A Comparison of American and German economies in WW2

[RichTO90]

My point is that Germany had a much larger stock of machine tools in proportion to the size of the economy than the US because the proportion of the sector of machine tool using industries in Germany was similarly larger than the US's in terms proportion of total employment as well. Hence, the proportion of GNP generated in this sector was larger in Germany in the late 1930's compared to the US.

Er, yes, of course, after all the Germans made a larger investment in producing machine tools during the 1930s in comparison to the U.S. So QED.

Germany compared to UK and US. US and UK were similar in that employment in metal working industries rose dramatically and much faster than Germany's.

So then to restate it with your "clarification", what you meant was:

"So when war started German machine tool stock was much more intensively used during the war as Germany shifted their workforce to machine tool using industries due to Germany's focus of their resources on production of aircraft and ships."

Unfortunately that isn't a "comparison" with anything. The statement makes as much sense if you substitute "United States" or "United Kingdom" for "Germany". In fact, it makes more sense.

Aircraft and ships in 1943 was apparently 25 billion dollars, or 50 billion RM, compared to 10 billion RM for Germany, aircraft alone was 25 billion RM for the US in 1943, 32 billion in 1944, compared to 8 billion RM for Germany in 1943 and 10 billion in 1944, 57/18, around 3 times more. Though for ammunition the figures are much closer, at 22 billion RM for the US in 1943-44, same as for Germany.

Using the 1939 3 RM = 1 1939 dollar and the Friedman and Schwartz (1963) price index converting 1945 dollars to 1939 dollars.

Dear God... Would you care to restate that so it makes some form of sense? Whose "aircraft and ships in 1943"? Germany's? The United State's? Argentina's? Is "25 billion dollars" "50 billion RM"? How, if you then state that 3 RM = 1 1939 dollar? Did the RM to US$ exchange in 1942 become more favorable to Germany? Why? Where are the data you are slinging about from?

In any case, why are you babbling on about comparative monetary expenditures when I asked you about what industrial OUTPUT advantage was derived from the U.S. having an INPUT of 4-million workers in an industry compared to 0.9-million German workers - NOT what the monetary INPUT was. Try, please try to focus on developing an actual logical and coherent argument.

What I find puzzling is the fact that Germany controlled a comparable economic potential as the US after defeating France (see that little table above) and despite taxing occupied territories as heavily as Germany itself they produced way less aircraft (naval vessels is easily explained by difference in military objectives). I explained that fact using two arguments:

1. The territories under German occupation suffered economic collapse, while the US as a whole grew, continental Europe GDP declined, by 1943, western continental Europe's GDP was ca. 60% of the US's, when it was nearly the same size in 1939.
2. Germany spend a smaller proportion of their resources on aircraft by virtue of different doctrines regarding airpower: US believe in airpower as a strategic weapon while German military used aircraft as support for ground forces. In 1943, German expenditures on aircraft were 8% of total military expenditures, compared to 16% in the US.

So then obviously the German policy of rapine WRT industrial resources, machinery, and the like had nothing to do with it? The German Occupation wasn't interested in integrating Norwegian, Danish, Dutch, Belgian, and French industry and economy into the Grossraum. Hungary, Bulgaria, Italy, and Romania were not occupied territories, they were sovereign states. The German's did a terrible job of integrating the manpower and industrial capacity of the occupied territories and their allies...and were unable to solve the key issue of liquid fuels. Nor were many of those states as well industrialized as either Germany or the U.S.

[RichTO90]

------------------GDP (PPP) ----- GDP (nominal) ----- Population ----- Per Capita Income ------ Coal output -------- Machine tool stock
"Grossraum" --- 869,339 -------- 82.2 billion ---------- 191,506 ------- 4,592 --------------------- 425,769 ------------ 944,527*
USA ------------ 862,995 -------- 90.5 billion ---------- 131,539 ------- 6,561 --------------------- 400,979 ------------ 896,035**

for sources, see "Estimating Warmaking Potential thread"

All numbers for 1939, except machine tools, 1938 for Germany only, 1940 for US.

