Superior productivity of American industrial workers

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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 21 Jul 2021 23:03

It appears that pre-war and wartime exchange rates did not factor into the figures presented by Goldsmith and Broadberry. Broadberry's underlying source relied on a measure of physical output:
WW2 Labor Productivity Rostas Method.png
https://books.google.com/books?id=GG43A ... &q&f=false

Likewise, from Harrison's website, Goldsmith did not use exchange rates to calculate his armaments expenditures index:
WW2 Labor Productivity Goldsmith Method.png
https://warwick.ac.uk/fac/soc/economics ... ndices.pdf

Broadberry's post-war figures do rely on exchange rates, but by then the international monetary system had stabilized, so the exchange rates should be a reliable source for computing relative productivity.
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 22 Jul 2021 14:10

historygeek2021 wrote:
21 Jul 2021 23:03
It appears that pre-war and wartime exchange rates did not factor into the figures presented by Goldsmith and Broadberry. Broadberry's underlying source relied on a measure of physical output:
Thanks!
historygeek2021 wrote: Broadberry's post-war figures do rely on exchange rates, but by then the international monetary system had stabilized, so the exchange rates should be a reliable source for computing relative productivity.
Does Broadberry use a nominal market exchange rate or a PPP rate postwar?
historygeek2021 wrote:Likewise, from Harrison's website, Goldsmith did not use exchange rates to calculate his armaments expenditures index:
Harrison's being generous to the actual content of the article. As I pointed out upthread, Goldsmith's 12-page article doesn't show any work; the US-Germany output-comparing analysis is a couple paragraphs with no calculations. That's why I suspect Goldsmith just worked backwards from nominal expenditures and prewar market exchange rates.

I'm trying to create a "physical" index of armaments production on a spreadsheet. When it's decent, I'll share it as editable and non-editable Google doc. Here's a screenshot so far, with estimated index values standing in for physical quantities. I'm working off July '44 instead of Goldsmith's 1944:

Image

"Guesses" are highlighted in yellow. Aircraft weights from KDF33, German armor from USSBS and as calculated for US, ammo discussed below. As you can see, my first take is that Goldsmith underestimated the American output advantage. For 1944 as a whole, his underestimate would be even greater. Again, my sense is that he worked backwards from prewar market exchange rates, which failed to notice higher inflation in wartime Germany than in US.

I'd like to propose we work together to complete this analysis. As it's not a productivity analysis, per se, (though related) I'm happy to split it into a new thread. There's a lot of data-gathering necessary to estimate MV and naval production; necessary to that are several analytical choices we can discuss.

For example: how to weight Germany's relative emphasis on half-tracks in the MV section? First thought is to obtain relative German prices for trucks and half-tracks and create a "truck-equivalents" ratio. Note that my first-take has already applied a penalty to US aircraft frame-weight output for its emphasis on heavy bombers.

My guess for US:Germany weapons ratio is probably too high. Just a rough draft.

--------------------------------------

It's a shame that even Mark Harrison has no better "physical" index than one produced in 1946, that shows no work, and that "conveniently" tracks USD:RM prewar market exchange values. Maybe we can fix that.

-----------------------------
KDF33 wrote:
06 Jul 2021 04:13
TheMarcksPlan wrote:
06 Jul 2021 01:13
I don't have US ammo production figures at hand (anybody have them)
I do. In metric tons, Germany / U.S. (with naval):

1941: 540,000 / 58,434 (no data) = 9.2-to-1
1942: 1,270,000 / 707,511 (798,763) = 1.8-to-1 (1.6-to-1)
1943: 2,558,000 / 879,362 (1,130,557) = 2.9-to-1 (2.3-to-1)
1944: 3,350,000 / 1,543,401 (2,013,237) = 2.2-to-1 (1.7-to-1)

Note that German data doesn't include naval ammunition.

