Can someone with a head for economics (or some formal education in the field!) help to clear things up here!
We've got threads like "Japan should have 100IC and USA 1000", discussions about how vast China's IC is in game compared to what it should be etc.
The problem is i think if people start comparing historic national GNP figures from that ERA, even I, a total layman, can think of reasons why it might differ from actual military production capability.
1) Inflation/Cost of living 3rd world vs 1st world
The Nationalist China paradox is a case in point. Its GDP was tiny in the 1930s, but you have to account for the "black economy" - much economic activity took place off the books, not least all the subsistence farming which is how most the population fed themselves. More pertinent is the issue of military salaries. Most of the cost of an infantry division will be salaries of the personnel. For a third world nation like that, these will be proportionately less than for France, UK or Germany, which helps explain why they can keep so many men at arms with such a small economy. In terms of the rifles etc, state of the art guns have always been expensive, especially if you're buying them in on the world market. However, weapons that are a few generations out of date can be bought for very little - witness the very low cost of something like an AK-47 today.
Mechanised forces and Aircraft are considerably more capital intensive of course, the cost of the salaries of the personnel is a much smaller portion of the life cycle cost. Much is going to depend on how much the poorer nation has to import to produce the plane, truck or tank compared to how much is indigenous. Obviously, if the steel has to be bought on the world market, the cost of one tank's worth of steel is much more crippling for Nat China than for USA. Ditto the machine tools to make it. However, 1000 Chinamen working in a Tank factory should not produce 100 times less than 1000 Yanks just because their GDP/Capita is 100 times less.. American workers do not have bionic hands, they work at about the same speed as other basic humans. What matters is the level of China's industrial tech vs USA's, how well automated the assembly process is, and ultimately how modern the finished product turns out to be.
Finally there's the other hot topic, France v Germany.
A lot of players are using HOI 3 as the basis for their discussion, which IMO is a mistake as the build/upgrade/economic model of that game feels so much worse than HOI 2 / Arsenal of Democracy.
You can blatantly cheat by churning out cavalry divisions as reserves, then upgrading to heavy armour at far less cost than building them directly. In fact you can mechanise virtually the entire army that way. Two can play that game of course, but if Germany does the same, the number of divisions becomes a supply logistics/micromanagement nightmare.
So, I'd rather go back to Arsenal of Democracy as a reference point. It is true that France had less than half of Nazi Germany's manpower and GDP, yet somehow they came close to fielding as many divisions in 1940 (with UK, Netherlands, Belgium forces taken in, actually having a slight numerical advantage). How did they do that? Well, in terms of manpower, they simply had a much larger proportion of reservists vs full time soldiers. France was calling up virtually anyone under the age of 40. Had they weathered the initial assault, they'd have found it hard to make good losses.
In terms of materiel, they had the advantage of a huge stockpile of STUFF, wheras Germany had virtually no army to speak of before 1934. Whenever the French came up with a new tank design, they just put the old one into mothballs. Scrapping a tank does not save much money compared to simply parking it in a warehouse, unused. They still had many Renault FT17 tanks from World War 1. After Fall Gelb encircled and destroyed the cream of their mechanised army, these FT17s were pressed into service. Of course, in practice the mothballed, 1920s era heavy tanks and reservist, part time crews did not perform as well as the recently built, full time german army, despite the heavy tanks having greater gun calibre and armour thickness than those early panzers. Essentially, they'd managed to compete on quantity with a much smaller economy, by sacrificing quality.
The nazis were able to fund a huge military spending splurge in their pre-war years by borrowing heavily from their own wealthier citizens (http://en.wikipedia.org/wiki/Mefo_bills)
Had they not annexed Austria when they did, they would have defaulted on the repayments and risked alienating the demographic most staunchly in support of Hitler.
- back to the game - i'm concerned about the issue of upgrade cost vs new build cost.
Perhaps this should depend what type of brigade is being upgraded?