Um, no, sorry, but again you are using defective figures. Very precise figures for U.S. products may be derived from the Statistical Abstracts, although on occasion data for particular years may be absent. However, for 1939, U.S. coal/coke production was:

Bituminous - 393,065,000 short tons
Anthracite - 51,487,000 short tons
Coke - 44,327,000 short tons

What is interesting, and indicative of the effect of the downturn in the 30s, is that the 1940 output of bituminous and anthracite coal was actually below that of 1930, although coke production exceeded the 1930 figure (467,526,000/69,385,000/47,972,000 respectively). It comfortably exceeded the mid decade figures in 1935, but were of course well short of the wartime peak in 1944 (619,576,000/63,701,000/74,038,000 respectively).

In actual comparison, German production in their 1939/1940 fiscal year was:

Bituminous - 204,800,000 metric tons
Brown - 211,600,000 metric tons (= 470,222 metric tons bituminous equivalent)
Brownite, Pitch Coal, Anthracite - 23,800,000 metric tons
Total - 279,070,222 metric tons compared to U.S. coal equivalent of 403,290,791 metric tons

So where did your figure for "425,769" come from? Table 55? Table 56? Table 57?

Table 55 gives 204.8-million metric tons of bituminous coal by German district.
Table 56 gives 211.6-million metric tons of brownite coal and 23.8-million metric tons of other coal in the Grossraum.
Table 57 gives 267.7-million metric tons of all types in the Grossraum, plus 96.9-million metric tons in occupied territories.

I can get that to total to 440.2-million or 364.4-million, but I cannot find "425.769-million"?

[Guaporense]

1)I am not convinced at all by the use of billions of $ to prove a point

2) I am not convinced at al by the old claim that Germany used its aircraft as support for ground forces

That's doctrine. The US developed strategic bombing doctrine of using 4 engine bombers to cripple industrial production, the British used a different doctrine to destroy the country's moral using strategic bombing (explaining why they focused on bombing civilian housing). Germany did not, the Luftwaffe's role was in supporting the army.

[ljadw]

Prewar doctrine and reality are 2 different things : the Germans were using the LW also in an independent role :attacks on the British merchant navy and the Allies (British and US) also used their air force in a subordinate role ,to help the ground forces : the " destruction " of PzL by the USAAF.

[Guaporense]

Also, we can estimate the size of each country's respective metal working sector in 1939:

Size of aggregate economy
GNP at official exchange rates
US ---------- 90.5
Germany --- 51.6

GDP PPP (Maddison estimate)
US ----------- 862,995
Germany --- 428,750 (using the 79.3 million for total population)

Aggregate wages (PPP, my estimate, relatively it is in between Maddison's numbers and GNP at official exchange rates)
US ----------------- 40,707
Germany --------- 22,359

Relative size of metal working sector
Germany (1939)
labor input
employed civilian labor force ---- 32,665 (excluding unpaid family helpers)
metal working sector -------------- 3,433
national income, millions RM
GNP ---------------- 129,000
Industry ------------ 43,649 (labor force: 10,464)
Metal working ----- 16,116
*source: Tooze, No Room For Miracles (2006), USSBS Report War Economy

Metal working employed 10.5% of the labor force and produced 12.5% of Gross National Income in Germany. In the US in 1939 the employed civilian labor force was 45,738 thousand workers, of which ca. 2.75 million were employed in metal working, in 1940 these were the following stocks of machine tools according to the USSBS:

Germany ---- 1,178,000
US -------------- 942,000

In 1939 the proportion was probably similar to 1940, number of employees per machine in the US was 0.97 of Germany's in 1940, according to The Cutting Edge of Modernity (2003), so employment in metal working in the US was perhaps 79.9% of Germany's, at 2,745 thousand workers. That's 6% of the labor force, if their relative productivity was similar to Germany's at 119% of the average economy, they produced 7.1% of the national income/domestic product.