Source for Germany: Armaments report, BA-MA R 3/1729
Source for the U.S.: Official Munitions Production of the United States (1947)
I've added US bombs to the table for ammo using your source. Is the German source available online or can you email me it? Idk its scope.
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 22 Jul 2021 18:34

TheMarcksPlan wrote:
22 Jul 2021 14:10

Does Broadberry use a nominal market exchange rate or a PPP rate postwar?
From his article:
WW2 Labor Productivity Broadberry Method.png
Harrison's being generous to the actual content of the article. As I pointed out upthread, Goldsmith's 12-page article doesn't show any work; the US-Germany output-comparing analysis is a couple paragraphs with no calculations. That's why I suspect Goldsmith just worked backwards from nominal expenditures and prewar market exchange rates.
Wow, that is pretty bad. It's a shame that no work has been done in this field since this lightweight attempt in 1946.
I'm trying to create a "physical" index of armaments production on a spreadsheet. When it's decent, I'll share it as editable and non-editable Google doc. Here's a screenshot so far, with estimated index values standing in for physical quantities. I'm working off July '44 instead of Goldsmith's 1944:

Image
I don't understand what most of the columns in the chart mean. Can you explain (e.g., %value, item ratio, US:German adjustment)?

I also don't understand what "index" means under the "units" column, or "mt". Please provide a key.
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 22 Jul 2021 18:52

historygeek2021 wrote:I don't understand what most of the columns in the chart mean. Can you explain (e.g., %value, item ratio, US:German adjustment)?

I also don't understand what "index" means under the "units" column, or "mt". Please provide a key
mt = metric tonnes.

US:German adjustment is any adjustment of physical quantity for cost factors. The only place I applied is to US aircraft production due to heavy bombers being cheaper per ton.

Index is basically a placeholder for a guess. Where I haven't yet decided on, let alone produced, a physical quantity for comparison, index is a guess with Germany=1 and US equals whatever multiple of Germany is guessed.

Item ratio tells the US multiple of German production (same as US "index" value when "units" are "index").

%value is the percent of German total armaments expenditure on a given item.

Multiply each German RM value times American multiple (item ratio), then by "adjustment" column, gives American production in RM. Summing American production items gives you the total US output in RM. Divide by German armaments in RM for ratio of armaments output.

I only give physical values for 3 categories so far - aircraft, ammo, AFV - but that's >70% of the story using a German base-weighting.

As with any base-weighted series like the CPI, choice of base influences outcome. I used German base because Wagenfuehr gives exact figures and they're quoted by Eichholtz. US base would produce a different result- can't say which direction. A geometric mean of the two resulting indices would be ideal.
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 22 Dec 2021 05:02

Came across some German:British productivity stats in Correlli Barnett's Audit of War**:
comparison with Germany and the United States in terms of output per
man-day, even though such a comparison can only be approximate, presents
a less inspiring picture. Perhaps expectedly, but nonetheless ominously with
regard to postwar market prospects for the aircraft industry, the United
States far outstripped Britain in productivity, with a peak annual average of
2.76 lb of structure weight per man-day in 194422 compared with the
British peak annual average of 1.19 lb in that year.
FN23 But even Germany’s
peak annual average productivity, at 1.5 lb per man-day in 1943, was a fifth
better than Britain’s. FN24 Moreover, this German productive superiority
constituted more of an achievement than the bare figures indicate. For
whereas German production overwhelmingly concentrated on fighters, a
large proportion of British output took the form of bombers, which required
fewer man-hours per structure weight to produce.

FN23: According to CAB 87/13, PR(43)98, the number of workers directly
employed by the airframe and engine factories (excluding subcontractors) came to 510,000; according to Postan, British War
Production, table 41, p. 310, total British production in structure weight
in 1944 was 221,985,000 lb; 221,985,000 ÷ 365 ÷ 510,000 = 1.19 lb.

FN24: Overy, The Air War, table 15, p. 168; The United States Strategic
Bombing Survey, with an introduction by David MacIsaac, 10 vols.
(New York and London, Garland Publishing, 1976), vol. II, Aircraft
Division Industry Report, Strategic Bombing of the German Aircraft
Industry, (European Report no. 4), p. 84; corroborative evidence is
supplied by a secret Whitehall calculation in February 1944 which
concluded that it could take 17,000 man-hours under the best British
production to make a Heinkel 111, as against the published German
figure of 12,000; 4300 man-hours to make an ME 109G against the
German figure of 3900:
see AVIA 10/269, Labour Statistics, 20 October
1942–16 August 1944, Memo by AD Stats 3 to Professor Postan, 16
February 1944
I'd be particularly interested to read the underlined documents regarding British estimate of how cheaply it could have made German planes.

**Mere mention of this book will raise the hackles of most of our UK compatriots, as it's resolutely critical of Britain as an inefficient country that peaked in the 19th Century and was led by deluded do-gooder liberals. These excerpts do not concern Barnett's broader thesis and are solely tied to assertions founded on the cited primary documents.

