ELI5-How did Germany go from losing two world wars to being the economic powerhouse of Europe?
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Economists such as Wilhelm Röpke inspired Germany’s “social market economy” approach, which was implemented by the economy minister Ludwig Erhard. The long postwar dominance of the Christian Democratic party made possible a consistent economic policy.
The 1948 monetary reform played a critical role: when the new Deutsche Mark was made available, wages, prices, and rents were kept at the same amounts as before, but both savings and debts were wiped out 90% or more. This made concrete economic activity the center of the economy, and within days shortages were alleviated.
https://www.cato.org/cato-journal/fall-2019/1948-german-currency-economic-reform-lessons-european-monetary-policy
I would say that Germany was one of major powers even pre-WW1 and strongly grew up between WW1 and WW2.
Both world wars spoiled it much, but generally Germany has strong base of labour, industry etc.
So, all reasons how it grew up were there before, Germany didn’t only gain it post-WW2.
We learned from the mistake of wwI, we did not over burden these countries with debt. WWII was deviation on another level throughout Europe. Occupying militaries help to start a rebuilding effort and societies we’re propped up by military shipments of food and clothing.
Germany itself is near the middle of the European continent and has a northern port. Also engineering and construction are huge industry in Germany. This with the raw materials and shipping areas by train and boat, Germany has a very robust and strong economy.
I’ll let others answer the post ww2 question but I think the question itself seems to hold some misconceptions?
The German-speaking area of Europe had been very wealthy and highly populated for hundreds of years before the wars. It didn’t unify as a single state until the late 1800’s. It benefited from being “slow” in industrializing so it could take advantage of developments elsewhere (the so called catch-up effect that China has benefited from – avoiding the mistakes of the pioneers).
By 1900 Germany was one of the economic powerhouses of Europe and a pioneer in chemistry for example. In fact it’s arguable that Germany’s unification and emergence as a political and economical powerhouse was one of the reasons for WW1.
WW1 left Germany largely unscathed “physically” – most of the fighting took place elsewhere.
My point here is that putting “losing 2 world wars” as the starting point for understanding the German economy is kind of misleading. Germany was perhaps the most powerful economy of the European mainland when WW1 started, continued to be so up until WW2 and was then bombed to shreds.
As a comparison – there were about as many people living in Germany as there were in France and the UK combined by the start of WW2 (excluding colonies, overseas territories etc). Point being that Germany was and is huge in comparison to its neighbors.
So the question that is interesting to ask is rather, how did a massive, wealthy, well-educated and industrialized country recover after a disastrous war? Then you can get into stuff like the Marshall plan, the cold war, coal+steel, the common market (EU).
They’re gonna complain about this being too short, but here we go.
Marshall Plan resurrected European agriculture and infrastructure.
German work ethic IS an actual quantified thing. The productivity of the average German exceeds most of Europe and even the US. Their ingenuity is well known, having invented many industrial objects and philosophical frameworks. Not to say other European nations are lazy, just that Germany is ahead.
Germans are a bit stubborn, so if they fail, they like to try harder than previous. This persistence translates to inevitable success.
Plus, the joke German trains running on time every time has a basis in truth. Timeliness and obsession with planning raises probabilities of finding success.
From Ariminius to Benz, Daimler, and Maybach and Kant/Nietzsche/Heidegger as well as just a culture of strength through doing, Germans have shown time and again throughout the eons that they are dedicated, crafty, insightful, and persistent peoples.
Having most of your infrastructure destroyed during a world war allows you to rebuild things better. See also Japan. Our biggest problem in the United States is maintaining our old way of functioning.
It’s amazing what you can accomplish when you aren’t allowed to spend much money on mililtary.
Same reason why japan is where it is.
They invested in technology and innovation instead of future war efforts.
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