boomed in 1942, when in response to the manpower crisis, Hitler appointed Fritz Sauckel to the new position of general plenipotentiary of labor mobilization (GBA). Sauckel was a crude, plebeian representative of the NSDAP’s populist wing. He has been compared unfavorably to the “handsome, urbane technocrat” Speer, but that underestimates him and downplays the rationality of his efforts. He succeeded in extracting millions of workers from occupied territories, either voluntarily or through press gangs. To give an idea of how many foreign workers were in Germany:
Between January 1942 and the end of June 1943 the GBA delivered 2.8 million new foreign workers to Germany: the workforce of a great factory - 34,000-strong – every week, for seventy-eight weeks. By the summer of 1943 the total foreign workforce had increased to 6.5 million, of whom 4.95 million were civilians rather than prisoners of war. After the summer of 1943 the pace slowed somewhat, but Sauckel continued to bring in workers. By February 1944 the total of foreign civilians and prisoners of war had risen to 7.356 million. By the autumn of 1944 it had reached a maximum of 7.907 million. At this point, foreign workers accounted for more than 20 per cent of the German workforce. Of the armaments workers of the Third Reich, more than a third were foreign. In the plants of the Reichswerke Hermann Goering and the Luftwaffe, the foreign share routinely exceeded 40 per cent. On individual production lines the percentage could be even higher. As State Secretary Milch boasted in June 1943, the Stuka Ju 87 was being '80 per cent manufactured by Russians'. (p.517-8)

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Besides POWs and Sauckel, another source of foreign labor was the SS. Through the practice of “Selektion” it sifted those useful or not for work. Part of the concentration camp population to arms was rented out to arms producers. This was done on the basis of units of labor, not specific individuals: when a worker died or became unproductive, the SS provided a replacement. For employers, the profitability of camp labor compared to hiring Germans depended on the fees charged by the SS, the cost of hiring overheads for the new workers and the money won from the official procurement agency for the job.  Ultimately the Reich was both selling labor to the producer and paying him for a task. In the construction sector, camp labor was profitable but less than hiring Germans; it was still used simply because sometimes it was the only labor available. 
A notable example of this kind of labor was the IG Farben chemical plant in Auschwitz, larger than the camp west of it and part of a wider industrial complex in Upper Silesia.
In addition to providing workers of its own, the SS was also instrumental in managing foreign workers from other sources as it kept them in line and held unruly workers in its camps.

The German economy was unprepared to handle such a large influx of labor. There was much waste at first and it took a long learning process, until late in the war, to finally assimilate them into its metabolism.
Among Soviet POWs brought for work, the high mortality of this category of prisoner continued within Germany. Meanwhile, Sauckel’s Ostarbeiter arrived so fast adequate housing and food could not be provided. They, too, had a high rate of attrition at first. Even after initial complications, they were mistreated, overworked and given limited food rations; the December 1941 ration for Soviet POWs and Ostarbeiter had a nominally high daily calorie value of 2,500, but it was of low quality with little fat and protein, and the real ration received was often less than that. Administrators were negligent and rations leaked into the black market. The populace resented the new arrivals and frequently accused authorities of favoritism, such as the case of Italian POWs who received more fruit and vegetables in accordance with their diet. The presence of so many foreigners clashed with ideology.  
Tens of thousands of weak laborers had to be sent back to the East in the autumn under haphazard conditions and many died on the trains. Poor conditions became known in recruitment areas and voluntary enlistment withered away. Escapes became common among this population. The Gestapo registered 42,714 between April and July 1942, with 34,457 recaptures.

Besides mortality, another problem was a productivity lower than that of Germans, particularly among POWs. Mortality and productivity were both tied to the treatment of workers, particularly the question of food. In sectors such as coal mining caloric input had a direct relation with productivity. Mere days after Sauckel’s appointment the Wehrmacht’s military-economic office wrote to him that a well-fed group can outproduce a poorly-fed group twice its size, and feeding workers only barely enough to keep them alive would be a net loss to the war economy.
The wastefulness of these questions was immediately realized. In early March the Mitteldeutsche Motorenwerke complained to the Food Ministry of insufficient rations, noting that unlike in the East, where replacements could immediately be provided, the loss of an Ostarbeiter working special machinery in Germany to malnutrition meant a lot of time wasted training his successor. Large-scale death and underperformance nullified much potential productive capacity.

Sauckel struggled to ensure foreign laborers were given more humane treatment so as to employ them efficiently and even to give propaganda value to his program. He insisted that they be fed appropriately and was backed by the Pleiger, the coal tsar. Besides existing complications, such as the popular feeling that any increase in rations for foreign laborers would have to be compensated with another increase for Germans, Backe opposed this on the grounds of the continent-spanning food crisis. Hitler intervened on Sauckel’s side and dictated that more food should be given to the foreign workers. This was achieved, though it had to be done at the expense of the food supply in the occupied territories. 
The SS also learned to better nurture its labor pool. Camp workers received improved medical attention, had their rations increased after the winter of 1942-3 and were stimulated with bonuses of food and cigarettes.
Ways were also found to distribute food more efficiently. In Upper Silesia, the innovation of Leistungsernaehrung (performance feeding) deducted rations from underperformers and redistributed them to overperformers, concentrating resources on the strongest and sending the least able on a spiral of malnutrition. By the end of 1944 it became a standard practice across the country.

The question of discipline also had to be dealt with. From September 1942 escapes were handled by a comprehensive system of police cordons on roads and cities. Punishments for incorrect performance also had to be dealt. There were legalistic means -the police, courts and SS. Sauckel wanted them to have a monopoly, with any corporal punishment within the workplace being treated as assault. However, official means were long-winded and kept workers unavailable. It was sometimes more convenient to let foremen handle the problem on site. Furthermore, corporal punishment was already present in the German workforce. Sauckel lost this case to Pleiger and Robert Ley.

Among civilian Ostarbeiters, mortality remained higher than Germans or their counterparts in the Soviet Union, but mass attrition ended completely: in July-August 1943 there were only 2,300 deaths among a population of 1,6 million. 
Productivity rose: comparing a September 1942 Krupp study with investigations eight months later, productivity as a % of German counterparts rose from 70-85 to 80-90 for the French, 70-85 to not far from 100 for Eastern women and 57 to 60-80 or 80-100 for Eastern men. However, the figure for Soviet POWs was only 42% in the Krupp study. Those who were in construction, along with concentration camp inmates, remained at less than 50% of their German counterparts. 
Overall, once contradictions were overcome, a massive pool of foreign manpower was efficiently integrated into the German economy. This was one of the pillars of the “Speer miracle” and output increases in the last three years of the war.

 >>/31096/
> Essentially the entire German workforce was employed in September 1939
Well they promised to abolish unemployment. They took that promise seriously...

I will read the whole thing ofc.

 >>/31096/
Ok, just finished this post and probably won't go on today, I want to restore my sleep schedule since I lack of much needed rest, like workers in tank factories.
But only by that post I have something to scratch: what was discussed at the production rates and how bombing effected it. One other factor why production stopped it's skyrocketing is the struggle with lack of manpower, as the war dragged on more people were needed on the fronts, more people were needed to replace the wounded, dead and captured.

 >>/31118/
The manpower crisis and its overcoming came a lot earlier than bombing. It got the leadership's attention during the 41/42 winter crisis and with Sauckel's efforts enough workers were brought in to make up for conscripted armaments laborers and achieve an expansion of production on top of that. On 1942 there was a lot of trouble integrating this workforce but by the time bombings began in 1943 there were already millions of foreign workers and their assimilation into the economy was in full swing. The Wehrmacht continued to bleed manpower but a powerful relief had been found.

Cool thread OP

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 >>/31097/

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 >>/31194/
Updated it to something better.

Beside these great pics I've something to add on holocaust denial line, but I always forget. So here's a bump, maybe I won't tomorrow.

I give this a bump because this deserves way more attention and the refugees here might be interested in this. WWII should be a popular topic, at least that was my impression.

 >>/28367/
> It’s common to think of early 20th century Germany as an affluent country

Who thinks that has no clue about German history and should not read such a propagandist book.

Why do you think people voted for Hitler if "Weimar" was so great as western propaganda try to sell us?

>  with a strong economy that carried it through two world wars.

Of course it had, or why do you think Britain and France waged war against her.

>  In reality, it had mediocre standards of living 

It was poverty and famine.

>  a weak economy

As a result of blockade, boycotts and straight plunder by the allies. Countries like Persia trying to trade with Germany were invaded and their leadership disposed. US policy in South-America wasn't different, any German gains in trade were aggressive countered by underhand and open threats.

Hey Germany wasn't even admitted to the International Red Cross association after WWI.

Hitler's economic policies were super successful and raised the living standards of common Germans greatly. Unemployment disappeared and foreign worker came to seek for employment in Germany.

MUH Military spending
Germany had no military and was constantly invaded by its neighbor since the "end" of the world war. Of course it was necessary to increase military spending for self defence when there was none before.

 >>/31938/
 >>/31938/
> voted for Hitler if "Weimar" was so great as western propaganda try to sell us? 
radicalism, populism and revisionism appereantly germans weren't the best when it comes to electing people. hindenburg was already wanted to reinstall the monarch and the monarch wouldnt just sit and watch he would be tear apart versailles. 

People wanted to get rid of versailles but I doubt they wanted complete mess like that. Hitler couldn't be appeased, brits offered some old german colonies ruled together with brit-france-belgium-germany. They let hitler take sudetenland without a fire shot. They let him militarize rhein. They didn't allow France take ruhr region. But no, hitler simply wanted to wage a war.

 >>/28367/
> In common with the remainder of Europe, Germany was behind ---.
> Ultimately this weakness was the reason it lost the war.
> It’s common to think of early 20th century Germany as an affluent country with a strong economy that carried it through two world wars.
Seems legit. We wouldn't want to all be talking German by now, right? Just don't ask any questions USA's strong economy that carried IT through 2 world wars, and only through them, because when there wasn't a war there was a huge depression with nothing to do with vampiric war bond trade, of course, of course...

 >>/31960/
let alone russia

 >>/31938/
> Why do you think people voted for Hitler if "Weimar" was so great as western propaganda try to sell us? 
Anyone with a minimum literacy in history is aware of suffering in the Weimar period. In fact, keins often overstate it, not being aware that, in between the painful first years and the Great Depression, there was a brief period of stability and under Stresemann there was a strategy to improve the situation at work.
> Of course it had
Read the posts, please. This is not even a question of which regime was in power, but of large-scale societal and economic imbalances between the countries. The German Empire, Weimar and the Third Reich were all behind England, and even more so, America. This is simply because Germany itself was behind in industrialization and had less favorable economies of scale. Under the Kaiser it was catching up but was still behind, like Japan, which, despite its fantastic entrance into the industrialized world, still took a long time to truly catch up with the First World in living standards and economic modernization. Under Weimar, aside from circa 1925 to 1929 there was too much internal and external pressure to maintain this momentum. Then Hitler had a broad geopolitical plan to solve the problem of economies of scale, but what happened in the 30s was merely a prelude to this plan's fulfillment. In 1939 Germany was still behind and its living standards were still lower.
The German countryside was very poor, wheter in 1900, 1925 or 1936. The processes of mechanization, agricultural modernization, urbanization, etc. were incomplete and far behind England and America. Germany had a large rural population with low productivity that still hadn't been released into the industries. The ratio of rural population to land was unfavorable to Germany, and this is where "land hunger" comes from. Nazi agrarians had a good grasp of these realities and the regime wanted to modernize the countryside once its wider plan had been concluded and land hunger had been solved.
Germany's resource position made it an inherently high-import country. From the Great Depression onwards it had neither the exports nor the credit to pay for those imports and this was a crippling limitation which required great sacrifices to live with and twice managed to stop rearmament dead in its tracks.
German industry wasn't bad but it didn't live up to America's economies of 
> As a result of blockade, boycotts and straight plunder by the allies.
You're trying to explain decade, even century-spanning differences in the modernization process in terms of a single time period's external pressures. And even those conjunctural problems were not entirely geopolitical, you're probably thinking of prewar Germany being boycotted but the balance of payments question meant little imports could be afforded even if the entire world had its markets open.

