by Jasmyne Keimig
I decided to focus on West Germany in the immediate postwar period and investigate the economic arguments that political parties/groups had from the end of WWII through the fifties. The first book I read was Modern Germany: Society, economy, and politics in the Twentieth Century by V.R. Berghahn. Broadly speaking, Berghahn discusses Germany society, economy, and politics in the twentieth century (as the title would imply…), but for the purposes of this book review I honed in on his analysis of postwar reconstruction in Germany. Within that context, Berghahn focuses a lot on the broader processes of construction of West and East Germany and emphasizes the role that America and the Soviet Union played in shaping the fractured German state. The Americans were huge proponents of the Open Door theory of free market trade in West Germany. Their eventual hope was to implement a liberal representative democracy in their zone of occupation and actively encourage competitive American style capitalism (B 183). In order to set both of those processes in motion, West Germany could not engage in most of their interwar economic practices, like protective tariffs, cartels, centralized planning, and nationalism. (B 185). The Allies, and especially the Americans, would not endorse any radical restructuring of underlying power structures, especially if it brushed near socialization or redistribution of property. (B 191-192). For Berghahn, Stalin and the Cold War loomed especially large in the eyes of the Americans responsible for moving the West German economy forward.
The second book I read was Freedom with Responsibility: The Social Market Economy in Germany 1918-1963 by A.J. Nicholls. Nicholls had a “people” based as opposed to structure-based approach to the economic theories and forces at work in postwar Germany. In particular, he focuses on Ludwig Erhard (FRG Economics Minister 1949-63, Federal Chancellor 1963-66) and the decisions he made during this period. The most compelling and in-depth idea throughout the book is the theory of the social market economy in Germany. Nicholls defines the social market economy coined and developed by Alfred Müller-Armack in 1946, as being “the third form of economic system” between laissez-faire and collectivism, a liberal market economy “steered in a socially acceptable direction.” (N 142-143). By socially acceptable he meant overcoming “unhealthy inequalities of wealth” through taxation, family alliances, and rent assistance for the needy. (144) At the time, the implementation of the theory itself was quite controversial, but was reluctantly taken up by the Free Democratic Party (FDP), though Nicholls notes the party did not take the social aspect seriously until the sixties (N 150). The author believed that Müller-Armack’s theory hit just the right note for the collectivist and Communist averse, yet extremely socially aware, post-war West Germany.
The third and final book in my short reading list was A Nazi Legacy: Right-Wing Extremism in Post War Germany by Rand C. Lewis. Upon closer reading and reflection, I think this book was not the best choice for this book review because I think it reflected my desire to study radical thought in this context than prominence of said thought in this context. That being said it was not my intention at all to keep associating Germans with Nazism (some stereotypes never die), but I suppose my inclination to include this book on my reading list was to see how the change in leadership and ideology in the immediate aftermath of the war affected those who were complicit (that’s a big word) in Hitler’s regime. Actually, Berghahn talks a lot about the nightmare of de-Nazification in Germany and how if it were thoroughly and completely done, there would not be administrative support or knowledge within German bureaucracy to have a somewhat functioning government (B 187). Anyway, Lewis writes about how this ineffectual method of rooting out Nazi sympathizers within Germany led to the rise of radical right-wing parties with the government (L 38). However, Germany was still quite war-weary and despite some sympathy for some radical right ideology, by and large, right-wing efforts to retake Germany were virtually nonexistent.
Both of the first two books discuss and outline the conflict of interests in postwar West Germany. There was a desire to dispel Communist and collectivist ideals, but, in light of the immense devastation the war wrought on the country, a sense of also rebuilding social and community ties. Both books mention the rise and growing strength of the social market economy, but situate it differently. Berghahn turns to America’s wants and wishes while Nicholls emphasizes the man behind the theory. What I found interesting about the theory + power of the social market economy is that it tries to create a system of (relatively) ethical consumption and production under capitalism. But as we approach neoliberal theory in class, and in light of our conversation about planning re: democracy, I feel very conflicted about economic “middle-ground” theories between capitalism and socialism. I think this conversation is still relative today, and going forward, I hope that we can look critically at neoliberal ideals and implementation.
