@WestphalianPeace comments on "Culture War Roundup for the week of September 2, 2024

Culture War Roundup for the week of September 2, 2024

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WestphalianPeace 2mo ago

I am not making my argument in bad faith. I stopped, considered your question and considered it legitimate. I tried to figure out which books would be best for an interested reader. I found talks the authors gave on youtube to summarize their arguments in case you didn't want to read Tooze's dry tome of a book. The book is ~800 pages long. It is dry. The talk is an hour & a 45. Believing that mere economics does not determine wars I recommend the most accessible operational history of the Germans to explain how they have a culture of achieving military victory inspite of poverty. I then remembered an illustrative case and provided a timestamped link to take you straight there.

You respond in 20 minutes, accuse me of bad faith, and provide as counter example a table of raw military production figures without consideration of any other economic factors.

I cannot help someone who, when provided extensive resources handmade specifically to make things easy, cannot even be bothered to look.

To anyone onlookers who've gotten this far. At least watch the Tooze video. See if my position is distortionary for yourself.

Context

ArjinFerman Tinfoil Gigachad WestphalianPeace 2mo ago

Sorry, if my antagonism / frustration is directed at anyone, it's more at people like Tooze.

WestphalianPeace ArjinFerman 2mo ago

I don't know the full extent of your knowledge of WW2. We could spend all day speaking past each other. You've got military production figures on hand from an archived source. I do take that seriously as more than the average person.

If you are interested, if you think the case is at least intriguing then please, at least watch the youtube videos. If you're convinced afterwards that I'm not arguing in bad faith then consider the books. Citino's books are actually rapt reading. Tooze is dry as a bone but if you can get past the first bit about manipulation of exchange rates then it becomes more engaging. The exchange rates chapters really do suck. It's worth it to get past them. I listened to it on audible and digested it over the course of a month. Because you get eye popping accounts of daily economic life like the following. Bolding & titles added by me

On the inability to stop a housing crisis in peacetime.

"Facing a continuing problem of overcrowding in the cities, in 1935 the Reich Labour Ministry launched an alternative vision of National Socialist housing in the form of so-called Volkswohnungen. Stripped of any conception of settlement or any wider ambition of connecting the German population to the soil, the Volkswohnungen were to provide no-frills urban housing for the working class, built according to the first projections for as little as 3,000-3,500 Reichsmarks. Hot running water, central heating and a proper bathroom were all ruled out as excessively expensive. Electricity was to be provided but only for lighting. Each housing unit was to be subsidized by Reich loans of a maximum of 1,300 Reichsmarks. Rent was to be set at a level which did not exceed 20 per cent of the incomes of those at the bottom of the blue-collar hierarchy, or between 25 and 28 Reichsmarks per month.

To achieve this low cost, however, the Volkswohnungen were to be no larger than 34 to 42 square metres. Though this was practical it was far from satisfying the propagandists of Volksgemeinschaft. The Goebbels Ministry refused to accept that accommodation of such a poor standard deserved the epithet 'Volkswohnung' and the DAF insisted that the minimal dimensions for a working-class apartment should be 50 to 70 square metres, sufficient to allow a family to be accommodated in three or four rooms.

But, as experience showed, the Labour Ministry's costings were in fact grossly over-optimistic. By 1939 the permissible cost of construction even for small Volkswohnungen had had to be raised to 6,000 Reichsmarks, driving rents to 60 Reichsmarks per month and thus pricing even this basic accommodation out of the popular rental market. The very most that working-class families were willing to pay was 35 Reichsmarks per month. Instead of the 300,000 per year that the Labour Ministry had intended, construction on only 117,000 Volkswohnungen was started between 1935 and 1939. As in the case of the Volkswagen, what Hitler's regime could not resolve was the contradiction between its aspirations for the German standard of living and the actual purchasing power of the population. But as in the case of the Volkswagen this did not prevent the D AF from espousing a Utopian programme of future construction.