> Hitler's economic policies were super successful and raised the living standards of common Germans greatly.
It was nothing magical. Everything that happened is explained by conventional historical and economic logic. Germany was already beginning its recovery once Hitler took power. The preceding government was about to embark on a work creation campaign precisely as Hitler did and already had credit earmarked for it, which was the new regime's first burst of spending. Then the following recovery was carried out in a very similar manner to what other states did at the same time, and to what other hypothetical German regimes would have done. For a time there was relatively little inflation despite the drop in unemployment, but that is precisely what some economists at the time predicted. Then after growth continued under full employment there was inflationary pressure, which is also in line with what was predicted.
Then even after recovery the gap in living standards remained, as the very post you quoted describes. The housing shortage was unsolved. Consumer goods industries had not recovered. The quality of available consumer goods was on the decline. Most of the regime's consumer goods programs had failed. 
This is not because the regime was incompetent (Tooze repeatedly refuses incompetence as an explanation for what took place and shows the rational basis for what political or economic forces did) or failed in a drive to increase living standards. It wasn't aiming for a short-term increase in living standards in the first place. Hitler's long-term strategy, which he settled for on his first days in power, was to use militarization to pave the way for a definite solution to Germany's structural disadvantages, and only then achieve material prosperity. And militarization was done very efficiently, at a pace and scale unmatched by any other capitalist economy in peacetime. In a handful of years the military share of the economy went from almost none to so high that it the threat of inflation was looming and the entire economic system was under strain, with consumer goods and railways suffering.
This isn't "guns vs. butter" as militarization was a popular measure; guns server as a sort of butter. But the long-term plan was to use them to replicate the conditions for American success and affluence within the European continent.
> Germany had no military and was constantly invaded by its neighbor since the "end" of the world war. Of course it was necessary to increase military spending for self defence when there was none before.
That other governments would still rearm is something discussed in this thread. But it's also a point that the specific government in power had a rational long-term geopolitical strategy that didn't include mere self-defense in its pursuit of rearmament.

 >>/31960/
> Just don't ask any questions USA's strong economy
America's economic supremacy is precisely one of the book's central themes!

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 >>/31954/ 
> hitler simply wanted to wage a war.

Blah blah... uncle Shlomo.

Letter of Polish Ambassador Jerzy Potocki in Washington to the Polish Foreign Ministry Warsaw
Washington 21. Nov. 1938
Talk with Ambassador Bullitt

I had a long conversation with Ambassador Bullitt, who is here on vacation.

When I asked him how he imagine this future war, he replied that first of all the United States, France and England must rapidly arm themselves to face the power of Germany.
Only then when the moment comes - Bullitt continued - will one have to make the final move.

I asked him how this move will happen, because probably Germany won't attack England and France first, and that's why I don't see how that will come to pass, the whole combination.

Bullitt answered that the democratic states needed two more years to be completely armed.

Meanwhile the German Reich would probably head in eastern direction, it would be the wish of the democratic states that there would be a war between the German Reich and Russia in the East.

Since the potential strength of the Soviets is still unknown, it is very likely that Germany, operating too far from its bases, would be condemned to a long and exhausting war. Only then - Bullitt said - could the democratic states attack Germany and force its surrender.

When I asked him if the United States would take an active part in such a war, he said that it was undoubtedly so, but only if England and France were to start first.


President Franklin Roosevelt appointed Bullitt the first US ambassador to the Soviet Union, a post that he held from 1933 to 1936. 

Bullitt was recalled after US journalist Donald Day disclosed that he had been involved in illegal exchange of and trading with Torgsin rubles.
...after a trip to Moscow during which she reportedly discovered him to be having an affair with Olga Lepeshinskaya, a ballet dancer.

...posted to France in October 1936 as ambassador. Fluent in French and an ardent Francophile, Bullitt became established in Paris society and rented a château at Chantilly. He owned at least 18,000 bottles of French wine.[28] As a close friend of Roosevelt, with whom he had daily telephone conversations, Bullitt was widely regarded as Roosevelt's personal envoy to France and so was much courted by French politicians.[28] Bullitt was especially close to Léon Blum and Édouard Daladier, …

Bullitt stated, "France and the United States were united in war and peace." That led to much speculation in the press that if war broke out over Czechoslovakia, the United States would join the war on the Allied side.


Franco-Polish alliance
The Franco-Polish alliance was the military alliance between Poland and France that was active between 1921[citation needed] and 1940. During the interwar period the alliance with Poland was one of the cornerstones of French foreign policy. Near the end of that period, along with the Franco-British Alliance, it was the basis for the creation of the Allies of World War II. 

The secret military pact was signed two days later, on February 21, 1921, and clarified that the agreement was aimed at possible threats from both Germany and the Soviet Union[2].

This alliance was closely tied with the Franco-Czech Alliance. 

Soviet–Polish Non-Aggression Pact
The Soviet–Polish Non-Aggression Pact (Polish: Polsko-radziecki pakt o nieagresji, Russian: Pakt o nenapadenii mezhdu SSSR i Pol’shey) was an international treaty of non-aggression signed in 1932 by representatives of Poland and the USSR. 

Franco-Soviet Treaty of Mutual Assistance
The Franco-Soviet Treaty of Mutual Assistance was a bilateral treaty between France and the Soviet Union with the aim of enveloping Nazi Germany in 1935 


Plan R 4 was the World War II British plan for an invasion of the neutral state of Norway in April 1940. Earlier, the British had planned a similar intervention with France during the Winter War. 

The Allies devised a plan to use the Soviet Union's 30 November 1939 a

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 >>/32054/
Plan R 4 was the World War II British plan for an invasion of the neutral state of Norway in April 1940. Earlier, the British had planned a similar intervention with France during the Winter War. 

The Allies devised a plan to use the Soviet Union's 30 November 1939 attack on Finland as a cover for seizing both the Swedish ore fields in the north, and the Norwegian harbours through which it was shipped to Germany. 


Stalin 'planned to send a million troops to stop Hitler if Britain and France agreed pact
Papers which were kept secret for almost 70 years show that the Soviet Union proposed sending a powerful military force in an effort to entice Britain and France into an anti-Nazi alliance.

Such an agreement could have changed the course of 20th century history, preventing Hitler's pact with Stalin which gave him free rein to go to war with Germany's other neighbours.

The offer of a military force to help contain Hitler was made by a senior Soviet military delegation at a Kremlin meeting with senior British and French officers, two weeks before war broke out in 1939.


Winston the spendaholic: He teetered on the brink of bankruptcy and was saved by secret backhanders.
Yet a new book on Churchill's finances reveals he spent £40,000 a year on casinos and £54,000 on booze
Churchill spent most of his life swimming in a mountain of personal debt
Gambled equivalent of £40,000 a year on holidays to the south of France
Had £54,000 bill from his wine merchant, including £16,000 for Champagne
Secret benefactor gave him £1million in 1940 as he became Prime Minister 

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 >>/32049/ del
>  there was a brief period of stability 

LOL after outright famine?

> The German Empire, Weimar and the Third Reich were all behind England, and even more so, America.

Oh please...
Germany was one of the leading industrial nations, it was the leading nation in science and research. Foreigner came to worship German universities.

> like Japan

There is no comparision... 
Japan was third world compared to Germany and did only catch up after the war in the 1950-60's with lots of "papercliped" stolen German know how.

> took a long time to truly catch up with the First World in living standards and economic modernization.

Please...
Labour delegations to Germany before the Great War were shocked to learn how much better the living condition for the German working class were compared to the situation in Britain.

German ruled Europe had first class living situation, that those countries separating from it would no longer experience for hundred years after until again a German financed restoration happened.

> In 1939 Germany was still behind and its living standards were still lower.

You mean a country that was plundered had not the same standard of living as that that did the plundering like France or the USA?

With the USA that "living standard" is very doubtful, despite being the main profiteer of first World War and Versailles Treaty.

> From the Great Depression onwards it had neither the exports nor the credit to pay for those imports

Yeah if just someone found a economic reason for the poverty after WWI in Germany?


> As a result of blockade, boycotts and straight plunder by the allies.

You're trying to explain decade, even century-spanning differences in the modernization process

The allies simply did steal German property and intellectual property - see Bayer USA.
 
> prewar Germany being boycotted 

Germany was robbed at gun point. "Hey Germany why are you so poor?"

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 >>/32050/
> Hitler's economic policies were super successful and raised the living standards of common Germans greatly.

> It was nothing magical. Everything that happened is explained by conventional historical and economic logic. Germany was already beginning its recovery once Hitler took power. 

It was super successful and much better than Roosevelt stifling authoritarian "New Deal" that prevented the full recovery of the WWI winner and financial super profiteer USA until the second World War had begone.

 >>/32054/
The book does go into the rising tensions between Germany and the Western powers, the worsening climate with each one of Hitler's moves and in particular how Roosevelt, after the end of his isolationist phase, was hostile to Germany. Like before the last war they were locked in an arms race and there was, if not a thirst for war, at least a willingness to put war on the table as part of brinksmanship. When war did break out it wasn't truly about Serbia or Poland but over this great power confrontation. Though Germany fired the first shot all the great powers were playing the dangerous game. 
The dynamic of the arms race is very important here: both sides knew Germany was weaker and would lose it in the long run, so the Allies played slow through appeasement and the like while Germany moved aggressively in its territorial acquisitions, and, ultimately, in being the immediate initiator of war. This logic continued to play through the war with a race against time and the Western power's economic superiority being the central concern of his French and Russian strategies.
> Meanwhile the German Reich would probably head in eastern direction, it would be the wish of the democratic states that there would be a war between the German Reich and Russia in the East. 
That's what I learned in school, that the Western powers wanted Germany and Russia to exhaust each other in war. Nothing unconventional here. Nor is it non-mainstream to complain of Versailles, I was also taught in school that it was brutal.

Churchill being a drunkard is no secret and doesn't matter much to this discussion.

Also, mind your manners. I post my fair share of Jewish jokes in the humor thread but here we don't just call each other "Schlomo" in a discussion as if it were an argument. That may be the case in Kohl but not here.

> LOL after outright famine? 
Yes. After 1925 hyperinflation was solved, foreign credit allowed a more comfortable level of imports, radical parties had little electoral success and through Stresemann a geopolitical strategy to maneuver around the French and British was at work. Then with the Great Depression everything went downhill.
> Germany was one of the leading industrial nations, it was the leading nation in science and research. Foreigner came to worship German universities. 
It is a fact that Germany had a large industrial base and had a good position in several areas of science and technology. It is also true that it lagged behind America in techniques of mass production, had an incompletely modernized agricultural sector and lower living standards. Development is uneven, both within and between nations. 

> German ruled Europe had first class living situation
The book has an entire chapter loaded with quantitative and qualitative, statistical and anedoctal, academic and lay data on interwar living standards. I wrote a synthesis here. I suggest you read it.

> It was super successful and much better than Roosevelt stifling authoritarian "New Deal" that prevented the full recovery of the WWI winner and financial super profiteer USA until the second World War had begone.
You didn't even process anything I wrote.

I'd like to remind you this book is recommended reading on /fascist/, where it's praised as being free of moralizing. Don't take this as a confrontation, the point of this thread is also to compile the information found in the book without moralizing.

 >>/32063/
> Roosevelt isolationist phase

He was a war monger from the beginning and adored the communist regime of the Soviet Union.

> Though Germany fired the first shot

The first shoot was fired by Poland in 1918!

> Allies  appeasement

That dumb propaganda has to stop.
There was never any "appeasement".

> Germany moved aggressively in its territorial acquisitions

Germany defending its territory, while its enemies invade her and half of the world. Just like today in Syria.

> Churchill being a drunkard

Churchill got ONE MILLION POUND from secret donors when he became PM.

Can you imagine what fantastic high value 1 million Pound Sterling in 1940 was?
The average house costs: £530
The average wage was: £181

 >>/32068/ 
> recommended reading on /fascist/

LOL image board fascist

> praised as being free of moralizing

Anyone writing about "slave labour" in Germany has lost me. That is cheesy propaganda at its worst. Dear allies only slightly overlooking their own conduct (all of them) and the laws of war.

In contrast to Brazil Germany had no slaves.

 >>/32072/
Says the imageboard fascist.

