Well, that depends. There’s a lot of different ways to look at this question. But what we’re going to do, is look at what it cost to manufacture a Luger. As it happens, the great book Mauser Pistolen has a table of Luger production costs in 19401. From there we can calculate would it cost in 1940 dollars, and from there it’s possible to make an estimate of its production cost in 2016, in today’s dollars. Let’s start by transcribing the original document, from the collection of Mauser Pistolen co-author Jon Speed. We’ll apply our MBA-fu and a little search online to translate the quaint old German accounting terms.
Table 1: P.08 with Haenel Magazine — Full Cost Accounting
|Item||Item (English)||Cost, 1940 RM|
|2 Haenel – Mag.||2 Haenel Magazines||5.32|
|Werkstoffgemeinkosten @6.8%||Material Overhead @6.8%||0.49|
|Betriebsgemeinkosten @182.7%||Factory (Business) Overhead @182.7%||18.65|
|Kostenabweichung @7.6%||Cost Variance @7.6%||0.78|
|Zuschlag für Ausschuss @2.2%||Surcharge for Spoilage (waste/scrap) @2.2%||0.82|
|Verwaltungs- u. Vertriebsgemeinkosten @3.8%||Administration & Sales Costs @3.8%||1.45|
|Umsatzsteueuer aus RM47.10 beziehungsweise RM 47.50 @2.0%||Sales tax on basis of RM 47.10 or 47.50 @2.0%||0.94|
|Selbstkosten per Stück||Our costs per unit||40.48|
|Private sale cost||47.50|
OK, now convert to period dollars. UCSB Historian Harold Marcuse has posted a useful table of exchange rates here. (He also, to digress for a moment, spent a portion of last year embroiled (with some allies, like Prof. Atina Grossman of Cooper Union) in a battle of wits with the relatively unarmed Erich Lichtblau of the New York Times over fabrications and exaggerations in Lichtblau’s America-bashing “history” of the postwar area as published in a book and the Times — something that will not surprise anyone who’s read Lichtblau in any form). So what did it cost Mauser to make a Luger in 1940, converted to 1940 dollars? Marcuse’s set of tables includes two tables that cover 1940, but they agree: RM2.5 = US $1 for that year. So let’s add a column, and see what that adds up to.
Table 2: Full Cost Accounting, RM and $US, 1940.
|Item||Item (English)||Cost, 1940 RM||Cost, 1940, USD|
|2 Haenel – Mag.||2 Haenel Magazines||5.32||2.13|
|Werkstoffgemeinkosten @6.8%||Material Overhead @6.8%||0.49||0.2|
|Betriebsgemeinkosten @182.7%||Factory (Business) Overhead @182.7%||18.65||7.46|
|Kostenabweichung @7.6%||Cost Variance @7.6%||0.78||0.31|
|Zuschlag für Ausschuss @2.2%||Surcharge for Spoilage (waste/scrap) @2.2%||0.82||0.33|
|Verwaltungs- u. Vertriebsgemeinkosten @3.8%||Administration & Sales Costs @3.8%||1.45||0.58|
|Umsatzsteueuer aus RM47.10 beziehungsweise RM 47.50 @2.0%||Sales tax on basis of RM 47.10 or 47.50 @2.0%||0.94||0.38|
|Selbstkosten per Stück||Our costs per unit||40.48||16.19|
|Private sale cost||47.50||19.00|
While what Mauser got from the HeeresWaffenAmt (Army Ordnance Office) for each Luger is not immediately apparent (it’s probably somewhere else in that excellent book), we know what they charged a German military or police officer seeking to privately purchase a Luger: RM 47.50 (that’s in another of Speed’s period documents on that same page). In American, $19.