Eg. Infantry, where most of the cost is in Salaries, training and consumables, the cost of upgrading to new small arms should be fairly low compared to the cost of raising a division from scratch.
However, with tanks, the cost of upgrading the fighting vehicles themselves would surely be a much larger fraction of the cost of raising a whole new brigade?
So really, when a new model tank/aircraft is researched... you have these options
1) replace existing equipment to upgrade your forces, and send the old stuff to scrap
2) raise new divisions to use the new equipement and have them fight alongside the divisions using old stuff
3) raise new divisions, park the old tanks and demob the crew to reservist status
4) replace existing equipment and mothball the old vehicles, to be used as reinforcements at times of dire need
None of the existing HOI games model this reality too well however.
In HOI2 or 3, you could try to reflect the France situation by giving them large numbers of under strength and obsolete infantry divisions in the starting OOB, generously brigaded with Arty (they had lots of stockpiled field guns!). You could also give them many early model light, medium and heavy tank divisions. However, in reality some of these tank "divisions" would just have been parked vehicles with no crew, support equipment or mechanics. All those FT17s museum pieces that were dragged out in an emergency. The problem then is that all of these divisions could too easily be upgraded to state of the art (in reality requiring France to manufacture far more Somua S35 than it could with the industrial capabilty available) with the game mechanics in place.
Reservist armour divisions were also a bit of a joke in HOI 3. Armour divisions are very IC heavy, and none of that would be saved by making them "reservist" in reality - the same amount of tanks, trucks and support vehicles must still be produced. The only thing you save on is wages for the crews, who are only part timers, and manpower. Yes, you'll save a bit of fuel and ammo and spares too, because they're practising less - but there's a very heavy price to be paid there, in terms of reduced proficiency when the need arises to defend the nation.
We've got threads like "Japan should have 100IC and USA 1000", discussions about how vast China's IC is in game compared to what it should be etc.
The problem is i think if people start comparing historic national GNP figures from that ERA, even I, a total layman, can think of reasons why it might differ from actual military production capability.
1) Inflation/Cost of living 3rd world vs 1st world
The Nationalist China paradox is a case in point. Its GDP was tiny in the 1930s, but you have to account for the "black economy" - much economic activity took place off the books, not least all the subsistence farming which is how most the population fed themselves. More pertinent is the issue of military salaries. Most of the cost of an infantry division will be salaries of the personnel. For a third world nation like that, these will be proportionately less than for France, UK or Germany, which helps explain why they can keep so many men at arms with such a small economy. In terms of the rifles etc, state of the art guns have always been expensive, especially if you're buying them in on the world market. However, weapons that are a few generations out of date can be bought for very little - witness the very low cost of something like an AK-47 today.
Mechanised forces and Aircraft are considerably more capital intensive of course, the cost of the salaries of the personnel is a much smaller portion of the life cycle cost. Much is going to depend on how much the poorer nation has to import to produce the plane, truck or tank compared to how much is indigenous. Obviously, if the steel has to be bought on the world market, the cost of one tank's worth of steel is much more crippling for Nat China than for USA. Ditto the machine tools to make it. However, 1000 Chinamen working in a Tank factory should not produce 100 times less than 1000 Yanks just because their GDP/Capita is 100 times less.. American workers do not have bionic hands, they work at about the same speed as other basic humans. What matters is the level of China's industrial tech vs USA's, how well automated the assembly process is, and ultimately how modern the finished product turns out to be.
Finally there's the other hot topic, France v Germany.
A lot of players are using HOI 3 as the basis for their discussion, which IMO is a mistake as the build/upgrade/economic model of that game feels so much worse than HOI 2 / Arsenal of Democracy.
You can blatantly cheat by churning out cavalry divisions as reserves, then upgrading to heavy armour at far less cost than building them directly. In fact you can mechanise virtually the entire army that way. Two can play that game of course, but if Germany does the same, the number of divisions becomes a supply logistics/micromanagement nightmare.