> Anyone writing about "slave labour" in Germany has lost me.
Okay. There was no slavery, only unpaid forced labor under harsh conditions with a high mortality rate.
I get it already. You have more information than Tooze and all of his data and historiography are invalid. You should just ignore this thread.

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 >>/32073/
> Says the imageboard fascist.

Shlomo please...

> There was no slavery, only unpaid forced labor 

Like in USA, GB, France, Soviet-Union etc.

> harsh conditions with a high mortality rate.

No there weren't.

What propagandist like you and your source do is to muddle different categories and then draw false generalizing conclusions.
For example "high mortality" that is created by adding the deaths of Soviet POW.

The Soviet Union did not recognize Imperial Russia's signing of the Hague Conventions of 1899 and 1907 as binding, and it refused to recognize them until 1955.[5] 

One could complain about the death of Soviet POW if the Soviets would not have killed 90 percent of German POW in the relevant time span.

Foreign civilian worker, that were all volunteers, were decent treated received comparable to Germans wages. 

> I get it already. You have more information than Tooze 

Someone that writes already in the preface of his book:
"As in many semi-peripheral economies today, the German population in the 1930s was already thoroughly immersed in the commodity world of Hollywood, but at the same time many millions of people lived three or four to a room, without indoor bathrooms or access to electricity. Motor vehicles, radios and other accoutrements of modern living such as electrical household appliances were the aspiration of the social elite. The originality of National Socialism was that, rather than meekly accepting a place for Germany within a global economic order dominated by the affluent English-speaking countries, Hitler sought to mobilize the pent-up frustrations of his population to mount an epic challenge to this order."

So according to Tooze the problem the Germans had were "pent-up frustrations of electrical household appliances" and not being fucked raw and robbed!

That is such an bizarre, "weltfremd", alien, crazy preposition I have not found yet in any other book about the Second World War.
The audacity of the Germans "to challenge this order"!

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 >>/32076/
> the affluent English-speaking countries,

Wilhelm Gustloff, in full Motor Vessel Wilhelm Gustloff, German ocean liner
 
The MV Gustloff was the first ship built specifically for the German Labour Front’s Kraft durch Freude (“Strength Through Joy”) program, which subsidized leisure activities for German workers. 

The Gustloff started on its maiden voyage on March 24, 1938, and over the course of 17 months it went on some 50 cruises, transporting some 65,000 vacationers.

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 >>/32076/
> For example "high mortality" that is created by adding the deaths of Soviet POW. 
Soviet POWs were used as laborers. Those who died in that condition were labor deaths.
That said, there were also deaths among civilian workers and other groups, mostly with the large influx in 1942, for which the coutnry was unprepared; afterwards authorities managed to dramatically reduce their mortality rates.

> Foreign civilian worker, that were all volunteers
Incorrect. There was large-scale conscription of civilians. The roundups in Poland were particularly famous.
> were decent treated
Not at first, but the book explains how treatment greatly improved and they were integrated into the economy with time. Even then, you must consider facts such as the apartheid regime under which Polish workers lived. Take a look at the "Polish decrees".
> received comparable to Germans wages. 
In the Polish case their wage was restricted at a lower than German level.

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 >>/32078/
> Soviet POW

Soviets savagely murdered POW, sick and wounded, medical personal. They have no reason to complain.

> apartheid regime under which Polish workers lived.

LOL
pic related, grandfather of Polish PM and EU commissar.

 >>/32079/
> Soviets savagely murdered POW, sick and wounded, medical personal. They have no reason to complain. 
I'm not discussing wheter they have any reason to complain. I'm stating what happened. There was conscription of civilians, there was forced labor, those are facts.
> pic related, grandfather of Polish PM and EU commissar.
Did the Polish decrees exist or not?

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 >>/32080/
>  There was conscription of civilians, there was forced labor, those are facts.

There is conscription of civilians and forced labour by the USA in this very moment, so what?
Does this mean the USA has slave labour with high mortality?

It is dishonest to try to conflate different categories of people in a war. You and allied historiography does it to lie about alleged "slaves" that "were killed or worked to death". 

Never ever would they call the Germans military and civilians, little children they forced to work for them as slaves, by France, Britain, the Soviet-Union and others.
Never ever do they acknowledge that million Germans were killed after the war during "peace", did the USA systematically starve the Germans to death by reducing their ration to as low as 700kcal a day!
Even less do they acknowledge that more than a million Germans had to flee their homes after the first world war due to the persecution by France, Poland and a row of eastern European states.
Always it is denied that thousands, ten thousands of Germans were killed already after the first world war by the assorted occupying powers.

> Polish decrees

> Apartheid

> MUH raysiss

Poles were an enemy population in war. Allies would not, have not tolerate Germans, but put them into camps in the desert.

USA captured the whole German population of Central America and at least many of them from South America to deport them where they never were seen again. I know of only one transport of hundred or two hundred deported Germans from Latin America that returned to Germany after the war. Their property was confiscated and never returned and never compensated for.
What happened to the rest? No they didn't return to Latin America.

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MUH toaster

 >>/32101/
I'm talking about the historicity of some events and conditions in interwar and wartime Europe. Whatever happened or didn't happened in America does not change the historicity of those other realities. I'm not even making a moral judgement but merely showing facts. Perhaps you're trying to make a moral equivalence, but that's not what I'm trying to show you.
There is an objective definition for slave labor and the usage of several categories of foreign labor by Germany fits it. Therefore there was slave labor in Germany. What about America? If what America does or did fits the definition, then both Germany and America practiced slave labor.
And what is slave labor with high mortality? That is also objective. It is slave labor with a lot of death. That took place in Germany. What if America also did it? Then it took place in Germany and America. 
Apartheid objectively describes the nature of the Polish decrees. Was that good? That's up to you.
Your claim that the entirety of foreign workers in Germany were there voluntarily is simply false.
Your claim that they were well treated is also incorrect. That topic was quite complex, which you can read here.
So is your claim that their wages were at a German level.

The size and luxuries of apartments afforded by common workers in the American industrial heartland were wildly out of reach of the income of their German counterparts. 
The housing programmes of either Weimar or the Reich fell short of their objectives.
For the same price as common radio models in Germany, Americans could buy radios of much higher quality and had a higher rate of radio usage. This is despite radios being the most successful consumer goods campaign of the regime.
This holds true for other household appliances: their accessibility was lower in Germany than in some other countries.
Most German peasants were overworked, owned little land and had difficult lives.
Rural conditions, access to consumer goods and housing are objective metrics of material living standards. In all of them Germany was behind. Hence it by far did not have the world's highest material standard of living.

Those are all realities. Dispute their historicity if you want.

 >>/32127/ 
> I'm talking about the historicity of some events

No you and the author and the MSM make up shit.

> Whatever happened or didn't happened in America does not change the historicity

It demonstrate perfectly the false reporting.

Either there exist equal standards or allied claims and allegation are just victors "justice", a vendetta against the country that doesn't bow to anglo-american "order" AKA hegemony.

> Perhaps you're trying to make a moral equivalence, but that's not what I'm trying to show you.

Moral judgment are only allowed if it pleases you I understand.

> There is an objective definition for slave labor

There ain't. 
It is just empty propaganda and massive fraud as the "slave labour compensation found" has show, where the Jewish initiators "compensated" itself. Similar happened in Poland were the blackmailed money was gambled away in currency speculation. What followed were demands that Germany should pay again.

What exist are traditional juridical definition of slavery since Roman times. By that long-standing definition there was never slavery in Germany.

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 >>/32127/
> The size and luxuries of apartments afforded by common workers in the American industrial heartland were wildly out of reach of the income of their German counterparts.

See  >>/32058/

> Most German peasants were overworked, owned little land and had difficult lives.

What do you know at all? Pic related

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 >>/32139/
Looks like it didn't digest all photos
> affluent Americans

The juxtaposition of huge agricultural surpluses and the many deaths due to insufficient food shocked many, as well as some of the administrative decisions that happened under the Agricultural Adjustment Act.[12] For example, in an effort to reduce agricultural surpluses, the government paid farmers to reduce crop production[13] and to sell pregnant sows as well as young pigs.[14] Oranges were being soaked with kerosene to prevent their consumption and corn was being burned as fuel because it was so cheap.[12] There were many people, however, as well as livestock in different places starving to death.[12

 >>/32138/
> No you and the author and the MSM make up shit. 
True.
We made up Germany's housing shortage. There were secret underground cities where workers had more luxuries than their American counterparts.
We made up the failures of housing programmes in the Third Reich. Not the failures of Weimar's programmes, though, then everything we say is true, despite the methodology being the same.
We made up land hunger and suffering in the countryside. There were millions of hectares of secret underground hydroponical farms.
We made up the qualitative difference between radios available to German and American consumers.
he technical specifications and consumer responses were fabricated postwar and all radios smashed into pieces to hide the coverup.
We fabricated all statistics on interwar German wages.
We made up the Reichsbank, RWM and RFM notes, the memoranda, the meeting records and all other documents related to the German economy in the 20s and 30s. They should not be used for historical analysis.
We made up the very idea that living standards can be inferred from wages, prices, access to housing, access to consumer goods, work hours and the like. Living standards are measured in ocean liners, of which only Germany had.
We made up America's edge in using economies of scale. All of Hitler's writings on replicating America's economies of scale were forged postwar. Hitler was ignorant of America and did not strategize on how to react to its rise.
We made up roundups and conscription in the acquisition of foreign labor. Millions of the General Government's enemy population, as you yourself put it, voluntarily enlisted to live under highly restrictive conditions in Germany. 

> Either there exist equal standards or allied claims and allegation are just victors "justice", a vendetta against the country that doesn't bow to anglo-american "order" AKA hegemony. 
All evidence disproving your claims can be a priori dismissed as a fabrication. Hence your claims are always true.

> What exist are traditional juridical definition of slavery since Roman times.
Present-day legal definitions of slavery would apply to such cases. So would present dictionary definitions. I bet you would also call it slavery if you were on the receiving end. If rounding up enemies of the people into unpaid work in Siberia is slavery, so is rounding up a camp population for unpaid work in the Ruhr and Silesia.

 >>/32139/
Ah yes, three pictures of slums debunk a study commissioned by the Ford Motor Company in 1929 with hard data. I'm devastated.
> What do you know at all? 
The ratio of agricultural land to agricultural population was vastly better in America compared to Germany.

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> Foreign civilian worker, that were all volunteers

LMAO

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 >>/32143/
> We made up Germany's housing shortage

You can drone and drone and brag about US cars and radios.
You dance and celebrate the "Roaring Twenties" while at the same time on the other side of the ocean, Germans died of starvation.

You can go on and ignore the reasons for it, Germans robbed naked and Americans wasting the loot they robbed from the Germans.
But I wont.

 >>/32054/
> Shlomo
İf you're uncapable of arguing you can go back to your pedo board. 

> Bullitt stated, "France and the United States were united in war and peace." That led to much speculation in the press that if war broke out over Czechoslovakia, the United States would join the war on the Allied sid
It's just one guy and lots of countries warm up each other with such words. It doesn't mean anything as allies let czechoslovakia cede a land without fire shot and they didn't even bother to ask german opinion. French were indeed wanted to create their little entente but they were incompetent about it.  Romania never actually wanted to join axis side, they just desperately cave in to germans out of the communist threat. 

As for franco polish alliance, remember the "why die for danzig?" slogan, french didn't do shit to help poland. 

> Only then - Bullitt said - could the democratic states attack Germany and force its surrender. 
LOL war weary allies wanted to attack germans when soviet threat still exist right? in what alternative universe you come from?

> There was never any "appeasement". 
that delusion..

> Germans died of starvation. 
there were germans died of starvation but that was during ww1 funny thing hitler refused acknowledge this, according to him germany surrendered because of jew ploy, there was nothing wrong going on.

 >>/32150/
> You can drone and drone and brag about US cars and radios. 
You were seemingly trying to argue that America had a lower material standard of living than Germany. Now you appear at least to admit you're wrong.
You were also wrong about the conscription and life of foreign laborers.

