What was the German economy like after World War 2?

Answer 1

It was very bad. The USSR had taken over, the people were hungry. Granndpa was there he told me that "it was a very sad place to be." the people did not have supplies or food. "It was like in the past."

Answer 2

After World War 2, Germany honestly didn't exist. Germany was split up into East Germany; Occupied by the Soviet Union, and West Germany; Occupied by the USA, England, and France. Berlin itself was divided in the same fashion, which was one of the many causes of the Cold War.

Answer 3

All the Germans money was worth nothing! well here is an unbiased answer....I can't give exact numbers and figures but I am well read on the subject so here goes....if you need EXACT figures (which actually don't exist, just estimates) wikipedia would be a good source....

Heres the short, short answer: The Russians shot them or worked them to death, freeing a small percentage 5 to 25 years after the wars end. The Western Allies occassionaly shot them on the spot (especially the SS troops) but mostly treated them as the Germans treated their P.O.W.'s very humanely, sending them to England and the U.S. and later to France and Belgium to be held in prison camps where they were treated decently. The partisans shot them on the spot or tortured them for information.

THE LONG ANSWER: The Italian and German/Austrian/French volunteer/Bulgarian/Hungarian etc. troops who were attached to the Werhmacht (German Armed forces) and Waffen SS were captured and imprisoned by two differing armies, the Soviet Union and the United States/British Commonwealth (including Australian, New Zealand and Canadian troops, LETS NOT FORGET THEM!) troops. Also attached to the U.S./U.K. units were Free French/Polish/Czech etc. troops. In between these two were the partisans who were ex soldiers and civilians who fought out of uniform, they are comparable to insurgants in the Middle East today. Incidentally the Germans referred to them as terrorists. So we will break it down by who the Germans were captured by, the Western Allies (U.S./U.K.), the Eastern Allies (Soviet Forces) and Partisans. As the partisans method of disposing of captured P.O.W.'s was quite simple we shall start with them....

PARTISANS: Nine times out of ten when an Axis (German/Austrians/Italian etc.) soldier, salior or airmen was captured by an individual or group of partisans they were executed on the spot. This was because when the Axis troops captured partisans they were shot out of hand or tortured and questioned by the SS and the Gestapo. There was also a sense of revenge killings to them as many partisans had friends and family who had been killed out of hand by axis troops or were escapees from Nazi concentration camps. There were whole units of partisans on the Eastern front composed of Jewish volunteers and after hearing what the Germans had been doing to their fellow Jews it's no wonder they werent too keen on keeping captured germans alive. Occassionally partisans would hold a soldier prisoner in hopes of gaining information or possibly exchanging prisoners but not often. Most of the partisans equipment came from captured Axis troops. You start out with a revolver or even just a machete, kill a german soldier, take his rifle and grenades and use them to attack larger groups of germans.

The SOVIET UNION: About 50 percent of the time Axis troops captured by the Red Army were executed on the spot. This was due in part to similar feelings like those of the partisans as the Germans had murdered many hundreds of thousands of Russian troops and civilians during the Operation Barbarossa invasion in 1942 of the Soviet Union and also due to the fact that Axis troops would also shoot Russian P.O.W.'s upon capture 50 percent of the time. The other half were sent east into the heartland of The Soviet Union to P.O.W. camps and slave work camps. During and after the was many hundreds of thousands of captured Germans were sent to be worked in salt mines, coal pits, forests cutting down timber, etc. Most did not live through the experience dying of overwork, disease and starvation. After the war a million plus German P.O.W.'s were marched east to reside in these camps, those who survived the ordeal not being freed and allowed to return west for many years, in some instances not untill the 1960's. You can't really blame the Russians for treating them thus, the Germans treated Russian P.O.W.'s HORRIBLY aswell.

THE WESTERN ALLIES: When captured by U.S./U.K. troops most German P.O.W.'s were treated fairly and decently being escorted west behind the fighting lines to be collected and sent to P.O.W. camps in England and the United States. There were quite a few here in Texas where I live as a matter of fact. The were housed and fed well and even allowed to pracitce patriotic excercises such as assembling to salute the German flag in the morning and for those who were ardent Nazis to assemble to discuss Nazi ideology. There were some instances of outright shooting and torture but it was a war, what do you expect? Give a bunch of 19 year old kids weapons, allow them to watch their friends be shot by Germans for years on end in battle and sometimes tempers would rise. Sometimes when a german was shot out of hand it was because they simply couldnt spare the men to escort them to the rear in the heat of battle. At the end of the war a German soldier was expected to serve out 2 years in a P.O.W. camp before being set free, but most were allowed to go home sooner than that. From what i've read, the U.S. troops were less harsh in their treatment of German P.O.W.'s than their French/U.K. counterparts but thats understandable because the U.S. had experienced less personal lossess than their european allies, e.g. the U.S. was never invaded by Germany and had very few civilian casualties. The exception to this rule of humane treatment would have been captured SS troops. They were considered a separate breed from those serving in the regular German/Italian armed forces. The SS were political soldiers, devout raving Nazis who often would NOT take U.S./U.K. troops prisoner but execute them outright, so the allies oftentimes returned the favor. However, towards the end of the war the treatment of SS prisoners was less harsh as by that time the SS had begun to draft German civilians who were not Nazis into their ranks with the result that the SS troops instances of treating allied prisoners harshly diminished. The novelist Gunter Grass comes to mind. He wasnt even a member of the Nazi party but was drafted into the SS at the end of the war to serve in an armed SS division and after the war was an ardent anti Nazi which is reflected in his writings. For insights into daily life of a German soldier during the war and a brief glimpse of a P.O.W. camp administered by the british read 'The Forgotten Soldier' by Guy Sajer. Mr. Sajer was Alsatia in eastern france, once part of Germany whose father was French and mother was German and he fought on the Eastern front.