So, I'd rather go back to Arsenal of Democracy as a reference point. It is true that France had less than half of Nazi Germany's manpower and GDP, yet somehow they came close to fielding as many divisions in 1940 (with UK, Netherlands, Belgium forces taken in, actually having a slight numerical advantage). How did they do that? Well, in terms of manpower, they simply had a much larger proportion of reservists vs full time soldiers. France was calling up virtually anyone under the age of 40. Had they weathered the initial assault, they'd have found it hard to make good losses.
In terms of materiel, they had the advantage of a huge stockpile of STUFF, wheras Germany had virtually no army to speak of before 1934. Whenever the French came up with a new tank design, they just put the old one into mothballs. Scrapping a tank does not save much money compared to simply parking it in a warehouse, unused. They still had many Renault FT17 tanks from World War 1. After Fall Gelb encircled and destroyed the cream of their mechanised army, these FT17s were pressed into service. Of course, in practice the mothballed, 1920s era heavy tanks and reservist, part time crews did not perform as well as the recently built, full time german army, despite the heavy tanks having greater gun calibre and armour thickness than those early panzers. Essentially, they'd managed to compete on quantity with a much smaller economy, by sacrificing quality.
The nazis were able to fund a huge military spending splurge in their pre-war years by borrowing heavily from their own wealthier citizens (http://en.wikipedia.org/wiki/Mefo_bills)
Had they not annexed Austria when they did, they would have defaulted on the repayments and risked alienating the demographic most staunchly in support of Hitler.
- back to the game - i'm concerned about the issue of upgrade cost vs new build cost.
Perhaps this should depend what type of brigade is being upgraded?
Eg. Infantry, where most of the cost is in Salaries, training and consumables, the cost of upgrading to new small arms should be fairly low compared to the cost of raising a division from scratch.
However, with tanks, the cost of upgrading the fighting vehicles themselves would surely be a much larger fraction of the cost of raising a whole new brigade?
So really, when a new model tank/aircraft is researched... you have these options
1) replace existing equipment to upgrade your forces, and send the old stuff to scrap
2) raise new divisions to use the new equipement and have them fight alongside the divisions using old stuff
3) raise new divisions, park the old tanks and demob the crew to reservist status
4) replace existing equipment and mothball the old vehicles, to be used as reinforcements at times of dire need
None of the existing HOI games model this reality too well however.
In HOI2 or 3, you could try to reflect the France situation by giving them large numbers of under strength and obsolete infantry divisions in the starting OOB, generously brigaded with Arty (they had lots of stockpiled field guns!). You could also give them many early model light, medium and heavy tank divisions. However, in reality some of these tank "divisions" would just have been parked vehicles with no crew, support equipment or mechanics. All those FT17s museum pieces that were dragged out in an emergency. The problem then is that all of these divisions could too easily be upgraded to state of the art (in reality requiring France to manufacture far more Somua S35 than it could with the industrial capabilty available) with the game mechanics in place.
Reservist armour divisions were also a bit of a joke in HOI 3. Armour divisions are very IC heavy, and none of that would be saved by making them "reservist" in reality - the same amount of tanks, trucks and support vehicles must still be produced. The only thing you save on is wages for the crews, who are only part timers, and manpower. Yes, you'll save a bit of fuel and ammo and spares too, because they're practising less - but there's a very heavy price to be paid there, in terms of reduced proficiency when the need arises to defend the nation.
) - different countries were at different levels of industrial mobilisation for military use in 1936 (or 1939) and every major changed their level of mobilisation radically over the course of the next decade, and the changes were far from uniform. Rather than trying to leverage GDP (which is a pretty rough and ready form of economic accounting in any event, particularly in the 1930s when most women weren't in the workforce in most countries) to calculate potential military production, it'd probably be safer to roll with what actually happened during the war, with sensible 'what-ifs' (ie, the US could go up another notch of mobilisation of there was a real threat of invasion to the mainland). The trickier thing is balancing when different countries can mobilise, and the impact this can have on dissent/national unity (or however this kind of concept is covered in HoI4).