An Input-Output Table for Germany in 1936 - Rijksuniversiteit ...

An Input-Output Table for Germany in 1936 by
Rainer Fremdling, Rijksuniversiteit Groningen/ Deutsches Institut für
Wirtschaftsforschung
and
Reiner Stäglin, Freie Universität Berlin/ Deutsches Institut für
Wirtschaftsforschung
Please do not quote without permission of the authors
1. Background and aim of the input-output oriented activities For the first time, the industrial census of 1936 provided a comprehensive
account of input and output data for all branches of German industry. Also
for the first time on this scale, German statisticians applied the Anglo-
Saxon concept of net production value (Nettoproduktionswert) or value-added
(Wertschöpfung) in order to measure output. The data were collected on the
level of operating or technical units (Betriebsstätten) of German
enterprises. In 1939, the German Imperial Office for Military-Economic Planning
(Reichsamt für Wehrwirtschaftliche Planung = RWP) published results in its
first and only volume on the Outcome of the Official Census of Production -
German Industry (Gesamtergebnisse der amtlichen Produktionsstatistik - Die
deutsche Industrie).[1] For reasons of camouflage, however, certain
industries considered important for warfare were hidden by the way the data
were aggregated (e.g. iron and steel, chemicals) or under misleading
categories. The foremost example is the aircraft industry which ended up
hidden under "construction and others" (Bauindustrie und sonstige
Industriezweige). The reunification of German archives has offered
historians easier access to the records of the Imperial Statistical Office
of Germany (Statistisches Reichsamt = StRA). Its archive, which used to be
in Potsdam, is now housed in the Federal Archive Berlin-Lichterfelde
(Bundesarchiv Berlin-Lichterfelde = BA). Historical research in this
archive has unearthed important new information from the industrial census
of 1936, which not only permits a re-evaluation of the official 1939-
publication but also makes possible the construction of an input-output
table for 1936. Originally, this census and its forerunner of 1933 had actually been
designed by the Imperial Statistical Office to compile an input-output-
table for Germany as a basis for managing the business cycle. In connection
with rearmament, however, this endeavour had been given up and instead,
these data were used for constructing detailed material balance sheets,
which served as a statistical basis for preparing the war (Tooze, 2001;
Fremdling/Stäglin, 2003; Fremdling, 2005). Based on these hitherto secret records and additional statistical
information we have been busy to fulfil the original plan of the StRA of
constructing the desired input-output table or as it was labelled at that
time the volkswirtschaftliche Verflechtungstabelle. The availability of a
table as such will provide a detailed and consistent account of the economy
of the German Empire in 1936, the second largest economy of the world at
that time. In several respects, 1936 is a useful benchmark year: About
three years after the German economy had gone through the trough of the
most severe business cycle of the world economy employment of people and
capital stock had recovered significantly. Three years before the German
Empire attacked Poland and thus started the Second World War it was
nevertheless essentially still an economy in peace-times. Thus neither an
exceptional position in the course of the business cycle nor an exceptional
intervention of the government spoils this benchmark for qualifying as
calibration year for international or inter-temporal comparisons. Further research based on this table could be pursued along the following
lines: Firstly, our input-output table could be used according to the
original intention, namely - this time in retrospect and for historical
research - to evaluate and design strategies for German recovery by
implementing the then discussed (or any other counterfactual type of)
"Keynesian" policy. Secondly, the table will shed new light on the
statistical information system of the German war economy, because the 1936
census provided the only reliable overview of industry for that period. In
fact already before the war, the statistics of the industrial census were
directly applied for military exercises under the guidance of the Imperial
Office for Military-Economic Planning. This office, however, failed in
setting up a consistent information system for the war and was finally put
back to its former position in the Imperial Statistical Office. The
statistical body of the industrial census subsequently still became the
information benchmark for Speer to run the German war economy under the
statistical guidance of Wagenführ and the Deutsches Institut für
Wirtschaftsforschung (Tooze, 2001, pp. 265f., pass.; Wagenführ, 1955 and
1963). Thirdly, the table and the related records could form the starting
