On estimating the relative size of military expenditures

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On estimating the relative size of military expenditures

Post by Guaporense » 18 Jul 2016 08:23

I have over the past couple of year obsessed over total military expenditure figures. The reason for that is that historians who chronicle the economic characteristics of WW2 often ignore these figures and instead focus on selected pieces of equipment like "tanks" and "machine guns", which were a tiny proportion of total expenditures in any country involved in the war. The only way to get a reasonable idea of the scale and magnitude of the relative economic resources mobilized by each country is the comparison of aggregate government/military expenditures (both were very close together).

However this sort of comparison also yields problems, these problems are that relative prices were very different among countries which makes it difficult to construct exchange rates between currencies (apparently, tanks and planes were relatively cheaper in Germany versus food products like bread, milk, beef and cheese in the Allied countries, a function of the relative scarcity of agricultural land in Germany) and another problem was that prices of military goods like airplanes and tanks changed greatly over time, since during the war these economies learned how to produce these goods.

For example, the average production cost of a Ju-88 was (from Audit reports on Junkers, from http://www.econ.yale.edu/growth_pdf/cdp905.pdf):

1940/41 - 345,536 RM
1941/42 - 307,677 RM
1942/43 - 254,496 RM

And the cost of a comparable medium bomber the B-25 was (from Air Technical Services Command, Budget and Fiscal Office, from http://www.warbirdsandairshows.com/Airc ... tswwii.htm):

1941 - $180,031.00
1942 - $153,396.00
1943 - $151,894.00
1944 - $142,194.00
1945 - $116,752.00

Given the conservative assumption that in 43/44 the production cost of a Ju-88 would decrease to 225,000 RM in 43-44 and 200,000 RM in 44-45 we have that total government expenditures in both countries in terms of tons of empty medium bombers were (fiscal years: September-August Germany, July to June, USA):

---------------- US ------------ Germany
1940/41 ----- 628,351 ------ 2,015,910
1941/42 ----- 1,875,646 ---- 2,858,087
1942/43 ----- 4,557,794 ---- 4,228,033
1943/44 ----- 5,837,821 ---- 5,676,820

*Note in 1940-41 the US was in peace so it's government expenditures were mostly civilian. When it shifted to war, it's volume of expenditures increased much faster than Germany's until 42-43 when Germany's expenditures increased due to the strategic deterioration while US expenditures increased less because they were already "good".

The implicit PPP exchange rate terms here are 2-1.6 RM = 1 which are much lower than those given by "Machine tools and mass production in the armaments boom: Germany and the United States, 1929–44, Ristuccia and Tooze (2013)", who said that military expenditures were compared at 3.8 RM = 1 dollar during wartime. They use that exchange rate on machine tool prices and spend half of the article trying to justify why American machine tools cost more than twice than German machine tools of the same categories (prices were 5,500 dollars and 9,800 RM, in each country) similarly I would find it hard to explain why a medium bomber produced in the US in 43 would cost 600,000 RM while in Germany it would cost 250,000. :wink: Well, maybe the exchange rate of 3.8 RM to 1 dollar was plain wrong. :roll:

Similarly one could compare military outlays between US and the USSR in terms of tanks. In 1943, the USSR spent 125 billion rubles on the war while the production cost of a T-34 was ca. 180,000 rubles, so total 1943 military expenditures were equivalent to ca. 700,000 T-34 tanks. In the US in the 1942-43 fiscal year military outlays were 72 billion dollars and a similarly sized Sherman tank cost ca. 50,000 dollars, so total military expenditures were 1.4 million Sherman tanks about twice of the Soviet level. In Germany a tank like the Panzer Mark 4 was ca. 100,000 marks which means military expenditures in the 42-43 fiscal year were ca. 1.1 million Panzer Mark 4's (the difference between mark-dollar conversion ratio was perhaps larger in terms of tanks than aircraft because the Ju-88 was produced in larger quantities than the B-25 while the Panzer Mark 4 was produced in much smaller quantities than the Sherman and the T-34 so it's cost was relatively higher).

And if we compare military expenditures in terms of soldier pay (how many years of soldier's stipend you can pay), the USSR probably had a large lead over the US or Germany.

