The American WW2 Economic Puzzle

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
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Guaporense
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Re: The American WW2 Economic Puzzle

#31

Post by Guaporense » 15 Sep 2016, 07:21

Estimating productivity change: WW1 versus WW2

All right, I (re)calculated the growth in GDP per worked from 1939 to 1943 in Germany, UK and from 1940 to 1944 in the USA and USSR. These are the figures:

Germany -- 27.7%
UK --------- 36.2%
USA -------- 30.4%
USSR ------- 29.4%
average --- 30.9%

US figures are Kendrick's (from the link above), Germany's figures are Klein (1957), UK figures are Maddison's and USSR's figures are Harrison's.

So, apparently, in all major powers (Japan was not major power, BTW), apparent or official productivity increased in a similar fashion in wartime. This contrasts with the experience of WW1 and apparently the distortions in WW2 are everywhere not only in the USA. Thing is, the USA had a bigger growth in GDP because it's civilian employment levels increased while in all other countries they decreased.

So I was wrong, USA productivity growth was similar to the other main belligerents.

The discrepancy in GDP growth is explained by manpower allocation:

Civilian employment levels in 1943-44 in proportion to pre-war levels in 1939-1940:

Germany -- 90.8%
UK --------- 92.3%
USA -------- 116.3%
USSR ------- 86.8%

WW1

Change in GDP per civilian worker 1913-1917:

France --------------- (11%)
Russia ---------------- (24%)
Austria-Hungary --- (13.3%)
Germany ----------- (22.3%)

Germany and Russia refer to industrial productivity (which tends to change more than aggregate productivity). Still WW1 was characterized by general collapse in economic activity among the major belligerents.

I think that the difference between the two wars was that in WW1, the degree of price control was smaller so that inflation could manifest itself more and since real GDP is equal to nominal GDP divided by inflation, in WW2 GDP growth was inflated, in WW1, GDP growth

WW1 was a more "serious" war than WW2: it was a war where the production of civilian goods decreased more, casualties per capita were heavier* and where conscription corresponded to a higher share of total population.

*Yes, that holds even for Germany: in WW1 the number of killed and wounded as a fraction of total mobilized or of the total population was higher than in WW2 (up to January 1945), even though the conflict was shorter, by about 20 months. Yep, total casualties up to January 1945: 6.1 million KIA+WIA, that's 64 months of war out of a country of 90 million, in WW1: 6.0 million in 50 months for a country of 67 million. So in WW1, German bloody casualties were 2.2% of the country's population per year, in WW2, bloody were 1.3% of Germany's population per year.

In WW1, German output of consumption goods industries:

1913 --- 100
1914 --- 91
1915 --- 53
1916 --- 46
1917 --- 43
1918 --- 41

In WW2, German output of consumption goods industries:

1939 --- 100
1940 --- 95
1941 --- 96
1942 --- 86
1943 --- 91
1944 --- 86

The workweek was also much higher in WW1 than in WW2, in WW1, German workers worked on average 68-69 hours a week in 1917-1918 while in 1943-44, they worked 48hours a week. (seriously!, https://babel.hathitrust.org/cgi/pt?id= ... up;seq=229) So, WW2 was not a total war like WW1. Germany did her best in WW1: mobilized it's labor force to the maximum: they conscripted 13 million soldiers out of 32 million strong workforce, increased hours worked by 20%, cut civilian consumption to the bone, suffered horrendous losses but against the combined forces of France, UK, Russia and the USA, they lost.

So, there was no point in trying again seriously. In WW2, they mobilized fewer soldiers in proportion of the population per year of war, even though they imported 8 million laborers from occupied countries, they suffered fewer bloody casualties (at least up to the end of 1944) in proportion to the population, they decreased civilian goods production to a much smaller degree and they worked 30% fewer hours.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

John T
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Re: The American WW2 Economic Puzzle

#32

Post by John T » 15 Sep 2016, 07:48

Guaporense wrote:
2nd - The types of goods demanded change: instead of clothes and cars, now the economy has to produce bombers and ships. Since the machines and tools in the economy were designed and made to produce clothes and cars, they suffer loss of efficiency if employed to produce bombers and ships.
You don't build tanks in a machine, as you previously noted.
The machines who build parts for truck or tank engines were basically the same.