MY grandfather saw and described to me the treatment of Axis prisoners first hand. A few personal stories....

During the invasion of Sicily he was armed with a U.S. M1 carbine rifle. When coming ashore during the invasion he was met by fleeing Italian soldiers trying to surrender. curious as to the strength of the M1 carbine which he had never used in battle he shot a retreating Italian in the buttock with the result that the bullet lodged in the lucky guys walled, lol. He reverted to usind his M1 Garand after this, a much more powerful calibre bullet was used in the Garand. He claims that many Italian P.O.W.s spoke limited english and would always say, "I LOVE America, I gotta cousin in Brooklyn!"

When taking Germans prisoner the first thing he says they would do is make them disrobe and look under their left armpit. This was becuase Hitler valued SS troops over regular army and SS troops had their blood type tattooed in their left armpit so that they would get better treatment in field hospitals if wounded. Often SS troops would don regular German Army clothing in an attempt to pass not as SS troops when captured but Wermacht knowing that they would be treated less harshly. The blood type gave them away. Grandfather admits that often they executed SS troops found out this way.

After the war he was stationed near the Elbe river which was the dividing line between Russian/U.S. troops in the east of Germany. Their were several thousand Russians who had volunteered for service in the German Army who had fled west to surrender to the western Allies. He tells me that the U.S./U.K. agreed to hand them over to the Soviets after the war and he saw with his own eyes these Russian Volunteers marched across a bridge of the Elbe river to be handed over to the Soviets who then lined them up on the river bank and machine gunned them to death allowing the corpses to fall into the water below.

I left some things out im sure, so as I tell my son, look it up, read it, study it. Hope this helps!

Read more: What_happened_to_surrendered_Germans

Answer 4

The Holocaust ended shortly after the end of WWII. Since Nazi Germany focused their attention on the war, they were distracted from their "Final Solution" and then they were conqured and the concentraion camps were liberated

Answer 5

After World War II the German economy lay in shambles. The war, along with Hitler's scorched-earth policy, had destroyed 20 percent of all housing. Food production per capita in 1947 was only 51 percent of its level in 1938, and the official food ration set by the occupying powers varied between 1,040 and 1,550 calories per day. Industrial output in 1947 was only one-third its 1938 level. Moreover, a large percentage of Germany's working-age men were dead. At the time, observers thought that West Germany would have to be the biggest client of the U.S. welfare state; yet, twenty years later its economy was envied by most of the world. And less than ten years after the war people already were talking about the German economic miracle.

What caused the so-called miracle? The two main factors were currency reform and the elimination of price controls, both of which happened over a period of weeks in 1948. A further factor was the reduction of marginal tax rates later in 1948 and in 1949.

Before

By 1948 the German people had lived under price controls for twelve years and rationing for nine years. Adolf Hitler had imposed price controls on the German people in 1936 so that his government could buy war materials at artificially low prices. Later, in 1939, one of Hitler's top Nazi deputies, Hermann Goering, imposed rationing. (Roosevelt and Churchill also imposed price controls and rationing, as governments tend to do during all-out wars.) During the war, the Nazis made flagrant violations of the price controls subject to the death penalty.1 In November 1945 the Allied Control Authority, formed by the governments of the United States, Britain, France, and the Soviet Union, agreed to keep Hitler's and Goering's price controls and rationing in place. They also continued the Nazi conscription of resources, including labor.

Each of the Allied governments controlled a "zone" of German territory. In the U.S. zone, a cost-of-living index in May 1948, computed at the controlled prices, was only 31 percent above its level in 1938. Yet in 1947, the amount of money in the German economy-currency plus demand deposits-was five times its 1936 level. With money a multiple of its previous level but prices only a fraction higher, there were bound to be shortages. And there were.