These military expenditures estimates were made by converting currencies into dollars using pre-war food prices for US, UK, Germany and Japan, for the USSR I just used Maddison's estimate of the 1940 GDP and USSR's expenditures in comparison to the pre-war GDP figures:

Image

I cross checked the figures for US, UK, Germany and Japan with Maddison's pre-war GDP estimates and found small discrepancies of less than 5% in the case Germany and Japan but a larger discrepancy of ca. 20% in the case of the UK. Still, I think these figures are good enough to get an idea, also notice that in terms of aircraft or machine tools, Germany's expenditures are bigger relative to the Allies than using pre-war food prices.
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Re: On estimating the relative size of military expenditures

Post by Guaporense » 21 Jul 2016 07:07

One issue I have with estimating the size of Germany's military outlays is that I lack precise data on it. For other countries, including Japan and Italy, the data is of higher quality than Germany's. From "Germany and the Second World War", there is a well defined figure called "Wehrmacht outlays" of 414 billion RM from september 1939 to april 30, 1945, however, if all military outlays by Germany were only Wehrmacht's outlays then civilian expenditures in the same period were 200 billion RM. That would imply in about 65% of all government expenditures being military outlays. That's too little compared to any other country (except the USSR), since in the US about 92%-94% of government expenditures in 1943-1944-1945 were military while in the UK it was about 82% during the same years (the UK mobilized to smaller degree than in the US and they had a bigger welfare state back then).

In other sources whose data goes only until mid. 1943, for example Klein 1957, it says for instance that total government outlays were 117 billion RM of which 112 billion were military outlays, which means that 96% of all government expenditures were military expenditures, in line with Germany's desperate military situation at the time. However, his numbers for total government expenditures were different from those of other sources, which states that Germany's government total expenditures were 125 billion RM in the fiscal year from September 1942 to August 1943, while Wehrmacht outlays were only 86 billion RM.

To make sense of this mess, first, Klein's figures only refer to Germany's Gross National Absorption (since they are in the context of Gross National product figures including net imports). So he doesn't take into account the contributions of foreign central banks in their purchases of German bonds to finance the German government outlays: to finance the massive costs of WW2, the Nazi government made the central banks of occupied countries buy German debt, as a result there was massive inflation in occupied countries like France, while that meant that German confiscation of occupied countries' resources was higher than given by the figures of "occupation costs".

So, what I did was that first, there were military costs such as construction of fortifications and subsidies to military industries are not included into Wehrmacht expenditures as well as supplied brought by other departments and diverted for military consumption. And so I assumed that about 90% of all government expenditures, meaning ca. 560 billion RM out of the 614.4 billion RM spend by the Nazi government from September 1939 to April 1945, were spent on the military in one way of the other, of which 414 billion were direct Wehrmacht expenditures and about 145 billion were war-related expenditures by civilian departments. That means that in the 1942-1943 fiscal year there were about 112 billion RM in military expenditures.
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Re: On estimating the relative size of military expenditures

Post by Guaporense » 25 Jul 2016 00:31

On estimating the composition of military expenditures

One should be puzzled by the fact that German military expenditures were so large relative to other combatant countries while their aircraft production was so low.

If you look at the figures for military outlays and look at the numbers of aircraft produced they match for most countries:

------------- aircraft produced ------ military outlays 1940-44
USA ------- 300,000 ------------------ 168 billion
USSR ------ 150,000 ------------------ 79 billion
UK -------- 130,000 ------------------ 72 billion
Japan ------ 70,000 ------------------ 37 billion

In Germany's case production was only 120,000 compared to outlays of 165 billion. Clearly, the distribution of military expenditures was different, how different was it? Or maybe are food PPPs a wrong way to measure military expenditures? Are my figures for government expenditures wrong?

Well, for starters, apparently German final armament sales were a much smaller fraction of total government expenditures than in other countries.

In billions of RM:

---------- armament sales ---- government expenditures (september the previous year to august of the year)
1942 --- 17.7 ------------------ 102.9
1943 --- 21.9 ------------------ 125.9
1944 --- 26.0 ------------------ 149.4

Sources: Armament sales, Tooze, No Room for Miracles (2005).

