ELI5-How did Germany go from losing two world wars to being the economic powerhouse of Europe?
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Caveat: This is somewhat debated amoung economic historians.
But a mix of:
* Marshall plan
* Strong institutions (think of paperwork in bureaucracies / rule of law sometimes being very good for growth)
* Strong education system (German universities were world-class pre-wars and good to very good post-wars)
* Luck: That cars became SO significant for rich countries was huge for Germany, the very strong south’s economy is basically lots of car companies + their partners (+ the rest).
The mentioned Marshal Plan did play a role but there is more to it then that. West Germany didnt acctualy recive the most money through the marshal plan (First is Britan with about 3 Billion $, Second is France with about 2.7 Billion $ third is Italy with 1.5 Billion $ and then comes West Germany with 1.4 Billion $ recived). After 1949 when the new german state was founded the economic minister Ludwig Erhard, build a system that is now called rhein-capitalism, which merges some wellfare state and strong unions with capitalism. Another point was that germany had waves of immigration from mostly italy in turkey to fill up the missing generation of workers so this wasnt as a big of a problem as other countries had. Those are just some examples but there are a lot more factors that play into it.
Germany has been, if taken as a whole, the economic powerhouse of Europe since the age of Charlemagne, especially from a knowledge and artisanal pre-industrial standpoint. Printing press, newspaper and many early scientific mathematical and chemical discoveries were made within the hundreds of Germanic microstates that constituted the Holy Roman Empire yet were under intense competition with each other. Until its unification in mid late 19th century, Germany was a highly decentralized region, unlike rest of Europe, it only unified centuries after Britain, France or Russia estabilished powerful centralized empires . After unification, Germany had countless of generations of proven culture, localized social systems and a deep trove of knowledge and wisdom in its people built after centuries of slow and gradual growth, and despite the disasters and mistakes in the two world wars, most of this potential survived (vast majority of the people enslaved and sent to die were young, fresh male adults without higher education and below the age of 25, yet that were demographically in a rich enough supply to provide further population growth afterwards) yet it is possible that these two world wars made Germany so much more more powerful and resilient, especially from an evolutionary standpoint, where only the most important, efficient and resilient industries and services survived and suddenly found themselves in a power vacuum that is a big part of allowed Germany so massively economically expand from the 1930s to 1941, and then again throughout the 1950s and 1960s. Marshall plan helped Germany to rebuild much faster and without authoritarian means (unlike in the 1930s) and willingness of US and Europe to accept a new Germany again as an economic partner greatly helped to reintegrate Germany back into the West European socioeconomic system. Similar “miraculous” recovery after a period of total war was also seen in Japan that was demilitarized, occupied and then aided by the US, South Korea, as well as UK, France and US itself that found an amazing increase in productivity and living standards in the 1950s and 1960s.
To put it in very simple terms – heavy industrialism. Following the sanctions from the Allies, Germany resulted in a weak military but a strong economy. From pharmaceuticals, to cars, to heavy machinery, to chemicals, they pretty much dominate the European market in exports. Even though they do not use it much for themselves, they also export military products at a mass scale.
This is combined with other factors such as: a very strong education sector – it is one of the most literate countries in the world. A vast network of natural resources which makes the country much less dependant on imports. Healthcare – one of the highest life expectancy’s in the world. I also believe all of this was fuelled by one of Hitler’s greatest projects – the Autobahn.
A lot of people will point at the Marshall plan, but that only applies to west Germany after WWII and not East Germany and Weimar Germany after WWI.
Also it applied to much of western Europe and countries like the UK and France actually got more money out of the Marshall Plan than west Germany. Additionally while money was coming in from the Marshall Plan it was also going out of the country in the form of reparations.
So the Marshall Pan certainly played a roll but wasn’t everything.
Part of the reason of why Germany faired much better than England after the war economically, was how the money was spent and how debts were repaid.
A big reason why Weimar Germany, West Germany and East Germany all managed to rebound as they did was having an educated workforce and natural resources like coal and most importantly infrastructure like rail and canals.
In some cases factories and infrastructure having been bombed and having to rebuild, meant that they were forced to have new modern ones instead of trying to keep old ones going.
A lot of it came down to luck, geography and some social and cultural factors like views on trade jobs, university, unions and small business.
Large population, resource rich, skilled labourforce (even after the war). Had they not destroyed themselves they would have been global hegemon.
– large, well educated population
– less of the industrial production capacity destroyed in WWII then one would expect
– geographic position. Germany’s location in the center of Europe makes it perfect for trade
The same way they went from the brink of economy collapse to conquering France and nearly destroying the Soviet Union in like 25 years.
They are German. They follow rules down to a T. And when the rule states that they must be an economic powerhouse, they will be.
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To use an analogy. Most people don’t believe that you can improve a plant if you cut it back violently as long as the roots are strong. Germany has a lot of natural advantages with its central location in Europe as long as its neighbors tend to cooperate rather than seek conflict. Imagine it like living in a certain neighborhood. If all the neighbors are positive people who want a neighborhood to flourish and thrive, then the people living in the centre of it will flourish, too. This works in particular if those people want to have a nice house in a nice neighborhood. That’s basically what the European Union is about.
However, all that would have been for nothing if the winners of the last war hadn’t allowed Germany to grow again. There was something called the “Morgenthau Plan” which was supposed to change Germany into several demilitarized and de-industrialized agrarian states. That plan never reached mainstream traction, though. However, if put into effect it might have broken German society apart in a way that the remaining pieces might have slowly drifted towards being absorbed into neighboring states and cultures.
Basically, a good location, an able and willing people and former enemies allowing it to grow back made it possible.
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