So at official exchange rates this was the valued added of metal working in 1939, millions of 1939 dollars:

Germany ------- 6,446
US --------------- 6,457

Using Maddison's PPP GDP estimates the difference increases, valued added in millions of 1939 dollars, but still comparable:

Germany ------- 53,564
US --------------- 61,573

But anyway, this explains why Germany had so many machine tools before the war, as the sector was a much larger portion of a smaller economy. During the war the US (and UK, and USSR) metal working sector expanded much more than Germany's in labor employed leading to a shortage of machine tools and industries working on double and triple shifts. Like Japan in 1990, when Japan's GDP was 3.0 trillion compared to the US's 5.7 trillion, but Japan's metal working industries were larger than the US's, Germany in 1939 had a smaller economy but specialized more in metal working (in Brazil in the 30's most metal products like bicycle chains were imported from Germany).

Solving the Machine Tool Puzzle

Germany had a greater supply of machine tools in 1939 than the US (or any other country), and for most of the war, until 1944-45, when US stock surpassed Germany's by a small margin. Why, despite the large difference in size of these economies? Simple, because in the late 1930's the metal working industries in Germany employed more workers than in the US, the German economy specialized in the field and even with the artificially overvalued mark they exported metal products. It's a myth that German industry used more machine tools because it was a "craft type of production" versus the mass production methods of the US, mainly because the US still used a lot of more traditional craft type of production and that German industry updated itself over the 30's to catch up to US machine tool technology, by the late 1930's, German machine tool stock was similar to the US in composition of types of machines, value of the capital stock besides quantity:

------------------------- Germany (1938 stock) ----- US (1940 stock) -------- USSR (1938)
Lathes -------------------- 303,884 --------------------- 235,235 -------------- 53,900
Presses -------------------- 189,111 -------------------- 185,633
Milling machines -------- 104,235 --------------------- 94,113
Production grinders ------ 45,831 --------------------- 56,823
Bending machines -------- 45,409 --------------------- 35,938
Gear-cutting machines -- 16,856 ---------------------- 20,753
Cutting-off machines ---- 44,068 ---------------------- 43,097
Welding and cutting
machines ------------------ 42,140 --------------------- 75,900
machine tools* ----------- 989,852 -------------------- 940,829
* including a couple more categories

The labor force employed in metal working industries in Germany (1938) case was 108% of US's (1940) case. Value of 1938 German machine tool stock was 101% of US's 1940 stock using 1942 German prices.

When the war started, the German labor force was drafted into the army so the labor force working in metal working did not increase much while in the US and the UK much of the labor force was mobilized into the metal working industries as they focused their resources on developing strategic bombing forces and building ships, partly to replace the merchant shipping losses to the U Boats.

Source: Tooze et al (2003)

[Guaporense]

Prewar doctrine and reality are 2 different things : the Germans were using the LW also in an independent role :attacks on the British merchant navy

Still the main role was in supporting the army, Germany didn't invest large resources in stablishing a large strategic bombing force unlike UK and USA.

and the Allies (British and US) also used their air force in a subordinate role ,to help the ground forces : the " destruction " of PzL by the USAAF.

Of course. Though overall the casualties inflicted in German ground forces by Allied air attack was a very small proportion of total German army losses in 1944-45.

[ljadw]

1)Germany had no large strategic bombing force because it did not need such thing and because it had not the means for it

2)About the casualties of the German ground forces by Alied air attacks the role of the allied air attacks was not to inflict direct casualties,the indirect casualties were much more important : attacks on railways

[stg 44]

1)Germany had no large strategic bombing force because it did not need such thing and because it had not the means for it

2)About the casualties of the German ground forces by Alied air attacks the role of the allied air attacks was not to inflict direct casualties,the indirect casualties were much more important : attacks on railways

2 He111s had more payload for the normal combat range than a He177 while being cheaper overall. The only real benefit of the He177 or a strategic bomber was range for deep targets, which would have been helpful, but only in limited numbers; anything over a air corps of He177s with attached escorts (perhaps the Fw187) would have been a waste.

[Guaporense]

1)Germany had no large strategic bombing force because it did not need such thing and because it had not the means for it

German military expenditures during the war were equal to the US and twice the UK. If the UK had enough resources to spend on bombers, Germany also had.