As I understands the biggest difference between the US and German way of producing munitions was that US did invest in new plants,
first causing an increase in construction and then facilitation for optimum output of arms.
While Germans tried to convert existing plants and part of the German late war effort where underground facilities with a much higher cost per area.
Guaporense wrote: Also, the most advanced an economy is, the bigger is the fall in productivity due to mobilization for war. The reason is that a blacksmith can shift from plowshares to swords easily while a modern economy that employs lawyers and burger flippers will have a hard time shifting the lawyers and burger flipper's employment to work in bomb and tank factories without losing a lot of productivity in the process.
If not the bigger economy have a much more flexible structure.

Guaporense wrote: So, I think that statistics showing wartime GDP growth are mostly an artifact of statistical distortion caused by government manipulation of prices and quantities sold in the market. The true market value of output would certainly decrease in wartime. Well, it's not like private individuals would be willing to pay 80 times the price of a car for a Sherman tank which was the average difference in official sales prices between Sherman tanks in 1943 and cars in 1939.
What the relevance?
If US government paid 80 times as much for a Sherman then fine, US could afford to pay the bill.
US government flooded the country with cash(investments) while they maintained price control a feat not easy to reproduce in any current economy.

Cheers
/John T


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Re: The American WW2 Economic Puzzle

#33

Post by Rob Stuart » 15 Sep 2016, 09:56

Guaporense wrote: But, during wartime the productivity per worker is expected to decrease.

The reasons include:

1st - Conscription is among young men which tend to be the most productive and vigorous workers in society. So the average quality of the civilian workforce declines during war.
Pre-war unemployment must have been highest among young men, so if you have to hire a never previously employed 20 year old woman instead of a never previously employed 20 year old man, you are still getting a productive and vigorous person. As well, the US manpower situation never became as strained as in the UK or Germany and the medical standards of the US armed services remained high, meaning that many a young man with flat feet or a minor vision problem remained available to join the work force. I would guess that the average age of the US work force decreased during the war, so the quality of the workforce may well have gone up.

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Re: The American WW2 Economic Puzzle

#34

Post by Richard Anderson » 17 Sep 2016, 08:11

Guaporense wrote:US tank factory:
Image

Where is the difference?
It's always amusing when people post pictures and draw assumptions from them when they don't actually know what they are looking at.

That is the Detroit Tank Arsenal between 22 July and 3 August 1942. On the left they are completing work on the last Medium Tanks M3A4 they produced. On the right they are completing the first Medium Tanks M3A4 they produced. On 10 July, DTA delivered its 3,100th Medium Tank M3A4 and twelve days later, it completed its first Medium Tank M4A4. Twelve days afterwards, on 3 August, production had completely changed over to the Medium Tank M4A4. The first Medium Tank M3 they completed was in March 1941 and was formally accepted, along with the second completed, on 24 April 1941. So 441 days to complete 3,100 medium tanks. 7.03 per day. Which was accomplished on an assembly line. Which is exactly what was used at DTA, three parallel assembly lines, increased to five by June 1944. That's how it was able to complete 22,234 medium and heavy tanks by 31 August 1945; 1,591 days or 13.97 per day. Nearly as many tanks as all German manufacturers completed (c. 23,543) in a similar period of time.

BTW, they did with a total of 230 full-time employees at the end of April 1941, increasing to 2,107 at the end of July 1941, then 5,000 at the end of August 1941. Peak employment was 6,212 in 1942, but averaged 4,500 to 5,500 until the end of the war.

The Grand Blanc Tank Arsenal (Fisher Body) also utilized an assembly line to produce medium tanks. As did Pressed Steel Car Company. As did Pacific Car & Foundry. As did Pullman Standard Car Company. As did Federal Machine and Welder Company. As did Ford's River Rouge plant before it was converted to engine production. However, two U.S. plants did not at first use an assembly line. They were American Locomotive Company (ALCO) and Baldwin Locomotive, which used station assembly techniques standard to the building of locomotives, where the parts were brought to a fixed station and assembled by a skilled crew...which is what you see in the photograph of the German arsenal, single stations assembling individual vehicles (and numerous types). Interestingly, Lima Locomotive when it began producing tanks did so on an assembly line, but then like DTA and GBTA the Lima plant was actually new construction, funded by the British originally to build the Medium Tank M3, but then shifted to building the M4A1. Light tanks were also produced on assembly lines. American Car and Foundry utilized an assembly line for the Light Tank M2A4 and then Cadillac, Massey-Harris, and International Harvester followed suite as they received contracts.

