THE GERMAN WAR ECONOMY  
                                                            
 
by  
                                                            
 
        H. W. Singer in the Economic Journal, London        
 
                                                            
 
 
These articles are based on a survey of German documents and publications and  
       published in three issues (to date)as follows:       
 
                                    I  
                                                            
 
December, 1940  
                                                            
 
 
1. That only the Nazi form of government is capable of the control needed  
in a war economy and that the control is less rigid than expected. Statistics  
are gathered currently from 150,000 establishments so that all information is  
           actual (not estimated) and up to date.           
 
                                                            
 
 
2. Orders are concentrated by the pooling of the most efficient (or "W")  
firms to whom are transferred the best machines and workers. The less efficient  
concerns are closed down but kept alive financially by a "work conservation  
subsidy". The slogan is "maintenance as usual" not business as usual. The   
allocation of materials is on the basis of orders. "The raw material follows   
                        the order."                         
 
                                                            
 
 
3. Labor is entirely on a draft basis and with labor-book system is entirely  
under State control. Exemptions from military service are determined by the  
contracts of the employer and not by occupation. Training is extensive, the   
aim being to make a foreman out of every skilled worker and a skilled worker   
out of every laborer. The emphasis is on quick uni-purpose training, first   
taking men from unessential industries and after them the women. Wage increases  
are largely given by "up-grading" but there appears to be considerable freedom  
             - although strikes are prohibited.             
 
                                                            
 
 
4. Price control is the core of the economy- the German collapse in 1918  
is attributed to "price-political negligence." The "price stop" is absolute and  
changes upward are permitted only to cover increased raw material costs. "War  
finance implies price stop and wage stop." The prices are fixed on the costs   
of a "moderately good firm" - excluding the "hot-house firms". Special conditions   
are cared for by the "price equalization fund" but there is no cost plus and   
no reward for inefficiency. Elaborate uniform accounting methods are prescribed  
to prevent increases from snow-bailing. The General Staff strictly controls   
prices for supplies to the armed forces. Soap is the "new model" for internal  
prices. Trade marks have been abolished; 90% of the margin of firms working at  
ss than standard cost goes to "a raw material cheapening fun