 >>/31938/  >>/32054/  >>/32055/  >>/32058/  >>/32060/  >>/32071/  >>/32072/  >>/32076/  >>/32077/  >>/32079/  >>/32101/  >>/32138/  >>/32139/  >>/32141/  >>/32150/
If you actually opened Tooze's book (available in OP for dl) and check the "Notes" section (starting on page 689) you would actually see what sources the author used, among them you would find great many documents the administration of the German Reich produced itself, and the own written works of such notable National Socialist figures like Halder or Speer.
What sources do you base your claims you try to wave away the conclusions based on aforementioned sources? What were the acceptable sources of your choice?
While you giving your divine statements you get into self-contradictions, not on one occasion - although I will quote only one due to lack of time and space (but it is right in your first post to this topic!):  >>/31938/
> It was poverty and famine.
> Hitler's economic policies were super successful and raised the living standards
So which is it?
You also resort to name calling:  >>/32054/
> Shlomo
Providing red herrings/whataboutisms:  >>/32055/
> Winston the spendaholic
Not to mention cherrypicking and your confirmation bias. With which we arrived to the point what was already touched ny Brazil Bernd: your posting reeks of indignation as if someone would have insulted your precious German Reich ****. Like:
> how dare you calling it weak
> how dare you insinuate they used SHLAAAAAAVEEEEEEEEESHHHHHH
> IT'S ALL LIES LIEEEEEEEEEEEEEES, PROPAGANDA
etc. etc.
These are all weakening your side of the argument, and generally what you wrote cannot be taken seriously. 

Yeah, criticism have to be applied to Tooze's work, ofc, like how Tooze arrives to the false conclusion to label the German economy weak when even the data himself provided in the book, and posted here:  >>/28367/
> 2nd image: compared national income.png
...shows it's the third largest/strongest economy at the timeframe given (sadly Japan wasn't shown on that list) way ahead of the main rival of the continent: France (even tho somewhat poorer than her in some respect).
Despite these Anglo biases Tooze also shows, if you would spend the time actually looking into it, you would see he provides valuable data and interesting insights how the Reich's economy worked.

So you really should reconsider your strategy of arguing. My advice is: start small. Pick one point and argue against that. Look up actual sources other than pol memes and stormfront posts. I think you don't try to troll, you really believe what you post (judging by the emotional charge your posts give away and the length of them) but if you want to be taken seriously consider what I wrote. Especially about the claims and statements hanging in the air I mentioned at the beginning of this comment.

 >>/32157/
> It's just one guy

LOL
It's just the ambassador of the United States close confidante of Roosevelt the US president.

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 >>/32172/
> You were seemingly trying to argue

Brush up your reading and comprehension skills.

 >>/32174/
>  sources  Speer.

Discredited

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> 32174

> What sources do you base your claims

Which claims?

> It was poverty and famine.

> Hitler's economic policies were super successful and raised the living standards

> So which is it?

Difficult?
It was poverty and famine and then super successful Hitler's economic policies that raised the living standard

> Providing red herrings/whataboutisms:  >>/32055/

> Winston the spendaholic

Yes the guy that declares war gets ONE MILLION POUND STERLING for what exactly and from whom?
Totally irrelevant you try to suggest? 

I mean, he just totally destroyed the Empire and impoverished his country and handed over everything of worth on a silver platter to the USA.

I say 1 million well spend!

> if you would spend the time actually looking into it, you would see he provides valuable data and interesting insights how the Reich's economy worked.

One can scrap "valuable data" even from known fraudster like Wiesental, so no reason for praise for Tooze.

I also read the book. Would recommend. I also want to get into other work by Tooze, notably The Deluge.

Also good thread. Reminds me of old KC serious discussions.

t. KC refugee

 >>/32181/
> It was poverty and famine and then super successful Hitler's economic policies that raised the living standard 
It was hardship immediately after the war, recovery to mediocre living standards in the mid-Weimar period, hardship under the Great Depression and then recovery and modest (not fantastic) growth beyond pre-Depression levels in the 30s. Then by the late 30s living standards were still far from the world's highest.
In early Weimar there was a gap between Germany and America.
In mid Weimar there was a gap between Germany and America.
In late Weimar there was a gap between Germany and America.
Under the Reich there was a gap between Germany and America.
The primary source of this gap was structural, in the different economies of scale, different land/population ratio, different rural productivity and technology level, different productivity in small crafts and retailers and so on. There was also the conjunctural problem of the balance of payments, which affected both late Weimar and the Reich. The former wasn't even related to the evil machinations of anti-German cabals in Washington and London. The latter was geopolitical, but only partially as some of the problem was inherent to Germany's condition, such as high imports.
Unlike you, the Reich's leadership had a good grasp of reality, understood this and had a long-term strategy to overcome those deeper problems through militarization. They weren't trying to maximize living standards on the short term, that would only come after the issues were faced.

> Discredited
Speer's ministry compiled valuable data on the war economy and the data isn't false. Speer wrote a lot and pushed a narrative on how things went. Tooze is very critical of his narrative and his book can even be called a deconstruction of the "Speer myth". Nonetheless his work, both during and after the war, is invaluable to historical research, just like many other biased sources.
But go on, try to understand history without reading a word Speer wrote and a number the Speer ministry registered.

> One can scrap "valuable data" even from known fraudster like Wiesental, so no reason for praise for Tooze.
Much of the data is German records ranging from those of powerful organizations like the Reichsbank and Armaments Ministry to minutiae of small areas and economic operations. Or it's otherwise obscure data that you can't call forged or even politicized, such as the Ford/ILO study. If you're going to discard all of Tooze's sources because they don't fit your preconceived notions you'll have to conclude Germany in the first half of the 20th century is a Dark Age with almost no documentary evidence to study.
Despite being so eager to disregard sources you seem poorly informed. Conscription of foreign laborers involved millions of people and a large fraction of the war economy's workforce, and you were completely oblivious to its existence. You were also oblivious to the Polish decrees, though they aren't as important. That you didn't know betrays either very superficial reading or that you yourself have been the target of someone's misinformation. 
You probably don't know what was the popular mood in 1934 and can't explain how the balance of payments was handled and its importance. Or even what it was.

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 >>/32101/ 
> USA captured the whole German population of Central America and at least many of them from South America to deport them where they never were seen again.
> What happened to the rest? No they didn't return to Latin America.

Scary stuff

 >>/32079/
> pic related, grandfather of Polish PM and EU commissar.

Nice lie. It's some random wehrmacht soldier and not a grandfather of Tusk.  Funny how you shout about lying jews but the only thing to offer as counter arguments are lies.

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'Agriculture and demographics
Hunger played a role in the outcome of the Great War. Choked by blockade, the Central Powers were unable to properly feed their armies and civilian populations, with disastrous consequences for morale. 
Twenty years later, food remained a topic as critical as manpower and industrial production. What was at stake was, first of all, morale. The Reich’s leadership remembered the past war all too well and was determined to keep the German population well fed at all costs. There was a geopolitical dimension: one of the reasons Franco chose not to enter the war was that he knew Axis Europe couldn’t feed Spain. And an economic: workers without sufficient nutrition, not just in total calories but also in protein and fat, could not be expected to be productive, particularly in sectors such as coal mining.
Yet the continent’s food situation wasn’t much safer. As discussed, even in peacetime it wasn’t strong, and now blockade and mobilization came with crushing force. By the time France was defeated Germany had on its hands an “Europe-wide agricultural crisis”. In 1940 French yields fell to less than half of their 1938 value with smaller contractions in the Netherlands, Yugoslavia, Hungary and Germany itself. Poland’s food surplus regions had already been annexed. Only Romania increased its grain deliveries, and in time the Soviet Union would make its contribution. 
If food stocks continued to shrink, Europe’s herds of livestock would be culled, permanently reducing the supply of protein and fat; this had happened in the “pig massacre” of 1916 and was already taking place in small scale with Danish swine and poultry populations. 

The RNS, of course, had its stores of grain, starting the war with 8.8 million tons, enough to give bread to the entire German population for a year. On the first year only 1.3 million tons were consumed, but with faltering harvests Herbert Backe was seriously worried about the following years.
Reich agricultural authorities now had to ration Europe’s scarce food supplies. They were concentrated and stratified by the priority of feeding each population, with the civilian German population having reasonable rations on the first years of the war. Within the General Government, rations were highest for the Germans themselves, followed by Poles working in important positions, the Ukrainian minority, Poles in general and Jews. By the end of the year Germans received 2,600 daily calories, Poles in general 938 and Jews 369.  By the spring undernourishment had noticeable effects on industrial workers. On several moments food had to be shipped to the General Government, but it made its contribution by supplying labor for German farms.
Rations hovered around 1,600 calories in Czechia and Norway and were as little as 1,300 in Belgium and France. Rations alone don’t describe how much was actually available as there was much black market activity.
Another aspect of food management was the distribution of nitrogen between fertilizer and explosives. It was relevant later on in 1943 and 1944, when explosives were favored, with consequences lasting into the postwar years.

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The scarcity of food thus drew attention to the Ukraine’s grain production, which became one of the main targets of Barbarossa. The short-term management of Eastern agricultural output to feed Axis-held Europe through the war of attrition with the Western powers was minutely discussed in the months preceding the invasion by Backe and General Thomas, with conclusions laid out in a meeting between Thomas and State Secretaries of major ministries on the 2nd of May aswell as the OKW’s “Green Book” of guidelines on the agricultural management of conquered territory; altogether this formed the “Hunger Plan”. However, a large gap was soon found between what was planned and what could truly happen.
The army was expected to live off the land, not only conserving the food produced elsewhere but also freeing up the overloaded logistics for war materials. Yet it failed to satisfy its demand with requisitioning, particularly in Belarus, requiring large shipments of food from Germany, and even that was not enough. Army Group Center did not starve but over the winter many soldiers went for days or even weeks without rations.
Then there was the topic of shipping the Soviet Union’s agricultural output westwards. A minor note is that the highest priority items were not grain but oil cake and oil seed.
The Ukraine’s grain surplus was actually modest and could only provide a minimal improvement to Germany’s position. This was the result of lower productivity and, most importantly, industrialization, which created a Soviet urban population numbering in the tens of millions which hogged most of the output. The solution was to simply take over the entire food supply and not give any to the cities, leaving their “surplus population” to starve or emigrate. This was proposed by Backe and fully accepted by General Thomas, who had earlier opposed the regime on some points; what was at stake was not ideology but ruthless pragmatism. As the OKW’s guidelines explained, “ ‘’Efforts to save the population from death by starvation by drawing on the surplus of the black earth regions can only be at the expense of the food supply to Europe. They diminish the staying power of Germany in the war and the resistance of Germany and Europe to the blockade.’’ “ (p.480). 

Though the sticking point in pre- invasion planning, this was never carried out. It was soon found that mere inaction could not stop the flow of food to the cities; that could only be done with massive security operations employing manpower that was sorely needed on the frontline. Occupation administrators also opposed this as they wanted to have a functioning society under their control.
Instead, food was distributed by authorities and the urban population did what it could to survive, resorting to the black market or moving to their relatives in the countryside.
The only groups that could be subjected to deprivation were urban Jews and POWs. Restrictions were placed on Jewish access to food markets, direct purchase from farmers and purchase of scarcer items such as dairy and meat. Jews on Minsk and other Belarusian cities received only 420 calories per day. Famine then struck over the winter.
The POWs would, given conditions on the Eastern Front -poor state upon capture followed by lengthy treks out of the frontline-, have suffered tens of thousands of casualties just from normal attrition. Their actual mortality was many times that due to systematic negligence and mistreatment.
However, several urban centers were cut off from the agricultural hinterland in an unexpected way -the frontline. The Soviet Union’s main agricultural areas were severed from Moscow, Leningrad and the rest of the unoccupied country, freeing up the output they used to absorb for Axis territory and leaving the other side of the front to fend off with what little food it produced. This was greatly worsened by Stalin’s mobilization policies, which diverted far too much manpower from the fields to Red Army, causing starvation on the Soviet side of the frontline.

