Published on 19 Apr 2016
*Sponsored* Hearts of Iron IV comes out on June 6!
The armies and technology of World War II required a vast supply of resources. A close look at Germany and Japan shows how the need to secure those resources played a significent role in determining strategy throughout the war.
The armies of World War II needed a vast supply and variety of resources. The Allies had many of those resources on their side, but the Axis powers did not. Germany imported many of its resources from countries it would soon be fighting, and needed their war strategy to account for the acquisition of those resources. The Molotov-Ribbentrop Pact signed with the USSR set up a trade agreement to bring them oil from Russia for a while, in addition to establishing temporary non-aggression with the Soviets. When the war began in earnest, Germany targeted Norway with its supply of aluminum and iron as well as its access to the even more resource-rich Sweden. Conquering France also gave them access to rich farmland to feed the troops. But even though they had gained control of the oil fields in Romania, it wasn’t enough to power their war machine. Many Nazi generals wanted to target North Africa for this, but Hitler had his sights set on the Soviet Union and wound up squandering much of Germany’s reserves in a fruitless effort there. Meanwhile, Japan’s entrance into the war had cost them their primary trading partner: the United States. The Japanese army wanted to pursue the Northern Expansion Doctrine (Hokushin-Ron) and push through China into Siberia, wounding the USSR in the process. They attempted this strategy, but the Soviets met them in Mongolia and pushed them back in the Battle of Khalkhin Gol. So they turned to the Southern Expansion Doctrine (Nanshin-Ron) advocated by the navy, and began to sweep up islands in the Pacific. They planned to strip the European colonial powers of their holdings, and they succeeded in capturing 90% of the world’s rubber production. But the US responded by synthesizing rubber, and built an industry so large that even today, more rubber is synthesized than harvested. If World War I was the first industrial war, marked by mass production and industrial capacity, then World War II was the first scientific war, marked by advancements like synthesis, radar, and jet engines.
May 30, 2016
May 29, 2016
Published on 12 Apr 2016
*Sponsored* Hearts of Iron IV comes out on June 6!
After Germany’s early push, the situation looked dire in Europe. The United States had resources to help out, but initially clung to an isolationist policy. Gradually, measures like Cash and Carry and the Lend-Lease Act expanded their involvement.
Germany’s blitzkrieg had been largely successful. France fell early, and Great Britain appeared on the verge of collapse. Europe needed more resources to sustain their resistance, but the United States was bound by the Neutrality Act which established a policy of isolationism and forbade the US from supporting foreign wars in any way. President Franklin Delano Roosevelt skirted those restrictions. He lobbied Congress to reinstate a provision in the law called Cash and Carry, which would allow other nations to buy US war materiel with cash and transport it themselves into the warzone. He also established an agreement which allowed him to place American military bases on British colonies in exchange for destroyer ships, thus safeguarding the far reaches of the United Kingdom from possible Axis invasions. When it turned out that the English won the Battle of Britain and successfully staved off the attempted Nazi conquest, America decided to support them in a more substantial, long term way. Thus the Lend-Lease Act was signed: the US would loan equipment to their strategic partners (who were not the Allies yet). Though supposedly the equipment had to be returned, it was pretty obvious that war materiel would not come back in the same shape if at all, so this was really the largest donation of war supplies ever. But it wound up benefiting the US in turn, since the increased production galvanized an economy that had been stagnant since the Great Depression. It also kickstarted the involvement of the US Merchant Marine, who were among the earliest US citizens to give their lives in World War II and suffered the highest casualty percentage of any branch of the service. These unarmed ships navigated U-boat infested waters to bring much needed supplies to Europe, North Africa, and Asia. Despite this, their service has gone largely unrecognized and unrewarded as they are still denied many veterans’ benefits and were not even formally thanked by Congress until 2012.
April 11, 2016
April 2, 2016
Colby Cosh gently pokes fun at the latest outbreak of manufactured patriotic fervor:
An enterprising Toronto man wants to sell us all “Ketchup Patriot” T-shirts, so that the virtuous among us might assert the correct position on the hot issue of whether it is right to eat products made with dubious foreign tomatoes.
This presents me with a dilemma: I agree with the many words already written in this space, and in the Financial Post, about the preposterousness of tomato isolationism; on the other hand, I am pretty sure our future as a country has less to do with mid-grade agricultural products destined for pureeing than it does to do with insta-auto-robo-printing of faddish social-signalling paraphernalia. You have to admire the spirit of enterprise wherever it emerges. The best answer ever given to Che Guevara’s philosophy was the Che Guevara T-shirt.