These costs were reduced about one Reichsmark per unit from the previous year, but Mauser’s costs in 1936-37 were lower and highly variable over time, suggesting that the ~5% difference might just be normal variance over time. It’s surprising that you don’t see cost reductions considering that Mauser produced the Luger for about ten years, beginning in the early ’30s when they took over production from then-corporate sibling DWM in Berlin (drawings, parts, and one engineer, August Weiss, were sent to Oberndorf). Other evidence in the book suggests that Mauser had quite modern management for its day.
Well, there’s the outrageously-expensive Luger for you — compare that to the US cost for the 1911A1, about $14-15 in 1940. Adds up if you’re making hundreds of thousands of them (Mauser and DWM together produced about 2 million Lugers, according to Weiss).
There are several different ways to calculate what a 1940 dollar is worth today (which was news to us, MBA and history degree and all). Marcuse also recommends the site measuringworth.com, which has this interesting discussion of which value comparison indicator is “right”. (The answer, it turns out, is “it depends.” Isn’t it always?)
Using Measuring Worth’s seven-index calculator, we get values for a 1940 dollar varying wildly from $13.40 (using the GDP deflator methodology) to $169 (using relative share of GDP).
As it turns out, GDP deflator is a good measure of “how much it cost compared to the present cost of materials or labor”, but so are worker wages, which as you can see (for an unskilled worker) is double the CPI (reflecting a rising standard of living in the last 3/4 of a century); and relative share of GDP is a good measure of the national weight assigned to such a project.
The common Consumer Price Index which we’ve used for previous longitudinal price comparisons is close to the low end, at $16.90. A perfect methodology does not exist, but it might require us to use different metrics for different components of the Luger’s cost structure. Instead, we’ll just use the GDP Deflator and the Relative Share of GDP to get the min-max:
Table 3: Full Cost Accounting, RM and $US, 1940 and 2014
|Item||Item (English)||Cost, 1940 RM||Cost, 1940, USD||Value, 2016 by GDP Deflator||Value, 2016, Relative Share of GDP|
|2 Haenel – Mag.||2 Haenel Magazines||5.32||2.13||28.54||359.97|
|Werkstoffgemeinkosten @6.8%||Material Overhead @6.8%||0.49||0.2||2.68||33.80|
|Betriebsgemeinkosten @182.7%||Factory (Business) Overhead @182.7%||18.65||7.46||99.96||1260.74|
|Kostenabweichung @7.6%||Cost Variance @7.6%||0.78||0.31||4.15||52.39|
|Zuschlag für Ausschuss @2.2%||Surcharge for Spoilage (waste/scrap) @2.2%||0.82||0.33||4.42||55.77|
|Verwaltungs- u. Vertriebsgemeinkosten @3.8%||Administration & Sales Costs @3.8%||1.45||0.58||7.77||98.02|
|Umsatzsteueuer aus RM47.10 beziehungsweise RM 47.50 @2.0%||Sales tax on basis of RM 47.10 or 47.50 @2.0%||0.94||0.38||5.09||64.22|
|Selbstkosten per Stück||Our costs per unit||40.48||16.19||216.95||2736.11|
|Private sale cost||47.50||19.00||254.60||3211.00|
We’d be very pleased to be pointed to any such cost accounting details from other nations/periods/firearms.
This post has been updated. Total Luger production has been added, and the paragraph noting that earlier costs were higher has also been inserted (Mauser Pistolen contains another, earlier cost breakdown table on p. 226 that shows these costs for the years 1936-38, with 1937 costs broken down by quarter. Plenty of data in that book for anyone interested in a deeper dive than this.
Weaver, W. Darrin, Speed, Jon, and Schmid, Walter. Mauser Pistolen. Cobourg, Ontario: Collector Grade, 2008.
Williamson, Samuel H. Seven Ways to Compute the Relative Value of a U.S. Dollar Amount, 1774 to present. Measuring Worth, n.d. Retrieved from: https://www.measuringworth.com/uscompare/
Williamson, Samuel H. Choosing the Best Indicator to Measure Relative Worth. Measuring Worth, n.d.. Retrieved from: https://www.measuringworth.com/indicator.php