Bibliography
Berghahn, V.R. Modern Germany: Society, economy, and politics in the twentieth century. Cambridge: Cambridge University Press, 1987.
Lewis, Rand C. A Nazi Legacy: Right-Wing Extremism in Postwar Germany. New York: Praeger, 1991.
Nicholls, A.J. Freedom with Responsibility: The Social Market Economy in Germany 1918-1963. Oxford: Clarendon Press, 1994.
Jasmyne, your book review in its descriptions of the conflict inherent in reconstruction of postwar Germany, has some interesting parallels with my own review of the conflict inherent in the immigration policies of Argentina. The theory of social market economy when Germany is simultaneously trying to rebuild community ties and deal with anxieties of Communism in the context of the Cold War is interesting. I would be interested in how the discourse of the social market economy adapted to both goals. How these two components are discussed in your books also interests me. I am glad that the two books by Berghahn and Nicholls address this conflict (both in discourse and praxis) in reconstructing Germany.
One of the authors I looked at, Solimano, argues that international immigration is a barometer of economic conditions, and that immigration most generally improves economic conditions of destination countries. I wonder how in the international postwar context, ideology could also be such a barometer of economic conditions. Was Bretton Woods the ideology of the richest and most “developed” countries, while ISI an ideology of the “developing” world, and if so, how did the theory of social market economy mark postwar West Germany economically?
Firstly, I really liked the way this book review is written – it flows really well. I found myself drawing some comparisons between perhaps the economic challenges facing post-war Germany and the challenges facing post-independent Ireland economically that I discovered in the course of my reading for the book review. It seems that both countries were perhaps in a place where they needed to carve out new identities, both politically and economically and perhaps on that level may have faced many of the same challenges. To that end, I think that your choice of the third book was very interesting from the perspective of, as you mention, how a change in leadership affected social, political and economic patterns going forward. Again, I feel that there could be some parallels here with Ireland as there was also a change of leadership following independence from Britain, albeit for different reasons. Very interesting book review.
Although we read different books for the same topic on Germany’s postwar economy, it’s interesting to see that the two main theories are still the same. That is the authors still either credit the United States and its intervention in Germany or Erhard’s social market economy. What I thought was interesting was how your books portrayed the United States’ intention: “The Americans were huge proponents of the Open Door theory of free market trade in West Germany. Their eventual hope was to implement a liberal representative democracy in their zone of occupation and actively encourage competitive American style capitalism” (B 183). In ways, your author makes the United States sound more aggressive by wanting to implement their politics in addition to its economic system. On the other hand, the authors I read about talked about the United States’ actions in Germany as part of the Marshall plan. They made it sound like the US came to provide immediate economic relief to the industries that were severely injured, so Germany could better recover.
With reference to the “conflict of interest” you discussed, I think the Berlin Blockade and resulting Airlift in 1948 and ’49 was a great example of this. With all Allied access to West Berlin blocked by the Soviets, the implementation of free trade and the proposed liberal administration were hindered until a method could be determined for circumventing this interference. It can be interpreted as one of the first major crisis of the Cold War, and certainly had economic consequences.
I was quite intrigued by Berghan’s approach to a postwar reconstruction of Germany. From what I recall from the Three Germanies course, we focused on “soft power” initiatives, so it was interesting to read an economic historians approach. The Nicholl’s book appears to be a great addition, and I believe will be useful for Jasmyne’s final paper. Lastly, I believe Jasmyne had the right idea picking Lewis’s book. Perhaps that book isn’t the right one, but I believe it is important to understand the shifts in leadership and ideology, especially as Germany was reconstructing their economy.
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