Introduction

The economic history of Germany's Great War appears intellectually unexciting. It is the story of a failed blitz campaign and a subsequent war of attrition. It is the chronicle of disappointed expectations, painful adjustment, and of quixotic efforts to ignore reality. It is the account of an insufficient resource base, and probably of misallocation and disingenuous economic planning. And, last, it is the story of a half-constitutional yet undemocratic system in denial of defeat, unable to compromise, unable to make peace, finally drawing the whole of society into the abyss of its own political and military collapse.

A tragedy foretold: in the winter of 1914, the Kaiser's military commander-in-chief, Erich von Falkenhayn, informed his government that Germany's war effort had failed, that its military machinery lay in pieces, and that the only way out of the deadlock would be through diplomatic channels (Mommsen 2001: 47). Whatever the changing fate of Germany's armies on the battlefield after that date, events in the end proved Falkenhayn right. Hardach (1973) and Ferguson (1998) have taken this point to the extreme. They argued that, contrary to conventional wisdom and popular myths, the economics of World War I explain little, if anything, that goes beyond the military facts of late 1914.

This survey chapter on the German economy at war is about these seemingly residual economics of World War I on the German side.