The miraculous economic recovery of Germany after the world wars

The miraculous economic recovery of Germany after the world wars

Germany was sanctioned after the First World War which ended in 1918. The reason was that they incited the war intending to dominate the world. The damages that they had to pay were too much that despite some debt removal, the payment was completed in 2010, just ninety-two years. After the Second World War, other sanctions were imposed on them. This set of laws includes application of german intellectual property and patents which yielded up to $10 million in two years for two involved countries. They also took their machinery and treated Germans like being a prisoner of war in your country.

All these sanctions were made even though, population of Germans was reduced drastically, and the youths were either disabled from war or frustrated with the situation. The country was also divided into four parts for the United Kingdom, United States, France, and the Soviet Union. Since these countries imposed their system of government on the regions, it happened that East of Germany controlled by Soviet Union was a socialist state while West Germany was a democratic state.

Due to lifting of price control

Miraculous economic recovery of West Germany started when America appointed a German son of a Nobel Prize winner in literature, Eucken to head the economy. Having studied Economics, he proposed a capitalist system where the government can control the market through fiscal policies. Like in war zones where black market thrives, food was scarce such that people looked for where and how to get food. Seeing that this scarcity is not primarily caused by war but by price control and hyperinflation of German currency, Marks, Eucken advocated for a new currency. He implemented price control removal to encourage free-market policies. Though radical counter-intuitive to citizens then, he operated it to show how sure he was.

Due to lifting of price control restrictions, people who hoarded foods brought them out. Another good development was that new currency has much more value than the older one. People began to work and get paid for work done. Improvement on economic status of West Germany improved so much that Eastern Germans had to migrate to the side. This migration infuriated the Soviet government that they had to build a famous Berlin Wall to separate East Germany from West Germany.

The miraculous economic recovery of Germany after the world wars

Another catalyst to the recovery was the Marshallian plan of economic development. The United States of America drafted out a four-year plan to aid the affected countries like West Germany. Though it is under an argument that the plan helped Germans as much as it was portrayed.

Eventually, decline and subsequent collapse of Soviet government made Germans from the two sides to pull down the Berlin Wall in 1989. Consequently, in 1990, there became unification of West and East Germany.

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