Price controls on food made the shortages so severe that some people started growing their own food, and others made weekend treks to the countryside to barter for food. Yale University economist (and later Federal Reserve governor) Henry Wallich, in his 1955 book, Mainsprings of the German Revival, wrote:

Each day, and particularly on weekends, vast hordes of people trekked out to the country to barter food from the farmers. In dilapidated railway carriages from which everything pilferable had long disappeared, on the roofs and on the running boards, hungry people traveled sometimes hundreds of miles at snail's pace to where they hoped to find something to eat. They took their wares-personal effects, old clothes, sticks of furniture, whatever bombed-out remnants they had-and came back with grain or potatoes for a week or two. (p. 65)

Barter also was so widespread in business-to-business transactions that many firms hired a "compensator," a specialist who bartered his firm's output for needed inputs and often had to engage in multiple transactions to do so. In September 1947 U.S. military experts estimated that one-third to one-half of all business transactions in the bizonal area (the U.S. and British zones) were in the form of "compensation trade" (i.e., barter).

Barter was very inefficient compared with straight purchase of goods and services for money. German economist Walter Eucken wrote that barter and self-sufficiency were incompatible with an extensive division of labor and that the economic system had been "reduced to a primitive condition" (Hazlett 1978, p. 34). The numbers bear him out. In March 1948 bizonal production was only 51 percent of its level in 1936.

The Debate

Eucken was the leader of a school of economic thought, called the Soziale Marktwirtschaft, or "social free market," based at Germany's University of Freiburg. Members of this school hated totalitarianism and had propounded their views at some risk during Hitler's regime. "During the Nazi period," wrote Henry Wallich, "the school represented a kind of intellectual resistance movement, requiring great personal courage as well as independence of mind" (p. 114). The school's members believed in free markets, along with some slight degree of progression in the income tax system and government action to limit monopoly. (Cartels in Germany had been explicitly legal before the war.) The Soziale Marktwirtschaft was very much like the Chicago school, whose budding members Milton Friedman and George Stigler also believed in a heavy dose of free markets, slight government redistribution through the tax system, and antitrust laws to prevent monopoly.

Among the members of the German school were Wilhelm Röpke and Ludwig Erhard. To clean up the postwar mess, Röpke advocated currency reform, so that the amount of currency could be in line with the amount of goods, and the abolition of price controls. Both were necessary, he thought, to end repressed inflation. The currency reform would end inflation; price decontrol would end repression.

Ludwig Erhard agreed with Röpke. Erhard himself had written a memorandum during the war laying out his vision of a market economy. His memorandum made clear that he wanted the Nazis to be defeated.

The Social Democratic Party (SPD), on the other hand, wanted to keep government control. The SPD's main economic ideologue, Dr. Kreyssig, argued in June 1948 that decontrol of prices and currency reform would be ineffective and instead supported central government direction. Agreeing with the SPD were labor union leaders, the British authorities, most West German manufacturing interests, and some of the American authorities.

The Change

Ludwig Erhard won the debate. Because the Allies wanted non-Nazis in the new German government, Erhard, whose anti-Nazi views were clear (he had refused to join the Nazi Association of University Teachers), was appointed Bavarian minister of finance in 1945. In 1947 he became the director of the bizonal Office of Economic Opportunity and, in that capacity, advised U.S. General Lucius D. Clay, military governor of the U.S. zone. After the Soviets withdrew from the Allied Control Authority, Clay, along with his French and British counterparts, undertook a currency reform on Sunday, June 20, 1948. The basic idea was to substitute a much smaller number of deutsche marks (DM), the new legal currency, for reichsmarks. The money supply would thus contract substantially so that even at the controlled prices, now stated in deutsche marks, there would be fewer shortages. The currency reform was highly complex, with many people taking a substantial reduction in their net wealth. The net result was about a 93 percent contraction in the money supply.

On that same Sunday the German Bizonal Economic Council adopted, at the urging of Ludwig Erhard and against the opposition of its Social Democratic members, a price decontrol ordinance that allowed and encouraged Erhard to eliminate price controls.

Erhard spent the summer de-Nazifying the West German economy. From June through August 1948, wrote Fred Klopstock, an economist at the Federal Reserve Bank of New York, "directive followed directive removing price, allocation, and rationing regulations" (p. 283). Vegetables, fruit, eggs, and almost all manufactured goods were freed of controls. Ceiling prices on many other goods were raised substantially, and many remaining controls were no longer enforced. Erhard's motto could have been: "Don't just sit there; undo something."

Journalist Edwin Hartrich tells the following story about Erhard and Clay. In July 1948, after Erhard, on his own initiative, abolished rationing of food and ended all price controls, Clay confronted him:

Clay:"Herr Erhard, my advisers tell me what you have done is a terrible mistake. What do you say to that?"

