The Economic Miracle, 1955-1966

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The Economic Miracle

The rate of economic recovery from the early 1950s to 1966 has been described as miraculous.

Rate of economic growth

On average, the annual growth in the Federal Republic of Germany between 1951 and 1965 was 8%.
The FRG's GNP (gross national product) increased by 100% between 1950 and 1955.

Exports

By 1954, the Federal Republic was behind the United States and Britain as a trading power.

Job creation

Employment had risen by 4.2% by 1955.
Between 1949 and 1963, incomes rose by around 400%.

Reasons Behind the Economic Miracle

Several factors contributed to the economic miracle in the Federal Republic of Germany. These included the following:

The impact of Bizonia

The formation of Bizonia drove economic recovery.
The Western powers removed price controlled, implemented currency reform, encouraged free competition and reduced marginal tax rates.
This encouraged people to work and this is confirmed by the fall in absenteeism.
However, we should remember that the benefit of policies in Bizonia did not come instantly. There was initially rising prices, which hit the poor.

The Marshall Plan

The aid from the Marshall Plan stimulated the Federal Republic of Germany’s economy.
- Traditionally, historians have argued that this was the principal cause of the economic miracle.
- However, revisionist historians have challenged this perspective.
- Between 1948 and 1949, the aid was only 5% of the FRG’s GDP.
- Perkins (1999): "The current general consensus, not shared by Nicholls, is that Marshall Aid...played a minor role in the recovery of the West German economy."

The Korean War

The economy benefitted from the Korean War.
This is because the FRG profited from greater demand for Ruhr goods.
Competitor nations could not supply war materials. Meaning that Federal Republic of Germany's exports increased by 100%.

The government

The government controlled inflation through the regulation of interest rates and the supply of money.
The government did not pay large amounts of reparations.
Because the Federal Republic of Germany did not have an army until 1955, the government also had minimal defence costs.

Historical interpretations

Alt and Schneider (1962): "So long as the means of production are not very badly destroyed...the main prerequisite for a rapid industrial reconstruction is the existence of a skilled labor force."
Perkins (1999): "The economic recovery from the late 1940s is explicable in terms of a juncture of circumstances, in particular those inherited from the era of the Third Reich and the emerging context of the development of world trade."

1Political & Governmental Change, 1918-1989

1.1Creation & Collapse of Weimar, 1918-1932

1.1.1Creation of a Republic

1.1.2Strengths & Weaknesses of Weimar Constitution

1.1.3Overcoming Challenges to the Constitution

1.1.4The Great Depression

1.1.5The Collapse of Democracy

1.1.6The Collapse of Democracy 2

1.1.7Hitler Becomes Chancellor

1.2Nazi Dictatorship, 1933-1945

1.2.1Establishing a Dictatorship

1.2.2Consolidating Power

1.2.3Nature of Government

1.2.4Government in Wartime

1.2.5Top Grade AO2/3 - Political & Governmental Change

1.3Return to Democratic Government, 1945-1989

1.3.1Creation of the FRG, 1945-1949

1.3.2Consolidation Under Adenauer

1.3.3Consolidation Under Erhard

1.3.4Maintaining Stability Under Brandt

1.3.5Maintaining Stability Under Schmidt

1.3.6Maintaining Stability Under Kohl

1.3.7Top Grade AO2/3 - Return to Democratic Government

2Opposition, Control & Consent 1918-1989

2.1Opposition to Government, 1918-1989

2.1.1Impact of Versailles

2.1.2Political Extremism & Crises, 1918-1932

2.1.3Opposition & Dissent in Nazi Germany, 1933-1945

2.1.4Political Dissent from the Left, 1949-1989

2.1.5Political Dissent from the Right, 1949-1989

2.1.6Top Grade AO2/3 - Opposition to Government 1918-89

2.2Controlling the People, 1918-1989

2.2.1Attempts to Control Extremism

2.2.2Repression, 1933-1945

2.2.3Censorship & Propaganda, 1933-1945

2.2.4De-Nazification Policies of Western Allies, 1945

2.2.5Constitutional & Legal Response to Extremism, 1949

2.3Popular Support, 1918-1989

2.3.1The Nature of Support for the Weimar Government

2.3.2Support for the Nazi Regime

2.3.3The Nature of Support for Democracy, 1945-1989

2.3.4Top Grade AO2/3 - Controlling the People

3Economic Developments & Policies, 1918-1989

3.1Reacting to Economic Challenges, 1918-1932

3.1.1Economic Crises & Government Response, 1918-1923

3.1.2Economic Loans, 1924-1928

3.1.3Policies for Recovery, 1924-1929

3.1.4The Great Depression

3.1.5Change in Living Standards

3.1.6Top Grade AO2/3 - Reacting to Economic Challenges

3.2Controlling the Economy, 1933-1945

3.2.1Attempting Economic Recovery

3.2.2Creating a Command Economy

3.2.3Change in Living Standards

3.2.4Impact of War

3.2.5Impact of War 2

3.2.6Top Grade AO2/3 - Controlling the Economy

3.3Creating the Social Market Economy, 1945-1989

3.3.1Economic Recovery, 1945-1955

3.3.2The Economic Miracle, 1955-1966

3.3.3Surviving the Recession, 1960-1969

3.3.4The Oil Crisis

3.3.5Integration into the European Economy

3.3.6Change in Living Standards

3.3.7Top Grade AO2/3 - Creating Social Market Economy

4Aspects of Life, 1918-1989

4.1Attitudes Towards Women, 1918-1989

4.1.1Role & Status of Women in the Weimar Republic

4.1.2Impact of Kinder, Küche, Kirche

4.1.3Impact of WW2 on Women

4.1.4Role & Status of Women in the FRG

4.1.5Top Grade AO2/3 - Attitudes Towards Women

4.2Education & Cultural Developments, 1918-1989

4.2.1Education in Weimar

4.2.2Cultural Experimentation in Weimar

4.2.3Education Under the Nazis

4.2.4Nazi Culture

4.2.5Education in the FRG

4.2.6Generational Conflict

4.2.7Top Grade AO2/3 - Education & Cultural Development

4.3Position of Ethnic Minorities, 19189-1989

4.3.1Ethnic Minorities in the Weimar Republic

4.3.2Nazi Racial Policies, 1933-1939

4.3.3Nazi Racial Policies During the War

4.3.4Ethnic Minorities in the FRG

4.3.5Top Grade AO2/3 - Position of Ethnic Minorities

5Historical Interpretations

5.1Influence of German History

5.1.1Influence of German History

5.2Hitler & Foreign Policy

5.2.1Hitler & Foreign Policy

5.3Contribution of Other Nations to WW2

5.3.1Weak Nations

5.3.2Appeasement

5.3.3The Rise of Fascism

5.4Reasons for Invading Poland

5.4.1Reasons for Invading Poland

5.4.2Top Grade AO2/3 - Historical Interpretation

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