The “Ketchup Patriot” view favours French’s brand ketchup, which is now made from tomatoes grown in the area around Leamington, Ont. Leamington is practically a creation of the H.J. Heinz Co., which was a major employer there for decades, but fled to the United States in 2014. Few Canadians are employed in the growing of tomatoes, mind you: migrant workers flown into local dormitories and paid around $10 an hour seem to do most of the hard work on Leamington-area farms and in greenhouses.
French’s, best known for selling mustard, is owned by the Reckitt Benckiser Group PLC of Slough, Berkshire. This “Ketchup Patriotism,” the closer you look at it, becomes more and more a matter solely of dream terroir. Canadians don’t get the profits, don’t pick the tomatoes and don’t even can the ketchup — that happens in Ohio, although French’s, obviously aware that it has a whole country by the tail, has hinted at plans to open a new cannery somewhere in Ontario. All we do, for the moment, is own the land. This ketchup has a mystical Canadian essence, one I defy anyone to detect in a blind taste test.
One may not detect the “distinctive Canadian ‘terroir'”, but having actually tasted Heinz and French’s products, there’s a reason that Heinz is the default ketchup for most people.
March 4, 2016
Published on 3 Mar 2016
The fierce Battle of Verdun continues but as the Germans under Crown prince Wilhelm push harder and harder, the German casualties begin to rise to the same levels as the French. The French Army is only kept alive through the sacred road which brings men to the front without a pause. One French soldier that gets captured around Verdun, is Charles De Gaulle. At the same time, on the almost forgotten Libyan Front South African cavalry saves the day like in the glorious past of the British Army.
November 12, 2015
Published on 18 Mar 2015
In this video, we talk about the special case of the decreasing cost industry. As output increases, costs will continue to fall, and more firms will enter which, again, increases output. It’s a virtuous circle! At the end of this video, we review the major points made in this section. If you find that something doesn’t quite make sense, feel free to re-watch videos as many times as you’d like.
September 7, 2015
In The Register, Bill Ray takes a geek’s-eye-view of the town of New Lanark, a key place in the early industrial revolution:
Nestled in the Clyde Valley the village owes its existence to the falls that were harnessed to refine raw cotton sent in from the colonies: a picture-postcard image from a time when Britain was the factory of the world.
But for all its industrial heritage New Lanark is a long way from being a typical “dark satanic” mill, as it marks the end of that time and the dawning of a better age.
Visit the village today and you can see the big machines that kept the empire running. Enormous water wheels; later supplemented by steam engines, connected by belts and ropes to machines which turned raw cotton into usable thread and fabric. However, it’s not industrial history that is celebrated at New Lanark, rather a social revolution, and one driven by one man whose ideas created the working life as we understand it today.
The man was Robert Owen, who, in 1799, bought New Lanark and immediately embarked on his “grand social experiment”. His radical ideas, such as refusing to employ children, providing medical insurance, and educating the workforce, were ridiculed by his competitors who couldn’t see the value in teaching children, let alone adults. But Owen believed that industry should serve the betterment of all men, not just those who owned the factories.
It worked too, rather to the surprise of his peers. New Lanark was a successful mill and profits rose steadily under the beneficent command of Owen. It could be argued, perhaps, that New Lanark would have been even more profitable without the social agenda, but every afternoon at five we should all be grateful for his reforms that made our working lives what they are:
“Eight hours daily labour is enough for any human being, and under proper arrangements sufficient to afford an ample supply of food, raiment and shelter, or the necessaries and comforts of life, and for the remainder of his time, every person is entitled to education, recreation and sleep”
Not that the workers at New Lanark did quite as well as we do; their working day ran ten and a half hours, but once mealtimes had been deducted it was approaching eight and certainly much better than the conditions in other mills around the country.
July 28, 2015
India spent a lot of time and money to develop an arms industry that could supply the Indian army with Indian-made weapons. One of these weapons is the INSAS rifle. Unfortunately. Strategy Page reports on the resurrection of the INSAS despite its many failings in combat conditions:
In early 2015 India seemed to be finally responding to complaints from soldiers and other security personnel fed up with the poor performance of the locally made INSAS (Indian Small Arms System) 5.56mm assault rifle. The government recently reneged on that promise and announced that the despised INSAS would be replaced, in two years, by the MIR (Modified INSAS Rifle). On paper there are some improvements, like full auto-fire (INSAS can only do single shot or three round bursts), folding butt stock, Picatinny rail (for all manner of accessories), more reliable and effective magazines and more ergonomic design (making MIR easier to handle, clean and use). The government also revealed that recent firing tests have shown only two jams after 24,000 rounds fired by MIRs. There will also be a MIR 2 that is chambered to fire the AK-47 (7.62×39) round. Despite all that, to the current unhappy INSAS users the promise of the MIR comes as a huge disappointment. The government weapons design capability has a long and consistent history of failure and disappointing promises. Few INSAS users believe MIR will be much of an improvement over INSAS and will serve more as another source of cash for corrupt officials. While buying foreign weapons uses a lot of valuable foreign exchange it is more closely monitored and has proven to be less corrupt. In 2010 the government had agreed to allow the military to get a rifle that works and that meant a foreign rifle. The leading candidate was Israeli. But now that competition has been cancelled and many troops believe it is all about corruption, not getting the best weapons for the military.
