Russia's relative economic strength to Germany in WW1 and WW2

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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Russia's relative economic strength to Germany in WW1 and WW2

Post by Guaporense » 11 Sep 2016 06:37

Contrary to popular belief, in WW1 and WW2, the relative economic strength of Germany and Russia was similar:

In WW1, Germany's GNP at market prices was 56.618 billion marks, while Russia's NNP at market prices was 20,266 million rubles, converting both at official exchange rates* to the pound we get 2,766 million pounds for Germany and 2,127 million pounds for Russia**. NNP is usually a 4-5% smaller than GNP so Russia's GNP was ca. 2,200 million pounds or almost 80% of Germany's. In 1939, for comparison, using Harrison (1994) estimate of USSR's per capita income I arrived at ca. 6,900 million 1927 pounds for the USSR while Germany's GNP was 129 billion RM, deflating back to 1927 and converting using Williamson (1995)'s PPP I got 8,500 million pounds, so the USSR's GNP was about 80% of Germany's in 1939.

While Germany quite easily defeated Russia in WW1 while allocating only a fraction of their strength in the eastern front while in WW2 they focused almost fully on the USSR and failed to defeat it. It clearly shows that raw economic size is not decisive for anything, specially given that in WW2, Germany had incorporated most of Europe as "colonies" as well, thus the European Axis acquired vastly greater resources relative to the Central Powers in WW1.

The difference between the two was essentially on the degree of exertion of Russia's military effort and will to win.

*Before WW1, official exchange rates in Europe were very close to PPPs thanks to the highly integrated economy of Europe: Germany and France's prices differed from the UK's prices by around 1-2% only.
**The 1,900 million pounds figure I posted earlier doesn't include revenues from indirect taxes and profits from state owned enterprises. Although 33% of Russia's NNP estimate consists of subsistence consumption by farms.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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Re: Russia's relative economic strength to Germany in WW1 and WW2

Post by Stiltzkin » 11 Sep 2016 13:44

Germany never truly defeated Russia in WW1, only the Western district armies until it had to drop out of the war. The numbers for the USSR are problematic and Harrisons estimates nigh useless.

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Re: Russia's relative economic strength to Germany in WW1 and WW2

Post by Guaporense » 18 Sep 2016 06:30

I wouldn't be so dismissive to Harrison's estimates. I just compared his estimate of per capita income of 1,440 1982 dollars to the Russian GDP using 1913 official exchange rates and his time series of Soviet GDP and the discrepancy was only of about 2.5%. I though that was pretty good indication of the high quality of the estimate.

Anyways, the plain fact is that in both cases, WW1 and WW2, the relative economic strength of Germany and Russia was very similar but with dramatically different outcomes. It's a good example of the fact that macroeconomic size is not the only factor when it comes to total war.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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Re: Russia's relative economic strength to Germany in WW1 and WW2

Post by Guaporense » 14 Apr 2017 04:40

GNPs of Russia/USSR and Germany from 1913 to 1939, converted from NNPs to GNPs using British proportions and converted to 1913 British pounds using official exchange rates of 1913 (20.47 marks per pound and 9.51 rubles per pound), them projected to 1943 using Maddison's time series projections up to 1939 and from 1939 to 1943, I used wartime estimates by Harrison and Klein for USSR and Germany, respectively:

--------------------- 1913 --------------- 1927 ----------------- 1937 ----------- 1939 ----------- 1943
Russia ----------- 2,394 -------------- 2,389 --------------- 4,100 ----------- 4,433 ---------- 3,160
Germany -------- 3,121 -------------- 3,318 --------------- 4,179 ----------- 5,320 ---------- 6,065

Germany's GDP grew a lot from 1937 to 1939 (about 25%) partly thanks to the annexation of territories with about 10 million people. Relatively, in 1913, Russia's GDP was 76% of Germany's, in 1939, the USSR's GDP was 83% of Germany's.

And the money from lend-lease didn't help much:

Soviet GNP and Net imports (i.e. that's the lend lease stuff), in billions of 1937 rubles (computed by Mark Harrison):

-------- 1940 ---- 1942 ----- 1943 ------ 1944
GNP --- 253.9 -- 166.8 ---- 185.4 ----- 220.3
net imports ----- 7.8 ------ 19.0 ------- 22.9

It increased Soviet resources by 5% in 1942 and by 10% in 1943-44, of course, those were critical given that Barbarossa destroyed a lot of basic raw material supplies of the USSR. Still, Soviet net imports were quite small in proportion to their pre-war GNP. In 1943, German GNP which was about 300 billion rubles in 1939, had increased to about 350 billion rubles: net Soviet resources in 1943 were less than 60% of Germany's GNP, and that doesn't include the resources Germany got from occupied territories. Still, the Germans lost at Stalingrad and Kursk and from November 1942 to early 1944, were pushed back over 1,000 km (over half of the distance from Stalingrad to Berlin):

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Re: Russia's relative economic strength to Germany in WW1 and WW2

Post by Stiltzkin » 14 Apr 2017 22:49

GNPs of Russia/USSR and Germany from 1913 to 1939,
This differs somewhat from Harrisons figures.

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Re: Russia's relative economic strength to Germany in WW1 and WW2

Post by Guaporense » 21 Apr 2017 20:12

Using Ritschl and Spoerer (1997) time series data for Germany (and the 1905 PPPs against the British pound) and two benchmark estimates for the USSR (Maddison's and 1913 official exchange rates) and Harrison's time series data:

https://docs.google.com/spreadsheets/d/ ... sp=sharing

In 1942-1943-1944, USSR's GDP was varying from 39% to 58% of Germany's.
Stiltzkin wrote:
GNPs of Russia/USSR and Germany from 1913 to 1939,
This differs somewhat from Harrisons figures.
In which sense?
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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