We're all are familiar with the fact that early-war Germany was massively outproduced in headline weapons stats (tanks, planes, etc.) by smaller economies such as Britain and the Soviet Union.
Most/many of us know of the early historiography on this shortfall:
- USSBS head economist Kenneth Galbraith remarked, "Germany should never have lost the war."
- Allen Milward formulated the Blitzkrieg Theory of the German economy, wherein the Nazis failed to mobilize fully due to perceived political weakness.
- The "official" German history of Germany in the Second World War, specifically Volume 5-1, advocates elements of the inefficiency theory. Its narrative is a dreadfully boring recap of administrative/political turf wars within the Nazi state - dubbed a "polycracy." In Volume 5-2, Albert Speer and his technocratic gang of dynamic youngsters emerge belatedly to impose rational order on German armaments planning and to harness German entrepreneurship. [this is, inevitably, a simplification of >2,000 pages] As discussed further below, however, GSWW validates some aspects of the old Blitzkrieg/undermobilization theories.
- Another exponent of the "inefficiency theory" is Richard Overy, whose War and Economy in the Third Reich gives German inefficiency primacy of place in explaining early-war shortfalls.
Tooze's Wages of Destruction is his most "popular" work; it contains themes explored in previous scholarly articles. Scherner is less well-known as much of his work is only in German, but some of his articles have been published in English.
Here's Scherner's academic page, listing his published work: https://www.ntnu.no/ansatte/jonas.scherner
For Tooze there's his website: https://adamtooze.com/
Both men have written on multiple topics and both seem like good scholars. For the purposes of our discussion, a rough summary of the shape of their revisionism:
- Both reject the blitzkrieg theory emphatically and explicitly and have produced research calling the inefficiency theory into question as well.
- Tooze is the most emphatic in rejecting inefficiency theory, calling the apparent early-war decline in German labor productivity a "in large part a statistical illusion." WoD p.667. Tooze's conclusion is based on rejection of the data typically used for German production indices (Wagenfuhr's), preferring an alternate series created by the USSBS but largely ignored up to now (per Tooze).
- Scherner sees some truth to early-war inefficiency but contextualizes it as normal and expected rather than remarkable. Scherner's work on inefficiency theory has focused on the German aircraft and powder industries. where he has argued that learning curves typical of all industrial production (and well-known even at the time) explain the later-war increases in German productivity. See, e.g., "Fixed-price contracts, learning, and outsourcing: explaining the continuous growth of output and labour productivity in the German aircraft industry during the Second World War," The Economic History Review (2010); also "The End of a Myth: Albert Speer and the so-called Armaments Miracle," Vierteljahrschrift fur Sozial- und Wirtschaftsgeschichte (2006).
- Both spill a lot of ink debunking the "Speer myth."
I've given short-shrift to many others who are contributing to this field but again I'm not doing a full literature review, just pointing up what seems the general shape of contemporary scholarship on the Nazi wartime economy.
Now comes some of my own editorializing/analysis...
First, we should note that Tooze and Scherner don't agree on everything of course. There's a pretty big central disagreement, for example, on the role of occupied economies in Germany's war effort. Tooze is very dismissive of their value, repeating the low headline stats for completed armaments around page 410 of WoD and stating, "the main contribution made by the occupied territories directly towards armaments production for the Reich was the conscription of millions of foreign workers for labour in Germany." Tooze thereby misses Europe's enormous contributions of imported intermediate and non-weapons military goods (e.g. all the radar detectors on U-Boats built in France) and civilian goods (which allowed transfer of German production into weapons). Scherner is on the case, emphasizing (along with others) that Germany's imports represented about a quarter of its war production. https://www.degruyter.com/downloadpdf/b ... 85-006.pdf And the imports don't include other massive military boons from occupied countries: French labor and firms built most of the Atlantic Wall and Ukraine fed most of the Ostheer, for example. The high-level analysis of occupied Europe was already laid out in Does Conquest Pay? in 1993; Scherner's scholarship fills in more of the detail.
Tooze and Scherner know each other's work of course; WoD's Acknowledgments section thanks Scherner as a manuscript-reader (but doesn't cite any of his work).
What's Tooze up to, then, in minimizing the usefulness of Germany's conquests? A hint may be in the jacket-blurb to WoD:
Also in his 2005 article "No Room for Miracles," Tooze states:The idea that Nazi Germany was an unstoppable juggernaut,
backed up by a highly industrialized economy, has been central
to all accounts of the Second World War. But what if this was
not the case? What if the tragedy of twentieth-century Europe
had its roots in Germany's weakness, rather than in its
WoD's over-arching theme is that the Nazis were Stupid and Bad; I suspect that he minimizes Germany's economic resources to reinforce how foolish and inevitably doomed Hitler's project always was. Hopefully we all agree that Nazism was Stupid and Bad but hopefully we don't need to diminish the threat Hitler posed and the effort necessary to kill him. While I agree that WW2's tragedy stemmed from German weakness rather than strength; I locate that weakness in her politics, in her insecurity about German culture versus France and Britain's, and in shame and humiliation over WW1. We must be able to say that there are forms of human weakness and badness that battlefields and economics do not address.we must reject not only the Blitzkrieg thesis. We should also reject any talk of a "lost economic opportunity" for Nazi Germany early in the war
Another point of disagreement between Jonas and Adam - albeit one of rhetoric and degree - involves the specifics of German productivity in WW2. While Tooze calls the supposed early-war inefficiency "in large part a statistical illusion," Scherner's treatment of the Speer myth concludes:
So where Tooze sees mostly illusion, Scherner sees a real decline in early-war productivity explained by temporary shocks (draft, factory conversions/foundings), followed by predictable learning effects and increased productivity. ["End of a Myth" cites and refines Tooze's critique of the Wagenfuhr data, btw, so Scherner isn't using data that Tooze would say is deficient].Revised macroeconomic data indicate that
labour productivity displayed a rather u-shaped development
during World War II, decreasing between
1939 and 1941 and increasing from 1941 onwards.
