Two Postwar Recoveries of the German Economy

The dynamic character of the German economy in both periods posed great problems of balance. A dynamic economy will always tend to be unbalanced. When it grows it never grows evenly in all its parts; and when its growth is interrupted, even more acute stresses appear. Either way it faces incessantly changing external circumstances. Assuring some sort of reasonable balance among the parts of the economy, and between internal and external economy, is a problem hard to define and when defined, often hard to solve. It is in large measure a matter of vision and will, of statesmanship and compromise, and of historical opportunity.

Experience and prospect of change crystallize strong economic interests in the population and induce them to aggressive and defensive action in the markets for products, factors of production and money, as well as in the political sphere. These activities may meet and combine in such a manner as to make a complex and necessarily uneven process of growth reasonably satisfactory to all and relatively smooth and continuous. But such good fortune is rare. The degree to which it has befallen the Federal Republic of Germany up to 1958 is perhaps one of the most surprising developments of the post-War-II era.

The most obvious form of economic imbalance are cyclical fluctuations of activity in all parts of the economy. Of such fluctuations the Weimar Republic had a far greater share than the Federal Republic. The economy of the Federal Republic enjoyed nearly uninterrupted expansion up to 1954. The setbacks suffered by some industries, e.g. steel, in 1958, proved temporary and like in other European countries there were no serious repercussions of the 1958/54 recession in the United States.

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