How Germany Lost Its Beauty after World War Ii

Before the Second World War, Germany was a revered state due to its development that was characterised by exceptional infrastructure, beautiful cities, and factories. However, the outlook would change drastically after the vicious Second World War. In the aftermath of the war, Germany was no longer the once-beautiful state, but a dilapidated country with no sign of recovery. Besides the destruction of the beautiful cities, factories, and infrastructure, Germany also lost its sovereignty. Apparently, the US, France, Soviet Union, and Great Britain all occupied the country and subjected it to strict rules. The devastation caused by the war seemed to condemn Germany to an incredibly long path to recovery, yet an “economic miracle” occurred. Since this economic event amazed everybody, it is essential to investigate it further.

The first step toward the seemingly miraculous economic recovery was occasioned by the currency reforms initiated in 1948. One area targeted by the reforms related to the then German currency, the Reichsmark. The government replaced the worthless Reichsmark with the Deutschmark, and managed to control the hyperinflation and currency devaluation caused by the old currency. Also, the reforms helped in the elimination of black markets that most Germans relied on for the supply of foodstuff. Subsequently, a favourable ratio between money in circulation and available goods was created. In short, West Germany recovered quickly- not miraculously- because of replacing a worthless currency, addressing inflation, and ensuring a balance between goods and money in circulation.

Secondly, the relaxation of rules by the Allied Forces and involvement of all Germans was essential to the recovery. The West Germany government engaged in activities suggesting prosperity was for all people1. Further, the Allied Forces allowed the country to revive some of its industries, contrary to an earlier stance. As a result of these and other positive changes, foreign investors started investing in the country, hence accelerating the economic growth. Eventually, the country’s economy grew at a pace that no one anticipated hence being termed as miraculous recovery.

Additionally, the abolishment of price controls imposed on the Germans by Adolf Hitler contributed to the fast-tracked economic recovery. Until 1948, all Germans had endured a tumultuous time occasioned by the price controls imposed by tyrant. The Hitler government purchased all weapons at a ridiculously low price but controlled consumer products. Inevitably, stock markets froze and free market principles almost ceased to operate in the country. However, with the abolishment of the price controls, Germany experienced an overnight change. Throughout the 1950s, West Germany’s Gross National Product (GNP) grew at a rate of between 7% and 8%, and its export revenue rivalled that of the US. The new Germany government would only intervene in the markets to bar cartels and curb monopolies.

In summation, the mind-boggling economic recovery in West Germany can be traced to the three critical decisions made by the new government. First, the currency reforms were instrumental in the turn-around of the economy since they addressed inflation and circulation of money. Secondly, the change of the highly punitive marginal taxes and reinstatement of the industries proved to be equally crucial. Thirdly, encouraging a free market with limited government intervention could only lead to a spurred economy. The above explanations, therefore, show that West Germany had an incredible economic recovery, and it is not a surprise that some people perceive it to be a miracle.