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.

In my paper I mostly focused on Lenin and the major economic policies he brought into being during his time as head of the Soviet government. Lenin instituted what was known as War Communism from 1918-1921. Essentially, War Communism replaced the market economy of the tsar with socialist allocations of goods and services. The Bolshevik government wanted to “…provide basis for radically different relationships between men out of which a higher form of existence will arise.” And in the Marxist context this meant self-realization, an end to man’s alienated existence. Lenin’s economic plan was to implement socially organized production for use, directly, by the community. This generally meant forced labor and famine and the collapse of Russia’s exports.

In 1921, Lenin established the New Economic Policy (NEP )to combat the failings of War Communism and turn the socialist republic more capitalist in order to grow its industry and production. Under NEP, the state wanted to limit the import of consumer goods. Grain and livestock became the most important export—thus tying the foreign trade sector with government policy towards peasants and agriculture. While Soviets cautiously opening up their borders to foreign trade was good in a free market/capitalist sense, by the end of the NEP, exports were only at about 40 percent of the 1913 level.

Despite the failures of Marxist socialist economic policies at home, there was still significant economic interaction between the Soviet Union and foreign governments. The Leninists and Bolsheviks saw themselves as being a part of a global world order—a global proletariat. While actual economic policy was highly regulated by the state, theoretically, their union was part of a much greater scheme of revolutionary movement. All of their economic policy was aimed at mobilizing a global proletariat. This position in the world economic order will certainly shape the Soviet Union’s relations with other European powers later in the century.