While US expenditures were the following:

Image

Their classification of "munitions" though is much wider than armaments for Germany, still according to Goldsmith (1946), the outputs of "combat related munitions" (i.e. "armaments") of the US were 38 billion dollars in 1943 and 42 billion dollars in 1944.

From another source I have a breakdown of US munitions outputs at constant prices (I believe, 1945 prices):

Image

So, aircraft appears to be 12.5 billion dollars in 1943, while war expenditures that year were ca. 82 billion dollars. So about 15.2% of war expenditures were aircraft in 1943 and 18.0% in 1944. Notice, however, that there figures are in constant unit prices probably from 1945 and prices of aircraft declined greatly during the war so that the real proportion of expenditures was higher, probably around 17-18% in 1943 and 19% in 1944.

For the German side we have:

German munition sales from the German industry:

Image

Inside armament sales things gets more complicated though. I have 3 distinct figures for aircraft sales: "direct", "indirect" sales of the aircraft industry and Wagenfuhr's figure of 830 million RM, including "associated equipment". In the US's figures things are clearer but still they have a lot of stuff in the categories "other equipment and communication and electronic equipment", which were probably used in aircraft. So I take the aircraft figure for the US to mean sales of completed aircraft but not all it's associated equipment, and I think it's closer to the 724 million RM figure rather than the 507 million RM figure for "direct" sales or the 830 million RM figure which includes a lot of sales from industries other than the aircraft industry.

In 1943 total aircraft production in Germany was 25,000 units while monthly aircraft production in the 3rd quarter averaged ca. 2,400 units. Overall though I guess about 10.5 months of output from the 3rd quarter were equivalent to the whole year, which means total aircraft sales were 7,600 million RM in 1943 out of total armament sales of 21.7 billion RM and total sales of "military products" from the German industry of ca. 26 billion RM in 1943.

Compared to military expenditures of ca. 112 billion in 1943, aircraft sales were 6.8% of German military outlays, much smaller than the proportion of US's outlays on the same product, varying from 15-19%. In number, German output in 1943 consisted of 21,200 combat aircraft compared to 53,200 in the US. Notice that if German expenditures in aircraft were 15.2% of military outlays we have 47,400 combat aircraft assuming the same unit costs. Compare that to the government expenditure data I produced before of total expenditures of "4,557,794 tons of medium bombers" for the US compared to "4,228,033 tons of medium bombers" in Germany.

Also, overall German expenditures on military products of around 26 billion RM in 1943 were less than 1/4 of total military outlays that year, compare that to the fact that in 1943-44, 60% of the US's military outlays being munitions and supplies. Although the sales of military products do not include Wehrmacht sales from occupied countries nor sales from other sectors of the German economy besides industry (like food from agricultural producers).

Overall, one difference between Germany and the other countries is that German military expenditures were focused on the soldiers and not on equipment. The bulk of their military outlays were on personnel and in maintaining and supplying their massive military which conscripted 18 million men compared to 9 million for the UK and 16 million for the US (measured in man-years, the German military was substantial larger than the US's for the period 1940-44). Finally, the medical costs of millions of wounded soldiers the Wehrmacht had to take care of probably cost more than all aircraft they ever ordered.

Also, the German military doctrines focused on fighting power and its elements: training, morale, doctrine, elan, etc. So their military expenditures were not focused on material things but more on human capital.
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Re: On estimating the relative size of military expenditures

