The economy and infrastructure had been so damaged that mere physical survival was a full-time occupation for many people. They devoted their days to finding food, and some starved.
Germany had been carved into four sectors, one for each of the victorious Allies: the USSR, the USA, France, and Britain. The Soviet zone soon isolated itself, and the remaining three zones began, for practical purposes, to merge into a single territory, which would eventually become West Germany.
Starting in the early 1930s, the German economy had been savagely abused by the Nazis: the government had controlled the prices of retail goods and the wages of workers. Tax rates were high. These brutal policies kept the populace in misery.
The Allies, who controlled Germany as an occupational force after the war’s end, did not rescind Hitler’s policies. The three western Allies, each for its own reasons, kept the economic cruelty in place. Thomas Hazlett writes:
In the eastern zone, the Russian formula was basic: loot everything of value. In the west, however, there was a different problem: total indecisive ness. As Wilhelm Roepke relates: “Among the victors only Russia could be said to have had a German policy at all.” The western zones were afflicted by an acute case of disarray, and government policy fluctuated among the vengeance of the French, the reformist zeal of the British (Laborites), and the bewilderment of the Americans. About the only consensus to be found anywhere was to rely on economic controls.
It would not be until 1949, when Konrad Adenauer became Chancellor and appointed Ludwig Erhard to address economic concerns, that the suffering would begin to end. Together, Adenauer and Erhard initiated policies of deregulation and lower tax rates.
This was the moment of Stunde Null - the ‘zero hour’ when there was a monumental historical reset: a chance to start over and rebuild the economy.
Adenauer and Erhard allowed the consumers, merchants, and manufacturers to have a degree of free which they’d not experienced in over a decade. The result was the Wirtschaftswunder - the ‘economic miracle’ of amazingly quick growth. Germany would become, within a decade or two, the most powerful economy in Europe, and one of the most significant economies on the planet.
