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Wages of Destruction Bernd 07/09/2019 (Tue) 20:28:52 [Preview] No. 27926
As I promised I'll write about this book.
It's quite lengthy but you'll reach the end if you read at your own pace. Most of the book isn't dense for me, an economic layman, with the exception of the parts about trade, which left me confused. I'll write what I manage to understand.
The author wrote it to argue in historiographical debates and make some points, but I read it just to add to my historical knowledge.

I'll write in sections, at most one a day so Bernd doesn't get overwhelmed, and will try to make the sections more thematic rather than just a sythesis of each chapter, as Hitler himself suggests in Mein Kampf for how one should mentally organize knowledge. I want to write about:

-Trade and controls of foreign currency and raw materials
-Budgets and revenue
-Businessmen and workers
-Consumer goods
-The fate of different industries
-General progression from 1933 to 1939

If I give up on writing I hope at least to cover the prewar period. I also hope to write on:
-Armaments priorities until 1940
-Historiography of the battle of France
-Occupied economies and pre-1941 America
-Wartime budgets
-Foreign labor
-Leadup and economic reasoning for Barbarossa
-The Speer miracle
-General progression from 1939 to 1945

But first I must make some notes on the Weimar era.

Bernd 07/09/2019 (Tue) 20:30:03 [Preview] No.27927 del
(180.16 KB 622x712 stresemann.png)
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.

Bernd 07/09/2019 (Tue) 20:30:37 [Preview] No.27928 del
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.

Bernd 07/09/2019 (Tue) 20:31:07 [Preview] No.27929 del
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.

Bernd 07/11/2019 (Thu) 05:37:40 [Preview] No.27957 del
I'm gonna chew through myself of this ofc.
You can continue anytime.

Bernd 07/11/2019 (Thu) 17:43:58 [Preview] No.27962 del
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.

Bernd 07/11/2019 (Thu) 18:14:41 [Preview] No.27963 del
The dollar's devaluation was in 1933, not 1931.

>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.

Bernd 07/12/2019 (Fri) 02:10:43 [Preview] No.27967 del
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.

Bernd 07/12/2019 (Fri) 02:11:39 [Preview] No.27968 del
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.

Bernd 07/12/2019 (Fri) 02:52:13 [Preview] No.27969 del

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.

Bernd 07/12/2019 (Fri) 03:05:56 [Preview] No.27970 del

Bernd 07/12/2019 (Fri) 05:25:11 [Preview] No.27971 del
Without reading what you wrote. That chart about unemployment. Those regular spikes are associated with seasonal workers?

Bernd 07/12/2019 (Fri) 12:20:26 [Preview] No.27974 del
Yes, on warmer seasons they're hired for the harvest and construction.

Bernd 07/13/2019 (Sat) 01:50:11 [Preview] No.27984 del
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.

Bernd 07/13/2019 (Sat) 01:50:26 [Preview] No.27985 del
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.

Bernd 07/13/2019 (Sat) 01:51:05 [Preview] No.27986 del
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.

Bernd 07/13/2019 (Sat) 07:43:15 [Preview] No.27989 del
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.

Bernd 07/13/2019 (Sat) 22:59:41 [Preview] No.27995 del
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.

Bernd 07/13/2019 (Sat) 23:12:12 [Preview] No.27996 del
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.

Bernd 07/14/2019 (Sun) 08:09:14 [Preview] No.27998 del
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.

Bernd 07/14/2019 (Sun) 12:48:43 [Preview] No.28002 del
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.

Bernd 07/14/2019 (Sun) 14:58:49 [Preview] No.28003 del
>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.

Bernd 07/14/2019 (Sun) 16:28:41 [Preview] No.28004 del
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.

Bernd 07/14/2019 (Sun) 17:16:58 [Preview] No.28005 del
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.

Bernd 07/15/2019 (Mon) 02:52:58 [Preview] No.28014 del
(579.00 KB 1307x793 finance.png)
>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.

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.

Bernd 07/15/2019 (Mon) 05:33:18 [Preview] No.28015 del
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.

Bernd 07/15/2019 (Mon) 07:40:33 [Preview] No.28016 del
>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.

Bernd 07/15/2019 (Mon) 11:28:21 [Preview] No.28020 del
>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.