Post by Stiltzkin » 04 Aug 2016 05:42

While i enjoyed reading your thorough analysis and accumulation of data (from sources I am acquainted with), I have to comment on some of the points. You cannot "cross country" compare AFV prices. These countries economical structure and procedures did not equate to comparable systems (free trade, investment and return etc.) and they did not have a reason to publish realistic figures (the initial T34 price from 600k to 130k roubles), hence currency conversions of all sorts are problematic. Basing off labour, resource allocation and deriving from PPP can be still unprecise. You could see them as "indicators", yes sure but Tooze's, Harrison's, (some of) Maddison's data...yes I am going to say that: These numbers are nigh to meaningless (especially GDP/GNP). It is better to compare the prices for each faction seperately (Heavy tanks cost was usually twice that of MBTs), or if you had certain information on the AFVs e.g. there was a CIA report stating that a T-34/85 would cost around 50,000$ in the US. Yes, prices drop under mass manufacturing conditions (and the Pz4 prices were marginally lower than the Panzerkampfwagen Vs) but many people make the mistake of thinking that Shermans and T-34s were cheap. In fact, they were not (example: the Germans discarded Alu engines as an option quickly, over 50% of the USSRs alu came from LL). German vehicles were designed for a "shortness economy": Maximum effectiveness for minimal resource consumption. Ergo, the Panther is in the same price category with a much higher "bang for the buck" (Combat value of 2.37 compared to T-34/85 1.36). On the other hand, the Soviets selected the best materials for their war effort (while their population was utterly poor), preferring simple solutions with their low level of industrialization and technological backwardness which forced them to produce inferior vehicles. Actually, they relied on license builds or tech espionage, the T-34s engine was a converted, modified Hispano Suiza Aircraft engine and the Tank facilities were built after Henry Fords example. Technically speaking, in order to bridge the gap, the Soviets just had to receive ONE vehicle (and strip it apart) but this goes far outside the scope of what I wanted to say and would consume pages of text, since my expertise is more on the military aspect than economy (although they are highly intertwined), so excuse me if I misunderstood anything. If you'll ever find a list that shows all correct prices and comparisons between factions let me know (so never) :)

As to some of the other points: You also have to take into account the length of the armament process, Germanys period of rearming (Versaille, to MEFO) and the USSRs expansionistic ambitions (the key for success besides their alliance to the Western Nations has been set before the War, Lennert Samuelson Stalins/Tukhachevski's War machine). Things are dominated by necessity and political stance (pragmatism) and not their inabililty, this is the nature of decision making. The US converts the outlay in a much shorter amount of time i.e. the Soviets, the Japanese and the Nazis are one of the major reasons for Americas strong fleet and military presence today.
You have used one of Scherners sources, look up his other work (forgotten wartime boom, USSBS correction), it shows that the investment was higher and that the USSBS numbers are misleading and incomplete, too. If I remember correctly even Tooze stated to have corrected some of his older values.

Best regards

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 10 Aug 2016 22:40

I don't think that different methods of accounting for costs would greatly change the cost figures.

For instance, American costs for the B-25 are sales prices and hence include besides the production costs, the returns on the equity invested and the depreciation of capital equipment. Usually in manufacturing firms of final goods the yearly volume of sales is 2-3 times higher than the value of the capital stock of the firm, so if the aircraft was sold for 100,000 dollars, the firm's capital stock invested per aircraft sold per year would be 35,000 - 50,000 dollars, depreciation is usually 5% for buildings and 10% for machines, which means an average 2,500 - 3,500 dollars depreciation per year of that capital stock, and on average the real returns on investment are 4-5%, which means 1,500 to 2,500 dollars of profits per aircraft sold, hence of the 100,000 dollars price of the aircraft, these capital costs would be around 4,000 to 6,000 dollars or 4-6% of the final price.

In the Ju-88 case the costs include only labor costs, production costs and raw material costs, according to accounting by Junker's Aircraft co., I don't know if their accounting method included these depreciation costs and interest on the firm's capital stock on their "production costs'. But these differences shouldn't be to great, around 4-6% as I calculated above.

Also, the American costs for the B-25 are sales prices and hence don't include the subsidies these industries received which were in the order of billions of dollars. These subsidies might cancel out with the profits and capital depreciation included in the costs of the B-25.

So overall, I guess my comparison between the T-34 and a Sherman appears to be valid for giving an idea of the total volume of military outlays.

