France Changes its Nuclear Policy; Not Very Much

Nicolas Sarkozy was in Cherbourg to name the latest French SSBN, the appropriately named Le Terrible, this week; and he had a few things to say about the circumstances under which she might be called on to fire her M51 SLBMs. The headline grabber, which everyone picked up on, was that France is going to reduce the number of operational nuclear weapons it declares to the world; specifically, the airborne component of the French deterrent is being cut by one-third in terms of warheads.

France, until not long ago, operated a nuclear triad; as well as the first class of submarines, there were also four air force squadrons assigned to the nuclear mission, originally with the Mirage IV-A bomber and then with the Mirage 2000-N, and a force of intermediate-range ballistic missiles based in southern France. These weapons were withdrawn at the end of the cold war; they were always slightly odd with regard to France’s overall policy, as due to their range their only credible target was Russia. Officially, of course, the French nuclear force has always been “tous azimuts” or omni-directional (i.e. could point west, or maybe even north:-)).

The reduction, however, is entirely in keeping with the long-term principles of French nuclear strategy; France, like Israel and the UK (although the UK doesn’t have a published doctrine), has a traditional policy of minimal deterrence. This argues that nuclear weapons are subject to diminishing returns; the consequences of having all your cities nuked once are not noticeably better than twice, three times, or more, so the certainty of retaliation is much more important than its scale. “Superiority” is probably meaningless, and anyway uneconomic if not actively dangerous. This was also the doctrine associated with the US Navy in the 1950s, as opposed to the US Air Force; it was much more important to have a very secure retaliation force than a massive first-strike force, which was certain to be perceived as aggressive and threatening, and by happy accident this policy would involve heavy investment in the Navy’s submarines and carriers.

Despite this, Sarko is trying to frame the change in opposition to Jacques Chirac’s speech in 2006 in which he suggested that deterrence extended beyond a direct nuclear threat to the Republic; his press-cat describes this as a return to the fundamentals of deterrence. Beyond that, he also suggested a “dialogue” on the role of nuclear weapons in European security; well, I suppose he had to say something more, as this is an idea that gets taken out for a stroll every 20-30 years without effect. The speech is here; as far as detail goes, he sticks closely to tradition in refusing to define “vital interests” precisely (so not so much difference from Chirac, then) and stating that the force is targeted on a counter-value policy, i.e. against cities rather than against nuclear weapons systems.

As far as the practicals go, France has some 60 airborne nuclear weapons, of which 50 are ASMP(A) cruise missiles and 10 freefall bombs; this happens to match the number of Mirage 2000N aircraft on line precisely, mirroring the original and highly aggressive concept of operations from the 1960s, which foresaw launching the whole bomber force, if necessary on one-way missions to reach more distant targets. The mathematical geniuses this blog is known for will no doubt spot that this will fall to 40; the French Air Force and Naval Aviation have currently got 120 Rafales on order out of 294 planned, all of which are capable.

The reduction doesn’t go quite as far as the UK’s decision to withdraw all the WE177 nuclear bombs from the RAF in 1998, which accounted for all the UK’s airborne and tactical nuclear weapons. However, it’s worth pointing out that the British and French jointly developed an air-launched missile recently; in British service it’s called a Storm Shadow. Some voices in the UK have suggested acquiring a supply of these with nuclear warheads as a substitute for the Trident missile submarines that would be cheaper and less dependent on the US; the argument is based on experience since 1991 that surface-to-air missile defences are considerably less fearsome than was thought in the 1960s.

However, the UK government has been notably unwilling to engage with the idea. Its recent white paper on the deterrent cited only two alternatives to Trident (or disarmament), one of which was to independently develop an ICBM and find bases inside the UK, and one was to procure very long range nuclear cruise missiles (which would need developing) and base them on large airliner-type planes (the range because these could not go in reach of enemy air defences). This can only realistically be seen as an exercise in closing down the debate.

Finally, on page one:

Il a fallu des decennies d’apprentissage pour maitriser de tels savoir-faire, que certains de nos partenaires ont eu bien du mal a reconstituer apres les avoir negliges…

I wonder who he might possibly mean?

A European Future?

Parag Khanna has a monster screed – eight pages – in the NYT on the subject of “turning away from hegemony”. The hegemony concerned is that of the United States; the argument is that US power will decline relative to that of China, India, big second-tier powers, and Europe. This is a topic that cannot fail to elicit trolls; but it’s worth looking to, perhaps just for that reason alone.

