Published on 19 Apr 2016
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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
WW2: The Resource War – III: The Engines of War – Extra History
The greatest German philanthropist you’ve never heard of
At the Cobden Centre, Alasdair Macleod explains how the sensible reforms of one man rescued the West German economy from rationing, inflation, and deprivation:
Anyone who favours regulation needs to explain away Germany’s post-war success. Her economy had been destroyed, firstly by the Nazi war machine, and then by Allied bombing. We easily forget the state of ruin the country was in, with people in the towns and cities actually starving in the post-war aftermath. The joint British and American military solution was to extend and intensify war-time rationing and throw Marshall aid at the problem.
Then a man called Ludwig Erhard was appointed director of economics by the Bizonal Economic Council, in effect he became finance minister. He decided, against British and American misgivings, as well as opposition from the newly-recreated Social Democrats, to do away with price controls and rationing, which he did in 1948. These moves followed his currency reform that June, which contracted the money supply by about 90%. He also slashed income tax from 85% to 18% on annual incomes over Dm2,500 (US$595 equivalent).
Economists of the Austrian school would comprehend and recommend this strategy, but it goes wholly against the bureaucratic grain. General Lucius Clay, who was the military governor of the US Zone, and to whom Erhard reported, is said to have asked him, “Herr Erhard, my advisers tell me what you have done is a terrible mistake. What do you say to that?”
Erhard replied, “Herr General, pay no attention to them! My advisers tell me the same thing.”
About the same time, a US Colonel confronted Erhard: “How dare you relax our rationing system, when there is a widespread food shortage?”
Erhard replied, “I have not relaxed rationing, I have abolished it. Henceforth the only rationing ticket the people will need will be the deutschemarks. And they will work hard to get those deutschemarks, just wait and see.”
The US Colonel did not have to wait long. According to contemporary accounts, within days of Erhard’s currency reform, shops filled with goods as people realised the money they sold them for would retain its value. People no longer needed to forage for the basics in life, so absenteeism from work halved, and industrial output rose more than 50% in the second half of 1948 alone.
Erhard had spent the war years studying free-market economics, and planning how to structure Germany’s economy for the post-war years. It goes without saying that his free-market approach made him a long-standing and widely recognised opponent of Nazi socialism, a fact that enhanced his credibility with the military authorities tasked with repairing the German economy. He became an early member of the Mont Pelarin Society, a grouping of free-market economists inclined towards the Austrian School, founded in 1947, and whose first President was Hayek.
Erhard simply understood that ending all price regulation, introducing sound money and slashing the burden of taxation, were the basics required to revive the economy, and that the state must resist the temptation to intervene and had to reduce its role in the economy. He remained a highly successful finance minister for fourteen years, before succeeding Adenauer as Chancellor in 1963.
Erhard not only allowed unfettered free markets to rapidly turn Germany around from economic devastation, but being publicly credited with this success he presided over the economy long enough to ensure that bureaucratic meddling was kept at bay subsequently. His legacy served Germany well, despite the generally destructive actions of his successors.
The contrast with Britain’s economic performance was stark, where rationing was not finally lifted until 1954, and her post-war socialist, anti-market government was nationalising key industries. The contrast between Germany’s revival and Britain’s decline could not have been more marked.
QotD: Facebook’s Orwell problem
As Orwell noted in 1984: “Who controls the past controls the future; who controls the present controls the past.” He was speaking, of course, about control of written history, of what we know to have happened — and thereby how we allocate our political support. It is not a small matter if the company that is coming to be the nation’s most significant source of news skews that news toward its own political preferences. In fact, it’s just a tiny bit chilling. Government censorship is, of course, terrible. But censorship by a small group of unelected young people is not all that much more appealing.
This problem existed already on another scale. The socioeconomic, racial and political homogeneity of the media is a problem, one that I have written about before. That said, those media were operating in a competitive landscape, and no one outlet really had all that much market power. In each medium there were outlets of different sorts of political leanings, and more of them with the rise of the Internet.
Facebook, on the other hand, dominates all other social media outlets for news to an extent that no print outlet ever dominated the American landscape. The only arguable parallel is the big television networks from the 1950s to the 1980s, and at least there were three of them, rather than one. Besides, for most of that time they operated under the Fairness Doctrine — in other words, under heavy-handed government interference to limit their power to shape the national debate.
[…]
The greater danger is that liberals will end up falling back on an argument that is gaining more and more currency on the left: that this biasing of information is not merely an unfortunately insoluble problem, or so minor that it doesn’t make much difference in our politics, but that it is actually an affirmative good. These are the people who embrace Orwell’s dictum and say: “Yes, absolutely, the left should have control over what people are allowed to hear and know, because that’s how we’re going to build a better future.” The first argument may be unsatisfying. But the second is … downright Orwellian.
Megan McArdle, “Facebook Dislikes Conservatives, and That’s OK”, Bloomberg View, 2016-05-11.