The prices I used to construct the military expenditure figures from that table are from these 2 papers and are mostly food prices but include other prices in the Germany and UK comparison:

http://gpih.ucdavis.edu/files/Fukao_Ma_Yuan.pdf (Japan, USA)
https://www.coll.mpg.de/pdf_dat/2009_18online.pdf (Germany, UK)

The USSR's figures I used Harrison's estimates of Soviet defense expenditures in 1937 rubles and converted then into dollars using Maddison's GDP estimates.
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Re: On estimating the relative size of military expenditures

Post by Guaporense » 10 Aug 2016 22:42

Here is data for German government expenditures:

Image
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Re: On estimating the relative size of military expenditures

Post by Guaporense » 11 Aug 2016 01:33

Expenditures by theater:

Germany and Italy

From 1942 to the end of 1944, the German army consumed 3,372,035 metric tons of projectiles ammunition including mortars and artillery and excluding anti-tank and AA (https://forums.spacebattles.com/threads ... w2.308559/), of which approximately 2.9 million tons were in the Eastern front, 235,000 metric tons in the Western front up to the end of 1944 and 243,000 metric tons were consumed in Italy and North Africa. So in terms of ammunition 86% of the expenditures in the 36 months from 1942-44 were against the USSR. A similar proportion is found in terms of combat related casualties (KIA and WIA). Overall, it's safe to claim that about 90% of the German resources invested in ground forces were consumed in the Eastern front from 1941 to 1944 and about 10% were consumed in Italy, North Africa and the Western fronts.

And about 76% of the Navy and 44% of the Airforce KIA were in the Western fronts from 1940 up to December 1944.

So one can use these figures as proxies to estimate that the Eastern front consumed about: ca. 90% of the army's resources, 56% of the airforce resources and 24% of the navy's resources. If we take personnel as the metric, the army consisted of about 3/4 of Germany's military expenditures the airforce was about 18.5% and the Navy was ca. 6.5%, (while one might argue aircraft was 40% of armaments, the armaments themselves were only 1/6 of Germany's total military expenditures, most expenditures were to maintain and supply the military personnel and were not armaments), we have that 79.5% of Germany's resources were allocated against the Soviet Union and 20.5% against the Western Allies.

By the way, in 1944 the Wehrmacht employed 12.2 million people including civilians supporting the armed services. While the armament industries: aircraft, ammunition, motor vehicles and shipbuilding, employed 740,000, 600,000, 390,000 and 145,000 respectively, in mid 1943, in total 1.88 million workers, or only 15% of the number employed by the Wehrmacht. This gives a good idea of the small role armaments played in the German overall war effort.

Germany's Allies also focused most of their resources against the Soviet Union (Hungary, Romania, Bulgaria, etc). So overall, out of 156 billion dollars spent by Axis forces in Europe from 1941 to 1944, 32 billion were spend in the Western fronts and 124 billion were spent in the war against the Soviet Union. While in 1940, 21 billion was spent in the Western fronts.

Japan

Of Japan's expenditures a considerable fraction was spent against China but the majority of resources was spent against the Western Allies. I assume 1/4 of total resources against China, 3/4 against US and UK. That's ca. 10 billion on China and 27.5 billion against the Western Allies.

USA

The USA spent about 50% of it's resources against Japan and 50% against Germany. That can be seem from the number of casualties (http://forum.axishistory.com/viewtopic. ... 7#p1165887) or the number of men and aircraft deployed (according to KDF33, in the end of 1943, each theater had half of the US's resources. So that's 84 billion on Europe and 84 billion in Asia.

US's strategic planners initially planned to allocated 85% against Germany but thanks to the Soviet Union drawing most German resources they could focus more resources against Japan.

UK

Here I assume 95% in Europe and 5% in Asia. So that's 69 billion in Europe of which 12 billion were spend in 1940 and 3.5 billion in Asia.

USSR

100% in Europe, that's 79 billion, of which 71 billion after 1940.

In the fronts we have:

Western front (1940)

Allies: 12 billion
Axis: 21 billion

Eastern front (1941-1944)

Allies: 71 billion
Axis: 124 billion

By the way, its true that Germany spent more resources than the Red Army, however that doesn't mean that they had more tanks or guns, just that 1) the fraction of their resources spent on tanks and guns was smaller. In terms of 75 mm mortar and artillery ammunition German consumption was significantly higher: 3.4 million tons for Germany compared to 2.25 million tons for the Red Army.

