The Economic Miracle (Wirtschaftswunder)
Currency reform, the social market economy and Marshall aid turn a ruined West Germany into Europe's leading economy within two decades.
- Postwar: A History of Europe Since 1945 — Tony Judt, Penguin (2005)
- A History of Germany 1918–2014: The Divided Nation — Mary Fulbrook, Wiley-Blackwell (2015)
- Germany: Memories of a Nation — Neil MacGregor, Allen Lane (2014)
On 20 June 1948 the western zones replaced the worthless Reichsmark with the Deutsche Mark. Almost overnight, shop windows filled with goods that had been hoarded. Economics director Ludwig Erhard, later economics minister, scrapped most price controls at the same time.
- Postwar: A History of Europe Since 1945 — Tony Judt, Penguin (2005)
- A History of Germany 1918–2014: The Divided Nation — Mary Fulbrook, Wiley-Blackwell (2015)
Helped by Marshall Plan aid, a skilled workforce swelled by expellees, and demand created by the Korean War, West Germany grew at extraordinary speed through the 1950s. By the early 1960s it had near full employment and was importing workers from abroad. Erhard’s “social market economy” combined free markets with social insurance and a strong role for unions; from 1951 coal and steel workers gained seats on company supervisory boards.
- Postwar: A History of Europe Since 1945 — Tony Judt, Penguin (2005)
- A History of Germany 1918–2014: The Divided Nation — Mary Fulbrook, Wiley-Blackwell (2015)
West Germany’s surprise victory in the 1954 football World Cup final in Bern, the “Miracle of Bern”, is often remembered as the moment the young republic felt it could hold its head up again.
- Germany: Memories of a Nation — Neil MacGregor, Allen Lane (2014)
- A History of Germany 1918–2014: The Divided Nation — Mary Fulbrook, Wiley-Blackwell (2015)
Why it matters today
The economic miracle gave West Germans a new, safer source of pride: the D-Mark, "Made in Germany", the VW Beetle and a strong welfare state. The model of the social market economy, with family-owned Mittelstand firms, worker representation on company boards and consensus between unions and employers, is still how many Germans think an economy should work.