point to analyse East German economic policy. After the war, the census
data served as benchmark information for implementing the East German plan
economy (Fremdling, 2005). Applying the information we generated by constructing the rows and columns
of our table our research thus far has concentrated on two other aspects. A
minor point is a comparison of the structure of the German economy before
and after the war. Was post-war recovery of both German economies a mere
resumption or rather a radical break with past economic structures? Our
preliminary results suggest more continuity than change, and the change
there was mainly derived from investment and the creation of new industries
and locations in connection with rearmament and the war economy itself
(Fremdling/Stäglin 2008). Our major concern, however, is the construction of the input-output table
as such with a new benchmark for income, expenditure and production of the
German Empire in 1936. These new data on German historical national
accounts will shed new light on the national income figures of the Imperial
Statistical Office itself and data sets derived from them. Above all, we
work on a replacement of the grossly unreliable figures of Hoffmann and his
collaborators (Hoffmann et al., 1965).[2] All three approaches to national
accounting can be pursued in a consistent framework of an input-output
table. The inevitable double-check of all figures within this system
enforces the consistent entry of all numbers into the bookkeeping of
national accounts. Neither the StRA nor Hoffmann underwent this coherent
and demanding procedure. And consequently, besides presenting alternative
estimates of national income and expenditure, we offer the first account of
pre-war German output by measuring production through value-added. Before presenting preliminary results of our input-output table and a
discussion of related national accounting figures we confront our findings
with the publication of 1939. We further show how we extended our
compilation based on archival evidence to a full coverage of the industrial
sector and how we covered agriculture. 2. Data sources of the input-output table By keeping up the original intention of the Imperial Statistical Office to
construct an input-output-table for Germany for the 1930s, we mainly draw
on the unpublished figures of the industrial census of 1936. Thus far, we
have completed a comprehensive set of input-output relations and aggregate
figures for 29 industrial groups or sectors and construction (Baugewerbe)
following the classification of the Imperial Statistical Office. In
addition, the agricultural sector is covered. For industry, we can rely on
three sources (Quellen = Q): Q1 and Q2 are the figures gathered and partly
compiled by the Imperial Statistical Office filed in the Federal Archive
(BA); Q1 contains detailed information for 326 industrial branches on
employment, wages, intermediate input, gross production, sales, imports and
exports, which allowed the quantification of the input-output relations.
For each single branch, inputs are listed with the product name, quantities
and values at purchaser prices[3], thus including the margin for
transportation and trade. The specific inputs of each of the 326 branches
were assigned to the 30 industrial groups and agriculture from which they
presumably had been purchased. Imports were separately accounted for. The
other variables were aggregated and assigned to the proper fields in the
input-output matrix. Source Q2 summarises some of these latter figures on
the same level of aggregation for the 326 branches, however, without e.g.
taking into account specific intermediate input products. Q1 is thus the
preferred source for our detailed accounting, whereas Q2 serves as check
and supplementary information on the aggregated numbers. Q2 is obviously
based on Q1 and was calculated by the Imperial Statistical Office itself.
In case of sometimes diverging numbers we opted for Q1.[4] Q3 comprehends
the figures published in 1939. This detailed but misleading publication of
1939 was used uncritically in the literature (Hoffmann, 1965) and after the
war by the Americans (Strategic Bombing Survey) and above all by the
statistical offices in East and West Germany (Fremdling/Stäglin, 2007).
Thus before turning to a comparison of our sources (Q1/2) with the official
publication (Q3), a closer look into its genesis, background and pitfalls
is due. 2.1 Published and archive census data A comparison of the published data of the German Imperial Office for
Military-Economic Planning[5] (RWP) with the records then kept secret but
being available now in the Federal Archives reveals that the published data
seem to be reliable, at least at first glance. The publication in 1939
seems both comprehensive and detailed in comprising the entire German
industry covering 30 sectors and a number of sub-sectors. In addition to
net production value