So that's the difference.
Richard C. Anderson Jr.

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Cracking Hitler's Atlantic Wall
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Re: The American WW2 Economic Puzzle

#35

Post by Richard Anderson » 17 Sep 2016, 08:22

OpanaPointer wrote:Are you comparing a single engine, two man aircraft with a four-engine bomber with (how many?) crewmen?
No, he's explaining how he makes his "estimations" to his grandmother. :roll:

Meanwhile, in the real world, production of all German aircraft in 1944 was 39,807 aircraft weighing 174,938 metric tons using 870,000 laborers. So 0.046 aircraft and 0.201 metric tons per laborer.

Production of all U.S. military aircraft in 1944 was 93,588 aircraft weighing 948,883,000 pounds (430,406 metric tons) or 1,087,493,000 pounds including spares (493,279 metric tons) using an average of 1.964 million employees. So 0.048 aircraft and 0.219/0.251 metric tons per employee. Except all U.S. aircraft production in 1944 was 96,318 weighing 962,441,000 pounds (436,556 metric tons) or 1,101,116 pounds including spares (499,458 metric tons). So 0.049 aircraft and 0.222/0.254 metric tons per employee.

And it is the later figure for American production that is relevant, because the total "employed in the aircraft industry" includes all prime and sub-contractors employees including those producing spares. Meanwhile, the Germans stopped producing spares...and started producing more airframes than they had engines for because of the bottleneck they had in engine production. Note also the use of "laborer" vice "employee" is intentional. So in the end we are looking at about a 20.9% productivity per metric ton and a 6.12% aircraft productivity advantage to the U.S. Not huge, but significant.
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
Artillery Hell

John T
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Re: The American WW2 Economic Puzzle

#36

Post by John T » 17 Sep 2016, 13:18

Richard Anderson wrote: So 441 days to complete 3,100 medium tanks. 7.03 per day. Which was accomplished on an assembly line. Which is exactly what was used at DTA, three parallel assembly lines, increased to five by June 1944. That's how it was able to complete 22,234 medium and heavy tanks by 31 August 1945; 1,591 days or 13.97 per day. Nearly as many tanks as all German manufacturers completed (c. 23,543) in a similar period of time.
Nice article here:

http://usautoindustryworldwartwo.com/Fi ... ytanks.htm

Cheers
/John

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Re: The American WW2 Economic Puzzle

#37

Post by John T » 17 Sep 2016, 13:25

Richard Anderson wrote: production of all German aircraft in 1944 .... using 870,000 laborers.
...
Production of all U.S. military aircraft in 1944 .... using an average of 1.964 million employees.
...
So in the end we are looking at about a 20.9% productivity per metric ton and a 6.12% aircraft productivity advantage to the U.S. Not huge, but significant.
And as the 6% per employee should be multiplied by a more than twice as big and well paid working force, there is not much of a
"American WW2 Economic Puzzle".


But I must say that at times Guaporense views from another perspective than the ordinary military centred are intereting!

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Re: The American WW2 Economic Puzzle

#38

Post by Rob Stuart » 17 Sep 2016, 16:19

For what it's worth, GDP in the other North American Allied country, Canada, doubled during the war, from $5.6 billion in 1939 to $11.8 billion in 1945. Canadian war production was fourth among the Allies, but only 30% of the output was used by Canadian forces. The rest was given to our Allies under the Mutual Aid program, the Canadian counterpart to Lend-Lease. (I note that German war production was not sufficient to provide significant materiel support to its allies. Would 6th Army have been surrounded so easily if the Romanian armies on its flanks had been given lots of Panzer IVs?)

Of note in this context, Canada produced 707,000 military vehicles, not including armoured vehicles, significantly more than Germany did. The Canadian vehicles were most assuredly produced on assembly lines, as was the case in the US.