Khanna, interestingly, bases part of the piece on demographics; Russian demographics. We’ve broached this before – it certainly looks like Russia is going to get more and more like one of the small Gulf states, an authoritarian petroleum exporter with a small population and a significant dependence on immigrants from a poor periphery. Further, we’ve also argued that Russian power is constrained by mutual dependence on the EU as a downstream market for energy and a source of investment; interestingly, a financial source of AFOE’s recently told us that he doubted the Russian sovereign-wealth fund spoke for anywhere near as much money as is sometimes claimed.

But the core of this row will probably be the US and Europe; it’s hard to imagine the US maintaining a hegemonic role in the world economy when it’s a massive importer of both goods and capital. Just as the UK’s financial hegemony didn’t make it past the First World War for the same reasons. Similarly, when Societe Generale had to dump the Kerviel overhang last week, they don’t seem to have bothered to tell the Federal Reserve; naturally, the French central bank and regulator were informed on day one (although Finance Minister Christine Lagarde seemed to deny she knew in advance on the BBC last week), and one presumes they clued-in the ECB.

Tony Karon calls it the Incredible Shrinking Davos Man. Well, their organisation is slipping; for the second year running, AFOE’s invite hasn’t turned up. But I’m not so sure, at least on the definition. If a multipolar world is going to work it’ll have to be more like, well, the European Union; all Khanna’s talk about playing by other people’s rules just drives home the point that they are rules, and rules mean institutions.

Institutions imply membership; which means the EU. Meanwhile, also at Karon’s, we see this in action. In Gaza, peaceful mass action to re-connect with the wider world has just capsized several world powers’ policy; the idea of locking up and refusing to engage with Gaza is now absurd, and it’s no surprise that it leads to concessions. If you can get out to the backbone, economically, suddenly all kinds of choices become available. It’s certainly very different from the days of George Habash, whose signature airline hijackings were directed precisely at separating from the rest of the world.

Review: The Wages of Destruction, Adam Tooze

Adam Tooze, who (it says here) is a senior lecturer at Jesus College, Cambridge, has a book out; The Wages of Destruction: The Making and Breaking of the Nazi Economy. It is getting some very good reviews, and this one will be no different. Tooze’s thesis is that the Nazi German economy was a more powerful factor in many decisions taken by the leadership than hitherto assumed, that its structural weaknesses were determining in the failure of Nazism, and that Nazism itself can be understood as an effort to escape them by a combination of will and technology. The first is fairly original, and certainly controversial, the second is hardly controversial (although it is surprising that it still needs restating; the image of impregnable fascist might dies hard), and the third is both new and highly controversial.

Tooze begins with a discussion of Germany’s economic problems and relative place in the world whilst passing through the Depression. He provides an excellent account of Stresemann’s policy in terms of a special relationship with the United States, importing US capital to develop German industry and help cover the reparations bills to France and Britain. At the same time, he argues, closer economic ties to the US were also a means of forcing the US government to press the European Allies over the reparations issue; France and the UK were insisting on the cash in order to cover their war debts to the US, so being as close as possible to the US meant that Germany could count on US support in a crisis, on the principle of being too big to fail.

America in German eyes is a main theme of the book, and a little-remembered sub-theme of Nazi discourse more generally. Not only were leading Nazis concerned about the potential power of the US, they both idealised what they took to be the unique efficiency of 1920s US industry, and demonised what they took to be the decadence and miscegenation of US society. It was the era of Josephine Baker, Al Capone, and Henry Ford, and all three icons were lapped up by Weimar culture, just as US bankers (Jew York, verdammtnochmal!) lapped up Weimar industry’s short-term paper. Stresemann and his fellow liberals, and the Social Democrats, thought the answer to America was to preserve the international political and trading structure; perhaps with a European community in the far future.

The Nazi response was to shake the structure until it fell down; the economic history of the 30s in Germany is one of continuous foreign exchange crises, mitigated by a succession of increasingly inconsistent expedients. Hjalmar Schacht, as Reichsbank president, is the figure most associated with this – it is perhaps worth noting that he was himself half-American, but didn’t use his other two Christian names (Horace Greeley) very often. A telling detail is that, as each crisis passed, the Bank and the ministries of finance and economics convinced themselves that this time, things would get back to normal. Memos for a return to multilateral trading, a relaxation of administrative controls, and a slowdown in armaments spending would be drawn up, and immediately ignored as Hitler, and the various groups either working towards the Führer or trying to take advantage for their interests, concluded that their survival of the crisis confirmed the rightness of their course.