Barnett also documents the exorbitant cost of the Spitfire - seen elsewhere but may as well add his two cents here:
For example, according to a
contemporary British calculation, the airframe of Mitchell’s Spitfire Mark
V C demanded over 13,000 man-hours to build, as against approximately
4000 man-hours for the Messerschmitt ME 109G, while even later the
Tempest and Typhoon took twice the man-hours of the Messerschmitt.38

FN38: Spitfire figure in AVIA 10/269, Labour Statistics, 20 October 1942 to
16 August 1944; Messerschmitt 109G figure in AVIA 10/269,
Memorandum by AD Stats 3 to Professor Postan, 16 February 1944;
Tempest or Typhoon comparison with ME 109F calculated by
managing director of Rolls-Royce, in Ian Lloyd, Rolls-Royce: The
Merlin at War (London, Macmillan, 1978), p. 70.
Finally, Barnett mentions interesting American comments on the efficiency of German practices:
Indeed according to an American team of investigating experts in 1945,
German designers were better even than American in designing ‘for easy
production with means at hand. American designs were, by comparison,
unsuited to large-scale manufacture at reasonable cost.’39

FN39: CIOS, Item No. 25, File No. XXV–42.
I'd be interested to read this document, maybe somebody like Tom from Cornwall understands where to find CIOS documents?

------------------------------------------------------

None of the foregoing should be surprising given the upthread macro evidence that America had a huge productivity lead over everybody else while Germany held a narrower lead over Britain in most industrial respects.

This should also not be surprising to anybody who knows their WW2 economic history. Thanks to economic historians like Tooze and Scherner, we know that the LW actually was highly rational in its economic approach, structuring contracts and designs with an eye towards maximizing resources. Contra Wehraboos and their mirror-image bait-takers, the LW did not (at least for most of the war) engage in a foolish/glorious pursuit of impractical wunderwaffen. Its planes were significantly cheaper than similar competition and it produced them more efficiently than anybody except America.
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Re: Superior productivity of American industrial workers

Post by Tom from Cornwall » 22 Dec 2021 11:24

TheMarcksPlan wrote:
22 Dec 2021 05:02
I'd be interested to read this document, maybe somebody like Tom from Cornwall understands where to find CIOS documents?
It's not easy given the sparse details in that footnote, but given Barnett's main UK National Archives sources seem to have been the SUPP and AVIA files (apologies, that's going off memory) there are a couple of possible candidates that come up after a search of the UK NA catalogue:

BTW for those of us who didn't know before, which certainly included me: CIOS = Combined Intelligence Objectives Sub-Committee - it seems to have been a late-war creation and, amongst other things, produced reports on elements of German industry during the immediate post-war period.

https://discovery.nationalarchives.gov. ... OS&_p=1925

I'd suggest SUPP28/384 (which seems to hold some miscellaneous reports) or AVIA10/114 but I think it might be a long search!

Regards

Tom

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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 22 Dec 2021 12:20

Tom from Cornwall wrote:
22 Dec 2021 11:24
TheMarcksPlan wrote:
22 Dec 2021 05:02
I'd be interested to read this document, maybe somebody like Tom from Cornwall understands where to find CIOS documents?
It's not easy given the sparse details in that footnote, but given Barnett's main UK National Archives sources seem to have been the SUPP and AVIA files (apologies, that's going off memory) there are a couple of possible candidates that come up after a search of the UK NA catalogue:

BTW for those of us who didn't know before, which certainly included me: CIOS = Combined Intelligence Objectives Sub-Committee - it seems to have been a late-war creation and, amongst other things, produced reports on elements of German industry during the immediate post-war period.

https://discovery.nationalarchives.gov. ... OS&_p=1925

I'd suggest SUPP28/384 (which seems to hold some miscellaneous reports) or AVIA10/114 but I think it might be a long search!

Regards

Tom
Thanks Tom!
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 22 Dec 2021 18:22

I suspect the German efficiency in air-frame production owed to their use of heavy presses to forge magnesium (one of the materials Germany had in abundance) components.

https://en.wikipedia.org/wiki/Heavy_Press_Program

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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 23 Dec 2021 01:32

historygeek2021 wrote:
22 Dec 2021 18:22
I suspect the German efficiency in air-frame production owed to their use of heavy presses to forge magnesium (one of the materials Germany had in abundance) components.

https://en.wikipedia.org/wiki/Heavy_Press_Program
That is some cool shit, thanks. Do you have any links to further details on the German presses? The Wikipedia links mostly focus on the postwar American presses from German designs - would like to know when the German presses came online. Do they coincide with the upswing in German productivity in midwar?

