Page 28 - The Making of the German Post-war Economy

INTRODUCTION

The history of the Federal Republic of Germany is mainly its economic policy.
Nothing shaped the West German state more than its economic-political development.
The economy not only created the foundation for the emergence of stable forms of democracy
but also for the international emancipation of the legal successor of the Third Reich;
the economy was vehicle for national identification and self-conception.
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(Werner Abelshauser, 1983)

The constitutional and economic foundations of the Federal Republic of
Germany (FRG), and in particular the introduction of the Basic Law and
the Social Market Economy, have received general praise. Whereas the
constitutional developments in the Parliamentary Council have been
much studied, economic developments in general and the Economic
Council in particular, West Germany’s first post-war legislative
parliament and progenitor of the German Bundestag, have received
considerably less attention. The current political and public debate on the
reformation of Germany’s socio-political and economic arrangements
and the recent constitutional anchoring of the Social Market Economy in
the Treaty establishing a Constitution for the European Union, however,
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draw attention to the formation of the distinctive German model of
economic and social policy and to the constitutive forces behind the
political and economic reconstruction of occupied post-war Germany.
While undoubtedly the Allies set the political, economic and institutional
framework in this transition period between the imprisonment of the last
Reich Government in May 1945 and the swearing-in of the
democratically elected Adenauer cabinet in autumn 1949, some confusion
remains about the extent of German involvement in the political and
economic reorganisation of post-war West Germany. Despite the widely
held perception that economic policy was imposed by the occupying
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powers and that Germans were mere objects of Allied policy, there is
concrete evidence of the active involvement of several German