By the late 1930s, the official ideal of 'people's housing' was a large family apartment of at least 74 square metres, fully electrified, with three bedrooms, one each for parents, male and female children. At the same time it was estimated that an apartment built to the DAF specification would cost in the order of 14,000 Reichsmarks, 40 per cent more even than those constructed by the Weimar Republic. The limitations of German family budgets, however, demanded that these generous apartments were to be provided to the Volksgenossen at monthly rents of no more than 30 Reichsmarks. In part, the costs would simply have to be borne by the Reich." - Wages of Destruction, pg 161

On the inability to produce cars economically in peacetime

In July 1936, the project began to slip definitively out of the hands of German industry. After a successful demonstration on the Obersalzberg on 11 July 1936 Hitler decided that Porsche's car was to be built, not in any of the existing car factories in Germany, but in a new special-purpose plant. Hitler claimed that this could be constructed for 80-90 million Reichsmarks. The factory was to have a capacity of 300,000 cars per annum and deliveries were to begin in time for the International Motor Show in early 1938. Faced with the impossibility of meeting the 1,000 Reichsmarks target on commercial terms, it seems that Germany's private car industry was on the whole content to see Porsche and his troublesome project transferred to the state sector. As a commercial project the VW was not viable. A factory built through the compulsory conscription of private business, along Brabag lines, would damage the entire industry. Far better to use public funds, or rather the funds of the German Labour Front (DAF). This suggestion seems to have come from Franz Joseph Popp, the founder of BMW, who also sat on the supervisory board at Daimler-Benz. Popp suggested that the DAF should take on the Volkswagen as a not-for-profit project. Non-profit status would qualify the factory for tax concessions that would help to cut the final price of the car. More importantly, from the point of view of industry, it would allow the sale of Volkswagens to be limited exclusively to the blue-collar membership of the DAF, thus reserving the profitable middle-class car market for the private manufacturers. The leadership of the DAF jumped at the chance. As Robert Ley, the leader of the DAF, later put it, the party in 1937 took over where private industry on account of its 'short sightedness, malevolence, profiteering and stupidity' had 'completely failed'.

In May 1937, with payments to Porsche and his design team totalling 1.8 million Reichs- marks, the industry cut its losses and ended its association with the VW project. On 28 May 1937 Porsche and his associates founded the Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH (Gezuvor). A year later, construction began on Porsche's factory at Fallersleben in central Germany. In October 1938, along with Fritz Todt and the aircraft designers Willy Messerschmitt and Ernst Heinkel, Porsche was awarded Hitler's alternative to the Nobel Prize, the German National Prize. The basic question, however, remained unsolved. How could the Volkswagen be produced at a price affordable to the majority of Germans? The DAF claimed that the Volkswagen was now to be promoted in conformity with Nazi ideology as a tool of social policy rather than profit. However, it too lacked any coherent system for financing the project. From the outset it was clear that the capital costs of building the plant would never be paid off by the sale of cars priced at 990 Reichsmarks per vehicle. The construction of the plant would therefore have to be financed through other than commercial means. The DAF, which had inherited the substantial business operations of Germany's trade unions, had assets in 1937 estimated to be as much as 500 million Reichsmarks. It also commanded a huge annual flow of contributions from its 20 million members. However, the demands of constructing the VW plant were enormous. Rather than the 80-90 million Reichsmarks originally mooted by Hitler, Porsche's planning now envisioned the construction of the largest motor vehicle factory in the world. The first phase, to reach a capacity of 450,000 cars per annum, was costed at 2.00 million Reichsmarks. In its third and final phase the plant was to reach an annual output of 1.5 million cars, enough to out-produce even Henry Ford's River Rouge facility. Investment on this scale placed huge demands on the DAF. The initial tranche of 50 million Reichsmarks to start work on the factory could only be raised by a fire sale of office buildings and other trade union assets seized after May Day 1933. Another 100 million were raised by over-committing the funds of the DAF's house bank and the DAF's insurance society.