Erhard:"Herr General, pay no attention to them! My advisers tell me the same thing."2

Hartrich also tells of Erhard's confrontation with a U.S. Army colonel the same month:

Colonel:"How dare you relax our rationing system, when there is a widespread food shortage?"

Erhard:"But, Herr Oberst. I have not relaxed rationing; I have abolished it! Henceforth, the only rationing ticket the people will need will be the deutschemark. And they will work hard to get these deutschemarks, just wait and see."3

Of course, Erhard's prediction was on target. Decontrol of prices allowed buyers to transmit their demands to sellers, without a rationing system getting in the way, and the higher prices gave sellers an incentive to supply more.

Along with currency reform and decontrol of prices, the government also cut tax rates. A young economist named Walter Heller, who was then with the U.S. Office of Military Government in Germany and was later to be the chairman of President John F. Kennedy's Council of Economic Advisers, described the reforms in a 1949 article. To "remove the repressive effect of extremely high rates," wrote Heller, "Military Government Law No. 64 cut a wide swath across the [West] German tax system at the time of the currency reform" (p. 218). The corporate income tax rate, which had ranged from 35 percent to 65 percent, was made a flat 50 percent. Although the top rate on individual income remained at 95 percent, it applied only to income above the level of DM250,000 annually. In 1946, by contrast, the Allies had taxed all income above 60,000 reichsmarks (which translated into about DM6,000) at 95 percent. For the median-income German in 1950, with an annual income of a little less than DM2,400, the marginal tax rate was 18 percent. That same person, had he earned the reichsmark equivalent in 1948, would have been in an 85 percent tax bracket.

After

The effect on the West German economy was electric. Wallich wrote: "The spirit of the country changed overnight. The gray, hungry, dead-looking figures wandering about the streets in their everlasting search for food came to life" (p. 71).

Shops on Monday, June 21, were filled with goods as people realized that the money they sold them for would be worth much more than the old money. Walter Heller wrote that the reforms "quickly reestablished money as the preferred medium of exchange and monetary incentives as the prime mover of economic activity" (p. 215).

Absenteeism also plummeted. In May 1948 workers had stayed away from their jobs for an average of 9.5 hours per week, partly because the money they worked for was not worth much and partly because they were out foraging or bartering for money. By October average absenteeism was down to 4.2 hours per week. In June 1948 the bizonal index of industrial production was at only 51 percent of its 1936 level; by December the index had risen to 78 percent. In other words, industrial production had increased by more than 50 percent.

Output continued to grow by leaps and bounds after 1948. By 1958 industrial production was more than four times its annual rate for the six months in 1948 preceding currency reform. Industrial production per capita was more than three times as high. East Germany's communist economy, by contrast, stagnated.

Because Erhard's ideas had worked, the first chancellor of the new Federal Republic of Germany, Konrad Adenauer, appointed him Germany's first minister of economic affairs. He held that post until 1963 when he became chancellor himself, a post he held until 1966.

The Marshall Plan

This account has not mentioned the Marshall Plan. Can't West Germany's revival be attributed mainly to that? The answer is no. The reason is simple: Marshall Plan aid to West Germany was not that large. Cumulative aid from the Marshall Plan and other aid programs totaled only $2 billion through October 1954. Even in 1948 and 1949, when aid was at its peak, Marshall Plan aid was less than 5 percent of German national income. Other countries that received substantial Marshall Plan aid exhibited lower growth than Germany.

Moreover, while West Germany was receiving aid, it was also making reparations and restitution payments well in excess of $1 billion. Finally, and most important, the Allies charged the Germans DM7.2 billion annually ($2.4 billion) for their costs of occupying Germany. (Of course, these occupation costs also meant that Germany did not need to pay for its own defense.) Moreover, as economist Tyler Cowen notes, Belgium recovered the fastest from the war and placed a greater reliance on free markets than the other war-torn European countries did, and Belgium's recovery predated the Marshall Plan.

Conclusion

What looked like a miracle to many observers was really no such thing. It was expected by Ludwig Erhard and by others of the Freiburg school who understood the damage that can be done by inflation coupled with price controls and high tax rates, and the large productivity gains that can be unleashed by ending inflation, removing controls, and cutting high marginal tax rates.

Answer 6

After the war, who controlled West Germany?- Soviet Union. Who controlled East Germany?- US, UK, and France. What type of government did Soviet Union had at that time?-Communist. So what type of government did West Germany have?-Communist.Occurs, communist. Great Job!

____

Right idea, but you have it backwards. West Germany was free. In the initial years after WW2 it was controlled by US, UK and France. It became a democracy

East Germany was controlled by the Soviet Union and became a "socialist republic" which is a form of Dictatorship.

Answer 7

Your mom told me it was good.

Answer 8

It was alright, less club however. Back then stripclubs were raided and made into tittie bars instead.

Answer 9

It was divided into a democratic part and a Communist part.