2)About the casualties of the German ground forces by Alied air attacks the role of the allied air attacks was not to inflict direct casualties,the indirect casualties were much more important : attacks on railways

Still allied air superiority did not have such enormous impact as envisioned by the military theorists before the war. Allied victory was mainly due to numerical superiority on the ground, thanks to superior size of the Allied manpower pool (specially the Soviet Union's).

In Normandy, Germany managed to send there nearly all the combat capable divisions they had in the west over a period of 50 days. Even though the Allies had air supremacy over France, it didn't have the crushing disruptive effect some claim. Germany lost in the Western front in 1944 because they simply did not have enough manpower to fill up the western front to defend against allied penetration. Even after sending their divisions to Normandy, they were still outnumbered 2.5 to 1 on the ground in late July, when Operation Cobra was launched and crushed the German defenses there, thanks to great Allied numerical superiority on the ground.

I think that today, with further development of laser guided bombs and missiles, air power can have greater actual strategic effect than in WW2.

[ljadw]

1)Germany had no large strategic bombing force because it did not need such thing and because it had not the means for it

German military expenditures during the war were equal to the US and twice the UK. If the UK had enough resources to spend on bombers, Germany also had.

Expenditures and resources are 2 different things,as any serious economist will tell you .

[Guaporense]

Expenditures in proportion to resources were similar (and they are a good indicator of total resources yes), Germany had the bulk of Europe, including the territory you are in right now. In terms of economic potential, Germany controlled more resources than the US did after June 1940. Though thanks to Nazi policies continental Europe's GDP collapsed.

GDP, Military Outlays and Coal Production

Notice the strong correlation between these 3 statistics:

------------------------- GDP (1939) ------------- Coal Production (1939) ------------- Military Outlays during the war
"Grossraum" ---------- 869,339 ------------------ 425,769 ------------------------------ 1,751
USA ------------------- 862,995 ------------------- 400,979 ------------------------------ 1,771
British Empire ------- 406,965 ------------------- 246,200 ------------------------------ 845
USSR ------------------ 420,091 ------------------- 170,100 ----------------------------- 742

Coal production includes coal used to produce coke and doesn't include lignite, in thousand metric tons. Includes British and Canadian coal output but doesn't exclude coal consumed at mines, US, Grossraum and USSR data does. Military outlays in billions 1990 international dollars, computed using Maddison's data.

British Empire GDP data is the following:
UK --------------- 300,539
Canada ---------- 55,167
Australia -------- 40,749
New Zealand ---- 10,510
total ------------- 406,965

I only include the industrialized parts of the British Empire because they were the ones most capable of paying taxes and producing supplies. Also, the UK themselves paid for ca. 75% of their military outlays during the war, so it's reasonable to estimate that 75% of the tax paying capacity of the British Empire was the UK.

Germany produced less aircraft because aircraft represented a much smaller proportion of German military expenditures than the US and the UK. Total expenditures on aircraft in Germany's case were ca. 35 billion RM, out of total military outlays of 550 billion RM (from 1939 to 1945), that's 6.5%, US spend 45 billion dollars on aircraft, while total military outlays were 290 billion 1945 dollars, or 15.5%.

If so desired, Germany could easily double historical aircraft production levels such by spending an extra 6% of total military outlays. German industry had plenty of spare capacity as well, which explains why they didn't even use the industrial capacity of occupied territories. Production of specialized equipment for aircraft production could be easily produced as well, given the small relative size and need of the aircraft industry against the whole industrial capital stock (even if required doubling).

[Guaporense]

Different metrics of total military Germany/USA expenditures:

Nominal military outlays during the whole war, not corrected for inflation, but provide a rough idea:

Germany -- 550 billion RM (90% of 614.4 billion RM total government expenditures, 1st September 1939 to 30 April 1945, 68 months)
USA -------- 308 billion dollars (4 years, 48 months: 1941-45)

Divided by 1943 costs of 2 engine bomber

Germany ----- 2.16 million bombers (cost of 2 engine Ju-88 bomber: 254,496 RM)
USA ----------- 2.03 million bombers (cost of 2 engine B-25 bomber: 151,894 dollars)

Divided by 1942 cost of machine tools

Germany ----- 56.1 million machine tools (average cost of machine tool: 9,811 RM)
USA ----------- 55.8 million machine tools (average cost of machine tool: 5,515 dollars)

Note: average machine tool price is defined as the average price of all machines sold in the US from 1940-44, average German price is the average price of the same "basket" of machines using 1942 German prices for each type of machine. Hence, stronger PPP index than a single aircraft production costs.