The cars themselves were to be paid for by the so-called 'VW saving scheme'. Rather than providing its customers with loans to purchase their cars, the DAF conscripted the savings of future Volkswagen owners. To purchase a Volkswagen, customers were required to make a weekly deposit of at least 5 Reichsmarks into a DAF account on which they received no interest. Once the account balance had reached 750 Reichs- marks, the customer was entitled to delivery of a VW. The DAF mean- while achieved an interest saving of 130 Reichsmarks per car. In addition, purchasers of the VW were required to take out a two-year insurance contract priced at 200 Reichsmarks. The VW savings contract was non-transferable, except in case of death, and withdrawal from the contract normally meant the forfeit of the entire sum deposited. Remarkably, 270,000 people signed up to these contracts by the end of 1939 and by the end of the war the number of VW-savers had risen to 340,000. In total, the DAF netted 275 million Reichsmarks in deposits. But not a single Volkswagen was ever delivered to a civilian customer in the Third Reich. After 1939, the entire output was reserved for official uses of various kinds. Most of Porsche's half-finished factory was turned over to military production. The 275 million Reichsmarks deposited by the VW savers were lost in the post-war inflation. After a long legal battle, VW's first customers received partial compensation only in the 1960s. But even if the war had not intervened, developments up to 1939 made clear that the entire conception of the 'people's car' was a disastrous flop. To come even remotely close to achieving the fabled target of 990 Reichsmarks per car, the enormous VW plant had to produce vehicles at the rate of at least 450,000 per annum. This, how- ever, was more than twice the entire current output of the German car industry and was vastly in excess of all the customers under contract by the end of 1939. Assuming a production of 'only' 250,000 vehicles per annum - which was significantly more than the German market could bear - the average cost per car was in excess of 2,000 Reichsmarks, resulting in a loss of more than 1,000 Reichsmarks per car at the official price. Furthermore, even priced at 990 Reichsmarks the VW was out of reach of the vast majority of Germans. A survey of the 300,000 people saving towards a VW in 1942 revealed that on average VW savers had an annual income of c. 4,000 Reichsmarks, placing them comfortably in the top tier of the German income distribution. Blue-collar workers, the true target of Volksgemeinschaft rhetoric, accounted for no more than 5 per cent of VW's prospective customers. - Wages of Destruction, pg 156

ArjinFerman Tinfoil Gigachad WestphalianPeace 2mo ago · Edited 2mo ago

We could spend all day speaking past each other.

Sorry I'm seeing you put a lot of effort and my reply probably won't be very satisfactory... but this is also why I have to jump in - you're right, we are speaking past each other, and I'm afraid all this effort is in vain. None of this addresses my argument that Germany cannot be accurately described as doing "Potemkin industrialization". Feel free to post quotes from the book - they are actually very interesting - but if you do so, please do it with the knowledge that this type of argument is not going to move me. It's not because I'm stubborn, it's that it presents a very narrow context.

The quotes don't let me see the entire economy of Germany, let alone let me compare it to the UK or the US. The pre-war times was the era of the Great Depression, there were incredibly insane policies, superficially meant to alleviate the problems of the working class, being implemented all over the world at that time. I'd have to dust off my Mises-Libertarian days' notes, but if I recall correctly, America was literally arresting people for selling their goods too cheaply, in order to fight deflation. In war time everybody switched to a command economy as well, and I assure you, economic pathologies are endemic in those regardless of whether you're a Nazi, or a nominal "capitalist".

In math / tech fields there's the concept of a sanity check. The idea is that it can take a lot of effort to reach a conclusion, and it's pretty easy to make a small mistake somewhere in the process, that will turn whatever it is you're deriving from representative of reality to clown world. So to ensure your conclusion is (/has a decent chance of being) correct, you come up with an easy test that will let you know if you made a wrong turn somewhere. For example, when you're deriving a formula for some physical metric you're interested in, you check the units of measurement that the formula spits out. If your formula for acceleration spits out anything other than units of velocity divided by units of time, you know you screwed up.