In our opinion, the initial decrease in productivity
was caused by start-up problems resulting from the
astonishing growth of both the capital stock and the
work force of traditional and newly founded armament firms.
The increase in productivity after 1941
then resulted mainly from learning-by doing. "End of a Myth"
Scherner has dug deeper into the characteristics of German productivity increases - primarily in the aircraft industry (see linked article above) and in a study of powder producers. "Wissenstransfer, Lerneffekte oder Kapazitätsausbau?" ["Knowledge transfer, learning effects, or capital accumulation?] in Zeitschrift für Unternehmensgeschichte / Journal of Business History (2008).
The aircraft-focused article concludes that knowledge transfer between aviation firms worked and happened long before Speer mandated it; the powder-focused article concludes that Speer's mandatory inter-firm knowledge transfers failed to increase productivity - higher productivity came from "learning by doing" and greater capital intensity instead.
In seeking to reconcile these divergent results, Scherner comes up with a plausible part-explanation: The complexity of aircraft production enables more division of labor (i.e. more distribution of production to subcomponent suppliers), which enables more learning-by-doing on specific tasks that can be shared between more producers up and down the production chain. Powder production, by contrast, is a relatively simple industrial process. Plant Manager A can't develop - and therefore can't share - many new insights into production refinement with Plant Manager B. Instead, labor productivity increases come from individual workers becoming more familiar with their using own tools (and managers/technicians more familiar with maintaining these tools).
To return, under Scherner's framework, to macro from micro, we would expect all industries - even the simplest - to have suffered a productivity shock in the early-war period when millions of workers were drafted, millions were compelled to move to new jobs, and millions of foreigners/PoW's were being integrated into the economy. In later years some integration of new workers and some drafts continued, but the workforce had more stability than in '39-'41 [e.g. call ups of working adults - non-18yo recruits - declined as a % of workforce, Germany's sources of foreign labor dried up or were tapped out].
I find Scherner's framework - a "U - shaped" German productivity curve - far more convincing that Tooze's "in large part illusion."
I agree with both men, btw, that the "Speer myth" should be discarded. Debunking Speer is important to show that German industry was moving towards efficiency in ways that Speer's propagandizing obscures.
I disagree, however, with the amount of ink both spill on this project. Show the industry trends and focus less on Speer. I wish we could all agree that Speer should have been hanged and leave it at that. He was a terrible architect too.
Just as Scherner goes beyond Tooze's mere myth-debunking to recover hidden trends in the productivity data, I suspect there are hidden trends to recover in some of other "myths" that have been "debunked" by Overy, Tooze, et. al. Here's some potential avenues for research:
The Closure Campaign
As boring as are GSWW's long narratives about Nazi polycracy and in-fighting, they contain nuggets of information that cry out for quantitative research a la Scherner's work. Volume 5-1, for example, discusses the cessation of the "closure campaign" after the defeat of France. Tooze cavalierly - and unjustifiably - says the campaign was "abandoned as a waste of administrative effort." (WoD p.360). Tooze provides no citation for this claim, which contradicts GSWW's narrative. In GSWW, the resistance of Gauleiters and influential party members temporarily ended the closure campaign, which Speer/Milch resumed in 1942.
As the CC sought to close small, inefficient firms and/or consolidate them with larger, the expected efficiency gains fit well within Scherner's broader narrative of productivity increases through increased division of labor, knowledge transfers, and learning-by-doing.
Early-war use of foreign labor
In the into to Paying for Hitler's War, Scherner returns to occupied economies and notes "Only recently  was a first attempt made to estimate the numbers of foreigners who worked for the German war machine within Germany’s borders." Elsewhere on this forum I have extensively cited Herbert's Hitler's Foreign Workers, but good as that work is it only scratches the surface. viewtopic.php?f=11&t=243557&start=45#p2216965 Herbert points to several factors that impeded more and earlier recruitment, including (1) a post-France perception that the war would soon end, (2) innate German resistance to foreigners and regime apprehension of political consequences, (3) a decline in German war fortunes, leading to more passive resistance such as absenteeism, and (4) German provision of generous welfare benefits to occupied Western Europe. Empirical research could tell us more about these trends. For example, did firms offered long-term armaments contracts show more willingness to hire foreigners?
The German clearing account and exports
We know that Germany's clearing account deficits rose throughout the war and that occupied countries - faced with little other choice - generally continued to finance these deficits. Yet we know also that Germany exported 8mil tons of steel in 1940, just ahead of the Barbarossa campaign and in the midst of an army program to enable it. What tangible trade impacts did Germany see from going deeper in arrears on its clearing accounts in the early war period? How do these stack up against 8mil tons of steel? [aside from obvious strategic necessities - e.g. Swedish ore and Romanian oil]
All of the foregoing sound in something like the old Blitzkrieg or under-mobilization theory - Germany wasn't trying hard enough. As with Scherner's revision of Tooze's revision of the inefficiency thesis, however, I expect that there are subtleties to uncover lying somewhere between the simplistic Milward/Galbraith view of a "peace-like war economy" and a view that Germany was maximally exerting itself in 1940. This is especially true after the Fall of France when the Nazi regime's political capital was basically unlimited, thereby removing political constraints that had earlier restrained certain economic measures.