What was Germany like after World War II? How different were the two parts of Germany, and why? How different was the growth trajectory in each part, and what consequences did it have for their current state? These are the questions that we try and answer in today’s post.
Still, not all participating nations benefitted equally. Nations such as Italy, who had fought with the Axis powers alongside Nazi Germany, and those who remained neutral (e.g., Switzerland) received less assistance per capita than those countries who fought with the United States and the other Allied powers.
The notable exception was West Germany: Though all of Germany was damaged significantly toward the end of World War II, a viable and revitalized West Germany was seen as essential to economic stability in the region, and as a not-so-subtle rebuke of the communist government and economic system on the other side of the “Iron Curtain” in East Germany.
A very short, and simple introduction to the Marshall plan from history.com. Key takeaways for me? It might be useful to think of the Marshall plan as first a political tool and second an economic plan (or at least a combination of the two), that political alignments (past and present) had a role to play in allocations, and the CIA seems to have been a surprisingly (although perhaps not, if you think about) large beneficiary of the plan!
As we have indicated, that Germany was a Marshall Plan recipient in the first place
did not make the other participating countries very happy, but taking economic revenge was simply not a viable alternative. In fact, Germany had already received a large amount of U.S. aid before the Marshall Plan was even conceived: starting almost immediately after the end of the war, the Allied-occupied part of the country received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas), and the value of these goods amounted to around $1.7 billion.
So the Marshall Plan aid to Germany, which amounted to about $1.4 billion in the
first four years, was not that dramatic in itself. Britain, France and Italy all received a larger slice of the cake (see listing below for the distribution of help to the ERP countries). And yet Germany put the aid to better use than any other country, and today, 50 years later, still continues to benefit directly from the ERP counterpart fund, known after 1953 as the ERP Special Fund.
Put it this way: because of the lessons learned from the First World War,the Marshall Plan can be seen as the response to the Economic Consequences of the Peace. This article was also worth a read for me because it spoke about the origins (sort of) of the KfW, the 1972 visit of Chancellor Brandt, and a useful counterfactual towards the end of the essay.
What if I wanted to teach myself what post-war German society was like through the medium of movies? The only one I have seen is The Reader.
But here’s an IMDB list that is as much of a bookmark for me as recommendations for you! I have not seen almost all of them.
“There is no example of merging two states with such vastly different political systems that has worked so smoothly. But this reunification was, and continues to be, far more difficult to achieve than was thought during the exuberance of the reunification celebrations.
“Even if the two parts were only separated for 41 years – that’s less than two generations – the citizens of east and west were socialised in such a different way that in retrospect the idea that integration would be swift was utopian.”
Klingholz estimates that it will take at least another generation before the two parts have truly grown back together. One major piece of evidence for that, he says, is that “many Wessis have never even been to the east,” while most Ossis have been to the west.
Written on the 25th anniversary of reunification, this article from the Guardian cites how long it takes for cultural reunification, and how little time (or generations) it takes for a hitherto united nation to grow apart. For obvious reasons, a depressing read. The report cited in the article is in German – if anybody knows of a English version, please let me know!
In 1936, industrial labour productivity was already 9 per cent lower in the East than in the West, largely due to a transfer of less productive industries to the East German region, and more productive sectors to the West. By 1950, this gap had reached 35 per cent and East Germany had lower labour productivity in every industrial sector. In fact, Sleifer estimates that 36 per cent of the East–West productivity gap between 1936 and 2002 had occurred before 1950. The main causes for this decline can be attributed to the war, reparations to the Soviet Union, and the loss of access for East German industries to their West German suppliers.
That is from a book review, the subject of which has now been added to the ever expanding list!
EconForEverybody 