And so, I proposed to take the raw output of tanks / aircraft / ships / munitions, and compare them between the belligerents of the war. These couldn't have been Potemkin tanks, and Potemkin aircraft, and Potemkin bombs, that they were using, otherwise the war would resolve a lot quicker than 6 years. You can't build real military equipment in a Potemkin factory, so I think those were real as well, and therefore I only see 3 possibilities:

Germany did not go through "Potemkin industrialization" - IMO, most likely
All the major world powers also went through "Potemkin industrialization" to a similar extent as Germany - also likely as per the above argument re: Great Depression era economics, but makes the criticism of German economy meaningless
Germany did go through "Potemkin industrialization", and no one else did, so the Nazis were fighting the war with one hand tied behind their back, which would imply they would wipe the floor with the UK and the USSR had they gone with more sane economic policies - the least likely option, IMO

Now, if you want I can go watch the videos you linked, and we can have this conversation in the next week's thread after I had the time to digest them, and we both cooled down... but also tell me, do they actually address the kind of argument I'm making? Is there any kind "big picture" comparative analysis they go through that will satisfy my need for a sanity check?

WestphalianPeace WestphalianPeace 2mo ago

As serious as the situation appeared to be in agriculture, it was not the issue of milkmaids and dairy prices that really troubled Hitler's regime in the summer of 1938. After months of bitter argument, the problem of dairy farming was given a political 'fix' by raising the farm-price of milk by 2 Pfennigs. Since Rudolf Hess had made clear that an increase in the prices paid by consumers was out of the question, the conflict was resolved at the expense of the dairies, by squeezing their profit margins. This did not curb demand for milk. Nor was it enough to resolve the income deficit of German dairy farmers. But it did at least send a political signal that the regime was not oblivious to the interests of its agrarian constituency

wages of destruction, pg 268

a perfectly healthy economy. Months of political argument followed by the state setting prices and then demanding that those costs be born by the producer. Then being surprised when the demand for milk is the same.

From this point of view the fundamental explanation for the poverty of German agriculture was simple: low labour productivity. According to conventional measures, the productivity of the more than 9 million people employed on Germany's farms was roughly half that of the typical non-agricultural worker.84 What was really scarce in the countryside was not labour but the necessary capital and technology to use labour efficiently. Such productivity comparisons of course depended on the relative prices paid for agricultural and industrial products. And the RNS demanded higher farm prices, but this ignored the enormous gulf between the prices paid by German consumers for their food and the prices prevailing on world markets.85 By the late 1930s, however, the 'world market' as far as Germany was concerned was an increasingly irrelevant abstraction. Given the politicization of its foreign trade, Germany no longer purchased at 'world' prices. Instead, agricultural imports were bargaining items in a complex web of bilateral deals, in which Germany often paid substantial premiums for the willingness of its trading partners to remain loyal to the Third Reich.

wages of destruction, pg 266

a healthy economy is probably not one that has detached price signaling in exchange for political loyalty.

Some skilled construction workers were rumoured to earn better wages than senior army officers. And this was no accident. In May 1938, Hitler had removed control of the Westwall from the army's engineering depart- ment and handed it to Fritz Todt, the man idolized as the master-builder of the autobahns. Todt's mission was to complete the fortifications before the outbreak of hostilities and he was to do so regardless of cost. Goering's decree on labour conscription provided Todt with all necessary legal powers to secure the quarter of a million workers he needed. But typically for the situation of the German economy in the late 1930s he chose to supplement conscription with monetary incentives. The contractors on the Westwall were freed from standard military procurement rules, allowing them to inflate both their profits and their wage bills. By the summer of 1939, Todt had completed his mission. The most vulnerable sections of Germany's western frontier were reinforced with thousands of bunkers and gun emplacements. The price, however, was a huge inflationary shock to the labour market.

wages of destruction, pg 265

wanting to eat their cake and have it to. I want all my workers to have high wages. and i want the Westwall made quickly. but don't make it inflationary. and don't make it so that the high wage low-skill labour competes with agriculture.

