Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

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TheMarcksPlan
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Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by TheMarcksPlan » 25 May 2022 03:14

Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy? - another new article by Jonas Scherner

https://journals.sagepub.com/doi/10.117 ... 6w.twitter

Scherner convincingly argues that the lack of German-Italian economic cooperation - previously attributed to German/Axis dysfunctionality ("they didn't understand strategy") - was in fact rational on Germany's part. The Axis suffered a lack of natural resources, Germany controlled most of what they had, and Germany developed efficient resource conservation measures while Italy did not (more on those measures here). In addition, Italian sovereignty (she did not become a "satellite" of Germany as did Hungary and other smaller Axis allies) prevented the close supervision of Italian firms that Germany needed to ensure efficient use of scarce natural resources (Scherner emphasizes that Germany viewed all firms suspiciously, not just Italian).

An excerpt from the conclusion:
Thus, if we compare the Axis and the Allies and try to assess how
successful these alliances were, at least in terms of economic cooperation,
we should consider their dramatically different access to economic resources. This access, in turn,
affected the level of economic cooperation as well as the level of conflict and competition
among the partners: whereas the Allies relative abundance allowed them to pay less attention
to aspects like raw materials productivity, the Axis’ raw material scarcity forced it to
take such questions far more seriously. In other words, the level of wartime cooperation
was not only a product of shared political goals or trust among the partners but also of the
relative abundance or scarcity of resources
---------------------------------------------------------------------

The article continues a trend of Scherner's research demonstrating that many of the supposed pathologies of the Axis war effort are entirely explicable in rational, resource-related terms. This is a great boon to WW2 scholarship, though I fear the somewhat technical bent of Scherner's articles will impede his insights seeping into broader historiography. That historiography has been warped by too many historians without economic training (e.g. Richard Overy), who see only dysfunction where better-trained economic analysts would see the effects of interlocking resource constraints and agency problems.
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Peter89
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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by Peter89 » 25 May 2022 21:36

TheMarcksPlan wrote:
25 May 2022 03:14
Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy? - another new article by Jonas Scherner

https://journals.sagepub.com/doi/10.117 ... 6w.twitter

Scherner convincingly argues that the lack of German-Italian economic cooperation - previously attributed to German/Axis dysfunctionality ("they didn't understand strategy") - was in fact rational on Germany's part. The Axis suffered a lack of natural resources, Germany controlled most of what they had, and Germany developed efficient resource conservation measures while Italy did not (more on those measures here). In addition, Italian sovereignty (she did not become a "satellite" of Germany as did Hungary and other smaller Axis allies) prevented the close supervision of Italian firms that Germany needed to ensure efficient use of scarce natural resources (Scherner emphasizes that Germany viewed all firms suspiciously, not just Italian).

An excerpt from the conclusion:
Thus, if we compare the Axis and the Allies and try to assess how
successful these alliances were, at least in terms of economic cooperation,
we should consider their dramatically different access to economic resources. This access, in turn,
affected the level of economic cooperation as well as the level of conflict and competition
among the partners: whereas the Allies relative abundance allowed them to pay less attention
to aspects like raw materials productivity, the Axis’ raw material scarcity forced it to
take such questions far more seriously. In other words, the level of wartime cooperation
was not only a product of shared political goals or trust among the partners but also of the
relative abundance or scarcity of resources
---------------------------------------------------------------------

The article continues a trend of Scherner's research demonstrating that many of the supposed pathologies of the Axis war effort are entirely explicable in rational, resource-related terms. This is a great boon to WW2 scholarship, though I fear the somewhat technical bent of Scherner's articles will impede his insights seeping into broader historiography. That historiography has been warped by too many historians without economic training (e.g. Richard Overy), who see only dysfunction where better-trained economic analysts would see the effects of interlocking resource constraints and agency problems.
This is an interesting article as usual by Jonas, thanks.

The biggest problem of Germany's economy was that it handled such questions pretty badly. In my opinion, they had something like a continental colonialism or a Spartan economy in their mind. Where the German-Aryans are warriors with civil rights, the "culture-bearers", by and large the Latin nations would be the perioikoi, and the "untermensch" Slavs would be the helots.