This article mentions Germany cold-pressing 40mm shells, btw.
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 23 Dec 2021 05:11

I have not found a reliable source on the German heavy presses. Only sketchy websites and YouTube videos. But there seems to be a kernel of underlying truth.

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Re: Superior productivity of American industrial workers

Post by Nyanko » 16 Feb 2022 04:31

Manufacturing productivity

In terms of manufacturing productivity, the USA has lead the world from the 19th century up to recent decades. In fact, the massive growth in manufacturing productivity in Germany and Japan following WW2 meant that by the 1980s, German manufacturing productivity per hour was equal to the USA and Japan was close behind. Today, manufacturing productivity per hour across the most advanced countries is not lower than in the US, as revealed by the wage cost of labor in manufacturing across countries:

Image

But in previous periods the US was far above Europe in terms of productivity. This book describes this discrepancy:

https://www.cambridge.org/core/books/pr ... 54E7D0C52F

Basically, the US's manufacturing productivity levels were twice the levels of the UK during the 19th and most of the 20th centuries. In the 1930s British manufacturing productivity was only 45% of American levels. German manufacturing productivity was higher than British but not by much, the most recent estimates are of German manufacturing productivity at 56-50% of American levels during the first half of the 20th century (https://econpapers.repec.org/paper/auuhpaper/032.htm). In the rest of Europe manufacturing productivity was equal or lower than Britain, in France was slightly lower than Britain, and in Czechoslovakia it was 2/3 of the level of Britain. In Japan, manufacturing productivity in the 1930s it was about 40% to 45% of British levels (Broadberry and Fukao (2015)).

Historically, European countries employed a far higher proportion of their population in factories than the US to compensate for their lower levels of manufacturing productivity. For example, in the UK, total manufacturing employment was comparable to the US in 1910 while their total population was less than half.

Productivity in ammunition and equipment

In terms of military equipment and ammunition, German productivity levels were actually higher relative to the USA than in civilian manufacturing. The USSBS estimates that German aircraft plants were about 70 to 85% as productive as American aircraft plants in terms of weight of airframe produced per worker. Since German aircraft had on average smaller airframes (even considering the function, 1 single engine German fighter had a lighter airframe than a similar American aircraft), which tend to require higher hours per unit of weight so this means that productivity of the German aircraft industry was much closer to American productivity levels than civilian manufacturing productivity.

I conjecture that since military goods are different from civilians goods, the superior skills of American industry to produce chocolate bars, shoes, and furniture did not translate into superiority in making bullets and planes.

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Re: Superior productivity of American industrial workers

Post by Nyanko » 16 Feb 2022 05:15

TheMarcksPlan wrote:
22 Jul 2021 14:10
I'm trying to create a "physical" index of armaments production on a spreadsheet. When it's decent, I'll share it as editable and non-editable Google doc. Here's a screenshot so far, with estimated index values standing in for physical quantities. I'm working off July '44 instead of Goldsmith's 1944:
I already did that, it only reflects output of combat related munitions (so no output of trains, trucks, cargo planes, and merchant ships). I aggregated output from a dozen categories using both US and German prices, which means I created two indexes and then I took the geometric average of the two indexes.

This is the result (with USSR output in 1943 normalized to 100):

--------------- 1940 ---- 1941 ----- 1942 ---- 1943 ---- 1944
--------------------------------------------------------------------
USA ---------- NA ------ 34.6 ----- 133.5 --- 277.4 --- 319.2
Germany --- 45.1 ----- 49.9 ---- 74.4 ----- 119.6 --- 153.5
USSR -------- NA ------- 39.6 ---- 76.3 ----- 100.0 --- 119.2
UK ----------- 32.7 ---- 50.2 ----- 70.1 ----- 75.9 ----- 76.5
Japan ------- NA ------ 16.0 ----- 22.0 ------ 33.9 ---- 47.0
--------------------------------------------------------------------

I will describe the methodology in detail in future posts.

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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 18 Feb 2022 06:58

Nyanko wrote:
16 Feb 2022 04:31
Manufacturing productivity

In terms of military equipment and ammunition, German productivity levels were actually higher relative to the USA than in civilian manufacturing. The USSBS estimates that German aircraft plants were about 70 to 85% as productive as American aircraft plants in terms of weight of airframe produced per worker. Since German aircraft had on average smaller airframes (even considering the function, 1 single engine German fighter had a lighter airframe than a similar American aircraft), which tend to require higher hours per unit of weight so this means that productivity of the German aircraft industry was much closer to American productivity levels than civilian manufacturing productivity.