And with the armaments effort reaching new heights, Goering's Decree for Securing Labour for Tasks of Special State Importance (Verordnung zur Sicherstellung des Kraeftebe- darfs fuer Aufgaben von besonderer staatspolitischer Bedeutung) of 22 June 1938 provided the Reich with general powers of conscription. Workers could be redeployed for any period required by the Reich, whilst their former employers were required to keep them on their rolls. By the end of 1939, no less than 1.3 million workers had been subject to such compulsory work orders. Though compulsion was not the norm in relation to German workers, any more than it was in the regime's dealings with German business, the possibility was now established that if rearmament demanded, the state could intervene in the working life of every single individual. In this respect as well, Hitler's regime clearly crossed a bridge in the summer of 1938. Perhaps not surprisingly, however, the rationing of labour functioned even less smoothly than the rationing of steel. The decree debarring rural workers from taking industrial jobs had to be abandoned, since, to avoid their children falling under the terms of the decree, rural families had taken to preventing them from entering farm work in the first place.

Meanwhile, in the inflation hot spots of urban Germany, the attempt to repress the market mechanism had only limited success. It was, after all, in the interests of neither employers nor workers to abide by the official wage restrictions. Workers wanted better wages and employers - keen to take advantage of the boom - were willing to pay for their labour. Given the formal ban on wage increases, the resulting upward adjustment of earnings was a covert process, hidden in accelerated promotion, high-status apprenticeships, retraining schemes, hiring bonuses, improved working conditions and a variety of supplementary social benefits. The extent of this 'wage creep' depended on the degree to which employers were subject to direct official oversight.

wages of destruction, pg 261

Nothing says "i'm developing an efficient economy" like compulsory work orders, forcing employers to keep workers on the rolls, and wage controls. Oh an forbidding rural people from taking industrial jobs. Good instincts there. Shame that second order effects exist. Who could have possibly imagined.

The frustrations of the housing shortage were no doubt acute. But, more worrying for the Reich authorities was the impact of underinvestment on the German railway system. By 1938 the Reichsbahn was increasingly unable to cope with the combined demands of the Wehrmacht and a booming economy. Rail investment had been badly squeezed by the steel shortage. In 1938 the Reichsbahn was not able to obtain even half the steel it needed to maintain its current rail infrastructure and rolling stock. From the summer onwards severe delays affected the entire system. Huge pressure was exerted on freight workers to speed up loading and unloading. But by the last days of September, as the Munich crisis reached its climax, the Reichsbahn was nearing the point of collapse. Less than half the requests for freight cars were being met on time. There was no option but to go over to an overt system of rationing in which priority was given first of all to the Wehrmacht and then perishable foods, coal, sugar beet and high-priority export orders.

Help. My rail industry is getting 50% of the steel it needs and I need to ration who gets transport. Should I start a Great Power conflict against all of my neighbors?

The rail administrators struggled to ease the problems of freight traffic by cutting passenger services wholesale. But even drastic measures could not prevent a crisis. By early 1940, tens of thousands of freight cars were frozen in kilometres of traffic jams. By January, turn-around times had risen to more than a week. The effective carrying capacity of the Reichsbahn's rolling stock plummeted and the immediate result was an interruption to coal supplies. By December, the mines were warning of an impending 'transportation calamity'. In the freezing city of Berlin, coal ran so short that even a leading armaments firm such as Rheinmetall could not protect its deliveries from requisitioning by the desperate municipal authorities. Meanwhile, at the pitheads in the Ruhr, the mountains of undelivered coal reached dangerous levels, forcing the mines to slow down production. In total, in the early months of 1940 almost 10 per cent of German armaments plants were affected by the coal shortages. In the central industrial district around Kassel the figure was as high as 27 per cent. In January 1940 Goering described transport as the problem of the German war economy.

pg343-344

My ideal economy is one where lack of capacity of steel production results in a failing transport network where i have to cut off passenger service and yet still have a shortage of coal. In Germany.

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