Western front (1941-1944) (i.e. Italy, North Africa, Europe, strategic bombing)

Allies: 141 billion
Axis: 32 billion

Japan vs Allies (1941-1944)

Allies: 87.5 billion
Japan: 27.5 billion

So, the Axis had an economic advantage in 1940 and against the USSR. While Japan was outspent by over 3 fold in the 41-44 period while in the Western front in Italy and specially strategic bombing and after Normandy, the Allies had massive material superiority, 4.5-1 according to these estimates.
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Re: On estimating the relative size of military expenditures

Post by Stiltzkin » 12 Aug 2016 03:32

So overall, I guess my comparison between the T-34 and a Sherman appears to be valid
Let me be a bit more precise here: Even today, it is difficult to make price comparisons (hidden costs, currency manipulations etc.). I went over all production prices for all factions and especially the "official" Soviet prices (for all they are worth). In the 30s-40s there was no free trade nor a free market in general, you could not freely convert currencies ("official exchange rates).
During wartime, the production was arranged by the military agencies and civilian authorities. These systems did not even have a reason to publish a realistic figure, additionally you do not know if it is an initial (for example prototype) or mass manufactured/line produced AFV.

I remember a CIA calculation showing that eastern germany was richer than the west.........

With that said, my understanding of WW2 Macroeconomics does not suffice for a deeper analysis but know that many of the given values have been revisisted and corrected (even the USSBS). I used to believe that the strategic bombing effects were limited (except civilian casualties) but they were actually higher.
Maddison's data is absolutely problematic, it is an estimate of proportions similar in trying to establish the exact temperature of a foreign solar systems sun to the last digit (not even black spotlight/Wiener would give you such exact values).
I think in order to establish a good view on the USSR, Samuelson's book outclasses Harrison's work (not to mention that Harrison repeats the same old story of "outproduction" and claims that the Soviets had better weapons than the Western Allies).
Goldsmith is ridiculous, Overy has made several mistakes of his own. Tooze went outside the scope of economics and his military analysis is quiet simplified.

Now if we specifically talk about the total expenditures, with its resulting errors, you might be going into the right direction (simply because these statistics values are so high, with the precision of a casualty comparison).

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 24 Aug 2016 00:53

I think that Maddison's figures are generally good (except the the wartime figures). Everytime someone does a new GDP estimate they tend to differ little from Maddison's.

One important note: quoting Tooze (2005) here on "direct" and "indirect" sales:

"Direct sales were those made direct to official procurement agencies. Not all of these direct sales were of military products or armaments, narrowly defined. The Wehrmacht was a consumer of a wide variety of industrial products. Furthermore, not all orders for arms were placed directly by the Wehrmacht. Some armaments will have been registered under so-called "indirect" Wehrmacht sales. In the main, these 'indirect Orders' involved sub components, for example guns or electronics equipment supplied to the final assemblers of aircraft or tanks."

For instance, aircraft industry sales were 724 million RM per month, of which 217 million RM were indirect sales and 507 million were direct. These indirect sales were probably mostly aircraft engines (in fact, 5,000 engines at 30,000 RM each would be 150 million RM, 3/4 of the value of indirect sales). This would mean that final sales of aircraft were only 507 million RM per month or about 5.5 billion RM per year and not 7.6 billion RM as I assumed before. Anyway, aircraft sales of 2,300 aircraft per month implies in average value of ca. 215,000 RM per aircraft (including all associated equipment), more realistic than ca. 310,000 RM implied by the 724 million RM value, given that Ju-88 costs were 255,000 RM and it was among the most expensive aircraft. US aircraft costs were ca. 165,000 dollars per aircraft in 1944 (including all associated equipment) which makes sense because they were bigger on average than German aircraft (airframe weight was 10,000 pounds for US aircraft in 44 compared to 6,500 pounds for German aircraft in 43, which means US aircraft would be 30% more expensive on average). The PPP implied by the Ju-88 and B-25 comparison was 1.73 RM = 1 dollar.

Overall this would imply that military expenditures on aircraft were only 4.5% of German military expenditures in 1943 instead of 6.8% I previously estimated compared with 15.2% for the US in 1943 and 18.0% in 1944.