This sad situation began in the 1980s when there was growing clamor for India to design and build its own weapons. This included something as basic as the standard infantry rifle. At that time soldiers and paramilitary-police units were equipped with a mixture of old British Lee-Enfield bolt action (but still quite effective) rifles and newer Belgian FALs (sort of a semi-automatic Lee-Enfield) plus a growing number of Russian AK-47s. The rugged, easy to use and reliable Russian assault rifle was most popular with its users.
In the late 1980s India began developing a family of 5.56mm infantry weapons (rifle, light machine-gun and carbine). Called the INSAS, the state owned factories were unable to produce the quantities required (and agreed to). Worse, the rifles proved fragile and unreliable. The design was poorly thought out and it was believed corruption played a part because the INSAS had more parts than it needed and cost over twice as much to produce as the AK-47.
June 25, 2015
Published on 20 Jun 2015
Activities at the Chrysler Tank Arsenal in Detroit. Wheel suspension units are milled, wheels ground, gun mount gears cut, armor plate put through a punch press and drill, sprocket gears cut by an arc torch, gears heat treated and immersed in oil baths, armor plate hydraulically riveted, the tanks assembled, armament installed, and the tanks lifted from the assembly line by cranes. The tanks are tested at Fort Knox, Kentucky.
May 29, 2015
Sarah Hoyt coined the term “the historian’s blindfolds” to describe historical situations where “the ‘everyone knows’ [happenings don’t] get recorded, and the ‘never happens’ or ‘happens so rarely it’s big and sensational’ gets recorded ALL the time”:
I’ve – for instance – for the last several years been very suspicious of Dickens, because my other sources for the time (not just primary sources, but those writing often in a family/biography) context paint quite a different picture.
I mean, yes, there were horrible conditions at the time, but they were horrible conditions by our perspective, and we live in an era of superabundance. And the underclass lived very disordered lives. Well, I read student doc. Our underclass just uses different substances and is better fed. Go to Student Doc “Things I learn from my patients” (it’s not coming up for me, hence not linked. Also, prepare to lose hours there. [This might the site]) BUT as “bad” as the industrial revolution might have been, it attracted droves of farmers from the countryside. And having seen it happen in real time in India and China, I’m no longer able to believe the propaganda that they were “forced” off their lands.
Farming looks like a lovely, bucolic occupation to those who have never done any, but the farming they did at the time involved no tractors, no milking machines. It was inadequate tools and inadequate strength beating inadequate livelihood out of inadequate (in most places) soil. Yeah, to paraphrase Mark Twain, the girls wove wreaths for Michaelmas, and everyone danced around the Maypole, but in between there was a very harsh reality that made the rather horrible conditions in the early mills seem like heaven and depopulated the countryside and packed the cities – as we see now in China and India.
So, our first problem with finding out if there really was a “first night” right for the seigneur is to figure out the difference between the accounts and the truth. There is no direct evidence, but remember all the recording of the times was done by church men who might very well not know what was going on. Sometimes, granted, it was willful not know. The village priest determinedly didn’t know of certain things that went on around May Day and I’m fairly sure would continue not knowing if he walked in on it and saw it. Because he wasn’t stupid and stuff that’s been going on for two thousand years and yet is of a nature not to be co-opted into the church celebration of this or that saint (St. Anthony and St. John with bonfires and wild herbs and jumping over the fires, and trekking to the city and across the city to see the sunrise on the sea, for instance, for Summer solstice. Yeah. Perfectly normal Catholic tradition) couldn’t be stopped cold, but knowing about it would mar his ability to preach against certain things which he must preach against. (“It was a morning in May—” And for the record this particularly guppie always thought going amaying is about gathering the flowers to put in every entrance to the house to word off evil spirits. But I am an ODD and often unable to see what’s right before my eyes because I was told it was different.)
The problem of the “first night” is compound by several issues: we’re talking a span of about 2000 years. It’s about sex and everyone lies about sex, or shuts up about it, which can be the same. We have fundamental disagreements on the basic nature of men and women. And that’s what I’m going to go with. Because that’s the interesting part.
May 28, 2015
Published on 8 Feb 2015
In this video, we discuss how markets link people and places all over the world. We’ll take a look at production and consumption markets and, importantly, the role that prices play in it all. Following up on our example of a rose, we take a look at other global products such as the Apple iPhone. Where is the iPhone made? It’s produced by thousands of people all over the world, working in cooperation in order to make one product that many of us enjoy. Join us as we observe the invisible hand in action.
