Germany: Post War Anomaly Germany has quite an interesting (and difficult) economic development history from World War II and the Nazis into the modern EU power house it is today. Problems set into place by poor government management and an effects of war such as price controls and inflation set by Hitler in 1936 left the German economy in shambles after World War II (Henderson). These policies were typical during war times (also done by the United States and the United Kingdom), but had detrimental effects on the population. The end result was a currency that was almost worthless, there was a mass shortage of goods because the suppliers did not find it worth their time to produce when they face price controls that keep their products …show more content…
This means that the members of this school of thought hated the totalitarian mindset that was the Nazi Party. The members of the school believed in things such as free markets, with a basic income tax system, and limits on monopolies (Henderson). Two members of the school, Wilhelm Röpke and Ludwig Erhard, sought to try and fix this mess. Röpke and Erhard were both in agreement that the best way to try and tackle the repressed inflation was to undergo currency reform and to put an end to price controls (Henderson). This faced a lot of opposition because people were afraid that this would lead to a large central government. However, Ludwig Erhard wins the debate because of his anti-Nazi views, this meant that in 1945 Erhard was appointed to Bavarian minister of finance, then in 1947 he became the director of the bizonal Office of Economic Opportunity, permitting him to advise the U.S. General, Lucius D. Clay, governor of the U.S. Zone (Henderson). It was then that Erhard started down the road to a brilliant currency reform. Essentially, his plan was to take the current currency, reichsmarks, and exchange it for a smaller number of deutsche marks (DM) as the new legal currency. The currency reform took place Sunday, June 20, 1948 and was highly complex, after the change to DM many Germans saw reductions in their overall wealth, the net results after the swap was about 93% contraction in money supply (Henderson). Another policy that Erhard pushed on the same exact
After World War One, Germany was thrown into downward spiral. They were left with a monstrous amount of
A factor that caused economic instability in Germany was the Weimar Republic. The Weimar Republic was put in place of the old German government post-WWI. The Weimar Republic caused many problems such as economic instability for Germany. An example of this is, “...the economic instability of the 1920s and early 1930s [made things worse for] the
Germany emerged from World War I with huge debts incurred to finance a costly war for almost five years. The treasury was empty, the currency was losing value, and Germany needed to pay its war debts and the huge reparations bill imposed on it by the Treaty of Versailles, which officially ended the war. The treaty also deprived Germany of territory, natural resources, and even ships, trains, and factory equipment. Germany’s population was undernourished and contained many widows, orphans, and disabled veterans living in poverty. The new German government struggled to deal with these crises, which had produced a serious hyperinflation.
East Germany had been struggling economically since the end of WWII. There were food shortages because of the lack of resources and money to import goods. Also this was a result of the war because of the bad economy and lack of land to grow crops on. Additionally, many intellectuals were emigrating out of East Germany, because of that and this hurt the economy. Plus, small and major businesses were not evolving and only closing because of high taxes. This led to Germans losing jobs which hurt the economy even more than it already was. An main reason for the failing economy was the Soviet Union was declining and not able to support East Germany. The Soviet Union was declining because Europe was mostly democratic/capitalists and this was hurting any country that had a communist government.This led to and was a reason for the
In Germany people travel to different places than the US. Many Germans choose to spend their vacation time going to the Balearic Islands in Spain (clarification). These are tropical islands with beautiful beaches and jaw dropping views. According to Jan Germans vacation there because it is “super cheap.” (was this place cheap?) Jan also said that many Germans enjoy traveling to the Mediterranean Sea because it is also cheap. They stay in Spain while there. (How should I word this??) The Mediterranean Sea also has crystal clear waters and unbelievable views. After hearing about what Jan had to say about vacationing I started to feel like Germans value travel much more than Americans. (Need to get more information in order to finish!!!)
Germany had very low employment rates in this time and it made it even harder to get back to a stable economy. In this time a lot of people had no jobs so this also did not help Germany because companies were going out of business. This directly led to the decline of Germany's economy. When having no business’s running the country as no money coming in and can not send anything out.
