War industry and 'Wirtschaftwunder'. Germany's economic mobilization for World War II and economic success in the postwar period

The economic crisis of the early thirties left large capacities of capital stock and human capital idle, a fact which made its direction towards war production easier. Overcoming the crisis earlier than all other World War II powers, therefore, was a precondition for a successful economic mobilization for war. This was achieved by a "Keynesian" approach to economic recovery and employment policy which was started with credit financed civilian outlays and ended up with "Military Keynesianism" on a large scale. The Weimar heritage was, however, a burden, too. Even before the crisis of the early thirties, Weimar's economy could not make full use of the rich rationalization potential which had accumulated since the twenties. This rationalization lag continued during the first years of the Third Reich, because emphasis had to be laid on job creation and not on the use of labour saving technologies. When, after the mid-thirties, the way for organizational as well as technical rationalization was largely open, German war industry, under the aegis of Todt and Speer, enjoyed a "miraculous boom" which, however, came too late to influence the outcome of the war decisively. Analysis of the German war economy is also essential to understanding the economic dynamism of West Germany after 1945. West Germany had clearly gained the material preconditions for economic success in the postwar period.