The German economy cannot achieve internal balance without maintaining a large exchange of products and services with other parts of the world. It must draw from the outside resources that are lacking in its narrow geographic space and offer in turn the products of its industry. The outside world must provide access to supplies and markets in its more and less developed segments, in Europe and overseas. The mutual accommodation of the internal and the external economy of the country, and of the component parts of its external economy among themselves, has been of great importance in the two postwar recoveries. We shall now examine some of the features of that accommodation, to the extent that it was found, before World War I, in the 1920's and more recently.
The late 1920's and the time after 1948 were periods of re- integration of the German economy into the world economy. The volume of Germany's foreign trade expanded. But in these periods the German economy also showed that it had become more intensive in its internal processes and in a sense more self- dependent than before the great international conflicts. A tendency of this nature may have operated in many other countries at the same time. But it comes as somewhat of a surprise to find for Germany that the successive reductions of territory and of the natural resource base, and the greatly increased density of population, did not bring about a rising volume of foreign trade in relation to national income over