I want to preface this post by making it clear that I am not a Holocaust denier or Nazi sympathizer. I understand this sub's policy on Holocaust denial and frankly agree with the reasons behind the rule. I don't think this post implies either position but thought clarity might be best. Also, since this post surrounds such a personal (to many), and important period in history, I want to apologize in advance if anything comes across as callous toward victims of the Holocaust (especially the sections regarding logistics and manpower). I readily admit that I don't always know the best way to communicate controversial ideas with appropriate sensitivity and thank you in advance for your patience and understanding.
My question stems from playing a recently released grand strategy game by Paradox Games called Hearts of Iron 4. In this game, you can play as most of the major (and minor!) nations involved in the Second World War, including Germany. However, the game's developers chose not to include the Holocaust (or any relate logistics or planning, either explicitly or implicitly) as a mechanic within the game. I'm less interested in the controversy that this decision has caused within the game's community than I am in what the war might have looked like absent the Holocaust being carried out concurrently. Since the question "Would Germany have won World War 2 if the Holocaust was not being carried out during the war?" is likely unanswerable with any degree of certainty, I'm focused on what the known effects of the Holocaust on the war might be.
For context, I thought I'd include my thoughts on how the war might have been impacted by the Holocaust. Please feel free to use these as a springboard for your answer or ignore them completely. For ease of communication, when I reference the German military, I am also referencing any relevant paramilitary groups (like the SS).
1. Recruitment of civilians. I see two ways that the Holocaust might have influenced Germany in terms of recruitment:
A. Impacts on potential military recruits. The number of people imprisoned or killed during the Holocaust was pretty huge. I have no context for how many people (whether or not they were directly victimized by the Holocaust) might have assisted the German Military had the Holocaust not have occurred, but the number certainly is not 0. In any case, do we know whether or not the Holocaust had a significant impact on the number of recruits available to the German war effort?
B. Impacts on the workforce. This is similar to the above, but might (in my opinion) have actually been a more significant factor in the war than the above since many of the people victimized by the Holocaust wouldn't have been directly fit for military service but might have still participated in their local industrial economies. Did the Holocaust significantly impact Germany's ability to produce, store or transport any equipment, weapons or other supplies during the war? On the other hand, was the use of slave labor a significant factor on the same capability?
2. Allocation of recruited personnel and materiel. I assume that the amount of people, supplies, equipment and resources required to carry out the Holocaust was fairly significant once you consider all military and non-military personnel and supplies involved(if this isn't correct, let me know). Do we know how significant of a logistical undertaking the Holocaust was in terms of the manpower and materiel offset from the war effort? Was this significant enough to have an effect on German war capacity?
3. Impacts on morale. Was there a significant impact to Military or Civilian morale (whether in Germany or in any occupied nations) as result of the Holocaust? I'm unconvinced by people that claim that civilians were unaware of the Holocaust and can only assume that some people had fairly strong opinions about it. The same seems likely true for military personnel. Did this cause any significant dissent that affected the German war effort?
If there's anything significant that I'm missing, definitely let me know!
I want to thank anyone that answers my question in advance.
Ok, so in answering this question, there are several things that need to be taken into account. The first and most important being that the war the Germans fought from 1941 onward -- but in certain ways also present in the war against Poland in 1939 -- can not be separated from the Holocaust. From the German political leadership to the army leadership to the field commanders to the SS the Holocaust, meaning the systematic murder of Europe's Jews as well as several other atrocities, can not be differentiated from the war they fought because the reasons behind them were rather congruent and large scale murder of people was part of German warfare from 1941 the latest.
The whole spiel about "If only Hitler hadn't decided to kill the Jews we'd live in our German speaking Europe without Bolshevism and had been to the moon by 1946" that certain kinds of people, including a certain kind of Holocaust deniers frequently employs is oblivious to the fact how much of an integral part the Holocaust and mass atrocities were to the German warfare in WWII. In fact, Nazi Germany would have been unable to carry on the war for so long if it hadn't been for the Holocaust and other atrocities similarly how no prototype of the V2 rocket that reddit loves to glorify so much would have ever left the assembly line if it hadn't been for the massive use of the slave labor of Concentration Camp prisoners.
Because this is a subject about which whole books have been written in the past, let me try to cover some of the areas I deem most important and then get to the points you made:
What kind of war the Germans were fighting and why they fought it
In line with Clausewitz' dictum that war is the extension of politics by other means, we tend to see modern war as a struggle for political and economic hegemony over certain areas and between states. This is also true for the war the Nazi state fought but it was also more than that. For Hitler and the leadership of the Third Reich, the war they started by invading Poland in 1939 was also always a racial war. A racial war in the sense that for Hitler history was ruled by the law of race struggle and the purest expression of that struggle was war. He and the rest of the Nazi leadership sought to fight the war to end all wars in Europe resulting in the total political and racial hegemony of the Aryan race.
