Germany Economy History

It is from the first decades of the nineteenth century (in some particularly advanced regions) that Germany has been able to value, on the one hand, the great potential offered by a deeply rooted and appreciated manufacturing tradition, which dates back to the Middle Ages (quality and small series) and, on the other hand, the not indifferent availability of raw materials, food products and skilled labor, at the time of the industrial take-off (heavy industry and mass production), further facilitated by the presence of an internal market among the most conspicuous in the Western world, and a particular political attention to the economic, financial and social development of the country. These basic characteristics have made Germany, at least since unification (1871) of the country, one of the very first world economic powers: a position that has never lost, except for extremely short periods, not even immediately after the two world wars from which it was defeated, and which hinges on a well-equipped industrial sector, technologically advanced, fierce in terms of marketing and international competition. However, the paths followed by the two G. in the second postwar period were considerably different. Materially destroyed in its productive structure and infrastructures and hit, as a whole, by very harsh punitive measures, as early as 1948 Germany saw its two sides move towards the implementation of diametrically opposed economic and territorial policies.

After a first phase in which the most relevant parts, Marshall plan) which aimed at the reconstruction and alleviation of the dramatic living conditions of the population, as well as particular attention, from the financial point of view, which allowed for the reform of the monetary system, leading to the creation of one of the strongest currencies in the world, the mark. Continuing in an uninterrupted tradition of the country, the West German government did not ignore the production system, but on the contrary, in addition to playing a mediating function between the social partners and promoting national production abroad, it intervened powerfully by stimulating the reconstitution of the production system and guiding the basic choices. After a first phase, which was characterized by what was defined, in fact, “social market economy” and which initiated the so-called German economic miracle, the West German economy resumed functioning on the basis of a system of large economic concentrations, already in place before the war, in which the banks played a major role. The GDP doubled in ten years (1950-60) and continued to grow vigorously also in the following decade, but highlighting sectorial and territorial imbalances that the State began to try to correct, above all, by intervening with a policy of concertation between the parties, which had remarkable results. The rapid and massive accumulation of profits, which took place in recent years, was the basis of continuous reinvestments, carried out first of all in West Germany itself, while the wide availability that the tax system allowed the State allowed the strengthening of training policies, research and development that have always been among the typical characteristics of the German system.┬áVisit for economy of western Europe.

At the same time, the financial sector was gaining ever greater breadth and reaching such a solidity that it continued to attract foreign investments to the country as well. After the 1980s, West Germany had in turn become one of the main international investors, both as a state (with development support interventions in numerous Third World countries) and as a private sector (with the launch of a large production relocation to countries with the lowest labor costs). The eastern part of Germany, in the very first years after the war, also suffered the effects of the defeat, which were added to those of the war destruction: the functioning productive apparatuses, for example, they were dismantled and transferred to the USSR by way of partial reparation of the war damages which Germany, as a whole, was bound by the conditions set by the Allies; furthermore, the emigration towards the West was massive and particularly affected the middle managers, depriving the system of important human resources.

Here too, however, with 1948 Soviet policy changed in the sense of integrating the East German economy into what would become the COMECON. The nationalization of large pre-war companies was accompanied by a flourishing of cooperative structures, both in the industrial and agricultural sectors (subject to a drastic land reform); large state-owned enterprises and small and medium-sized cooperatives, as part of centralized planning, they first oriented themselves towards basic production – according to the Soviet model – then, gradually, also towards the sectors of consumer goods. Productive diversification was by now considerable in the seventies and not unlike that which affected West Germany, when precisely with the western part of the country, as a consequence of the start of the Ostpolitik, a not insignificant interchange was established, which in a certain way put East Germany in a position to follow the evolution of the western part. Domestic consumption expanded, thanks to an increase in wages and incomes resulting from the growth of productivity and exports, while social policy achieved very respectable achievements in the health, welfare, education and so on. East Germany, despite a lower productivity than that of Western countries and other structural limits (such as the very modest energy efficiency of the system or the strong environmental compromise), found itself to be the socialist country with the highest income per resident (and even with the highest consumption), with the deepest involvement in the international market, with the strongest industrialization. Notwithstanding, therefore, the profound gap that separated the two Germanys in 1990, the reunification work had, however, concerned two structures similarly at the top of their respective political and economic areas of belonging.

Germany Economy History