According to Tooze, who provides a considerable quantity of statistical evidence for this claim, the work-creation programme created little work; after all, actual spending on the autobahns and public works projects was not all that great, and the total demand for construction workers was limited. Fritz Todt’s new reinforced concrete building methods were capital-intensive and required specific skills, rather than hordes of labourers. What got Germany back to work was rearmament, and Tooze argues that much of what is thought of as civilian investment was actually more like disguised military investment, or investment in war-supplying industry. It is well worth pointing out here that Tooze is excellent on the corporate world of Nazi Germany, and especially the fast-growing influence and power of the top technical executives of big industry (especially chemicals and aeronautical engineering), who made up something like an independent technocratic lobby in their own right. J.K. Galbraith’s technostructure comes to mind; this may have been the most malevolent and evil manifestation of it ever. Even the big coal and steel men, who generally went along, were frequently horrified by Nazi policy; not so Junkers, BASF, Bosch or IG-Farben, who were not only profiting from arms sales but benefiting from massive state capital investment into the latest technologies in their research divisions.

As a rule, steel and forex were the limiting factors, and hence swung conservative; chemistry and engineering were convinced that all could be achieved with enough budget, will, and steel. But it wasn’t their job to find the steel or the sterling, so their ambitions ballooned to deranged proportions. By the Munich crisis in 1938, Germany was nearly bankrupt – after a summer of currency crisis, the Reichsbank was able to get away a succession of huge bond issues in the relief afterglow, but ran into a wall when the market refused the fourth loan. Only by paying suppliers 40 per cent of their contract prices in tax credits could the Reich roll over its short-term loans; at the same time, the vast consumption of steel by the war industries meant that the State Railways were struggling to keep going. The forex question even put a crimp in anti-Semitism; right up to the war, the Reichsbank was required by its charter to convert anyone emigrating from Germany’s marks into foreign exchange. And even though the total wealth that could be seized from the Jews was risibly tiny, it far exceeded the available cash. Tooze argues that one of the motivations of Kristallnacht was to scare them into leaving without their money; even that was a problem, as so much plate glass could only come from Belgium, which meant it had to be paid for in hard currency and cash on the nail.

By 1939, the Reichsbank was reduced to commissioning secret studies to estimate the mark’s exchange rate; the economists who carried them out concluded that the concept was now meaningless in the light of dozens of mutually incompatible side-deals with Germany’s trading partners. Germany paid 72 per cent over the world price for Peruvian cotton, and 10 per cent over market for petrol from the same source; 63 per cent over market for Dutch butter, but Danish butter was paid for at the world market price (there must have been plenty of butter moving from Denmark to Holland…).

The upshot was that the decision for war, and then the decision to take the offensive in the West, and finally the decision to take the offensive into Russia, were at each step driven by a logic of economic bootstrapping. War, and the consequent loss of world trade, had a serious initial impact on the German economy; inflation threatened to burst out of control, there was a constant struggle between interests over short-supply assets, and a key feature of the German economy caused deep discontent. This was uneven development; Tooze argues strongly that Germany’s apparent economic might concealed a long tail of poverty, not just in the hard-arse Mietskasernen of the working class but also among the peasantry.

Peasants were a key Nazi constituency, as well as occupying an important place in ideology; unfortunately this image of virtue didn’t translate into grain all that well. Agricultural productivity was poor, with a toxic cocktail of absentee landlord estates and tiny plots that barely supported their tenants. Most of the Nazi solutions to this started off with the idea of a class of farmers with secure tenure of farms big enough to make a good living, but wanted the excess peasants to stay on the land for reasons of mythology. Ominously, the answer was to put them on someone else’s land. Here, the appalling figure of Herbert Backe, State Secretary and later Minister of Agriculture, stands out; Backe wrote a PhD thesis years before entering office on the Russian grain business, in which he explained that the superior people without space must get rid of the Russians in order to secure the Ukraine’s surplus and settle enough of their urban working class to overcome the unrooted, degenerate tendencies created by the modern nomads, that is to say the Jews.

Hilariously, the examiners threw this manifesto for genocide back in his face; terrifyingly, he had it reprinted and issued as part of Wehrmacht formation commanders’ briefing material for the invasion of Russia. Tooze makes a good case that Backe’s elevation to the Ministry in early 1942 was an important catalyst in the decision to launch Operation REINHARD, the extermination of the European Jews; it is well-known that one force encouraging ghettoisation the year before had been other Nazi proconsuls’ tendency to herd their own race enemies into the Government-General of Poland, which was slated to be reduced in population. However, one hitherto underestimated fact is that Backe’s revised grain allocations at the same time foresaw a dramatic change; rather than being a net importer of food, Hans Frank’s fief was to become a major exporter.