How these principles shaped how they fought this war was apparent from 1939 and only increased over time. When the Wehrmacht marched into Poland in 1939, she did so not only with less regard for civilian life than had been displayed at least in certain areas in WWI (the bombing of Warsaw comes to mind) but also with the SS Einsatzgruppen closely on their trail. The Einsatzgruppen in Poland were charged with conducting rear security for the Wehrmacht. How they understood this task gives us an impression of what the aims of this war were. In between the invasion of Poland in September 1939 and December of the same year, the Einsatzgruppen murdered 65.000 people. Their victims were the Polish intelligentsia, i.e. priests, politicians, intellectuals, authors etc. as well as politically active Jews and some Roma communities. The purpose of this killing spree was to physically wipe out the people most likely to lead the Polish resistance against the occupation as well as to kill any elites from which the notion of Polish nation could persist. The Poles were to serve the Germans as subhuman slaves. They had no need for any kind of political or intellectual elites and in order to prepare them for their serfdom, their leaders and intellectuals had to be killed. The war in Poland was from its very beginning fought as a war of racial dominance and the campaign of murder by the Einsatzgruppen was seen as a first step of racial consolidation of Poland.
This is important to mention because similarly to the Polish intelligentsia, the Jews in the eyes of the political and military leadership of the Third Reich always represented a security risk. Jews were seen as the puppet masters behind Communism and Partisan resistance. "Where the Jew is, is the Partisan and where there is the Partisan, there is the Jew" ran the Wehrmacht moniker. This thinking becomes apparent in Serbia in 1941 when the Wehrmacht encounters serious Partisan resistance due to the communist and nationalist uprising against the occupation. The immediate response of the Wehrmacht aside escalating violence against civilians is to write to Berlin to deport the male Jews of Serbia to Poland because in their mind, it's these people who are responsible for the uprising. When that doesn't work out for several reasons, the Wehrmacht commander, Franz Böhme, orders all male Jews shot as part of the anti-Partisan campaign.
This example serves to illustrate the for the Nazi and military leadership, racial ideological thinking was so deeply ingrained in their idea of how to conduct this war that the Holocaust as in the systematic murder of all of Europe's Jews became an integral part of the war comparable in its importance to, let's say, building tanks. The same way they thought they could not conduct their war without tanks, they thought they conduct their war without killing Jews once they started resp. this was also a factor in what lead them to start the killing in the first place as I discuss here and here.
With this underlying mindset in mind, the organization of the Holocaust and the decision for several other atrocities taken where designed in a fashion that assisted the German war effort further than just satisfying their idea of security through killing Jews.
Your question is one of the most important aspects of the German war effort during the Second World War. I also play Hearts of Iron, so I can see why that experience would lead to this line of inquiry.
The short answer is yes, it definitely affected the German war effort for many reasons.
From a brain trust point of view, the Nazi beliefs regarding racial superiority excluded the contribution of some of the best minds in Germany. A great many Jewish refugees were incredible scientific minds that could have contributed greatly to a German victory had the nature of the German government not been as it was. The "brain drain" of Germany was immense. The differential between Nobel Prizes awarded to German scientists before 1933 was significantly higher when compared to the US. After the war Germany was awarded less than 10, and the US over 60 I believe.
The loss of 6 million people, a great many of which could have been part of the workforce, was a considerable problem for Germany in the conduct of the war. Germany had terrible problems with labor shortages, and the loss of this many capable skilled laborers definitely exasperates the issue.
This also applies to those who could have otherwise served in the military. German Jews proudly served the Kaiser during the First World War with distinction.
The logistical problems began to become highly evident from 1942 onward, the time following the Wannsee Conference. To conduct genocide as the Nazi's did required considerable dedication of resources that could have otherwise supported their massive war effort. Trains, trucks, personnel, construction, and time. All things they needed desperately during the war, but instead chose the path they did.
The effect on the morale on the Homefront is strange. I would suggest that you read Nicholas Stargart's, "The German War" which very aptly explores this issue, as well as other aspects of German life during the war. Many Germans on the Homefront saw the Allied air campaign over Germany as retribution for what they were doing to the Jews and others.
The long and short of it is this: When it came down to what was best for Germany or the war effort, Hitler always chose the course of action that would best serve the ideological interests of the Nazi party. Andrew Roberts contends in his book, "The Storm of War" that while it was entirely possible Germany could have won the war, the reason they did not was Hitlers prioritizing of serving Nazi ideological interests.