1. After the Second World War the Federal Republic of Germany (FRG) went through the same three stages as did the German Republic following the First World War: (i) a period of economic chaos; (ii) a period of economic stabilization and reconstruction associated with an increased politico-economic significance in the world capitalist system; (iii) a period of militarization coupled with expansionist slogans.
The last phase, which we are witnessing today, shows, however, an important difference from the corresponding period of the 1930s. Hitlerism came to power during a deep economic crisis. Armaments and related government investment, such as road-building, were designed to stimulate production--it was the fascist way out of the crisis. But the Adenauer regime started the process of remilitarization of West Germany during a period of a high level of economic activity, and, as will be seen, its continued favourable course has by no means depended directly on the armament programme. Hence the question arises as to the relation between militarization and the basis for the economic development of the FRG. This article discusses this question and the correspondence between West Germany's economic policy and its military strategy.
Unlike Hitler's, the Adenauer regime bases its military strategy on close collaboration with the whole capitalist camp. The key to the economic role of militarization of the FRG must be also sought in its indirect impact on the economic situation of that entire camp, which in turn influences the economic situation of the FRG.
2. Let us begin with an analysis of the FRG national income and its components in the remilitarization period 1956-60 for the purpose of establishing the source of its continued economic upswing. It will be seen that the driving force of this upswing has not been armaments, but non-productive investment. The relevant data, calculated on the basis of official statistics, are presented in Table 58.
This table is constructed along the same lines as Tables 55 and 56, used for the study of the economic situation in the USA (see pp. 388