In the past few months I am gathering and going through some archive / private collection materials concerning the Hungarian synthfuel program and the lengths the Germans went to block it :D
Not to mention the energy mix used by their allies, Hungarian domestic consumption of oil was on atrocious levels given Germany's constant lack of it.


It is also really funny that raw materials travelled hundreds and sometimes thousands of kilometers on trains and barges unrefined, just to arrive to Germany to be refined there. In case of bauxite (most of which came from Hungary and Yugoslavia) the ratio between bauxite and alumina was roughly 4:1 and between bauxite and aluminium 8:1, which put an insane and unnecessary burden on the transport system.
“And while I am talking to you, mothers and fathers, I give you one more assurance. I have said this before, but I shall say it again, and again and again. Your boys are not going to be sent into any foreign wars." - FDR, October 1940

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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by TheMarcksPlan » 25 May 2022 21:58

Peter89 wrote:Where the German-Aryans are warriors with civil rights, the "culture-bearers", by and large the Latin nations would be the perioikoi, and the "untermensch" Slavs would be the helots.
Definitely true but not really an economic question.
Peter89 wrote:In the past few months I am gathering and going through some archive / private collection materials concerning the Hungarian synthfuel program and the lengths the Germans went to block it
Fascinating, can't wait. Pre-war or during the war?

It it's prewar it doesn't really contradict Scherner's thesis. If during the war it very well might. I say "might" because Germany may have had a rationale for blocking, such as they believed Hungary lacked the technical expertise to do synthfuel well and preferred them to concentrate on other things. In addition, whether it's the German state blocking development or a German company (e.g. via patent rights objections) matters to Scherner's thesis. German companies acted in "unpatriotic" and military-irrational ways constantly, of which the German state was aware and tried to address (desultorily prior to 1942, harshly thereafter).
Peter89 wrote:In case of bauxite (most of which came from Hungary and Yugoslavia) the ratio between bauxite and alumina was roughly 4:1 and between bauxite and aluminium 8:1, which put an insane and unnecessary burden on the transport system.
Point taken but IIRC Germany moved a lot of bauxite refining capacity towards Austria, perhaps on account of this factor. As a % of rail traffic, bauxite was negligible...
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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by Peter89 » 26 May 2022 00:57

TheMarcksPlan wrote:
25 May 2022 21:58
Peter89 wrote:In the past few months I am gathering and going through some archive / private collection materials concerning the Hungarian synthfuel program and the lengths the Germans went to block it
Fascinating, can't wait. Pre-war or during the war?

It it's prewar it doesn't really contradict Scherner's thesis. If during the war it very well might. I say "might" because Germany may have had a rationale for blocking, such as they believed Hungary lacked the technical expertise to do synthfuel well and preferred them to concentrate on other things. In addition, whether it's the German state blocking development or a German company (e.g. via patent rights objections) matters to Scherner's thesis. German companies acted in "unpatriotic" and military-irrational ways constantly, of which the German state was aware and tried to address (desultorily prior to 1942, harshly thereafter).
It seems most of the story is pre-war; a Hungarian scientist developed a new albeit similar hydrogenation as the Germans; a small capacity factory was built because back then Hungary imported crude like Germany (had to pay in foreign currency). The Germans (IG Farben) brought the matter to court, claiming their patent was stolen; they settled outside the court (how and why is what I read now).

Later on, oil wells were discovered and Hungary became an exporter of oil, but it didn't mean the end of the synthfuel program. I also read about the production figures now.
TheMarcksPlan wrote:
25 May 2022 21:58
Peter89 wrote:In case of bauxite (most of which came from Hungary and Yugoslavia) the ratio between bauxite and alumina was roughly 4:1 and between bauxite and aluminium 8:1, which put an insane and unnecessary burden on the transport system.
Point taken but IIRC Germany moved a lot of bauxite refining capacity towards Austria, perhaps on account of this factor. As a % of rail traffic, bauxite was negligible...
The whole industry didn't need to move back and forth. In fact the Germans knew this and after they occupied Hungary began to build up a robust aluminium industry there, which the communist regime completed in the 1950's. They were simply not interested in the industrialization of their allies.