Official pre-war exchange rates in 1939 prices:

Germany ----- 210.70 billion dollars
USA ----------- 189.24 billion dollars

Multiplying (total military expenditures divided by national income) by Maddison's PPP GDP estimates for 1939:

Germany ----- 1,751 billions 1990 dollars
USA ----------- 1,771 billions 1990 dollars

It appears to be a very strong evidence that Germany mobilized very similar quantities of resources for WW2 than the US, though over a longer period of time (68 months versus 48 months for the US).

[Guaporense]

And with regard to the cuts in investments : I do not have overall figures, but some indicators are useful.
Notably and on different levels :
* factory floor surface shrank in 1944,

(and the fact that it was contradicted "by production plans" is almost as ridiculous as said production "plans").

No it did not.

Read:
http://economics.yale.edu/sites/default ... 060329.pdf

Industrial investment in 1944 was very large, nearly as large as the peak and still way above pre-war levels. In fact, given the size of Germany's government outlays during the war and the stock of machine tools in the country, the scale of industrial investment and the output of machine tools increasing aircraft production to 100,000 units a year would be perfectly feasible and wouldn't actually hurt the government budget.

In 1943-1944 fiscal year, the German government spent 149.4 billion RM I don't know exactly how much were military outlays but I guess around 90%, in the US it was 93%. Aircraft expenditures in 1944, for the 40,000 units delivered, spare parts and associated equipment for the airforce, was 10.5 billion RM (using 1943 prices). So 100,000 aircraft, spare parts and associated equipment would be ca. 25 billion RM, 17% of government expenditure. Price of a 2 engine bomber was 255,000 RM.

American government expenditures for the 1943-44 fiscal year were 93.8 billion dollars, of which 87.0 billion dollars were military outlays and 17 billion were outlays on aircraft, spare parts and associated equipment (less using 1945 prices as I did in this thread previously, that would be ca. 15 billion), that's 19% of total government expenditures for 90,000 aircraft. Price of a 2 engine bomber was 150,000 dollars.

[ljadw]

And with regard to the cuts in investments : I do not have overall figures, but some indicators are useful.
Notably and on different levels :
* factory floor surface shrank in 1944,

(and the fact that it was contradicted "by production plans" is almost as ridiculous as said production "plans").

In 1943-1944 fiscal year, the German government spent 149.4 billion RM I don't know exactly how much were military outlays but I guess around 90%, in the US it was 93%.


Aircraft expenditures in 1944, for the 40,000 units delivered, spare parts and associated equipment for the airforce, was 10.5 billion RM (using 1943 prices). So 100,000 aircraft, spare parts and associated equipment would be ca. 25 billion RM, 17% of government expenditure.

1)It is questionable to use guesses in a discussion about economics

2) SO:why SO ?

It is questionable to use an automatism (translation : guess again) in an economic discussion ,

There is no proof that ,if 40000 units = 10.5 billion RM,that 100000 units = 25 billion RM.

You have the custom to use guesses,estimations,extrapolations,interpretations to build a house of cards to prove your right,this result in the justified suspicion by a lot of posters that you are using such things(guesses,interpretations,estimations,extrapolations)because you know that the facts are putting you in the wrong .

[RichTO90]

You have the custom to use guesses,estimations,extrapolations,interpretations to build a house of cards to prove your right,this result in the justified suspicion by a lot of posters that you are using such things(guesses,interpretations,estimations,extrapolations)because you know that the facts are putting you in the wrong .

ljadw, given that his custom is also to repeatedly use defective data after he is corrected (recycling it occasionally here and at other sites in his own peculiar Internet version of the Große Lüge), then aside from his shaky house of cards, he also has his head firmly planted in his...sand? So I doubt that much will get through his ironclad intellectual biases.

Cheers!