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Over the course of the winter crisis concessions had to be made to the local population. As 1942 passed Germany’s food situation continued to worsen. On April civilian rations were reduced, a dramatic measure taken only because there was no alternative; the political cost was high and there were fears of industrial performance reduction in the event of further cuts.  To make matters worse, there was now a massive influx of foreign workers and it was eventually settled that they would be properly fed. 
The German and foreign worker population was then fed at the expense of the occupied territories.  with the harshest results in Poland (where rations were down to a pitiful level until the 1943 harvest) and the occupied Soviet Union. Goebbels described this as “digesting” occupied lands; if there was to be starvation in Europe, then Germans would be the last to starve. French and Soviet deliveries of grain, meat and fat in grain equivalents rose from 3.5 million tons in 1940-41 to 8.78 in 1942-43. Even the General Government, a food deficit region, was squeezed to provide over half of German rye, oats and potato imports. The harvest was also better than expected in 1942, and in October 19th rations were substantially increased for Germans and foreign workers. The food crisis was under control for now.

Parallel to this was the long-term reorganization of conquered territory. It began in Poland. Hundreds of thousands of ethnic Germans from South Tyrol and the Baltic were to be resettled in the annexed provinces on land taken from the local peasants. The Jewish and Polish populations in general would move to the General Government, with some of the Poles assimilated. In reality both resettlement and non-German emigration were much slower than expected, with many eastern Germans remaining in their transit camps. Jews were moved to ghettos and Poles conscripted for labor in Germany.
Once Barbarossa was in the horizon, this could take a much grander scale. Planning was largely made through Himmler’s subordinates in the SS economic administration, Reinhard Heydrich’s Reichssicherheitshauptamt (RSHA) and the Reichskommissar fuer die Festigung deutschen Volkstums (RKF), where Konrad Meyer was settlement expert. Their discussion continued into a year after the invasion and by July 1942 had produced three drafts, the first and last by the RKF and second by the RSHA, of the “Generalplan Ost”. It covered the future of the German East widely, even going into mundane details such as forestry.

The planned reorganization of the East would be a massive project on the scale of the past decade’s rearmament. It would begin with a rationalization of land distribution, with plots being consolidated into 18-30 ha estates at the hands of the most hardworking small farmers, so that in the future no farm would yield less than 3,000 Reichsmarks per anuum. This would affect as much as 30% of farms in some areas, and that was a concession to local sensibilities as otherwise that rate could get close to 50%. 220,000 families would be freed up by this and join 220,000 young rural couples and 2 million urban colonists to settle the East. They would mostly occupy Hufen (self-sufficient farmsteads) of at least 20 ha. Poorer lands would be formed into larger Wehrbauernhoefe run by SS veterans with Slavic labor. By 20-30 years 10 million Germans were expected to have become settlers. But not all colonists would become farmers: the population structure would be similar to Bavaria and Hanover, which was considered balanced and had only a third of the workforce in agriculture. Only 36% of investment would go to agriculture and land remediation.

Even when imagery of the Teutonic Knights was used, it was not in an “atavistic”, backwards-looking sense; the calculating, commercial character of the Ostsiedlung’s settlements was emphasized. But the historical process that was taken as a model was the conquest of the American West. The construction of a German East was a thoroughly modernizing project and sought a high-intensive living space with cities, livestock and machinery on the farms and an extensive infrastructure network.
To pay this 67 billion Reichsmarks -more than had been spent on rearmament- would be raised from the national budget, local government, a special RKF fund, the Reichsbahn and debt, with more from the private sector; it would be a grandiose eastward movement not just of population but of capital. 
Alongside massive expenses, this would require a large workforce; 400,000–800,000 were expected for the first phase. Forced labor would be used extensively and could reduce labor costs by 20%. 

Some of this workforce would be lost to wastage, contributing to the demographic rearrangement that was expected to take place: a large part of the local population would starve or be moved to the east of the Reich’s new border. The mechanism for this was the one defined by short-term planning, which, as discussed, could not be implemented as expected. Expulsion from immediate areas of settlement was also considered, and a “trial run” done in the General Government. Starting on July 1942, the Polish population around Zamosc was expelled. This had limited success: many locals escaped to the forests, resistance activities heightened and the operation could only be carried out with a lot of German manpower.
This topic is part of wider controversies on wartime population management, for which Tooze has an insight. From the perspective of manpower, populations were an asset and it was desirable for the Reich to have them as large as possible for absorption into its war economy. Yet there was large-scale loss of population, including many potentially useful workers, through the treatment of Soviet POWs and foreign workers, the distribution of food and other factors, with further loss expected in plans that were not realized. This is a grave contradiction. The most commonly cited explanation is that counterposed to the desire for manpower was ideology, with a struggle taking place between a committed minority of SS officers and a pragmatic majority of Wehrmacht and civilian bureaucrats. Himmler himself sometimes used the rhetoric. 

This ignores that there was another rational, economic concern on the same level as manpower: food. From this perspective, given Europe’s agricultural crisis populations were a liability and it was not desirable to have too many people. The three competing factors of manpower, ideology and food would over the course of the war evolve into a synthesis. 
The gist of it was that scarce resources would be concentrated on the economically useful, with population loss left to the economically useless. The economically useful included the German population itself, which was kept at the top of the food hierarchy at all costs. It extended to the foreign workers - volunteers, conscripts and in the camps. As shown, in time their wastage was dealt with and the Reich tried to keep them alive and productive. Mortality among foreign workers was successfully brought to fairly low levels. Even the section of the camp population rented out to the war industry had its conditions improved. Some expected losses such as among the Soviet urban population did not take place, at least not as imagined. The concentration is also visible in small scale in performance feeding. In turn, the occupied countries with low productivity were at the bottom of the food hierarchy. Populations captured by the SS were subjected to “Selektion”, separating those who could be used by the war economy and those who couldn’t.

 >>/33217/
Well they had the vision at least.

 >>/33215/
 >>/33216/
Is there more data on rationing? The time periods how long they were in effect?

 >>/33287/
I've found some numbers here:
https://forum.axishistory.com/viewtopic.php?t=39928
https://forum.axishistory.com/viewtopic.php?f=6&t=139314

 >>/33303/
Many thanks.

Sun Tzu wrote that one feeds his army on the expense of the enemy. It's a bad practice to take away the food for the army from our own civilians, it has to be acquired from the enemy's subjects. And after the conquest the same, the population of the conquered lands have to feed the army.
This is age old axiom, it was practiced all over the world by people in places and times who never even heard of Sun Tzu. It is perfectly normal what the Germans did as far as the norms of a war goes.
Wars on large scale fought before, but the enormity of the two world wars was an entirely new challenge for which there were no proven solutions, but the age old axiom was still true.
In WWI there were little conquered lands which could have been used to live off, resulted in food shortages in Germany. Now they could reach for the resources of others, and they did, this is practicality.
The same practicality led to the corrections of the rations of the foreign workers.

 >>/33457/
It's relatively common to overlook this short-term pragmatic dimension of food management, its continent-wide context and the way its real implementation greatly differed from what was planned. Even Wikipedia covers this but not well. The focus seems to lie on the long-term intentions, though they're only one dimension. They would also be implemented differently from what was planned if the East were conquered, Berlin would soon find it couldn't spend as much and establish as many settlers as it wanted to.

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Albert Speer, man and myth
In 1942 the German war economy was divided among:
-The Reichsbank, RFM and RWM civilian economic administration, which maintained the Reich’s financial stability.
-Backe and Darré’s agrarian bloc, centered on the RNS and Food and Agriculture Ministry, administered the continent’s food supply.
-Sauckel’s provision of manpower.
-The SS served several purposes, providing manpower aswell as discipline and control for foreign workers and the German population itself.         
-Goering’s and Milch’s Luftwaffe political bloc. 
-General Thomas’ military-economic office. It would soon lose its power at the same time as Speer rose.
-Coal was, since 1941, under Paul Pleiger’s Reichsvereinigung Kohle (RVK) after a conflict between Reich Coal Commissioner Paul Walter, a populist hailing from the DAF, and coal syndicates. Walter’s anti-capitalist rhetoric led to his demise.
-Fritz Todt was Minister of Armaments and oversaw mostly the Heer’s industrial base, delving into the Luftwaffe only in the case of ammunition. 

On the 8th of February Todt died in a plane crash. SS intrigue has been suggested but it was likely an accident. Hitler names Albert Speer as his replacement, and from that point he becomes the “protagonist” of the last third of the book, just as Schacht for the first. Unlike Schacht, Speer propelled himself to international fame and remains a figure of much public interest today.
The first thing that must be known about him is how much he was image-savvy and publicity-minded. He was an expert at inserting narratives favorable to himself into public consensus. In wartime he hammered into the home front the tale of the “arms miracle”; his task was as propagandistic as it was economic and as such he worked closely with Goebbels. The need to maintain the momentum of propaganda and to provide “big stories” (the tank, missile, electric submarine programmes and so on) grounded his production decisions. After the war, he successfully rehabilitated himself and presented a tale in which “Speer is presented as an artistic soul, an architect, who was pushed reluctantly to take on wider responsibilities. This was a self-image that Speer shared with Hitler.”; his detractors then took him for an “’unpolitical technician', a man given the task of resurrecting the German war effort, who did his job without asking questions about the wider purpose of his work or the wider activities of the regime that he served.” (p. 552) 
Both took for granted his narrative of a miraculous reform of the German economy and of himself as an apolitical technocrat, the two forming the “Speer myth”, which Tooze seeks to bring down and pick apart. “Myth” not in the sense he lied about the “Speer miracle”: the data collected by his ministry is valid, there was indeed a great expansion of output in his tenure (in two periods with an interruption from mid 1943 to early 1944) and, save for one case in July 1944, he did not falsify statistics for the public. But Speer’s explanation for why and how this took place must be read critically.
The “apolitical” half of the myth is merely wrong. The book doesn’t cover much his ideological fervor but it does question any implication that he was an outsider. He joined the party in 1931, when it wasn’t mainstream yet and soon became a close friend of Hitler. He was then chosen first and foremost because he could be relied upon, and indeed, he remained loyal, not swerving even in moments such as the 20 July coup; this friendship was also his trump card within the Reich’s power struggles.

With Himmler he only had a working relationship at the time of his nomination but, contrary to Speer’s later attempts to distance himself, they formed an alliance and he came to rely on the SS for labor and discipline; by the end of the war they were the “two strong men of the regime”.
Through his work, Speer became well acquainted with the regime’s other important figures. He was already engaging in “office politics” long before being Minister and continued to the end of the war.  His decisions were influenced by the need to maneuver around his rivals for control of the war economy: the A4 (V1/V2) program allowed him to sap resources from the Luftwaffe, the development of closer economic relations with France got around Sauckel, the reorganization of the steel industry contested Pleiger and so on. He accumulated “secret sources” of inputs unknown to the other managers of the war economy, which were funneled into his prestige projects. He was very ambitious and in his pursuit of power managed to expand beyond Todt’s fields, which were at first all he controlled, to swallow Kehrl and the navy’s spheres in 1943 and the Luftwaffe’s in 1944.
But he was apolitical in one sense: the propaganda of the arms miracle, in its insistence on the possibility of victory through willpower, did away with questionings of the rationale and purpose of Germany’s position -something Kehrl confronted Speer about but nevertheless lost his power- and thoughts of a political solution to the war, which Generals Thomas and Fromm aswell as Todt had considered.  

On the arms miracle itself, Speer’s wartime rhetoric had two elements: the “self-responsibility of industry” and “rationalization”.
In accordance with self-responsibility, or “Selbstverantswortung”, the Ministry would merely set targets for industry to achieve. What this meant in practice is that at least at first there was a close relationship between the regime and the industrialist class, which were bound together by the shared existential threat of a Stalinist victory. In 1942 the industrialists were committed to arming the Wehrmacht to fulfill the Reich’s strategy in the East; the war effort still seemed coherent. Speer sided with the industrialists on matters of business profits, even at the expense of the fight against inflation. The Armaments Ministry’s structure of Rings and Committees was used to communicate with the industry and staffed by companies, each receiving a number of posts proportional to their power.
By 1943 the war effort was losing its coherence and the relationship began to sour. Over the course of the war’s last years the regime’s treatment of industry became dictatorial as the latter’s enthusiasm died off at the same time as the former began to speak of total war and sought a continuous radicalization and mobilization of the economy. Nonetheless “self-responsibility” remained in rhetoric and was used to defend Speer’s methods against the likes of Kehrl, who wanted fiscal tightness and state control.