April 7, 2015
Published on 2 Jan 2015
In this video, we explore the relationship between price and quantity supplied. Why does the supply curve slope upward? The supply curve shows how much of a good suppliers are willing to supply at different prices. For instance, oil suppliers in Alaska and Saudi Arabia face different costs of extraction, affecting the price at which they are willing to supply oil.
April 6, 2015
Published on 2 Jan 2015
Why does the demand curve slope downward? The demand curve demonstrates how much of a good people are willing to buy at different prices. In this video, we shed light on why people go crazy on Black Friday and, using the demand curve for oil, show how people respond to changes in price.
Update, 16 June: Forgot to link to the very first video in the series … here.
March 11, 2015
In Forbes, Tim Worstall looks at last week’s announcement that China is (slightly) lowering their economic growth forecast.
On that larger scale though what people are worrying about is this. Catch up growth is easier than growth from the technological frontier. What is meant by this is that it’s a great deal easier to generate economic growth if you have an example in front of you of how to do things. To take a trivial example, if you can go and buy a mobile phone, take it apart to see how it works, it’s a lot easier to copy that technology than it is to invent it for the first time. And this is true of how you make cement, how you put up buildings, how you farm a field and so on. And at root that’s what economic growth is: becoming more efficient at doing all of these things as well as everything else. Each time you become more efficient at doing one task you free up resources to be doing something else. Thus you get both the original thing plus the new one from the same resources: this is the very definition of economic growth.
However, there’s a limit to such catch up growth. In certain areas China is right at that technological frontier (in some areas ahead of the rest of the world in fact). Which is where things become more difficult: there’s no one to copy. Therefore that invention has to happen domestically. This is obviously more difficult. But also it rather requires a certain set of institutions. The rule of law, property rights and so on. These aren’t things that China notably has (although things are very much better than they were decades ago). It’s those headwinds that need to be beaten. Bringing in these new institutions, embedding them in the society and the economy, without causing so much disruption as to slow down growth while they are done.
The standard jargon for this is “middle income trap”. To be crude about it the general feeling is that it’s pretty easy to go from dirt poor to middling income. The essence is really just to stop doing stupid things that hold economic development back. China’s done that very well even though they did start from a very low level of an immense number of very stupid things that Maoism did to hold economic growth back. The middle income trap is where the transition over to those institutions that promote technological frontier growth don’t appear (or are not imposed). And thus the stunning growth peters out.
January 31, 2015
Earlier this month, I linked to an article about the low reputation enjoyed by India’s first domestically designed and manufactured assault rifle. According to Strategy Page, there’s a potential change of heart by the Indian military on the INSAS rifle:
In response to the growing combat losses because of flaws in the locally made INSAS (Indian Small Arms System) 5.56mm assault rifle, the Indian government seems likely to capitulate and allow the military to get a rifle that works. Unfortunately for nationalist politicians, this will probably be a foreign rifle, and the leading candidate is Israeli.
This all began in the 1980s when there was growing clamor for India to design and build its own weapons. This included something as basic as the standard infantry rifle. At that time soldiers and paramilitary-police units were equipped with a mixture of old British Lee-Enfield bolt action (but still quite effective) rifles and newer Belgian FALs (sort of a semi-automatic Lee-Enfield) plus a growing number of Russian AK-47s. The rugged and reliable Russian assault rifle was most popular with its users.
In the late 1980s India began developing a family of 5.56mm infantry weapons (rifle, light machine-gun and carbine). Called the INSAS, the state owned factories were unable to produce the quantities required (and agreed to). Worse, the rifles proved fragile and unreliable. The design was poorly thought out and it is believed corruption played a part because the INSAS had more parts than it needed and cost over twice as much to produce as the AK-47.
The original plan was to equip all troops with INSAS weapons by 1998. Never happened, although troops began to receive the rifle in 1998. By 2000 half the required weapons ordered were still not manufactured. Moreover in 1999 the INSAS weapons got their first real combat workout in the Kargil campaign against Pakistan. While not a complete failure, the nasty weather that characterized that battle zone high in the frigid mountains saw many failures as metal parts sometimes cracked from the extreme cold. Troops complained that they were at a disadvantage because their Pakistani foes could fire on full automatic with their AK-47s while the INSAS rifles had only three bullet burst mode (which, fortunately, sometimes failed and fired more than three bullets for each trigger pull.) What was most irksome about this was that the INSAS rifles were the same weight, size and shape as the AK-47 but cost about $300 each, while AK-47s could be had for less than half that. The INSAS looked like the AK-47 because its design was based on that weapon.
Update: Added the link to Strategy Page.