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

Bernd 07/15/2019 (Mon) 15:18:39 [Preview] No.28021 del
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> 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.

Bernd 07/15/2019 (Mon) 17:19:34 [Preview] No.28022 del
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.

>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.

Bernd 07/15/2019 (Mon) 17:55:39 [Preview] No.28023 del
>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.

Bernd 07/15/2019 (Mon) 18:11:36 [Preview] No.28024 del
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.

Bernd 07/15/2019 (Mon) 18:18:53 [Preview] No.28025 del
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.

Bernd 07/15/2019 (Mon) 18:22:25 [Preview] No.28026 del
Those numbers aren't the whole reality of what determines prices and values and any "calculation" based just on them would have distortions.

Bernd 07/16/2019 (Tue) 03:23:39 [Preview] No.28029 del
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.

Bernd 07/16/2019 (Tue) 03:24:56 [Preview] No.28030 del
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.

Bernd 07/16/2019 (Tue) 03:25:38 [Preview] No.28031 del
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)

Bernd 07/16/2019 (Tue) 03:26:16 [Preview] No.28033 del
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.

Bernd 07/16/2019 (Tue) 16:36:05 [Preview] No.28038 del
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
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.

Bernd 07/16/2019 (Tue) 16:42:17 [Preview] No.28039 del
>local governments
The governments of the constituent states or governments of municipalities?

Bernd 07/16/2019 (Tue) 17:00:07 [Preview] No.28041 del
>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.


Bernd 07/17/2019 (Wed) 04:33:35 [Preview] No.28050 del
subjective theory of value was debunked
source: bunkerchan

Bernd 07/17/2019 (Wed) 05:28:30 [Preview] No.28051 del
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.

Bernd 07/17/2019 (Wed) 12:27:35 [Preview] No.28052 del
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.

Bernd 07/17/2019 (Wed) 16:09:01 [Preview] No.28053 del
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.

Bernd 07/18/2019 (Thu) 02:28:07 [Preview] No.28066 del
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.

Bernd 07/18/2019 (Thu) 02:29:14 [Preview] No.28067 del
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.

Bernd 07/18/2019 (Thu) 02:30:41 [Preview] No.28068 del
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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.

Bernd 07/18/2019 (Thu) 02:31:27 [Preview] No.28069 del
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.

Bernd 07/18/2019 (Thu) 02:34:27 [Preview] No.28070 del
*production turned out great profits

Bernd 07/18/2019 (Thu) 03:53:02 [Preview] No.28072 del
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anonymous delivers

Bernd 07/18/2019 (Thu) 05:44:13 [Preview] No.28074 del
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.

Bernd 07/18/2019 (Thu) 05:47:51 [Preview] No.28075 del
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.

Bernd 07/18/2019 (Thu) 13:59:12 [Preview] No.28076 del
>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.

Bernd 07/18/2019 (Thu) 15:01:16 [Preview] No.28080 del
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.

Bernd 07/18/2019 (Thu) 17:47:44 [Preview] No.28081 del

Will reply sometimes, but first...

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.

Bernd 07/22/2019 (Mon) 18:26:08 [Preview] No.28139 del
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.

Bernd 07/22/2019 (Mon) 18:59:34 [Preview] No.28141 del
>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.

Bernd 07/23/2019 (Tue) 13:33:40 [Preview] No.28158 del
This thread is too hard for me. I have never read anything about these.
but it made me interested in some topics. Thanks op.

Bernd 07/23/2019 (Tue) 16:41:39 [Preview] No.28160 del
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.

Bernd 07/23/2019 (Tue) 16:42:09 [Preview] No.28161 del
>gladly give an answer.
That is if we can.

Bernd 07/31/2019 (Wed) 21:42:28 [Preview] No.28367 del
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.

Bernd 07/31/2019 (Wed) 21:56:41 [Preview] No.28368 del
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.

Bernd 07/31/2019 (Wed) 21:57:38 [Preview] No.28369 del
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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)

Bernd 07/31/2019 (Wed) 22:41:44 [Preview] No.28374 del
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.

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.

Bernd 08/01/2019 (Thu) 17:33:54 [Preview] No.28381 del
Ofc I'm gonna read it but first:
Wtf Denmark!!! I see Tuborg and Lego make stronk economy.