“Rationalization” was the silver bullet. As the story went, until that point the war economy was held back by bureaucratic inefficiency, which the technocratic Ministry swept away and then, through technocratic reform, began to unleash potentially infinite output from Germany’s limited resources by raising productivity, a triumph of the will that would overcome the enemy’s material superiority. Minute attention to detail would optimize all processes. American-style economies of scale would continually find more productivity. The Minister would empower outsiders to vigorously impose modern techniques against industrial conservatives.
In practice this didn’t matter much. One example of this rationalization was the price system reform initiated a few months before Speer’s nomination, but as shown the previous system was not irrational and the improvement was incremental.

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The chief innovations made after Speer’s appointment were organizational. He joined Milch, Goering’s secretary, Kehrl, Sauckel, Backe and others in the Zentrale Planung, an overarching organization for discussing the allocation of raw materials and hence the war economy as a whole. Within his field, Todt had already set up five Main Committees to manage industries in each sector (e.g. Tanks, Electrical Equipment); Speer added two more and had Karl Otto Saur command them as head of the Technisches Amt. Saur was ideologically committed and Speer’s successor in Hitler’s last will and testament. Alongside the Main Committees, Speer created Rings to handle subcomponents and raw materials and had them overseen by Walther Schieber, ideological like Saur.

An example of the gap between the Ministry’s rhetoric and what could be achieved was its intervention in the Mark XXI U-boat program. In the spring of 1943 the navy expected it’d take until March 1945 before series production could begin. Speer believed that the possibility of doing away with piece-by-piece construction, implementing mass production and replicating the success of America’s Liberty ship program was open and all that stood in its way were conservative bureaucrats and industrialists. As such, Otto Merker, an outsider to shipbuilding, was assigned to revolutionize submarine production. He had the hull divided in eight sections made by inland firms -mobilizing additional capacity and allowing economies of scale- and only used the dry docks, which were a bottleneck, at a short final phase of assembly. A fleet of 30 U-boats was promised by the end of summer 1940, with the same number every month. The conservatives balked at his outsider status and did not believe German industry was ready for this kind of mass production; Rudolf Blohm, the naval patriarch, opposed the program and had to be sacked from his Main Committee and Business Group. They were right. The hull sections delivered by inexperienced inland firms were grossly deficient. The administrative apparatus needed to handle multi-stage production was not ready. The Mark XXI design itself needed time for fine-tuning. Merker’s timetables were not fulfilled. The U-boat could only be used in the final days of the war.

Productivity did significantly spike in one field -the Luftwaffe’s, which was outside Speer’s authority and yet responsible for much of the increase in arms output during the “miracle”. In 1942-3 output doubled with a negligible increase in labor and aluminum inputs. Germany remained with less per capita productivity than America but in aircraft the gap was shortened.
Milch set up Rings in Speer’s manner. Investments started in autumn 1940 began to pay off. A rhetoric of “more for less” appeared and had in its proponents William Werner, who complained that the aeroengine industry produced more waste chips than engines; this fact, however, was not a German failure but the norm throughout the world; the industry was just advancing in technique.
But the central pillar of Milch’s success was the exploitation of economies of scale: the concentration of production into fewer models, larger batches and the accumulation of experience. The aircraft industry had long sought “American-style” success by concentrating production into larger new or expanded plants, with both successes or failures, but this led to internecine competition. Milch instead cut the big firms down to size, taking direct control of Junkers, Messerschmitt and Heinkel.
But economies of scale weres at odds with the adoption of new designs, which dispersed efforts and caused lags. In the previous year Udet had waited for new aircraft designs and did not commit to any; the Me 210 and He 177 were then finally pushed into production, but their performance was gravely disappointing.

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Milch’s response was to trade quality for quantity and produce old aircraft with some updates. Among them were the Me 109 G, which could match the speed of its enemies with new engines but not their agility, putting it at a disadvantage in dogfights, and the He 111, which was equipped with electronics and heavy guns to serve as a night fighter; it was useful in this new niche until the second half of 1943, when the USAF began escorted daylight raids. 
And yet it was this decision that produced much of Milch’s successful numbers.

(A digression on technology)
By the following year the Me 210 and He 177 had become viable. They needed better design specifications and suffered from a recurring theme in German wartime technology: the sacrifice of the test and fine-tuning phase of development to save time. On aircraft this could shorten the development cycle from four to three years. But this meant running the risk of producing faulty designs, whose perceived failure was worsened by the heavy expectations placed on them in the desperation to find war-winning weapons. With enough time they could mature and overcome their weaknesses but this negated the time won by rushing production. The gamble worked better with the Ju 88, which came out imperfect but good enough as a workhorse. The Panther entered Kursk with teething problems. The Mark XXI U-Boat had a convoluted story but could only be put into action when it was truly ready -at the war’s very end. The Me 262 was not rushed and the Luftwaffe’s leadership did all it could for it; it has been said that it could have been put into production earlier but that would have been rushing it. If anyone sabotaged it, it was Speer and Willy Messerschmitt. After the war the rockets, jet aircraft, tanks and electric submarines inspired future designs but there was no way to cheat time, technology had to mature on its own pace.

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Within Speer’s field, the bulk of the expansion in output came not from rationalization but from payoff from the heavy investments made in 1940-1, guarantees of food and financial stability and, most importantly, inputs of labor and raw materials. Finances, food and labor were handled by others through the year and Speer had a 30% increase in his workforce in 1942. Among raw materials steel was king: there were extensive reallocations and production soared. For that to happen, however, another crisis had to be faced, and Speer played a role.

In June the industry was organized in the Reichsverenigung Eisen (RVE), modeled after the RVK but lacking any “steel tsar”; it was instead pluralistic with the leading steel industrialists represented in its presidium. Though Vestag’s Voegler was the most important the chairman was Roechling.
Steel rationing had been disorganized since the end of 1941, when priority was shifted back to the army; entitlements for bombs, anti-aircraft shells and naval and aerial expansion were cut, but some remained for investment and exports. There was now a “ration inflation” with more steel entitlements than actual steel, allowing producers to pick the grades of steel they wanted and not the ones needed for high priority projects. With Kehrl’s help the backlog of steel orders was canceled, entitlements slashed to match production -with the greatest cut falling on the civilian sector- and only issued to 90% of total production, with 10% for priority projects.
Previously enough iron ore and scrap to continually grow steel output, but at the turn of the year it dropped due to a coal crisis. It could recover and soar but only with more coking coal. Some of the fall over the winter was logistical, as the railways strained under the size of the Reich’s new territory. Speer oversaw a crash locomotive program with a 90% increase in the sector’s workforce.
But even then Pleiger couldn’t provide the needed coal. Output was dying in occupied territories and even German mines suffered from lack of manpower. Speer and Hitler pressured Pleiger and the steel industrialists to come up with a solution. Sauckel promised more men but did not deliver. Ultimately the answer found in October was to slash domestic coal consumption by 10% and have the steel firms pool the output of their coal mines.

With the coal crisis dealt with the Reich achieved a heavy industrial boom. Steel production soared to 2,7 million monthly tons in 1943. If iron mines could be held, it could continue to rise and reach 3,25 million tons in April 1945. This, not “rationalization”, is the foremost reason for the main period of the Speer miracle, from his nomination to early-mid 1943. Even the productivity improvements that did take place owe a lot to the economies of scale made possible by the increase in inputs. Naturally, the period came to an end when the steel surge itself was interrupted. With Allied bombing of the Ruhr from March to July 1943 output did not rise but rather fell by 200,000 tons. Until a final second burst in 1944 the speed at which armaments output grew slowed down considerably, revealing how much the first period depended on the steel boom.

 >>/33904/
It seems they just fucked up the order of things with that U-boat. Build a couple, test them out, correct the design then give them to those inland firms to speed up manufacturing. This should have been the order no? The prototypes could have been built by them too, which also would allow maturing the "multi-stage production" practices.

 >>/33905/
The thing with arms-race that it's a race. If one can't suppress the enemy with volume they have to win with qualitative advantage. Which Germans rarely had. The successes at the first phases of the war was based on the revolutionary usage of combined-arms. Panzers in themselves, or aircrafts in themselves weren't that great. Not to mention small arms and artillery pieces which were just common. Same on the seas: one can have sophisticated submarines but without air cover they can suck the D. But the application of superior operational practices can only hold until the enemy catches up and if by that time he isn't on his back, then it's too late.
So the Germans what really didn't have was the luxury of time. Competing against the world two and a half biggest economies just impossible and the longer it took the more impossible it got. It's kinda WWI again. It would have been needed a revolutionary approach to the beat them, finding something what makes economy and battlefields less relevant (leik media or something).

 >>/33964/
One way or another the Mark XXI would never be ready by summer 1944 as promised. When the project was taken over in 1943 the test/fine-tuning phase was incomplete, so it'd inevitably have a delay of many months. Implementing Merker's ideas only added further pain as they not only had to iron out the design's deficiencies but also the failures of the inexperienced manufacturers.

Regarding wartime production, I found this interesting article on the Mukden Arsenal.

https://wwiiafterwwii.wordpress.com/2017/04/03/mukden-arsenal-after-wwii/

I didn't really know where to post it so I will post it here.

 >>/33991/
Thanks. Rated. Some nice obscure factoids over there.
Made me think - related to this thread, and to Suvorov somewhat - if the Japs had any chance to win the war.

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Book with a lot of numbers on the war economies. Harrison is one of Tooze's sources. As it follows a conventional historiography it disagrees with Tooze on several topics, such as attributing Germany's late war growth primarily to rationalization.

An example of how Speer could mislead the public using real statistics is in page 555:
Then on 5 June 1943 Speer addressed a mass rally of 10,000 armaments workers at the Sportspalast in Berlin at which, for the first time, all the major industrialists and managers of the war effort were decorated for their services to the German nation. Speer showered his audience with spectacular statistics, claiming a sixfold increase in ammunition production and a fourfold increase in artillery production since 1941. The production of anti-tank guns had quadrupled and the delivery of tanks in May 1943 was according to Speer 12.5 times greater than on average in 1941. But insiders noted that Speer gave no absolute figures. He made no mention of the fact that his indices were calculated with reference to well-chosen periods in 1941 when production had been particularly low, and he ignored altogether the fact that Germany's
production records were entirely eclipsed by the overwhelming mass of material being thrown against Germany by its enemies.

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1942 to the end of the war
With America in the war the much anticipated world coalition was now arrayed against Hitler. Its material superiority would soon fall on the skies and frontlines. Germany still had to secure resources for the long war, deliver a killing blow against the Red Army, now in the Caucasus,  from where it would also threaten Britain’s position in the Middle East together with the Afrika Korps. The time horizon for this was short. But there was one good news: Japan’s rampage against the Western powers distracted them from the European theater, giving Germany some breathing space. 
The production priority at this time was ammunition. Little had been produced after large stocks were built for the Battle of France and followed by brief fighting, but now with the prospect of long-lasting attrition warfare it came back to fore.
The topic of the nuclear program briefly came to Fromm and Speer’s attention but was dropped as it’d take years to bear any fruit.

Rommel’s offensive effort ended inconclusively in September. Immediately afterwards American tanks began to arrive through the Suez canal. This was the watershed in the arms race: the Allies had finally brought their economic superiority to the battlefield. By the 23rd of October Rommel’s 123 up-to-date tanks faced nearly 1,000 Allied counterparts. Outnumbered and outgunned, the African foothold came to its inevitable defeat by May 1943 with the surrender of 290,000 troops.
In the East, the pattern of the previous year’s offensive and counteroffensive were repeated but this time the enemy was better armed and organized, achieving a catastrophic counterblow over the winter. The Heer was pushed back to its original positions and the front only stabilized by Von Manstein in March 1943.
The reasons for defeat in Africa are clear, but in the East they’re more elusive. By now the Soviet Union displayed remarkable staying power, absorbing brutal military and territorial losses and coming out stronger than before and a threat to the Reich’s position. As this is a book about Germany, not the USSR, there isn’t an in-depth discussion but three points are mentioned:
-Lend-Lease is considered decisive only after 1943, when it kept the Soviet economy afloat and gave the Red Army mobility in its great offensives.
-The new Soviet industrial complex existing beyond the frontline and the economies of scale it achieved by concentrating production in massive factories. Yet that alone couldn’t outcompete German industry.
-Most critical was the Soviet Union’s mobilization. With its pharaonic powers the Soviet state could  move an unbelievably high share of the economy towards the war effort. Even the farms had too much of their manpower taken by the army, causing hundreds of thousands or millions of deaths by starvation. This was unsustainable and had to be toned down by 1944, but it allowed superior armaments production over the decisive 1942-3 period.
(Harrison’s book shows the USSR mobilized a % of their economy equal, not higher to Germany’s, but their year-by-year mobilization was much faster and the peak achieved earlier).
Russia’s industrialization is, along with America’s rise to superpower status, one of the two great developments of the 20th century which formed the backdrop to Germany’s history.