I conjecture that since military goods are different from civilians goods, the superior skills of American industry to produce chocolate bars, shoes, and furniture did not translate into superiority in making bullets and planes.
It seems that Germany's productivity in airframes owed to its use of heavy presses to forge magnesium components that were assembled piece by piece in the United States and other countries. It's mentioned briefly at the start of this video:

https://www.youtube.com/watch?v=hpgK51w6uhk

Since German airframe production is the only category of equipment for which any relative productivity advantage (or rather, lesser disadvantage) seems to exist, it seems pretty clear that German productivity in armaments lagged behind the United States to the same extent as general German industrial productivity.

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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 03 Mar 2022 23:08

Nyanko wrote:
16 Feb 2022 05:15
TheMarcksPlan wrote:
22 Jul 2021 14:10
I'm trying to create a "physical" index of armaments production on a spreadsheet. When it's decent, I'll share it as editable and non-editable Google doc. Here's a screenshot so far, with estimated index values standing in for physical quantities. I'm working off July '44 instead of Goldsmith's 1944:
I already did that, it only reflects output of combat related munitions (so no output of trains, trucks, cargo planes, and merchant ships). I aggregated output from a dozen categories using both US and German prices, which means I created two indexes and then I took the geometric average of the two indexes.

This is the result (with USSR output in 1943 normalized to 100):

--------------- 1940 ---- 1941 ----- 1942 ---- 1943 ---- 1944
--------------------------------------------------------------------
USA ---------- NA ------ 34.6 ----- 133.5 --- 277.4 --- 319.2
Germany --- 45.1 ----- 49.9 ---- 74.4 ----- 119.6 --- 153.5
USSR -------- NA ------- 39.6 ---- 76.3 ----- 100.0 --- 119.2
UK ----------- 32.7 ---- 50.2 ----- 70.1 ----- 75.9 ----- 76.5
Japan ------- NA ------ 16.0 ----- 22.0 ------ 33.9 ---- 47.0
--------------------------------------------------------------------

I will describe the methodology in detail in future posts.
Very much looking forward to this, Nyanko. Also :welcome:
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Re: Superior productivity of American industrial workers

Post by Nyanko » 01 May 2022 20:14

Sorry for the late post.

To estimate these munitions indexes:

(1) First I computed a series of prices for munitions and other industrial goods. These prices were mostly taken from posts in this forum and from articles, such as an article that used census data to estimate manufacturing purchasing power parities between Germany and the US. To estimate prices for ammunition and bombs I used data for aggregate purchases and divided the value of purchases by tonnage. Prices were corrected for 1943 values using GDP deflators estimated by Kuznets (1952) for the United States and by Ritsehl and Mark Spoerer (1997) for Germany.

(2) Then I multiplied the physical quantities by these prices. For each pair of countries, I added the sums obtained for the output series of these military goods for both countries.

For example, for Germany and the UK, the index is made by aggregating the outputs of the following categories for which I was able to dig time series for both countries:

Artillery ammo (& mortar)
Bombs
Combat Aircraft
Guns
Tanks
Major naval vessels
Rifles
Machine pistols
Machine guns
Locomotives

(3) Adding these categories in terms of RM and US dollars yields the following time series in billions of national currency units:

Billions RM -- 1940 - 1941 - 1942 - 1943 - 1944
Germany ----- 4.23 -- 4.71 -- 7.05 -- 11.51 -- 14.99
UK ------------- 2.98 -- 4.57 -- 6.40 -- 7.00 -- 7.00
Billions US dollars -- 1940 - 1941 - 1942 - 1943 - 1944
Germany ------------- 2.46 -- 2.71 -- 4.12 -- 6.66 -- 8.47
UK -------------------- 1.78 -- 2.74 -- 3.91 -- 4.22 -- 4.23

Then I normalized these time series setting the USSR's output in 1943 at 100, and I took the geometric average of the munitions index in RM and in US dollars. Although using either dollars or RM did not change the index much.

For the 5-country index comparison, I excluded some items from the index, like machine guns/machine pistols/rifles since I lacked comparable data series for these smalls arms for US, Japan and the USSR. However, as small arms were 2% of the value of the index for both Germany and the UK that exclusion did not impact the index very much.

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