Economic Attrition & the Outcome of the War…
Economic or industrial attrition has been the deciding factor in many wars. Will the Russia Ukraine war be any different?
In 1941, as Hitler’s German troops ran all before them as they stormed across Europe and North Africa, Churchill pleaded with Roosevelt for America’s intervention before it was too late. Churchill explained that unless the United States took “more advanced positions now, or very soon, vast balances may be tilted heavily to our disadvantage.”
But the American people remained unconvinced, secure in their oceanic isolation and assumed invulnerability that they could last out the war untouched by Europe’s chaos.
Until the tragedy of Pearl Harbor brought reality crashing down onto American shores.
And everything changed from that moment forward.
“Victory! For you we fought for almost 4 years, and now we will never give you up for anything, for anyone.”
RedStar Newspaper in the USSR,1945.
Putin’s grave miscalculation…
“Crimea is our land, our territory, our sea, and our mountains. Give us your weapons and we will bring our land back,” said President Zelensky this past week, as he once again vowed to take back all territory occupied and claimed by Russia.
In response Kremlin spokesman, Dmitry Peskov, again predictably waved the only weapon the Russians have left; their nuclear bombs, when he once again threatened Europe saying that if Ukraine attacked Crimea it would be “extremely dangerous,” and would raise the conflict “to a new level that will not bode well for European security.”
This in some way backed up what the increasingly unhinged and hawkish Dmitry Medvedev, Putin’s deputy head of the national security council, who had warned a few days earlier that any Russian defeat in Ukraine would inevitably lead to nuclear war.
And all this as Putin scoffs at the effect Western sanctions have had on the Russian war economy, when he said, “The actual dynamics of the economy turned out to be better than many expert forecasts,” then adding gleefully that some Western experts had “…predicted a decline of 10 percent, 15 percent and even 20 percent,” and not the paltry 2.1% that Putin said Russian GDP had actually contracted by.
Of course, the figures are hard to confirm; we have to take Putin’s word for it really; but a cursory examination of the everyday lives of many Russians reveals little has changed, superficially at least. Supermarket shelves are apparently full, and many Russians are carrying on their lives just as they did before the war started.
This has left some in the West questioning once again the efficacy of a sanctions regimen that has caused so much economic distress and discomfort across the West. And those questions need addressing, for sure…, but this remains outside of the scope of this post!
Western experts will say that the sanctions are not designed to hit the Russian people, but the Russian war machine, and that it is there we need to look to see if they are biting and taking chunks out the Russian military’s ability to wage war.
Looking beyond the full supermarket shelves, the Russian statistics agency Rosstat have reported that retail sales are down 10%, and cargo revenues down 7%; while perhaps more significantly the finance ministry say tax revenues outside of the energy sector have fallen by 20%; all of which are key economic indicators that point to the fact that the rosy picture Putin paints may be only surface deep, and things could well be about to take a turn for the worse as we move into 2023.
Vladimir Milov, one time Russian energy minister and politician, and now exiled democratic opposition figure says hopefully, “All objective indicators show there is a very strong drop in economic activity,” adding that Putin’s trumpeting of the Russian GDP figures is meaningless because government ended the rubles convertibility, so “…we don’t know what the real ruble rate is, and secondly if you produce a tank and send it to the front where it is immediately blown up, then it is still considered as value added…” to the economy.
Milov also suggests that full supermarkets are a misleading indicator and do not reflect the reality for most Russians. A recent poll published in October 2022, reveals that 68% of people have noticed a reduction in the supply of goods, and with inflation soaring over 16%, that is in stark contrast to official figures of just below 12%, have led more than 35% of Russians to spend less on food than they did before the war, with only a lowly 23% happy to say their own financial situation is still ‘good.’
And beyond this there is increasing evidence of Russia’s inability to produce and supply new products, particularly for the military, as shown by the new recruits from Septembers partial mobilisation being told to buy their own uniforms and battle body armour.
There is growing concern too among the remaining Russian business community that pressure will be put on them “…to make (them) do what (they don’t) want to do” and produce goods for the military at below-cost rates, said Nikolai Petrov, senior research fellow for Russia and Eurasia at Chatham House, with any refusal bringing heavy fines, or even prison.
