Going into the red – the failed economics of Operation Barbarossa

Understanding the seriousness of Germany's strategic predicament by the autumn of 1941 depends upon two essential factors, firstly, the weakness of Germany's economic base, and secondly, the failure of the Ostheer's summer blitzkrieg in the Soviet Union. This chapter assesses the strategic ramifications of Hitler's failure to defeat the Soviet Union in a summer campaign and how these were set to become worse from September 1941 onwards.

There can be little doubt that together Britain and France enjoyed a superior economic position at the start of World War II. Yet in the first two years of the conflict Germany maintained the strategic initiative and effectively manoeuvred itself to offset the impact of the economic imbalance. Hitler did this by means of brief military campaigns to eliminate strategic military threats and seize vital stockpiles of foreign commodities as well as gain additional industrial capacity fundamental for the expansion of his war effort. Moreover, rather than exacting a cost militarily, most of the early campaigns yielded vast quantities of war materiel (although a good deal of it was obsolete on the modern battlefield) and proved relatively light in casualties. Nevertheless, Germany's success was limited to land warfare. In the sea and air battles against Britain, Germany was already engaged in two bitter wars of attrition, and after February 1941 the North African campaign proved a constant, albeit minor, drain on the army too. At sea the German navy was attempting to sink more tonnage than British shipyards could replace, while at the same time offsetting their own losses in U-boats by increased production. In the air campaign Germany first attempted to destroy Britain's air force, as a prelude to invasion, and then switched its priority to bombing both as a reprisal for air raids over Germany and as a means of limiting British industrial might. Yet, as costly and as indecisive as these campaigns were to prove, Germany's real hope, and overwhelming strength, rested in its army. Until the summer of 1941 the German army stood intact and unengaged, ready to reinforce North Africa, defend Western Europe, attack vital strategic possessions in the Mediterranean or possibly even launch an invasion of Britain itself.