The reason why this was so important is simple; although the conquest of western Europe turned a very bad economic position into a tolerable one with considerable potential, Europe was far more globalised than the Nazi economists assumed. Oil is the canonical example, but Europe also imported a lot of animal feed, and also British coal. Problems with transport, and the planners’ inability to come up with a settlement of coal supply between the mighty interest groups concerned, exacerbated the feed problem. As agricultural productivity fell, so did productivity down the mines; it probably would have done anyway, French communists not being likely to bend their backs any harder for German fascists, but hunger is enough to explain the droop in coal output per hour. The Foreign Ministry put forward schemes for a European community, but in the prevailing climate of hubris this never stood a chance; the government far preferred a more exploitative option, the centralised clearing system under which exporters to Germany were paid by their own central bank, which then charged an account with the Reichsbank. German exports in the other direction were meant to be set off against this; however, the Germans simply ran a permanent overdraft.

This permitted a substantial theft of goods, services and assets; it also created a powerful incentive not to produce. The upshot was a European economy operating massively below capacity and a German economy running red hot, with a continent-wide shortage of key inputs. Soviet trade, under the Molotov-Ribbentrop pact, matched part of the difference, but the Soviet government demanded its price, especially in terms of technology transfer. Trade with allies and neutrals, meanwhile, had the serious disadvantage from a Nazi viewpoint that it was actually trade; it required matching exports, which for political reasons were a priority claim on resources.

Hence, the crisis; with the occupied territories only a marginal benefit, and much capital investment not yet producing, Germany was faced with the rapid spin-up of US production. Where to go for the next bootstrap, before US industrial power took effect? Russia, clearly. Tooze’s book may be a final slam-dunk demonstration for the “functionalist” view of Nazism, dominant since the 1980s, which argues that the regime’s internal politics, shared assumptions, and the incremental radicalisation caused by a succession of crises drove Germany into war and genocide, rather than a clear rationalist design. Independent decisions, taken for different reasons, mutually reinforced each other.

This is no longer controversial, but there is much in the book that is. For example, Tooze vigorously criticises the common idea that Germany never attained the same level of civilian mobilisation as the UK, that the Nazi government “protected” civilian living standards at the expense of the war effort and the occupied up to the declaration of “Total War” in 1943. In fact, he argues, there was very little slack in the economy; if anything was being held back from war production, it was because the early war years were years of massive capital investment. This investment, he claims, explains the surge in armaments production from 1942 onwards that is usually ascribed to Albert Speer. It was the pre-war dynamic between the Luftwaffe, the Führer, and the industrial technocrats writ stupefyingly large, combined with a new emphasis on the entrepreneur as leader. (Of course they were not entrepreneurs, but technocrats managing huge state-funded projects; they thought of themselves as Unternehmer, though, and Nazi propaganda lionised them as such.)

Some of this was wasted, of course. There was the fabulous Flugmotorenwerke Ostmark, a scheme to build a gigantic aero-engine plant in Austria to match the output of Ford’s new plant next to River Rouge (it could as well have been to match Rolls-Royce’s at Barnoldswick, but it had to be American); it never produced more than 198 engines a month compared with a target of 1,000. But in the same industry, Daimler-Benz was able to upgrade one of its own facilities from 300 DB605 engines a month to 1,200, at a fraction of the cost. (The UK war economy had a similar experience with the state-financed shadow factories; Rover and Vauxhall never really got the hand of aero-engines, especially not the jet program, but things improved immensely when the whole thing was slung to the real experts at Rolls-Royce.) And who knew that the Buna synthetic-rubber plant next to Auschwitz still produces about 5 per cent of the world’s synthetic rubber? The installation, never completed during the war, was first robbed of the fancier chemical engineering bits by the Russians and then rehabilitated by the Poles; even if there is no Hitler in uns selbst, there may be some Hitler in your tyres.

So there should be no surprise, then, that the German war economy pulled out of the Moscow crisis in the winter of 1941; it was the capital formation whatdunnit. Tooze has ample statistical data to underpin this, but I am less sure of his conclusions regarding another of the classic controversies. In nearly all British accounts of the second world war, the author takes sides regarding one or more of the morality, effectiveness, and wisdom of the RAF’s strategic bomber offensive against Germany; it’s an identity-creating decision for any British historian. AJP Taylor is the leader for the opposition; he argued, on the basis of J.K. Galbraith and George Ball’s US Strategic Bombing Survey results, that not only was it wrong, but it was also incredibly wasteful, sucking up almost one-quarter of UK industrial production and failing to seriously interrupt the German war effort. Still less did it deliver the crushing blows to morale the airpower theorists promised. And no branch of service offered its members a shorter life expectancy.