To a great extent imperialism and militarism were big factors as to why Germany started World War One. Since the Ottoman Empire lost rule around that time, the Balkan regions were open, and many countries tried to gain control over them including Germany. Also Germany wanted the Balkan regions more than others, since they has weak colonies in Africa, and the Balkan regions were located at a very good spot for trading and other things, since they were located near the ocean. Also Germany wanted to surpass Britain’s Royal Navy, and take control of the seas. Overall Germany wanted to have the most power, and they thought they could do so by conducting a war. Since they had plans to take out their competitions, such as the Schlieffen Plan and
The country was poor and desperate and seemed to be in a spiral of poverty. The inflation had caused Germany to have a breakdown of infrastructure and the economic downfall. The inflation had caused Germany to lose money because the importation costs were not even close to the exportation rate, causing a loss of money. This led to the downfall of Germany. People around the world had grown to have resentment for Germany and its people. This gave Germany a disastrous future from the beginning. Since people disliked Germany, it came with some consequences. The main consequence being that Germany was so poor, so desperate, and became the enemy of many; this allowed people like Hitler to rise to power. The country was desperate and impoverished; people wanted to become great again. When someone like Hitler says that he knows how to get Germany out of poverty and can make Germany into a world power, people believed him and were willing to let him try. Keynes describes, “The menace of inflationism described above is not merely a product of war, of which peace begins the cure. It is a phenomenon of which the end is not yet in sight” (329). Keynes explains that inflationism is not only produced after a war, but it shows that there is never an end. It does not just come after a war and end the war. It is its own war to battle the rise costs and
Germany is in fact dancing on a volcano.” But USA withdrawing their loan wasn’t an inevitability. The direness of the impact seemed to be the combination of events as Germany had just managed to recover before Stresemann died just 26 days before the Wall street crash, leaving Germany without an experienced leaders fortitude, meaning a significantly more powerful impact from the Depression for Germany politically as Brunings centre spectrum government couldn’t hold its own in November 1932 before being toppled by its polar opposites of extreme left(100 seats) and right wing Nazis who had 196 with the centre party holding only 90 seats. Economically as the key difference being the Depressions incredibly high unemployment rate, 6 million by 1933, created a ‘before and after’ psychological effect, which holds significance in the solidifying of the publics dismal mind set, therefore significant in altering Germanys ethos. Germany went from innovative and modern to economically crippled and chaotic, for many this repeated the feelings from the Treaty of Versailles which produced a similar ‘before and after’ effect, of which was Weimar's inception therefor its root association, leading the public to believe that there was a clear pattern of flaw in how Germany was run, thus turned to
In the years leading up to World War II, Germany was one of the most powerful countries in the world. Though physically small, the country gained power through a unifying force in 1933: the Nazi Party. It did not long for the Nazis, led by Adolf Hitler, to establish control over all of Germany. Before Hitler, the economy was so bad and the citizens were so unhappy that they were desperate for anyone who would improve their situation. Hitler became the perfect candidate when he promised them tax breaks and new social benefits. Of course, Hitler is now considered to be one of the most evil human beings to ever live, setting up concentration camps that starved, abused, and killed an estimated six million Jews.
In this essay I will consider to what extent the German economy has been central to change regarding the development of Germany over the whole period, 1890-1991. I will consider the German economy under the Kaiser in accordance with World War 1, during Hyperinflation under the Weimar Republic in 1923, in Nazi Germany under Hitler and in East and West Germany leading to the building of the Berlin Wall. It appears that the German economy to a large degree has been exceedingly central to change in the country over this entire period. It is evident though that the economy itself has not solely been the derivation of precise events over the course of the period. There have been other ideas and proceedings that must be taken into consideration
The emergence of the nation has been understood in very different ways at different times. Humanist scholars of the early sixteenth century initiated a discourse about the German nation by identifying contemporaneous populations as descendants of ancient Germanic peoples, as they were represented in the writings of Roman authors such as Julius Caesar (100–44 B.C.E. ) and Cornelius Tacitus (c. 55–c.116 C.E. ), author of the famous work Germania. From the viewpoint of Ulrich von Hutten (1488–1523), among others, Tacitus provided insight into the origins and character of a virtuous nation that was in many ways equal or superior to Rome. The German humanists found their hero in Armin, or Hermann, who defeated the Romans
Hitler used Germany’s economic crisis to his advantage in order to rise to power. Germany’s economy was in a great state prior to WWI, but at its conclusion the economy was a catastrophe. As a result of the Treaty of Versailles shown in Source B, Germany had to pay huge reparations to their Allies. But when Germany went broke the French and Belgium troops invaded taking raw materials and resources. Germany attempted to pay striking workers by printing more money, but hyperinflation wiped out the value of their savings. For a while there Germany’s economy was looking up again, they borrowed money and unemployment was reduced, but then the Wall Street Crash occurred. Unemployment had badly affected over 20million people, they were willing to turn to extremist parties like Hiter and the Nazis (The Holocaust Explained, 2011). The Germans were fed up with the terrible times and there despair turned them to
Germany was broken up into different states until Otto Von Bismarck unified all of the German states. The economic growth in Germany was much greater than those of other European countries. Therefore, Otto Von Bismarck thought it would be a great idea to sign treaties with Austria-Hungary and Italy in case a war broke out. In response, Britain, France, and Russia made their own alliance. The groundwork for World War I was set. When Archduke Ferdinand was assassinated by a Serbian nationalist, World War I would begin six weeks later. World War I changed the lives of people whose countries were involved in the war effort. The trench warfare influenced the lives of the soldiers, the war effort changed the workforce and gender inequality, and the
Germany’s raid on Poland came as a surprise because before the war started they had agreed to a nonaggression pact. Poland then gained multiple pieces of land from Germany. During the war the Germans signed a pact with the Soviet Union which allowed Germany to attack Poland without the Soviets intervening. Germany broke the pact with Poland and attacked them. When Germany attacked it only took a matter of weeks until they defeated Poland. The attack on Poland caused multiple countries to declare war against Germany, starting World War II.