The same is true for panther and other licenses: the Germans happily let their allies to produce worthless crap in their factories from the same material base.
“And while I am talking to you, mothers and fathers, I give you one more assurance. I have said this before, but I shall say it again, and again and again. Your boys are not going to be sent into any foreign wars." - FDR, October 1940

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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by TheMarcksPlan » 26 May 2022 01:16

Peter89 wrote:
26 May 2022 00:57
In fact the Germans knew this and after they occupied Hungary began to build up a robust aluminium industry there, which the communist regime completed in the 1950's. They were simply not interested in the industrialization of their allies.
This seems contradictory. Doesn't it indicate that, unless Germany thought Hungary would be part of the postwar Reich (not sure but seems unlikely), they were willing to industrialize it?
Peter89 wrote: The same is true for panther and other licenses: the Germans happily let their allies to produce worthless crap in their factories from the same material base.
As regards Italian weapons, Hitler stated a rational reason: the expense and time lost of re-tooling to produce German weapons would exceed the benefit. By the time Panther is viable to license, it's a little late and the needs a little too urgent to shut down and retool.
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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by Peter89 » 26 May 2022 01:32

TheMarcksPlan wrote:
26 May 2022 01:16
Peter89 wrote:
26 May 2022 00:57
In fact the Germans knew this and after they occupied Hungary began to build up a robust aluminium industry there, which the communist regime completed in the 1950's. They were simply not interested in the industrialization of their allies.
This seems contradictory. Doesn't it indicate that, unless Germany thought Hungary would be part of the postwar Reich (not sure but seems unlikely), they were willing to industrialize it?
I am not sure, I am still only at the beginning of it. I don't know what was the reason why the Germans suddenly realized that there is chrome in Albania, a reasonable option to build up an aluminium industry in Hungary, etc. Was it the coming end? The relative safety from Allied bombing? Was it that they only gave thoughts about developing areas directly under their administration...? Maybe a combination of these?
TheMarcksPlan wrote:
26 May 2022 01:16
Peter89 wrote: The same is true for panther and other licenses: the Germans happily let their allies to produce worthless crap in their factories from the same material base.
As regards Italian weapons, Hitler stated a rational reason: the expense and time lost of re-tooling to produce German weapons would exceed the benefit. By the time Panther is viable to license, it's a little late and the needs a little too urgent to shut down and retool.
Yes, maybe if the idea that one last campaign would win them the war didn't persist until 1943, they might began that process in due time (1940/41) :D
“And while I am talking to you, mothers and fathers, I give you one more assurance. I have said this before, but I shall say it again, and again and again. Your boys are not going to be sent into any foreign wars." - FDR, October 1940

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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by TheMarcksPlan » 26 May 2022 05:47

Peter89 wrote:
26 May 2022 01:32

Yes, maybe if the idea that one last campaign would win them the war didn't persist until 1943, they might began that process in due time (1940/41) :D
True but again its a mistake on the strategic rather than economic level, so beyond the scope of Scherner's thesis. If we keep moving up levels of description, we can always say it's irrational to care who's German and who's Hungarian and irrational start wars at all. :D
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Re: Incompetence or Ingenuity? Why Did Nazi Germany Not Seek Closer Wartime Economic Cooperation with Italy?

Post by Peter89 » 26 May 2022 07:42

TheMarcksPlan wrote:
26 May 2022 05:47
Peter89 wrote:
26 May 2022 01:32

Yes, maybe if the idea that one last campaign would win them the war didn't persist until 1943, they might began that process in due time (1940/41) :D
True but again its a mistake on the strategic rather than economic level, so beyond the scope of Scherner's thesis. If we keep moving up levels of description, we can always say it's irrational to care who's German and who's Hungarian and irrational start wars at all. :D
I see it the other way around, like the economic level influenced the German strategic level and German strategy influenced historiography. Hitler and others quoted economic reasons to support their bad strategic choices all too often, and many historians tended to believe them. What Scherner does is to go back to the economic level, but it addresses what we know about German strategy as much as it addresses economic matters.
“And while I am talking to you, mothers and fathers, I give you one more assurance. I have said this before, but I shall say it again, and again and again. Your boys are not going to be sent into any foreign wars." - FDR, October 1940

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