West Germany in Ruins: The Aftermath of Defeat
West Germany in Ruins: The Aftermath of Defeat
This chapter focuses on the economic situation of West Germany in the aftermath of defeat after World War II. Transport was badly hit, private dwellings and shops had also been destroyed in large numbers, and the problems of homelessness worsened. Germans had made every possible effort to protect industries from aerial bombardment, dispersing it into safer regions and sometimes even putting it underground. The average worker now spent only four or five days (instead of the normal six days) at the conventional work-place in order to earn enough devalued currency to pay for the allowance of rationed goods. Political parties shared and made efforts towards collectivist solutions for economic problems. The neo-liberals suggested a currency reform which would eliminate the excess purchasing power, the freeing of prices, and the liberation of the market. The free-market position in the immediate post-war period suffered from the abolition of controls which seemed impossible without generous foreign credits. Foreign trade was dominated by the so-called ‘dollar gap’, or dollar shortage.
Keywords: economic situation, collectivist solutions, free-market position, foreign trade, currency reform, industrial policies
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