Bernd 08/03/2019 (Sat) 06:58:00 [Preview] No.28408 del
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.

cont. Bernd 08/03/2019 (Sat) 20:03:13 [Preview] No.28411 del
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.

Bernd 08/03/2019 (Sat) 21:25:21 [Preview] No.28413 del
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.
>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.

Bernd 08/03/2019 (Sat) 21:28:16 [Preview] No.28414 del
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)

Bernd 08/03/2019 (Sat) 21:30:01 [Preview] No.28415 del
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.

Bernd 08/03/2019 (Sat) 21:33:32 [Preview] No.28416 del
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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.

Bernd 08/04/2019 (Sun) 15:11:05 [Preview] No.28436 del
Thanks for the writing, it was interesting to read it.

Bernd 08/05/2019 (Mon) 20:25:02 [Preview] No.28483 del
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.

Bernd 08/06/2019 (Tue) 19:10:20 [Preview] No.28501 del
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.

Bernd 08/06/2019 (Tue) 21:32:06 [Preview] No.28503 del
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.

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

Bernd 08/09/2019 (Fri) 21:03:58 [Preview] No.28552 del
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.

Bernd 08/09/2019 (Fri) 21:04:38 [Preview] No.28553 del
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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).

Bernd 08/12/2019 (Mon) 19:10:52 [Preview] No.28612 del
Done read. You can continue if you have more.

Bernd 08/28/2019 (Wed) 19:23:37 [Preview] No.28714 del
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The prewar years
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.

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.

Bernd 08/28/2019 (Wed) 19:24:18 [Preview] No.28715 del
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.

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.

Bernd 08/28/2019 (Wed) 19:25:20 [Preview] No.28716 del
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.

Bernd 08/28/2019 (Wed) 19:26:56 [Preview] No.28717 del
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.

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.

Bernd 08/28/2019 (Wed) 19:28:01 [Preview] No.28718 del
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.

Bernd 08/28/2019 (Wed) 19:28:47 [Preview] No.28719 del
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.

Bernd 08/31/2019 (Sat) 14:23:28 [Preview] No.28823 del
>pic 1
>negative entry implies German borrowing from abroad
From who?

Bernd 08/31/2019 (Sat) 20:46:48 [Preview] No.28830 del
Partially relevant. Freshly stolen from fellow Hungarobernd on Kohl. Original probably on youtube.

Bernd 08/31/2019 (Sat) 21:08:49 [Preview] No.28831 del
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.


Bernd 09/01/2019 (Sun) 01:05:04 [Preview] No.28833 del
now 1977, that was the year

Bernd 09/01/2019 (Sun) 01:58:56 [Preview] No.28834 del
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.
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.

Bernd 09/01/2019 (Sun) 08:16:27 [Preview] No.28836 del
I always knew the Netherlands were an evil warmongering country.

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.

Bernd 09/01/2019 (Sun) 08:22:14 [Preview] No.28837 del
>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.

Bernd 09/01/2019 (Sun) 12:03:11 [Preview] No.28839 del
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.

Bernd 09/01/2019 (Sun) 13:41:51 [Preview] No.28841 del
belgium is never a country. but you are a coontreeh because austria-hungary shows up.

Bernd 09/01/2019 (Sun) 20:52:15 [Preview] No.28854 del
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.

Bernd 09/01/2019 (Sun) 20:53:02 [Preview] No.28855 del
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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.

Bernd 09/05/2019 (Thu) 18:09:45 [Preview] No.28940 del
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.

Bernd 09/06/2019 (Fri) 20:17:01 [Preview] No.28966 del
>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.

Bernd 09/06/2019 (Fri) 23:38:19 [Preview] No.28972 del
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.

Bernd 09/06/2019 (Fri) 23:38:40 [Preview] No.28973 del
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.

Bernd 09/07/2019 (Sat) 07:24:09 [Preview] No.28977 del
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?

Bernd 09/07/2019 (Sat) 07:25:34 [Preview] No.28978 del
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.

Bernd 09/08/2019 (Sun) 14:33:54 [Preview] No.28994 del
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.

Bernd 09/08/2019 (Sun) 21:17:40 [Preview] No.29012 del
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.