Milov suggests that patience with sanctions may bring its own rewards, and that the people may start to agitate.
The state is, however, working hard to portray Russia’s resilience, war spirit and inherent strength, as personified in the Great Patriotic War, as winning out. The propaganda machine is going full throttle to maintain some sense of social stability, some sense of success, but for those who care to look the cracks are glowering.
“Whoever says that fascism is not an exportable commodity is mistaken.”
Is it all just a numbers game?
At the end of the day this is all very much Putin’s war, just as WWII was Hitler’s. As Margaret MacMillan wrote in Foreign Affairs, the logic of Putin’s invasion is all of his own making. To all intents and purposes Putin was winning in his competition with the West, and winning well, until he destroyed Russia’s future with his hair-brained invasion.
Putin had made himself rich beyond the wildest dreams of most; his infamous Black Sea monstrosity of a villa even has ridiculous gold toilet seats! So kitsch, I just can’t imagine! He has either killed, exiled or jailed all his political competitors. He was, and remains surrounded by ‘yes men,’ all of them wealthy in their own right, but all wholly dependent upon Putin to stay that way. The Russian media is his plaything, and he has formed strong relationship with other authoritarian leaders around the world. His trolls farms were successfully fostering division all across Europe and America. His fascist message was being successfully exported, just as Mussolini had predicted it could be.
The question has to be asked; why not just keep stealing from the Russian people and let it all play out?
Eighty years earlier Hitler too had achieved far more than perhaps even he had thought possible. In a short period of time he had transformed Germany into the most dominant power in Europe. He had ‘acquired’ his homeland of Austria as well as Czechoslovakia without cost and without firing a shot, and his influence was spreading, bearing solid fruit in the growing fascism of Hungary and Romania.
But for Putin, just like Hitler before him, the world just wasn’t enough. They both wanted more. Both have underestimated the capabilities of the leaders they pitched themselves against — Hitler with Britain, and Putin with Ukraine — and both miscalculated massively the forces that ended up being arrayed against them.
“Words are beautiful things,” Mussolini said, “but rifles, machine guns, ships, aircraft, and cannon are still more beautiful.”
Hitler’s numerical conundrum…
In the early days of WWII Hitler was faced with very similar arithmetical problems to those Putin is facing today. For both, time became a crucial factor. For Hitler it was literally a race to gain as much territory as it could before the Americans entered the war, and for Putin it was a race to Kyiv before any resistance could be organised.
Putin knew that if he made it to Kyiv and install a pro-Russian government he would be very hard to dislodge.
Hitler knew that if enough ground could be taken, and Germany’s capacity to reconstitute could be improved sufficiently quickly, that it might dissuade the US from ever entering the war. But should things go awry, then obtaining that increased industrial capacity, particularly in respect of oil resources before the US entry would be vital.
Hitler’s Chief of Staff Halder said bluntly in 1941,“The war will be decided in the East” and “only through possession of that territory (the Transcaucasus) will the German war empire be viable in the long-term,” and then a couple of months later he told his Generals, “if we don’t get to Maykop and Grozny I shall have to pack up the war (1).”
In 1941 the Wehrmacht was marching across Europe almost unopposed and perhaps right then German confidence was high that success in the Caucasus would be achieved.
In fact in War Directive no.41 Hitler said as much in his introduction:
“The Winter battle in Russia is approaching its end,” he said. “Through the unequalled courage and self-sacrificing devotion of soldiers to the Eastern front, a defensive success of the greatest scale has been achieved for German arms. The enemy has suffered the severest losses in men and matériel. In an effort to exploit apparent initial successes, he has expended during the Winter the bulk of his reserves earmarked for later operations (1).”
He had already begun to rotate his frontline troops and Luftwaffe units, sending many back to Berlin for a touch of R & R. The advance across the steppe was continuing apace, but an early, and abnormally cold Winter arrived sending temperatures down to as low as minus 35°C, and the advance slowed down as the Wehrmacht ploughed across the open steppe of Ukraine.
Unforeseen events also played their part and took up valuable men and materiel away from what was the main push East.
The Germans occupied Greece after what Hitler had called Mussolini’s “regrettable blunder” in making a unilateral decision to invade, which stalled almost immediately, but had the effect of bringing the British to the islands of Crete and Lemnos by way of honouring a prior agreement to help defend the Greeks.
