Prompt: What were the important components of Germany’s Economic Miracle?
Germany’s economic miracle was a currency reform that took place after WWII. During this time German citizens were starving and miserable. Their currency was worthless, they were only allowed roughly 1200 calories a day, and the allies that occupied the territory were worried people would revolt. Ludwig Erhard and Lucious D Clay were the two main men to carry out the new system of Deutschemarks. Clay was the governor of the American zone, and Erhard was a German politician who had been heavily influenced by Wilhelm Röpke. Röpke was a Professor of Economics who opposed the Nazis and believed that the only way to obtain a non-corrupted morally neutral economic system was through liberty in the free market.
On June 20th 1947, Erhard implemented the Deutschemark currency and the results were undeniable. Grocery stores who the day previous had empty shelves now were filled, and Germans citizens who had been using cigarettes as money now had a currency of actual value. The German economy flourished under this new system. When WWII ended Germany was only able to produce about 35% of the goods they had produced previous to the war. With this new system implemented they were easily able to surpass the amount they produced prewar. It worked so well that the free market was incorporated into West Germany’s new constitution, and Germany became an example of how extraordinarily beneficial a liberty based free market can be.
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