Tooze argues, against Galbraith, that the bombing was indeed effective. Specifically, he cites the “Battle of the Ruhr” in the spring of 1943 as essentially being enough to stop the growth of German armaments production in its tracks; and he has a graph to support this, with a little explosion at the inflection point (presumably there isn’t a carbonised ironworker’s corpse in MS Excel’s clipart file). He also quotes various people’s reactions to the destruction of Hamburg with a slightly distasteful enjoyment, hence the rather harsh finish to my last sentence. In fact, he goes as far as to conflate the Ruhr and Hamburg, although Hamburg can’t have been the key point because it’s not a steelworks town and it never has been. And anyway, the bombers didn’t win the war in 1943, nor 1944 or 1945 for that matter. What went wrong? Tooze argues that the mistake was Bomber Command’s – although he doesn’t say so. But it was Bomber, and particularly “Bomber” Harris, who shifted the target from the Ruhr to Hamburg, and then on to Berlin. Harris and his staff didn’t want to disrupt industry, after all; they wanted to “dehouse the German working class”, which they believed would lead to revolution or at least chaos. So this counterfactual would have required a different Bomber Command; one that didn’t believe in airpower theory, and therefore probably wouldn’t have existed. This is not mentioned, even though Tooze repeatedly and approvingly quotes the phrase “dehousing”.

More importantly, he argues that RAF Bomber Command could simply have kept bombing the Ruhr at the rate of May 1943 indefinitely; but there was a reason why the Battle of Berlin was called off at the end of February 1944. Quite simply, the Nachtjäger had won and the RAF’s loss rate was running permanently well above the rates its infrastructure was scaled to support. Even the Ruhr battle had an aggregate loss rate of 4.71 per cent; the Oberhausen raid on June 14th hit 8.37 per cent, and nowhere could be more of a Ruhr target than Oberhausen. The RAF Air Historical Branch thought that “Bomber Command was approaching perilously close to the unbearable, or at any rate the insupportable, sustained casualty rate during the Battle of the Ruhr”; it’s worth remembering that each cohort of crews faced that average rate every time they went out, for a tour of thirty missions. It wasn’t a question of finding enough aircraft, but enough people. The figure of 30 was meant to represent the point at which the individual reached a 50/50 risk of death, and once the loss rate went past a critical figure this datum line, as it was known, moved closer and closer. And the rate went progressively higher over time; the Berlin battle had an average of 6.44 per cent, the last Berlin raid 8.88 per cent, the raid on Nürnberg six days later a knockout 11.94 per cent.

Something changed, and it wasn’t just targeting; the Luftwaffe completely redesigned its tactics, command and control, and equipment between the spring of 1943 and the autumn. The tightly-controlled “Zahme Sau” system was replaced by the free-rein “Wilde Sau”; new airborne radar meant that the night fighters began coming out halfway across the North Sea to meet the bomber stream. Of course, this could just be the sort of operational history that economic historians don’t bother with; but you would think that costs are a pretty important concept in economic history. Further, Bomber Command competed for resources primarily with the U-boat war, with RAF Coastal Command; but there’s nothing here about this.

Tooze returns to the bombers, later on, as the bombers returned later on; apparently, in the autumn of 1944 “the war-winning airfleet was now ready”. It seems rather late; and, we read, “the correlation between the area bombing of Germany’s cities and the collapse of its war production was loose at best…the wanton destruction of German cities could disrupt production but it could not bring it to a complete standstill.” In between these sentences we learn that far from submitting to the “operational stranglehold” claimed for the Ruhr in 1943, the Krupp Gußstahlfabrik in Essen kept going through the bombs until its electricity supply was wrecked in October, 1944; war-winning, indeed. Further, he argues that it was actually the massive attacks on the railways in this period that did it; which isn’t the same thing as bombing steelworks two years earlier.

But despite this, there is no doubt whatsoever that this is a major contribution. (It’s notable that the sections that deal with bombing are the least well-referenced in the book.) In conclusion, what stands out is that the Third Reich was fascinated by the United States, perhaps even more than the Soviet Union; Hitler spoke of the Volga as Germany’s Mississippi, and various SS Schreibtischtäter of treating its inhabitants as “Red Indians”. The size of the proposed empire was frequently compared to Canada or Australia. It is clear that a major motivating factor for many leading Nazis was a wish to escape from an increasingly integrated world economy, and a matching desire to have a Grossraumwirtschaft to match the people seen as controlling the world economy; Tooze’s book leaves the disturbing sensation that this is us.