Hitler considered that British planes so close to the Romanian oil fields, that remained the single biggest fuel supplier to the Wehrmacht and Luftwaffe, was a threat that could not be ignored (1).
Russian aircraft based in the Crimea had already destroyed vast quantities of oil and the need to secure another source was becoming an existential necessity for the Wehrmacht (1).
In January 1941, Hitler had voiced his concerns thus: “Now, in the era of air power, Russia can turn the Romanian oilfields into an expanse of smoking debris…and the very life of the axis depends on those fields (1).”
Furthermore, with the British now in Greece, there was also the potential for greater problems in the Balkans should the British try to land any significant ground forces and attempt to push inland to attack the German’s Southern flank in their Eastward march to Moscow and beyond.
Greece had not been any part of Hitler’s plans, but now El Duce’s blunder had invited trouble. He had no choice.
At the same time as Hitler directed his forces to occupy the Greek mainland and what islands they could, the Germans were also securing Yugoslavia — both achieved in a remarkable 11 day period for Hitler (1)— whilst further to the South in the deserts of North Africa Rommel’s Afrika Korps were getting the best of the combined British and Australian forces.
Churchill had been pleading with Roosevelt to enter the war since the start of the Battle of the Atlantic in 1940. The Germans were destroying British ships five times faster than they could be replaced and something needed to change.
The situation for Europe was perilous. But Roosevelt’s perpetual problem was the American public who didn’t want to get involved in the European war, despite the growing dangers.
As Robert Kagan explains in his new book, The Ghost at the Feast, the British Ambassador Lord Halifax noted how Roosevelt was caught between two poles; his “perpetual problem (being) to steer a course between … 1) the wish of 70 percent of Americans to keep out of war; 2) the wish of 70 percent of Americans to do everything to break Hitler, even if it means war.”
Though Hitler was well aware of the force and industry the US could bring to bear, he was working hard to ensure that America stayed out of the war if at all possible. As Roosevelt cajoled and encouraged the U.S. House and Senate to engage, even the lend-lease agreements with a struggling Britain were hard pushed to survive the House vote, in the end passing by the narrowest of margins.
But as Roosevelt began his third term in November 1940 Hitler was all but convinced that American involvement was merely a matter of time.
But Hitler also knew that Japan could be valuable in distracting, if not delaying America’s entry into the European theatre. Two months earlier in September 1940, Hitler had told Mussolini “…a close cooperation with Japan” was the “best way either to keep America entirely out of the picture or to render her entry into the war ineffective.”
Hitler and his advisers knew that (by)1941 U.S. aircraft production would exceed that of the Reich and that by the end of 1941 the United States would possess a modern, well-equipped army with 1.5 million troops. Hitler told Gen. Alfred Jodl in December 1940 that Germany needed to solve all continental problems in 1941 “because in 1942 the United States will be ready to intervene.”
Japan, for their part, was also well aware of what America might bring to the party should they seek to intervene in any Japanese expansionist programmes. For Japan, their massive reliance on the US economy, and particularly for the supply of much needed oil, was a problem that needed to be solved, and solved quickly.
To the South lay the rich oilfields of the Dutch East Indies, and the Japanese knew they needed to move quickly to secure the resources, and most particularly the oil, to safeguard and bolster the territory already gained in China before the Americans attempted any sort of intervention.
Roosevelt had been reluctant to rein in the increasingly aggressive Japanese economically, imposing what he called ‘moral embargoes’ that would discourage US companies from supplying the parts and technologies Japan needed for its aircraft and air munitions but not force it stop.
But the effect was negligible. However, Roosevelt’s ambivalence and strategic patience unwittingly gave the Japanese enough rope from which to hang themselves.
Though at this stage any thoughts of ultimate defeat were far from the minds of all parties, except perhaps that of Admiral Isoroku Yamamoto, who went on to command the Japanese fleet for the attack on Pearl Harbor, who said rather prophetically, “If I am told to fight, regardless of the consequences, I shall run wild for the first six months or a year, but I have utterly no confidence for the second or third years.”
And run wild the Japanese certainly did, conquering more territory in a shorter period of time than any nation had achieved in history.