Also, in 3rd quarter of 1943, Wehrmacht sales from German industry were 2.3 billion RM of which 507 million were aircraft, so that's 20-25% of German military equipment expenditures on aircraft for German industrial output. Also, in 1943, sales to the Wehrmacht by occupied countries were 4.3 billion RM, including all types of supplies (not only industrial products), including some aircraft (like 7-8% of the German supply of aircraft, less in value terms, like trainers and stuff).
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Re: On estimating the relative size of military expenditures

Post by antwony » 24 Aug 2016 09:01

Am not really sure what the point of this thread is and you seem to be ignoring Stiltzkin's rather excellent points about the problems with a purely fiscal analytical model.

Also, I'd like to add that Conchita Martinez's wages for riveting B-17's together vs. Rachel Goldstein's "wages" for working at IG Farben Birkenau is going to distort any model you create.

But, to get to your mail.
Guaporense wrote: USA

The USA spent about 50% of it's resources against Japan and 50% against Germany. That can be seem from the number of casualties (http://forum.axishistory.com/viewtopic. ... 7#p1165887) or the number of men and aircraft deployed (according to KDF33, in the end of 1943, each theater had half of the US's resources. So that's 84 billion on Europe and 84 billion in Asia.

US's strategic planners initially planned to allocated 85% against Germany but thanks to the Soviet Union drawing most German resources they could focus more resources against Japan.
Casualties figures =/= resource allocation and the thread you linked to doesn't even show a 50/50 split.
Guaporense wrote:UK

Here I assume 95% in Europe and 5% in Asia. So that's 69 billion in Europe of which 12 billion were spend in 1940 and 3.5 billion in Asia.
A large part of UK's resource allocation against Germany was allocated outside of Europe and your 5% is just a random guess, isn't it?
Guaporense wrote:USSR

100% in Europe, that's 79 billion, of which 71 billion after 1940.
Russia maintained forces in Pacific Russia right through the war and eventually attacked Japan in 1945 (as well as being involved in battles with them before).

Also, you're forgetting Lend Lease.

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 25 Aug 2016 00:18

antwony wrote:Also, I'd like to add that Conchita Martinez's wages for riveting B-17's together vs. Rachel Goldstein's "wages" for working at IG Farben Birkenau is going to distort any model you create.
Not really.
Russia maintained forces in Pacific Russia right through the war and eventually attacked Japan in 1945 (as well as being involved in battles with them before).
Not significantly though. They had ca. 500,000 troops in the border and they never fought so consumption of equipment, ammunition, etc, was zero until after the war.
Also, you're forgetting Lend Lease.
Not really because it's included.
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Re: On estimating the relative size of military expenditures

Post by Stiltzkin » 25 Aug 2016 00:43

I want to point out that it is very interesting where this is going. Such an estimation would be valuable, though I highly doubt that it is that simple (and I consulted other economists on this issue).
I was in the process of establishing mass produced vs initial AFV prices (Datenblätter, Archive documents etc.) and tried to find a way to compare them, but it turned out to be impossible. The only reliable figure was in the CIA Engineering analysis and there is no elaboration on how it was calculated.

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 25 Aug 2016 01:19

I don't think it's simple. My point in the first post was exactly that: it's not possible to make a absolute figure out of nominal expenditures, since different countries have different relative prices.

Afterwards I was just trying to describe the composition of expenditures not the magnitudes. (i.e. how much aircraft represented among German military outlays).
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 28 Aug 2016 01:21

Guaporense wrote:Here is data for German government expenditures:

Image

This data here is slightly different:

http://www.axishistory.com/axis-nations ... xpenditure

Well, the fiscal year of 1941-42 in the link gives total government expenditures of 101.5 billion RM while the paper gives 101 billion RM. Anyway, the distinct between "war expenditures" and "military expenditures" should be stressed: "war expenditures" include civilian things like subsidies for war-related industries, government financed industrial investment on war related industries, construction of fortifications and purchases of equipment/supplies that are later allocated to the Wehrmacht from civilian departments.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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Re: On estimating the relative size of military expenditures

Post by Guaporense » 29 Aug 2016 05:23

Well, I can guess the composition of Wehrmacht outlays in 1943:

Personnel - 12 million (4,250 RM of pay and subsistence costs): 50 billion RM
Munitions - 27.6 billion RM (German made), 4.3 billion RM (occupied country made): 31.9 billion RM
total: personnel and munitions - ca. 82 billion RM

The 1942-1943 fiscal year data states 86.2 billion RM.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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