How West Germany found its way out of the ruins of war

The demand side, at least initially, played only a secondary role. Due to the devastation caused by the war, demand was enormous, but the population was impoverished and purchasing power was low when currency reform effectively expropriated financial wealth. The decisive factors were those of supply, and here especially the supply of capital and the potential of the labor force. Back in the 1950s, Berlin’s DIW found that the impression of destroyed cities and demolished infrastructure could not be extrapolated to the state of industrial capital. It was by no means comparatively neglected, as the work of Werner Abelshauser later confirmed in detail. At the end of the 1940s, net of war damage, restitution and dismantling, the volume of fixed capital was still higher than before the war; But above all, her “certification” was overwhelmingly favorable. Because of the heavy investment during the war in important areas of the capital goods industry, after the war these companies were able to work with relatively new and large capital, which also benefited from the fact that the older systems were dismantled. Allies were quickly replaced by new ones, that is, replaced by more modern ones. In terms of capital, the start-up conditions were by no means so unfavorable. And despite the many casualties of the war, the labor potential in West Germany after the war was not less, but ultimately greater than in 1939.

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