Bernd 09/10/2019 (Tue) 21:18:33 [Preview] No.29063 del
Yeah Luftwaffe was the little favourite...

>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.

Bernd 09/11/2019 (Wed) 21:01:47 [Preview] No.29076 del
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.

Bernd 09/11/2019 (Wed) 22:11:13 [Preview] No.29077 del
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.

Bernd 09/12/2019 (Thu) 05:35:39 [Preview] No.29079 del
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.

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.

Bernd 09/12/2019 (Thu) 05:40:13 [Preview] No.29081 del
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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...

Bernd 09/12/2019 (Thu) 21:57:34 [Preview] No.29084 del
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.

>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.

Bernd 09/13/2019 (Fri) 05:21:06 [Preview] No.29086 del
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.

Bernd 09/13/2019 (Fri) 10:54:25 [Preview] No.29090 del
>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.

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

>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..

Bernd 09/13/2019 (Fri) 14:14:54 [Preview] No.29092 del
Also even tank platoons can be attached to lower level units, not just divisions can have detachments.

Bernd 09/15/2019 (Sun) 14:45:15 [Preview] No.29130 del
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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?
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.

Bernd 09/15/2019 (Sun) 21:19:04 [Preview] No.29136 del
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.

Bernd 09/16/2019 (Mon) 05:44:55 [Preview] No.29140 del
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.

Bernd 09/20/2019 (Fri) 01:58:06 [Preview] No.29200 del
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.

Bernd 09/20/2019 (Fri) 01:59:45 [Preview] No.29201 del
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.

Bernd 09/20/2019 (Fri) 02:00:45 [Preview] No.29202 del
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.

Bernd 09/20/2019 (Fri) 02:04:44 [Preview] No.29203 del
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.

Bernd 09/20/2019 (Fri) 02:07:04 [Preview] No.29204 del
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.

Bernd 09/20/2019 (Fri) 02:07:31 [Preview] No.29205 del
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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.

Bernd 09/20/2019 (Fri) 17:39:07 [Preview] No.29215 del
Soon we need analysis on America's economy and politics.

Bernd 09/20/2019 (Fri) 21:38:03 [Preview] No.29227 del
(174.01 KB 1650x926 Lutzow1940.jpg)
>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.

Bernd 09/21/2019 (Sat) 07:20:31 [Preview] No.29231 del
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.

Bernd 09/21/2019 (Sat) 11:57:12 [Preview] No.29233 del
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.

Bernd 09/21/2019 (Sat) 19:52:50 [Preview] No.29238 del
>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.

Bernd 09/21/2019 (Sat) 20:33:53 [Preview] No.29240 del
>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.

Bernd 09/24/2019 (Tue) 21:41:43 [Preview] No.29353 del
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.

Bernd 10/01/2019 (Tue) 18:29:25 [Preview] No.29450 del
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.

>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?

Bernd 10/01/2019 (Tue) 19:54:54 [Preview] No.29452 del
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.

Bernd 10/01/2019 (Tue) 20:39:08 [Preview] No.29453 del
>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.

Bernd 10/06/2019 (Sun) 19:45:24 [Preview] No.29512 del
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.

>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.

Bernd 10/06/2019 (Sun) 22:38:29 [Preview] No.29513 del
Tooze has some notes on data, with the tables here:
The third is the armaments index.
>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.

Bernd 10/07/2019 (Mon) 05:27:32 [Preview] No.29515 del
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.

Bernd 10/07/2019 (Mon) 23:26:04 [Preview] No.29525 del
>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.

Bernd 10/11/2019 (Fri) 05:33:07 [Preview] No.29845 del
Will read and reply sometimes.

Bernd 10/13/2019 (Sun) 22:43:42 [Preview] No.30401 del
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.

Bernd 10/13/2019 (Sun) 22:44:57 [Preview] No.30402 del
(224.53 KB 727x588 silent financing.png)
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.

Bernd 10/13/2019 (Sun) 22:45:19 [Preview] No.30403 del
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.

Bernd 10/13/2019 (Sun) 22:46:54 [Preview] No.30404 del
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.

Bernd 10/16/2019 (Wed) 21:08:18 [Preview] No.30527 del
>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).

Bernd 10/17/2019 (Thu) 18:46:41 [Preview] No.30555 del
>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.

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