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Re: The American WW2 Economic Puzzle

#39

Post by Richard Anderson » 17 Sep 2016, 17:59

John T wrote:Nice article here:

http://usautoindustryworldwartwo.com/Fi ... ytanks.htm

Cheers
/John
Yes it is and I know it well and have used it extensively, but not in my last post.
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
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Re: The American WW2 Economic Puzzle

#40

Post by Richard Anderson » 17 Sep 2016, 18:07

John T wrote:But I must say that at times Guaporense views from another perspective than the ordinary military centred are intereting!
Frankly, I find "estimates" which consist of little more than WAGs suitable for story-telling time to grandmothers, sprinkled with altered and falsified data, and blatant anti-Americanism combined with an unhealthy admiration for Nazi policies, completely uninteresting.
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
Artillery Hell

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Re: The American WW2 Economic Puzzle

#41

Post by Richard Anderson » 17 Sep 2016, 18:14

Rob Stuart wrote:Of note in this context, Canada produced 707,000 military vehicles, not including armoured vehicles, significantly more than Germany did. The Canadian vehicles were most assuredly produced on assembly lines, as was the case in the US.
Indeed Rob, it was Mr. G's unthinking use of his photographic "evidence" and his declaration that assembly line manufacturing was not used in the U.S. war effort, which solidified my conviction that his every post is a house of cards built on altering, cutting, and pasting random "evidence" to fit his preconceived construct. It's the opposite of the scientific method, so he must be an "economist".
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
Artillery Hell

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Re: The American WW2 Economic Puzzle

#42

Post by John T » 17 Sep 2016, 19:17

Richard Anderson wrote:
John T wrote:But I must say that at times Guaporense views from another perspective than the ordinary military centred are intereting!
Frankly, I find "estimates" which consist of little more than WAGs suitable for story-telling time to grandmothers, sprinkled with altered and falsified data, and blatant anti-Americanism combined with an unhealthy admiration for Nazi policies, completely uninteresting.
Well, very few at this forum maintains a scientific standard, what about labeling people "anti-Americanism" when you dont agee?
Is that American scientific standard post election 2016? ;)

But seriously, I find it interesting with different views on things, admittedly prefer better supported on actual facts than these threads,
but I completed Joe Maiolo's “Cry Havoc" a while ago and found his views on the inevitable organizational momentum of things to be enlightning.

Here we always has to filter, but why such an aggressive tone ?


Cheers
/John T.

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Re: The American WW2 Economic Puzzle

#43

Post by John T » 17 Sep 2016, 19:19

Richard Anderson wrote:
John T wrote:Nice article here:

http://usautoindustryworldwartwo.com/Fi ... ytanks.htm

Cheers
/John
Yes it is and I know it well and have used it extensively, but not in my last post.
Intention was to educate me and G, you provided me with the seed to goole from

/John

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Re: The American WW2 Economic Puzzle

#44

Post by Richard Anderson » 17 Sep 2016, 20:12

John T wrote:Well, very few at this forum maintains a scientific standard, what about labeling people "anti-Americanism" when you dont agee?
Is that American scientific standard post election 2016? ;)
You cannot discern opinion from analysis? I will try to be clearer in the future. Meanwhile, have you actually read Mr. G's various anti-American diatribes?
But seriously, I find it interesting with different views on things, admittedly prefer better supported on actual facts than these threads,
but I completed Joe Maiolo's “Cry Havoc" a while ago and found his views on the inevitable organizational momentum of things to be enlightning.
Seriously, I too find different views interesting, especially when backed by consistent facts. Or "actual facts" as you say.
Here we always has to filter, but why such an aggressive tone ?


Cheers
/John T.
Not aggressive at all, but measured by seven years of witnessing the same poster repeatedly re-post the same misinformation in different thread and at different sites.

Cheers!
Last edited by Richard Anderson on 18 Sep 2016, 03:20, edited 3 times in total.
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
Artillery Hell

Richard Anderson
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Re: The American WW2 Economic Puzzle

#45

Post by Richard Anderson » 17 Sep 2016, 20:16

John T wrote:Intention was to educate me and G, you provided me with the seed to goole from

/John
I would post my bibliography, but its eleven pages now and I haven't updated it from my footnotes for some time now. Send me a PM if you would like recommendations.
Richard C. Anderson Jr.

American Thunder: U.S. Army Tank Design, Development, and Doctrine in World War II
Cracking Hitler's Atlantic Wall
Hitler's Last Gamble
Artillery Hell

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