Japan had thought that such aggressive tactics at the outset may deter the Americans from going to war. And Hitler was quietly confident that America would not want or be able to effectively fight wars on two fronts, and would do no more than prop up the ailing Brits and Europeans.
So, as the Japanese began setting fire to South Asia, Hitler remained convinced that America’s input in Europe would be minimal. They were both wrong.
Both Germany and Hitler fell into what Robert Kagan calls the ‘American trap.’
It wasn’t just the numbers of men involved, though the American mobilisation was impressively quick, efficient and massive, going from a relatively small 188,000 at the end of 1939 to over 12 million men by the end of the war, so it’s hard deny this was anything but a huge success.
But it wasn’t perhaps the most vital part of the American involvement.
No, what really did for Japan and for Germany was the American war economy.
Across a vast land, with seemingly inexhaustible resources that was being spared the ravages of war that was destroying much of Europe and Asia, “American weapons production eclipsed all previous efforts.”
As Robert Kagan details the monumental effort of the American people literally won the war for the allies.
“Shipyards produced almost 9,000 “major naval vessels” between 1941 and 1945, nearly 10 times the number produced by Britain in the same period and 16 times the number produced by Japan. In 1943 alone, the United States built 16 aircraft carriers, which more than replaced their early losses. The Japanese, who lost just as many in the early fighting, built none. American industry produced over 300,000 military aircraft during the war, more than Britain, Germany and Japan combined. The United States also produced 90 percent of the Allies’ aviation fuel and, through Lend-Lease, supplied a quarter of all British munitions and over half of all military vehicles used by the Red Army.”
In the end, it all came down to numbers. Neither Japan nor Germany could match the ability of the allies to reconstitute their forces and arms, largely as a result of America’s entry into the war.
Neither of the aggressors were able to keep America out of the war. They simply couldn’t move fast enough to secure the resources they needed to be able to match the numbers being produced by the American led allies. The ability of the Axis nations to reconstitute their forces was far in arrears by comparison with America’s vast output.
And now, 70 odd years later Putin appears to have made a similar error in his calculations. Of course, the war is only between two countries on the ground, and two enormously unmatched countries at that.
If, however, that had been the sole equation then Putin would likely be holding court in Kyiv, and Zelensky would probably be rotting in the ground somewhere.
Putin gravest error was in assuming that the West, and the US in particular wouldn’t care about Ukraine, and would react in much the same way as they had in 2014 to Putin’s illegal annexation of Crimea and the regional uprisings he stirred in the Donbas.
He was wrong.
But in this numbers game the algebra is still evolving; the numbers still being crunched, and Putin knows the final calculation is still yet to be figured out.
“When the situation was manageable, it was neglected, and now that it is thoroughly out of hand, we apply too late the remedies which then might have effected a cure.”
Winston Churchill speaking on the late arrival of the Americans to the party!
Hindsight truly is a wonderful thing! When the Russia situation was manageable back in 2012, or perhaps 2013, the West ignored the dire warnings.
Now, some 9 years or so after Putin illegally annexed Crimea and fomented separatist revolts in the Donbas the West has finally decided to send in the cavalry. Literally.
The decision this week to send in US Abrams and German made Leopard 2 tanks from across Europe is welcome, but far too late to save the many Ukrainian lives already lost, buried beneath a daily bombardment, courtesy of a belligerent, bellicose and brutal Vladimir Putin.
As Churchill might have said, tanks now are a bit too late ‘to effect the cure,’ when the man often compared to him these days, Volodymyr Zelensky, had been pleading for just this delivery since day zero of the invasion!
The overly cautious tardiness of the West to supply Ukraine aside, this war is surprisingly similar to many that have been before.
As Max Fisher noted in the NYT last week the war between Russia and Ukraine is not what one might have been expecting from a 21st century war. In the way it ebbs and flows, first one way then the other, it is much more like wars from the 20th century, with shifting battle lines, occasional large battles, bombardment of infrastructure, mile after mile of trenches crammed full of men and machine guns, lines of tanks, exchanges of artillery fire, urban warfare, often times house to house, sometimes room to room, and in the skies, a constant battle for air supremacy.
