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The Toozian argument is that, before WWII, a large portion of the German economy remained focused on 'conventional' production, matters like textiles, farm labor, mining, etc, while more advanced or complicated technologies were either unavailable or made up smaller portions of the full sector. The Nazis were very much able to exploit this; despite often tragicomedic levels of incompetence, there were so many low-hanging fruit in a country with a lot of industrial technology but not anywhere near as much industrial economy that they could pick winners.
Tooze focuses a lot on textiles as one particular example: in 1933, the German textile industry was a vast part of both German labor force and total import balance sheet, but it was also not especially advanced or unusually automated by the standards of its time. Nazi policy squeezed the entire sector hard (Tooze has a chart showing nearly a 15% drop in total employment in the sector), and at the same time pushed the remainder toward more emphasis on synthetic fibers and final productions, mostly a side effect of their autarky policies.
Similarly, while agriculture was a massive portion of the German economy in 1933, with just over a quarter of the working populace, much of these people were just barely above sustenance farming on tiny parcels of land, while agricultural automation and electrification had stalled badly post-WWI. Germany had pioneered artificial nitric acid and ammonium nitrate during WWI (and the Haber process was a good part of how Germany had been able to fight as long as it did), but there was no German 'green revolution'; these technologies were focused almost entirely into the military, industrial, and transportation sectors.
((To its credit, this lack of focus on agricultural automation and efficient use of labor is probably why some local populaces in conquered territories were supposed to be useful after invasion... as, uh... 'not-quite-voluntary labor'. So not much credit.))
By 1938, the urban areas and military matters had been heavily revamped, but large sectors were basket cases, both urban and otherwise -- Tooze highlights the extent that rural agriculture was often overlooked in the buildup with a lengthy segue about Nazi ponderings to encourage farm labor that, after politics hit, turned into a counterproductive tax on the dairy farms somehow. And while Tooze doesn't focus on it, a lot of the Nazi policies emphasizing centralized control of the electricity infrastructure pushed toward urbanization and against agricultural automation.
((That said, I do think Tooze's argument overlooks the extent this was a choice. Tooze says:
But, to borrow from Hellsing Abridged, if you call heads, it matters what face the coin falls. The liberal fallacy about utilization of national resources not only ended up working in Mexico, it ended up working in no small part thanks to pre-Nazi German technology!))
Ignoring the US for a moment, where else was there an agricultural sector that was more mechanized and advanced than the German in 1933?
When it comes to mechanization, he gives the US and Australia pre-WWII, which basically just means the US. I don't know for post-1938, since Tooze doesn't get into the numbers for that and I've had trouble finding any serious efforts to pull apart the results of policy from the results of everything with wheels getting blown up. Much of the productivity difference beyond that is more prosaic: German agriculture focused more than the typical country on staple crops than cash crops or animal products, run by small and often inefficient farms, which had major labor shortages, while dependent on external feedstocks of fertilizers and vulnerable to bad weather.
But Tooze's argument is more:
The comparison is unfair, and Tooze knows it's unfair -- the British economy shrunk its agricultural sector by having someone else do it, in a way that post-WWI and pre-Nazi Germany wasn't going to be allowed to do. But it's the argument he makes.
Correlli Barnett's works, however, paint a rather unflattering picture of the British war economy, don't they?
https://en.wikipedia.org/wiki/Correlli_Barnett#The_Pride_and_Fall_Sequence
It's been a long time since I read the The Collapse of British Power, but I thought most of the wartime manufacturing criticism focused on pre-WWI, where British on shore manufacturing was an absolute mess of tiny shops with no serious production capabilities. By the 1920s, the Barnett highlights the development of national manufacturing as a turnaround (if with US and continental assistance) from an area where engines, steel, and basic mechanisms couldn't be produced at all. For WWII, the problem is instead political and peacetime economics, with the UK waiting until years after the last minute to start re-arming and then finding itself slow to build the tools to build the tools to get back up to parity, as well as struggling entirely to modernize aircraft work (though I remember Barnett kinda glossed over a lot of interwar British aviation work).
((There was, to return to the topic, some criticism of Churchill in the book... but more under his Treasury policies.))
To some extent, yes, both countries hard major problems moving to mass manufacturing, in different ways. Barnett highlighted some extremely powerful mills and lathes that interwar Britain had to import from Germany, as part of Britain's general issues bringing together general-purpose.... but even where 1930s Germany had as many lathes-per-metalworking-employee as the US they were largely manual work
I can definitely recall his observation that the manufacture of one Supermarine Spitfire fighter aircraft took on average three times as many working hours as that of a comparative Bf-109 in Germany, for example.
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