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In 1943 the Reich’s situation was growing desperate. Nonetheless arms output continued to rise. The focus was nominally on tanks through the Adolf Hitler Panzer Programme announced on January 23.  They received resources from other sectors, their workforce labored for more hours and the industry was given “Panzer priority” in deliveries, a priority the Luftwaffe soon lobbied and also got for itself. Production soared and now the Panther and Tiger saved Germany’s qualitative position in the field of tanks. But they were still only a small fraction of the overall war effort in terms of resources consumed and wider production successes were achieved in the Luftwaffe.
The year’s summer offensive at Kursk was anticlimactic. What followed were relentless Soviet offensives until by spring 1944 Army Group South had been evicted from the Ukraine. The Kriegsmarine was all but knocked out of the war, interrupting its surface and submarine campaigns. Meanwhile Mussolini was toppled and the Allied strategic bombing campaign became serious with the battles of the Ruhr and Hamburg. They interrupted the steel boom, driving down production, and triggered a subcomponents crisis (Zulieferungskrise). The classic period of the “Speer miracle” was over. The speed at which arms output expanded slowed down across the board. Tank production fared better because it was compensated with more resources.
It was at this point that civilian morale began to die out. 

The Reich’s leadership responded with a “determined escalation of violence”. SS and Party extended their control and politicization of general and factory security, local government and the courts. Repression kept the population, including the upper classes, in line, though it could not contain the growth of the black market which fed the inflation that would burst into the open in the next year. Speer subordinated Kehrl, fully took over the navy and closely allied with Himmler and Goebbels and together they sought “total war” (though that was already part official rhetoric since the winter), employing the repressive apparatus to extract whichever civilian capacity remained for the war effort. This is something I’ll cover later as not all of the extra weapons production achieved in the last years of the war can be attributed to this, nor was there so much capacity lying idle; the undermobilization of the early war German economy is overstated.
Speer’s attentions moved away from tanks to two projects: the V1/V2  and the Mark XXI U-boat. The former produced some of the most advanced technology of the war but ultimately offered little help to Germany’s situation. The latter was precisely what was needed to respond to Allied anti-submarine efforts and restart the Battle of the Atlantic, but the Speer Ministry’s promises of a quick delivery were a fiasco.

In 1944 Germany only had two consolations: it still had large buffers of occupied territory, preventing any enemy strike from immediately hitting the heartland, and could prolong production after the loss of economically valuable areas with its stocks of raw materials.

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Starting on February and lasting until around the middle of the year the war economy woke up from its relative slumber and soared for one last time. The most spectacular surge was in aircraft, from 1,323 units in February to 3,538 in September, most of them fighters. As the Speer Ministry had just begun to coordinate with the Luftwaffe’s bloc through Otto Saur in the newly-created Jaegerstab (and later absorbed it in August), this burst so late in the war under hostile conditions is the triumphant final chapter of the Speer myth. Speer himself was removed from day-to-day business from the first weeks of the year until early May, so Milch was effectively still in charge; the Jaegerstab mattered insofar as it made Speer’s “secret sources” available to the Luftwaffe. It is stated to have rationalized and revolutionized a previously “feather-beaded” field, a claim dismissed by a contemporary RLM study. The Luftwaffe’s producers were competent. The reason for the particularly good performance of this field is that over 1943 the RLM had expanded aeroengine production and acquired 243,000 workers on its own and received 317,000 from Sauckel and 100,000 from the concentration camps.
Within the war economy as a whole, this period reflects its adaptation to the bombing campaign aswell as the campaign itself becoming less effective. Rather than continuing to strike the Ruhr, in 1943 the Allies shifted attention to the less economically critical target of Berlin, while the Luftwaffe improved its defensive capabilities. It was also caused by payoff from the early war investment boom and harsher demands, including working hours, from the German and foreign workforces, the former compensated with rewards but the latter only with greater repression. Foreign workers were used more actively and their numbers still increased, with the notable case of Hungary’s Jews.

Over mid-late 1944 each war industry reached its peak production and then slid into oblivion until the rest of the war. Aircraft, the most complex, peaked earlier in the summer, while ammunition did so in September. This collapse was both internal from the buildup of inflation and external from a new phase of strategic bombing. In the first half of the year the RAF and USAAF had cemented their air superiority and, after focusing on the invasion of France, came down in full force against Germany. City after city was scorched with tens of thousands of casualties. But what was effective was neither the area bombing of cities nor strikes against specific plants, but the strangulation of infrastructure, particularly in the Ruhr, creating a coal famine across the entire economy.
The arms race started in the 30s had finally come to its conclusion. Even though the German war machine peaked later than its Allied counterparts it was still several times smaller in all fields. All efforts to raise production could not change the course of the arms race, not for German failure but because, as anticipated even before the war, the world coalition would in time bring its overwhelming economic superiority to bear.
This cemented the Reich’s fate and made the last moments of the war in Europe their bloodiest.

The immediate aftermath of the war seemed to confirm Hitler’s apocalyptic view: Germany would be condemned to irrelevance and deprivation if it could not secure for itself a strong economic position. It had now ceased to exist as a political, military and economic unit. The country was a smoldering pile of rubble. The Rhine ran clean because there were no factories left to pollute it. What few coal was produced couldn’t leave the mines. For years there wasn’t enough coal for heating. Famine struck Western Europe and Germany received the least priority for food.
Yet it was Stresemann who was avenged in the end. As he predicted, the other great powers would realize they needed Germany for its economy and that would allow it to regain a place in the European stage. By 1947 America realized the value of a prosperous West Germany as a bulwark against communism and, after overcoming the resistance of France, which still expected to retain the resources of the Ruhr, changed its policy to one of reconstructing a strong German economy. 
West German and European recovery proceeded as miracles. However, a cost had to be paid for that: not just West Germany but also the victorious states found themselves with constrained sovereignty. The age of great powers was over. Within Germany the scope of discussion about possible geopolitical courses of action, once wide in Weimar years, shrank.

The book ends here but I'll still write some more, particularly on the topic of undermobilization.

Pretty straightforward the point of this part. When the allied economic snowball started to roll there weren't stopping. Germany could have hold herself against Britain, but not with USA and SU.
One note: the SU had the luxury of not building a real fleet, they could concentrate on ground and air forces. Tho seeing the numbers here  >>/34053/ without the US entering the war I doubt they could have hold out so the opinion posted in the OP of the Suvorov thread (in the video for sure, I can't remember if Suvorov really stressed this I don't think so) that the SU didn't need the land lease is most likely false. It not just helped, it helped a lot.

 >>/34054/
Yeah, after the war another economical race started, they couldn't allow to waste all the potential of Germany.

Albert L.... pdf
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 >>/34082/
Tooze seems to think the Soviet Union became dependent on Lend Lease but not immediately, mostly after 1943. Maybe without it they're still near historical strength in 1942 but can't recover from the negative effects of their hypermobilization and their war economy suffers from 1943 onwards.
This book lists the total tonnage (in long tons) by period as:
> June 22, 1941–Sept. 30, 1941: 166,200
> Oct. 1, 1941–June 30, 1942: 1,420,255
> July 1, 1942–June 30, 1943: 3,054,259
> July 1, 1943–June 30, 1944: 5,747,722
> July 1, 1944–May 12, 1945: 5,532,780
> May 13, 1945–September 2, 1945: 1,541,699
The peak of Lend-Lease was late in the war. If the lesser quantities shipped in the early war proved to be decisive at least in 1942 (they probably weren't in Operation Typhoon and the winter counteroffensive) then the significance of Russian development diminishes and the Eastern campaign is also part of the main theme of the book, which is American development and Germany's reaction to it.

One point on which Tooze has a controversial take is on early war German undermobilization.
This thesis goes along two lines. The first is that the war economy prior to 1942 was marked by inefficiencies: labor productivity went down, economic institutions accused each other of incompetence, the price system did not pressure industrialists to innovate and so on; this was particularly bad in 40-41, a period for which footnotes speak of "egotism and incompetence" and of Germany "squandering its armaments advantage". Only under Speer and his rationalization the economy was put in working order. The second is that initially the Reich's leadership wanted to shelter civilians and prior to the "total war" drive of 1943 a large portion of German manpower, plants and capital were still in the civilian sector producing useless consumer goods and the like. Those lines converge to the conclusion that from the very beginning there was a lot of unused capacity which could at any moment, even before Barbarossa, have been unlocked by implementing rationalization and total war.
As soon as the war this entered historiography and remains influential today. I've seen it in Wikipedia, the Paradox Interactive Forums, /k/ and elsewhere. Tooze explicitly bashes the first line and weakens the second.

On the first line:
1)The inefficiencies are called into question. The price system wasn't bad. The apparent productivity decline still appears in revised data (see the third graph in  >>/29201/). The sector which received the greatest number of workers in the France-Barbarossa period was the Luftwaffe, and it is in aerial production that the lag between workers&inputs entering assembly lines and more armaments coming out is the greatest, lasting several months, and this creates the statistical illusion of faltering productivity. In army and naval production output grew much more than the labor force. There was indeed a factor which could harm productivity: the logistical disarray and drafting of workers for Barbarossa, but it was minor. Further, it must also be noted that with the ongoing investment boom the industry wasn't focusing merely on short-term output.
Tooze defends the German war economy in its France-Barbarossa period. It had a clear direction, was coordinated with geopolitical planning and achieved its objectives.
2)The "Speer miracle" was mostly led by factors other than rationalization, mainly the heavy industrial boom and the arrival of foreign workers, so there wasn't that much output to be unlocked by rationalization in the first place, or if there was, Speer couldn't reach it. Milch made a truer rationalization but even most of the extra productivity he got was from his decision to ditch quality for quantity; further, it was easy for Milch in 1942 to outperform 1941, when aerial production stumbled over difficult technological leaps. Not that Speer and Milch did no technocratic reforms, their organizational innovations could've been made earlier and Milch subordinated the big aerial firms.
So Hitler couldn't just appoint Speer or some other technocrat to replace Todt (himself a questionable "miracle-maker") in 1940, seek "rationalization" and get a massive boost.

On the second line:
1)Much of the output expansion in the late war was from sources other than the transfer of resources from the civilian to the military sector within Germany. Heavy industry grew (though in 1942-3, not later) and millions of workers were added to the German economy, most of which weren't even available before Barbarossa and Hungarian Jews weren't available prior to 1944. The early war investment boom already produced some effect by the late war. As more production could have been done without this investment, to some extent there was more production late in the war because there was less early on. Some investments, of course, only showed their true potential after the war, and sacrificing investment for extra weapons in Barbarossa would have made sense. But the Reich wasn't preparing for Barbarossa in isolation, it wanted to spend just enough to win a quick campaign because the campaign itself was part of a wider conflict with the Western powers. Hence it invested long-term a lot and spared some effort for the air force and navy. If it expected to wage a war of attrition on land for several years it could have done differently, but then its geopolitical outlook would be completely different and it may not even have done Barbarossa.
Late-war expansion alone cannot be taken as a gauge of how much civilian potential was left to mobilize because these other factors must be discounted from it.
2)Some civilian production in the early war was not consumer goods but exports. This wasn't wasted production as the logic of the balance of the payments was still in place and German goods were needed to prop up and maintain allied states.
3)The German military economy's previous phases do not show any "slack" towards the civilian sector but a continuous drive to mobilization. In 1933-39 it went from almost nonexistent to a higher level of mobilization than the Western powers, so high it was causing economic problems. Never before had national production been redistributed on this scale or with such speed by a capitalist state in peacetime.(p.659). It was a strong and very effective reallocation, and the side effects were just natural for this level of mobilization. Interruptions in 1937 and 1939 were this high speed mobilization hitting the country's resource ceilings. 
Then in 1939-40 mobilization had the most radical policy, to sacrifice not just civilian production but even the war effort's long-term industry to immediately maximize output. Already in the first winter of the war there were severe shortages of items such as ovens and stoves and the civilian industry -not just consumer goods but even electricity and mining- had large cuts to its steel rations. In 1940-41 the time horizon was reversed, there was now much investment for the future, but the stance on the civilian sector did not change. 
In 1942 civilian coal was sacrificed for steel. In 1943 total war is formally announced, but since a decade before resources were continually migrating from superfluous civilian production to the military-industrial complex. There was a consistent movement towards total war. As the first graph in  >>/34051/ shows the civilian sector shrank with every year. It was probably possible to accelerate the transfer, though that could run into 
a limitation -the state's power- and hence it wouldn't be as fast as the Soviet Union's lightning fast mobilization as Germany wasn't a command economy.

