economic miracle

At the end of World War II the German nation faces the momentous task of disposing of the vast rubble of the war, integrating over 10 million refugees and expellees, and reviving the prostate economy. West Germany, along with other countries of Western Europe that are threatened by Communism, receives substantial assistance from the US, which institutes the reconstruction program for Europe (the Marshall-Plan ). The West German currency reform in June 1948 replaces the worthless Reichsmark with the Deutsche Mark (DM). Measures that intervened in the economy, such as forced cultivation and fixed prices, are lifted. This creates the conditions for the free development of the power of the market economy and for the economic revival of the Federal Republic of Germany.

Archiv [j]karef

As early as 1948 the future Federal Chancellor Ludwig Erhard elaborates his idea of a "social market economy". He foresees an economic and social order for West Germany in which the economic freedom of the individual and of enterprises would remain basically untouched. The state would assume at most regulatory and control functions, in order to ensure a maximum of social justice, prevent the misuse of power, and protect free competition. This should bring about "The Welfare of All"-the title of a book by Ludwig Erhard that at the time is widely approved. The "social market economy" of the German Federal Republic soon becomes a model of success for many countries.

Archiv [j]karef

In the 1950s, the standard of living of the population rises markedly. There is talk at home and abroad of a Wirtschaftswunder (economic miracle), which could have been accomplished only because of the opportunity provided by the Marshall Plan to replace destroyed productive facilities with uptodate technology, and because of the people's willingness to take on difficult labor. This economic development is facilitated by investment incentives in the tax policy and by a highly qualified labor force, which is augmented by refugees from the DDR (until 1961-construction of the Berlin Wall).

Full employment and then even "over employment" follow the unemployment of the post-war years. Since the 1960s, foreign workers (Gastarbeiter-guest workers) are recruited in their home countries in order to meet the great demand for labor in Germany.

People who accepted deprivation over the years, now see the possibility of a new life style. There is a "feeding frenzy" and then a "travel frenzy". In the 1950s, Italy becomes the dream travel destination for West Germans. At the same time many consumer goods, such as washing machines and televisions, which had been considered luxuries, come to be taken for granted. The number of automobiles on the roads of the Federal Republic doubles between 1954 and 1957 to over 5 million.

Ergebnisse der Bundestagswahl 1957
(Statistisches Bundesamt)