With the new administrative structure in place, which for the first time allowed for the coordination of much of the German armaments industry, Speer was able fairly quickly to raise production levels simply by utilizing industrial capacity more fully and rationally. By August 1942, production of weapons had risen 27 percent from its February low, that of tanks by 25 percent, and that of ammunition by 97 percent. Although vital to the continuance of the war, Speer’s ability to increase production was hardly miraculous. In most cases, his ministry better exploited factory space by encouraging more shift work, rationalized the supply chain, reduced the number of firms engaged in the manufacture of weapons and equipment, and concentrated output in the largest or most efficient firms. At the same time, Speer established a new set of organizations, known as rings, to manage the supply of raw materials, semifinished products, and components. Based on the principle of self-responsibility, the rings essentially amounted to an Auftragstaktik policy for industry, in which the Reich Armaments Ministry would set targets, leaving responsibility for meeting them to industry. Finally, Speer also attempted to get the army to reduce the number of modifications to weapons in the pipeline as well as to accept both a reduction in the number of weapons types and a standardization of parts and components. Through such simplification and standardization, not only would a more rational use of labor resources and higher levels of automation be possible, but the need for highly skilled labor would also be reduced. The result of this de-skilling and increased use of machine tools was a sharp rise in labor productivity in the armaments industries, while more effective allocation of raw materials and the massive labor mobilization campaign provided an additional boost to production.53
Speer’s success thus rested on the radical mobilization of labor and raw materials as well as the beneficial effects of rationalization, although persistent problems in coal and steel production always threatened to unravel his tightly wound system. Nonetheless, his “armaments miracle,” and the underlying promise that more could be done with less, provided an important political and mythical function for Hitler’s regime. Goebbels’s propaganda manipulated the dramatic increases in production in 1942 and into the following years to dispel any lingering defeatism and to demonstrate to the German people that the winter crisis of 1941–1942 had been overcome and the war could still be won. The remarkable performance of German industry not only fortified morale on the home front; it also reassured Germans that success was still possible, that, as Goebbels’s slogan had it, “the best weapons bring victory.” The increase in arms production was certainly real enough, but its mythical dimension was just as vital to the continuing German effort as its physical manifestation: as long as Germany could continue to produce weapons at an ever-increasing rate, there would not be another November 1918.54
Goebbels’s propaganda, however, was self-deceiving. Even as German armaments production increased and new investments were made that would result in a substantial jump in output by 1944, Germany, as we have seen, had already been outproduced in 1941 by the Soviet Union. Nor was this a one-year aberration. Despite resource losses and a disruption to production that resulted in a 25 percent fall in total national product, in 1942 the Soviet Union alone, even without the contributions of Great Britain and the United States, would once again outproduce the Reich in virtually every weapons category. In the key areas of small arms and artillery, the advantage was three to one, while, in tanks, it was a staggering four to one, accentuated by the higher quality of the Soviet T-34. As Adam Tooze has noted, the real productive miracle in 1942 took place in the Urals, not in the Ruhr. Buoyed by the flow of vital goods and raw materials through Lend-Lease, the Soviets could concentrate production on a limited number of weapons while at the same time employing the full range of Stalinist methods of oppression to exact enormous sacrifices from the Russian home front, where millions of civilians died for the sake of the “Great Patriotic War.” This effort was not sustainable, and by 1944 German production roughly equaled Soviet, but by then it was too late. The key year was 1942, the last time that Hitler could dictate the course of events to his enemies. If the Third Reich was going to survive, German forces would have to win some sort of decisive victory before the awesome power of the United States was fully mobilized.55
“Will this winter never end? Is a new glacial age in the offing?” mused Joseph Goebbels in late March 1942 as he paid a visit to Führer Headquarters. There he found morale to be “extraordinarily good, although the endless winter has a somewhat depressing effect.” At first glance, the propaganda minister thought the Führer looked to be in good health, although “he has gone through exceedingly difficult days, and his whole bearing shows it…. He must take the entire burden of the war upon his shoulders, and nobody can relieve him of the responsibility for all the decisions that must be made.” Despite the successes in stabilizing the military situation and the promise of increased armaments production, the anxieties touched off by the winter crisis were not far from the surface. On closer look, Goebbels found Hitler to be psychologically shaken by the recent reverses. The Führer had been wracked with doubts during this “cruel winter” as to whether the Eastern Army could be saved. Goebbels referred openly to a “crisis in the regime, of dancing on a razor,” while Hitler himself railed at the incompetence and cowardice of his generals. He had wanted to seize the Caucasus and strike a mortal blow at the Soviet regime, but they knew better, had, in fact, consistently interfered with and undermined his plans. Then, confronted with military reverses and a collapsing supply system, they lost their nerve. Only his iron will and determination had surmounted the crisis and avoided a “Napoleonic disaster.” Indeed, the crisis of the past months only intensified his belief that he had to struggle not only against external enemies but also against those within his own ranks who were either inadequate or disloyal. “Stalin’s brutal hand,” he remarked with approval, “had saved the Russian front…. We shall have to apply similar methods.” Not surprisingly, his first target was to be the Jews, toward whom Goebbels found the Führer’s attitude “as uncompromising as ever. The Jews must be got out of Europe… by applying the most brutal methods.”56
Hitler also revealed to Goebbels the outline of a plan that, if not exactly designed to end the Ostkrieg—he talked of a “hundred years’ war in the east”—would by the end of October leave Germany in a very formidable position to wage a global war over an extended period. This plan, submitted to Hitler on 28 March under the code name Fall Blau (Case Blue), sketched the goals for the German summer offensive. After reworking by the OKH and Hitler, it received concrete expression in Directive No. 41, which Hitler signed on 5 April 1942. Declaring that it was vital to seize the strategic initiative and “force our will on the enemy,” Hitler directed that all available forces would be concentrated in the southern sector, “with the aim of definitively destroying the remaining vital enemy forces and, as much as possible, depriving him of the most important military-economic sources of strength.” The ultimate goal, however, was “to secure the Caucasian oil fields and the passes through the mountains themselves.”57