4)There weren't much women to be mobilized. The majority were already in war-vital work, not in the weapons factories but in the fields which were just as important. The topic of fields is interesting because Germany could free up a lot of manpower by modernizing its rural sector, but this is long-term structural change and not something that takes place in wartime. A lot could have changed if the Reich had pursued agricultural modernization in peacetime, but this topic was left to the postwar, when it could be dealt with at the same time as the settlement of conquered territory.

This line, however, is not quite wrong as after 1943 there were still manpower to take from the civilian sector and output to squeeze from it by demanding more working hours. However, exploiting it in the early war wouldn't produce late war results because of the limitation of how much there was to mobilize and said results had other sources. Further, there was probably an upper limit to how fast mobilization could happen. So in this case Hitler could have Goebbels do his Sportpalast speech in 1940 and have some extra production but not all that much.

Before I read the latest post I have to interject for a moment. The coin has two sides, on the one is the war economy that produces the material needed to wage war. And it is an important factor how the strength of the economy translates into production.
But on the other side we can find the usage of the material produced. How well this material could be utilized (basically quality, which topic was touched, but it is a little bit more than that since it depends on suitability too) and how they utilized it (e.g. did they "trump" the other sides weaponry? were they used just to throw at the enemy preferring material loss over human? were they just wasted with surrenders? were they just put to into storage? etc.). 
I know the scope of Tooze's work is on the economical background, but I feel he had some notion that the war was decided already purely by this factor even before the war started, and reading all this one might get the impression. It is because the focus is so much centered on this it really can cover our view and see the other factors, and we all know I hope that a war is decided by many factors. In this case one factor was very much against Germany and the Axis.

 >>/34088/
> how they utilized it
Initially there was little coordination between production and military doctrine and planning, the industry put out weapons and the generals figured out what to do with them. In 1940 Von Manstein devised a brilliant plan of maneuver and encirclement maneuver but it was "makeshift", years of military production up to that point had not been specifically geared to carrying out what he had in mind. Once it proved successful then there was finally a strategic synthesis and the factories now focused on providing the means to carry out more campaigns of this sort.

 >>/34089/
What do you mean? There was always a close bond between production and the army, Manstein's plan only worked because the army had spent so long developing new strategies and equipment to go with that, the army was constantly practising manoeuvres and theorising and this led them to conclude things like tanks needed radios, the infantry needed half tracks, etc.

 >>/34101/
Production in the 30s wasn't specifically geared towards a drive like that achieved in the Ardennes. Hitler was competing in the arms race on general terms without thinking that he'd have to use this kind of maneuver warfare in the future nor concentrating his resources on mechanized forces and drawing grand strategic conclusions from the speed of such campaigns. When the war came the production priority from the Polish to the French campaigns was ammunition, especially artillery shells. German industry was arming itself from a WWI-style campaign, and that was precisely what the first drafts of the invasion plan were. Manstein came up at the last minute with a very different concept, and though of course it was made possible because there were mechanized forces available and those were fit for a lightning campaign, for the past years production had not been focused on achieving this moment.
Once Manstein was proven right it was a given that operational planning for Barbarossa would follow the same logic. This time, however, arming mechanized forces became the priority of German industry. The ability of blitzkrieg to defeat materially equal enemies and save time was incorporated into grand strategic planning. All of Barbarossa rested on the assumption that the Soviet Union would be vanquished quickly, securing Germany's position in its war with the Western powers and allowing drafted workers to be sent back to their factories and production priority to shift to the Luftwaffe and Kriegsmarine. Operational, grand strategic and economic planning were joined together and depended on each other, the difference from the preparations for the Battle of France is like day and night.

*came up with an operation with a different concept.
The concepts existed earlier, in fact the most important was a timeless concept (concentration).

 >>/34053/
 >>/34086/
I'm not sure about the weight of the Hungarian Jewry. Historians here (or journalists, or anyone really) rely on the works of Randolph Braham (he has a bunch, I only managed to acquire one), and they say concisely that ~440 000 Jews were deported to Auschwitz and killed with very little exception. There's nothing about how many were gassed on arrival, how many were directed to work (if any), or whatever. Basically they give the impression that while the German authorities give the rational to the Hungarian authorities that this is workforce transfer, it was just an empty lie and were transported to simply liquidate them.
I haven't read the Braham book I get, but judging from the contents he probably writes little to nothing what the Hungarian Jews in Auschwitz did during their stay (or how long an individual lived on average or how long could work or such).
So if we say this is all true, then we have to suppose, not many of the Jews were available for work, and they did their share for a short time. Knowing they weren't fit or skilled in hard physical labour and armament manufacturing, they weren't the best at this job, their products should lack both in quantity and quality.

On the sidenote: I think Germany had the best interest to "recruit" all the usable workforce she could, I believe the Jews were transported there to work (tho they didn't care too much about their well being). But then I really don't think that those heartbreaking little stories are true what survivors tell:
> I was just a little child and we were deported to Auschwitz and on arrival we were round up and selected out and my parents were sent straight into the gas chamber
Why the fuck would they kill potential workers in their prime(in their 20s-30s!) while they left the useless children alive? It just doesn't add up. I know many things don't.

 >>/34107/
This is what the book has to say:
To ensure that it played its part in the defence against the Red Army, Hungary was militarily occupied by the Wehrmacht on 19 March 1944. Within weeks, the possibility of employing hundreds of thousands or Hungarian Jews for war work was being excitedly discussed in the Fuehrer headquarters. The first priority for the allocation of Jewish labour were Kammler's gigantic underground building sites, but given the emergency facing the Luftwaffe the possibility of employing Jews in aircraft factories was no longer ruled out. Eichmann began the deportation of Hungarian Jewry, at the rate of 12,000-14,000 per day, in mid-May. According to the familiar principle of 'Selektion', the majority would be gassed. However, at least a third were expected to be suitable for forced labour in the Reich. Auschwitz was to serve as the 'collecting camp' for the incoming transports. Those chosen for work were to be allocated directly to Sauckel, the Todt construction organization, or other high-priority employers, such as the Jaegerstab. It is estimated that of the 509,000 Jews eventually deported from Hungary, more than 120,000 survived the war as forced labourers. In the Jaegerstab, the employment of Hungarian Jews was discussed first on 26 May 1944, the first meeting attended by the rejuvenated Albert Speer. The Jaegerstab was anxious to know what number of Jews they could expect and heard a report from an official who was clearly in regular contact with Auschwitz. With Eichmann's transport operation eleven days old, the news from the camp was not good. From the first arrivals, the Armaments Ministry had been offered only 'children, women, and old men with whom very little can be done'. The best male labour, it seems, was being retained in Hungary, digging tank traps for the Wehrmacht. The minute concluded laconically that: 'Unless the next transports bring men of an age fit for work, the whole action will not have much success.' At this stage in the war nobody can really have been in any doubt about the fate of those Jews who were not considered fit for employment. But that did not concern Speer or the Jaegerstab. A month later the flow of human material was improving and the Jaegerstab was pleased to learn that Auschwitz was now ready to make good on its promises. In particular, the SS were hoping to deliver '13,000 Hungarian Jewesses in batches of 500. Thus the smaller firms, too, will be in a position to employ these concentration camp Jewesses better. (p. 630-631)

The notes for this are 24 to 28:
24 C. Gerlach and G. Aly, Das letzte Kapitel: Der Mord an den ungarischen Juden (Stuttgart,
2002), 163-71.
25 Eichholtz, III. 239.
26 Orth gives the somewhat different figures of 458,000 deportations to Auschwitz from Hungary and 350,000 gassings. See Orth, Das System, 256-7.
27 Milch Case, II. 555. Jaegerstab conference, 26 May 1944, NOKW-336.
28 Milch Case II. 557-8, Jaegerstab conference, 27 June 1944, NOKW-359. This same group is also referred to in the Speer Chronik though they are not identified as Jews, see BAL R3/1739, June 1944, 137.

The conclusion also mentions that In the summer of 1944, Speer and the Jaegerstab maintained
a telephone hotline to the ramp at Auschwitz (p.671)

> what the Hungarian Jews in Auschwitz did during their stay
The chemical industry had a lot of work in Auschwitz itself. It still does, the Soviets took away the most advanced instruments but the Poles put it to good use and today it's one of Europe's foremost suppliers of synthetic rubber. There's no mention of the Hungarian deportees working there in the book, though.
> I think Germany had the best interest to "recruit" all the usable workforce she could
That's what it eventually realized after a lot of initial wastage, though the success of economic integration varied: Himmler's workers couldn't be assimilated as well as Sauckel's. But at the same time with scarce food populations were a liability. So the synthesis which took years to achieve was to conserve the useful working population but not the rest.

 >>/34102/
Ahh, you meant the type of things they were producing not the things themself, that makes more sense.

 >>/34014/
No, I don't think they ever did. They were more of a sideshow than anything.

 >>/34112/
What I can find say something like this (with variations in the tens of thousands):
By 1941 there were ¬750K Jews on the Hungary.
60K were lost prior to '44. Most notably the 2nd Hungarian army had 42K Jews as forced laborer (well they would have been conscripted soldiers but they weren't allowed to have weapons, they served as workers in the army), ~35K of them died, disappeared or fallen as POWs at Voronezh (they fought against the Red Army as they could too). These were men in their prime, so as a labour it was great loss.
440K deported to Auschwitz, very few of them returned (no numbers given, not even guesses, they are treated as closed cases)
250K weren't deported, most of them survived, ~50K were sent to the Reich during early '45, few thousand(?) of them were killed during these "Death Marches". Few thousand(?) were also shot into the Danube during 44-45 winter.

The deportation was went on from 44 May to July, when governor Horthy stopped it. They say there were escaped Jews who returned and they told that the "labourers" were killed in gas chambers, and lo Horthy could see the Germans lied. However it was, the transports were stopped, it wasn't hard since Eichmann had liek 200 man, and most of the deportation was done by Hungarian gendarmerie.

It's not easy for me getting a Hungarian history book about the holocaust - which should discuss the question of the deported and their fate in details - the most popular torrent site where I can get warezed Hungarian ebooks doesn't seem to have books about the holocaust. Very redpilled.

Some things I left out:
The huge volume of money flowing through IG Farben changed its internal distribution of power. The central corporate administration lost its control to young technicians with ever-increasing independence and responsibilities, and the latter could justify any decision by referring to Wehrmacht orders, though they themselves pushed the military towards what they wanted to do.

An example of the limitations of prewar raw materials rationing was that by 1938 Germany was full of half-finished building sites with idle men and machinery; they had their steel reassigned to others but just waited for a new ration.

The file with all of this writing is 55 pages long, I should finish it. Some points made by myself, Russia and Hungary based on other sources will be made into notes and graphs (but not portraits and maps) added, along with corrections and an index.

 >>/36344/
Wow. That's impressive. Not (just) the pages, but that you make into a pdf. I keep postpone turning my stuff into a complete "portable" document. No joke, this would deserve recognition, I can only give my gratitude - I hope this doesn't sound too... syrupy(? maybe cheesy s the right word I'm not sure).
Maybe we could lobby for a dedicated Kohlzine issue?