How are wars tied to the economy?

Germany 1945-1949

After the dismantling of German industry in the first post-war years, the so-called Marshall Plan resulted in a comprehensive aid program for Europe from 1948. In the same year, the D-Mark was introduced with the currency reform.

The US special envoy for the Marshall Plan Harrimann and the Berlin Mayor Reuter. (& copy AP)


Hardly any Allied operation met with so much incomprehension and bitterness among the Germans as the Potsdam decision to reduce the industrial capacity of the German economy as planned. The dismantling of industrial plants was intended, on the one hand, to promote economic demilitarization through the dismantling of heavy industry, and on the other hand, the manufacturing facilities were reparations goods that should benefit the economies damaged by Germany in the war. In the French and Soviet zones, the dismantling of industrial and transport facilities was excessive, and resources such as mineral resources and forests fell victim to the compensation claims. However, this dismantling ran into increasing contradiction to the efforts to increase productivity in the American and British zones, which should gradually enable the Germans to become self-sufficient again through the export of industrial goods (and coal).

In lengthy negotiations, the Allied Control Council endeavored to draw the limits of the industrial capacity allowed in the future and to set the quotas that could be produced in the future. Steel production was particularly controversial until its scope was set at 39 percent of pre-war production. Chemical industry products were limited to 40 percent, light metals to 54 percent, and machine tools to 11 percent of pre-war production.

The result of the negotiations in the Control Council was laid down on March 26, 1946 in the form of the Industrial Level Plan. This determined the extent of the German post-war economy and the extent to which the capacity reduction in favor of reparation deliveries would be. A list of the operations to be dismantled was then published.

The principle was to maintain an average standard of living in Germany, which was not allowed to exceed the average standard of living in Europe (with the exception of Great Britain and the Soviet Union), and after the reparations had been paid Germany should be able to support itself. Not only because of the self-service procedure, which had already started in all zones before the adoption of the industrial plan and which was continued in the east and south-west of Germany, of course, the plan soon became obsolete. In addition to the Soviet Union and Poland, there were 18 states with reparation claims against Germany, which were satisfied from the western zones. At the Paris Reparations Conference (November 9th to December 21st, 1945) the quotas were set for the individual states and were distributed by the Inter-Allied Reparations Agency in Brussels from 1946 onwards.

Dismantling and repairs

In the Soviet zone, not only were factories, railroad tracks and transport facilities dismantled and transported away, beginning immediately after the end of the war. There was also a second type of dismantling in the form of expropriation and conversion of factories into "Soviet Stock Companies" (SAG), which continued to produce on the spot under Soviet control. Around 200 companies, which generated 20 percent of the industrial production of the Soviet zone, were transferred to this new legal form in 1947, including the Bunawerk near Merseburg and the Leunawerk. In 1953 the SAG was bought into the possession of the GDR. The largest SAG with over 100,000 employees, Wismut AG, which mined uranium in Saxony and Thuringia, remained jointly owned by the GDR and the Soviet Union with a special status until the end of the GDR. The SAG did not produce exclusively for the occupying power. 30 percent of production went to a reparations account, a third was available for the domestic market, and a third was exported.

The actual dismantling affected over 1000 companies by the end of 1946, mainly in the iron, chemical and optical industries, mechanical engineering and power generation. In addition, there were withdrawals from ongoing production. The amount of reparations that the Soviet Union took from its zone of occupation or from the GDR up to 1952 is unknown. It is estimated to be up to 66 billion marks. It is undisputed that the sum of ten billion dollars demanded in Yalta for the benefit of the Soviet Union was more than raised by the Soviet occupation zone.

One would also have to add the work performed by German prisoners of war during the reconstruction in the Soviet Union and in France. Prisoner of war labor was a significant factor in the postwar economies of these two countries. Of the more than eleven million German soldiers, around 7.7 million were in the custody of the Western powers, particularly the USA, and around 3.2 million were in Soviet captivity. While the Americans and British began to release their prisoners immediately after the end of the war, the Soviet Union kept German prisoners of war in Siberian camps for years because their labor was needed. The French acted similarly at first, who even made "prisoners of war" when the war was over. From Stuttgart, for example, the case is reported that a convoy of German soldiers who were supposed to be released by the Americans were declared French prisoners of war at the moment of their release and were transported in the other direction.

The Americans cared about the expertise of German scientists and technical specialists who brought them to the United States between 1945 and 1950. American missile technology benefited most visibly from it.