As such this conflict has drawn comparisons with the Iran-Iraq war, Armenia and Azerbaijan, Israel and the Arab states, Pakistan and India, Ethiopia and Eritrea, even North and South Korea, all of which have been punctuated by periods of peace, or lulls in the fighting, interspersed with times of extreme violence, but ultimately with no clear winner either way.
And these wars, much like the Russia Ukraine conflict, have been fought over disputed territory that often goes back to the founding of one or other nation, making them difficult to resolve with outbreaks of fighting sometimes separated by a period of years, or even decades during which an uneasy peace is assumed.
That ebb and flow of peace and conflict, as well as the ebb and flow of the frontlines during times of conflict, often occurs as a consequence of industrial attrition as each side attempts to reconstitute their forces and matériel.
As Fisher explains; “But this works very differently from the competition over raw manpower that defined conflicts like World War I, touching more on matters of technology, economic capacity and international diplomacy.”
That said, it’s clear that Russia’s problem begins with one of a lack of manpower. That became blatantly clear almost as soon as the initial push to overwhelm Kyiv last March stalled.
The losses incurred were huge, both in manpower and matériel, and since then Russia has been playing catch up. The problem has been magnified by the loss of so many officers and experienced battle-hardened troops in the poorly strategised and executed early encounters, and whilst the partial mobilisation last September has papered over the manpower crisis, the addition of a raw recruit, poorly equipped and poorly trained, is no substitute for a well armed, experienced soldier.
This shortfall in manpower has been made up, to some extent with an increase in artillery fire, but it has become clear of late that Russia is now suffering a shortage of shells and, as seen in the battle for Bakhmut, the rate of fire is far down on what it once was.
Manpower aside, this war, like the others mentioned, has followed a similar pattern, in that each sides ability to take and then hold on to territory is very much an indicator of the rate of reconstitution, not just of men, but of the machines that the men operate and use, such as tanks, aircraft, anti-aircraft weaponry, artillery shells, but also on smaller scale, rifle and machine gun ammunition.
You can’t fight a battle and expect to win without the weaponry. So, when Russia was running out of one, two, three or all of the above, it had to retreat ahead of the Ukrainians with their newly supplied Western weapons, such as the HIMARS.
Now as we move into a Winter stalemate, both sides are scrambling to reconstitute again ahead of possible Spring offensives, but also to hold off the chance of any Winter pushes.
So as Russia pounds the Ukrainian infrastructure, it is destroying their ability to reconstitute locally, hence Ukrainian survival and, beyond that success, is wholly reliant on what the West can and will give.
Before the war started Russia’s military spending dwarfed that of Ukraine (Figure 1.), and by that comparison alone Russia probably, wrongly as it turned out, concluded that it would be able to achieve a very quick a decisive victory.
But, as Paul Krugman rightly pointed out, that was the wrong comparison entirely. The fundamental miscalculation made by Putin and his Generals was that they thought the West would stay out of the fight, pretty much as they had done in 2014.
But this time it was different. Not only was Russia becoming blatantly more aggressive, this time the West stepped in, and the moment that happened the calculation shifted.
All of a sudden it was Russia’s military spending that was dwarfed (Figure 2) by the US, which is by far the biggest military contractor in the world. Not that all of that is going to Ukraine of course, but the potential for embarrassing the Russians in terms of spending power alone was much greater.
Economically Russia is merely a minnow by comparison to the leviathan economies of US the EU (Figure 3.), and so whilst its supermarkets may have bread for the time being, the Russian military’s ability to reconstitute in the face of the most draconian sanctions ever seen will become more apparent with each shell that is launched, and with each bullet that is fired.
Ukraine’s ability to reconstitute is not a financial consideration; it is a political and a diplomatic consideration. But the numbers do not lie, no matter how much Putin scoffs at Western sanctions.
Full supermarket shelves do not an army make!
Ukraine’s armoury will only become more modern, more lethal with continued Western support, while Russia’s, even if it is able to somehow garner the resources it needs to keep fighting, will decline in both quality and amount as the sanctions bite ever harder over time.
For Putin the numbers are screaming…but will he hear it?
Thanks for reading.
- Stopped at Stalingrad: The Luftwaffe & Hitler’s defeat in the East 1942–1943; Joel S. A. Hayward, 1998.